IN THE HIGH COURT OF RAJASTHAN
Arun Bhansali, J.
Suresh Kumar Kothari - Appellants
Vs.
State of Rajasthan - Respondent
S.B. Arbitration Application No. 18 of 2018
Decided On : 03-05-2019
Constitution Of India, 1950 - Article 7 - Arbitration and Conciliation Act, 1996 - Sections 11 and 12 – Construction - Manufacturing - It is inter-alia claimed that applicant concluded requisite work and thereafter started raising demand for his outstanding payment when he was informed that was outstanding in applicant – Where after reference has been made to certain communications calling upon respondents to make payment which was responded to raising counter claim on which applicant issued notice dated seeking reference of dispute to arbitrator in terms of agreement - It is claimed that same has not been responded to and therefore present application for appointment of arbitrator has been filed - Held, We have heard learned counsel for parties at some length material facts are not in dispute that a Service Provider Agreement was executed between parties is admitted that said agreement provides for settlement of dispute in relation to agreement by way of arbitration is also not in dispute - Whether or not petitioner has provided services envisaged under agreement and if so whether said services were adequate and satisfactory are matters that can be examined only by arbitrator - So also question whether claim made by petitioner is time barred cannot be examined in present proceedings and shall have to be left open to be raised before arbitrator - There is in that view no gainsaying that present petition shall have to be allowed with appropriate directions particularly when this Court is concerned primarily with question whether an arbitration agreement exists between parties and if so whether disputes falling within scope of agreement have arisen for determination - Our answer to both these questions being in affirmative petitioner has made out a case for appointment of an arbitrator and for reference of disputes for adjudication to him/her - Application is allowed.
ORDER :
Arun Bhansali, J.
1. This application under section 11 of the Arbitration and Conciliation Act, 1996 ('the Act') has been filed by the applicant seeking appointment of an independent arbitrator for resolving the dispute between the parties.
2. It is, inter-alia, claimed in the application that the applicant was awarded contract for Manufacturing & Supplying of 35 lacs Pucca Bricks at Kiln R.D. 750 1st (Labour & Carriage) by order dated 22.08.1988 and an agreement Annex. 4 in this regard was executed between the parties. For resolving the dispute between the parties Clause 19(a) of the agreement contains arbitration agreement.
3. It is, inter-alia, claimed that the applicant concluded the requisite work in May, 1991 and thereafter started raising demand for his outstanding payment, when he was informed that a sum of Rs. 1,10,576/- was outstanding in the applicant. Whereafter, reference has been made to certain communications in the year 2001, 2002, 2004, 2006 and ultimately, a notice dated 23.02.2018 calling upon the respondents to make payment, which was responded to raising counter claim of a sum of Rs. 91,860/-, on which the applicant issued notice dated 30.06.2018 (Annex. 12) seeking reference of dispute to the arbitrator in terms of Clause 19(a) of the agreement. It is claimed that the same has not been responded to and therefore, the present application for appointment of arbitrator has been filed.
4. A reply to the application has been filed by the respondent referring to various communications and raising dispute that the applicant has waived his right for appointment of arbitrator, the claim made was barred under the law and that the application, therefore, deserves to be dismissed. However, existence of arbitration agreement between the parties has not been denied.
5. When initially, the matter came up before the Court on 14.09.2018, it was noticed that the applicant was seeking payment of a sum of Rs. 3,97,078/- along with interest from the year 1991 and time was granted to counsel for the applicant to make submissions, when reliance was placed on judgments in M/s. EMM ENN Associates v. Commander Works Engineer & Ors. AIR 2016 SC 3079; M/s. Wesford Financial Inc. Panama v. Bharat Heavy Electricals Ltd., AIR 2016 SC 3447 and M/s. Ajmer Singh & Company v. State of Rajasthan & Ors. : S.B. Arbitration Application No. 10/2015, decided on 08.02.2017 by a Co-ordinate Bench of this Court, whereafter, the notices were issued to the respondents.
6. Learned counsel for the parties made submissions in terms of the averments made in the application and the reply, while learned counsel for the applicant submitted that there being an arbitration agreement between the parties and a dispute therefore, in terms of Section 11(6-A) of the Act, the dispute needs to be referred to the arbitrator and learned counsel for the respondent alleged that the entire dispute being ex-facie barred by limitation.
7. I have considered the submissions made by learned counsel for the parties and have perused the material available on record.
8. The issue as raised in the present application and effect of the fact that the dispute was raised belatedly, was considered by a Coordinate Bench of this Court in the case of M/s. Ajmer Singh & Company (supra), wherein also, the submissions made were that in respect of work completed in the year 1994, the dispute was raised after 19 years and was therefore, apparently barred by limitation, it was, inter-alia, observed/laid down as under:-
8. In the matter of 'Wexford Financial Inc. Panama v. Bharat Heavy Electricals Limited' (2016) 8 SCC 267 : (ATR 2016 SC 3447), the Hon'ble Supreme Court has specifically held that the matter with regard to the claim sought to be referred to arbitration being barred by law
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