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2025 Supreme(HP) 497
IN THE HIGH COURT OF HIMACHAL PRADESH AT SHIMLA
G.S. Sandhawalia, C.J.
Ajnesh Sood - Petitioner
Versus
Himachal Pradesh Housing & Urban Development Authority - Respondent
Arb.Case No. 995 of 2023
Decided On : 25-04-2025
For the Petitioner:Mr. Susheel Gautam, Advocate.
For the Respondent:Mr. C.N. Singh, Dr. Nidhi Singh and Mr. Anshul Gandhi, Advocates.
The limitation period for appointing an Arbitrator under Section 11(6) is three years from when the right to apply accrues, and ongoing correspondence can keep the claim alive.
Headnote:
(A) Arbitration and Conciliation Act, 1996 - Section 11(6) - Appointment of Arbitrator - Dispute regarding construction work as per Agreement dated 29.07.2006 - Claim for appointment of Arbitrator rejected on grounds of limitation - Court held that the claim was not time-barred as correspondence was ongoing and last payment was made on 15.09.2018 - Petition allowed, Arbitrator appointed. (Paras 10, 11, 12)
(B) Limitation - The limitation period for making an application under Section 11(6) is three years from when the right to apply accrues - Ongoing correspondence kept the claim alive. (Paras 10, 11)
Facts of the case:
The petitioner sought appointment of an Arbitrator for a construction dispute, claiming last payment was made on 15.09.2018, while the respondent argued the claim was time-barred due to a final bill passed on 06.05.2014. (Paras 3, 7)
Findings of Court:
The court found that the claim was not time-barred due to ongoing correspondence and the rejection of the claim was premature. (Paras 11, 12)
Issues: Whether the claim for appointment of an Arbitrator was time-barred and the validity of ongoing correspondence regarding the claim. (Paras 7, 11)
Ratio Decidendi: The court ruled that the ongoing correspondence indicated the claim was alive, and the limitation period had not expired. (Paras 10, 11)
Result: Petition allowed, Arbitrator appointed.
JUDGMENT :
G.S. Sandhawalia, CJ.
The petitioner seeks appointment of an Arbitrator under Section 11 (6) of the Arbitration and Conciliation Act, 1996.
2. The dispute was regarding the work of construction, as per Agreement dated 29.07.2006 (Annexure P-1).
3. The case of the petitioner is that representation dated 02.07.2023 (Annexure P-5) had been made by him tothe respondent-Department for appointment of an Arbitrator as per Clause 25 of the Agreement. In the said demand notice/representation, there is a reference as such that the last part payment for the said work was made on 14.09.2020, but the unmeasured items were not taken into consideration, resulting in heavy financial liability.
4. It is mentioned in the communication dated 27.11.2023 (Annexure P-6) that vide letter 12.10.2022, the petitioner was advised to provide fresh representation of claims for amicable settlement. The said letter has also been placed on record as Annexure P-3, wherein the Executive Engineer of the respondent-Department had asked the petitioner to provide fresh representation, so that further action of amicable settlement of the case could be processed. Eventually, the respondent-Department as such had chosen to reject the claim of the petitioner for appointment of Arbitrator vide communication dated 01.12.2023 (Annexure P-7), which led to filing of the present petition on 13th December, 2023, itself.
5. On 05.07.2024, the Co-ordinate Bench of this Court had noticed the averment in the notice dated 02.07.2022 (Annexure P-5) regarding the proof of payment received by the petitioner from the respondent on 14.09.2020 and accordingly, asked the learned Counsel for the petitioner to file necessary proof of the said payment.
6. Reference has now been made to Annexure P-8 to show that the actual date of last payment to the petitioner was 15.09.2018, when the amount of Rs. 3,60,270/- was received by him. Thus, it is the case of the Counsel for the petitioner that the last payment to the petitioner as such was made on 15.09.2018. In the reply as such filed by the respondent-Department, the averments made in the petition were denied.
7. The claim as such is thus sought to be disputed on the ground that the final bill was passed on 06.05.2014, the work had been completed on 28.04.2012 and the claim was barred by limitation. The claim as such of the respondent is that he had made a representation to the respondent-Department for appointment of an Arbitrator on 02.07.2023, after a lapse of more than four years, nine months and 16 days.
8. In the rejoinder/(sic-replication) filed by the petitioner, reference has been made to the order dated 01.12.2023, whereby the claim for the petitioner had been rejected on the ground that it was time barred.
9. Thus, it is apparent from the record that matter was still pending consideration and the Department itself had asked the petitioner to submit his representation giving details of his claim, which was duly rejected by the respondent-Department on 01.12.2023. The petition has been filed immediately thereafter.
10. Reliance can be placed on the judgment of the Apex Court in Arif Azim Company Limited Vs. Aptech Limited, (2024) 5 SCC 313 , wherein it has been held the limitation period for making an application under Section 11(6) of the Arbitration and Conciliation Act is three years from the date when the right to apply accrues.
11. In such circumstances, when the rejection of the petitioner’s claim was made on 01.12.2023 itself, the preliminary objection taken by respondent-Department that the claim of the petitioner is time barred, would not be tenable in view of the fact that the last payment was received by the petitioner on 15.09.2018 and the correspondence was still going on between the petitioner and the respondents. Moreover, recommendation dated 12.10.2022 would go on to show that officials of the respondent-Department were still keeping the claim of the petitioner alive. Thus, prima-facie, a case is made out for appointm
