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2021 Supreme(J&K) 536
IN THE HIGH COURT OF JAMMU AND KASHMIR AT JAMMU
PANKAJ MITHAL, J.
Enviro-Sanitation J&K - Petitioner
Versus
Municipal Corporation, Jammu - Respondent
Arbitration Application (AA) No. 12 of 2016
Decided On : 16-03-2021
For the Petitioner: Rahul Sharma.
For the Respondent: Sachin Gupta.
The main legal point established in the judgment is the determination of the limitation period for seeking appointment of an arbitrator under Section 11(6) of the Jammu and Kashmir Arbitration and Conciliation Act, 1997, and the consideration of the 'breaking point' for the accrual of the cause of action in arbitration disputes.
Headnote:
Arbitration - Appointment of Arbitrator - Jammu and Kashmir Arbitration and Conciliation Act, 1997 - Section 11(6) - [ENVIRONMENTAL SANITATION] - [CONSTRUCTION DISPUTE] - [Jammu and Kashmir Arbitration and Conciliation Act, 1997, Section 11(6)] - The court discussed the legal provisions related to the appointment of an arbitrator under Section 11(6) of the Jammu and Kashmir Arbitration and Conciliation Act, 1997, and interpreted the limitation period for seeking appointment of an arbitrator. The court referred to the decision of the larger bench of the Supreme Court in the case of M/s. Geo Miller & Co. Pvt. Ltd. v. Chairman, Rajasthan Vidyut Utpadan Nigam Ltd., AIR 2019 SC 4244, and emphasized that the limitation for applying under Section 11(6) of the Act is three years from the date on which the cause of action or the claim which is sought to be arbitrated first arises. The court also considered the principles established in the cases of State of Orissa and Another v. Damodar Das, (1996) 2 SCC 216 and Grasim Industries Limited v. State of Kerala, (2018) 14 SCC 265, to determine the 'breaking point' for the accrual of the cause of action in arbitration disputes.
Fact of the Case:
The petitioner, a registered Voluntary Organization, filed a petition under Section 11(6) of the Jammu and Kashmir Arbitration and Conciliation Act, 1997 for the appointment of an independent arbitrator to resolve a construction dispute with the respondent-Municipal Corporation, Jammu. The respondent objected to the petition on the grounds of limitation.
Finding of the Court:
The court found that the petitioner had invoked the arbitration clause within time and had applied for the appointment of an arbitrator within the prescribed limitation period. The court emphasized that the history of the case is crucial for determining the 'breaking point' for the accrual of the cause of action in arbitration disputes.
Issues: The issues involved the determination of the limitation period for seeking appointment of an arbitrator under Section 11(6) of the Act and the 'breaking point' for the accrual of the cause of action in arbitration disputes.
Ratio Decidendi: The court held that the limitation for applying under Section 11(6) of the Act is three years from the date on which the cause of action or the claim which is sought to be arbitrated first arises. The court also emphasized that the history of the case is crucial for determining the 'breaking point' for the accrual of the cause of action in arbitration disputes.
Final Decision: The court appointed an independent arbitrator to resolve the disputes between the parties and directed the arbitrator to make an award within the time provided in the Act, with the prescribed fee and incidental expenses to be shared by the parties.
JUDGMENT :
1. Heard Sh. Rahul Sharma, learned counsel for the petitioner and Sh. Sachin Gupta, learned counsel for the respondent.
2. The petitioner (Enviro-Sanitation J&K), a registered Voluntary Organization, has preferred this petition under Section 11(6) of the Jammu and Kashmir Arbitration and Conciliation Act, 1997 (for short 'the Act') for the appointment of an independent arbitrator for the resolution of dispute vis-a-vis the petitioner and the respondent-Municipal Corporation, Jammu.
3. The petitioner was allotted construction work of low cost toilet complex at Gumat, Jammu vide Government order dated 28.01.1999. An agreement dated 02.07.2001 was executed between the parties for the above construction work. It is alleged that the petitioner successfully completed the construction work but in respect thereof certain disputes arose between the parties regarding the amount due and payable to the petitioner for the work done.
4. The aforesaid agreement vide Clause 10 provides for the adjudication of disputes through arbitration.
5. In order to get the above disputes resolved through arbitration, the petitioner filed Arbitration Application No. 36 of 2006 under Section 11(6) of the Act for the appointment of an arbitrator. The said petition was disposed of on 06.09.2008 directing the Secretary to Government, Housing and Urban Development Department to nominate an arbitrator within four weeks for adjudicating the disputes between the parties.
6. The Secretary to Government, Housing and Urban Development Department failed to comply with the above direction and the matter was not referred to the arbitration. The petitioner was forced to initiate contempt petition No. CPAA No. 01 of 2009. The said contempt petition was dismissed as withdrawn with liberty to the petitioner to initiate fresh proceedings in terms of the Act.
7. It is in the above backdrop that the petitioner has filed the present petition under Section 11(6) of the Act in the year 2016 for seeking appointment of an arbitrator.
8. Admittedly, there is an agreement dated 02.07.2001 between the petitioner and the respondent regarding construction work of low cost toilet complex at Gumat, Jammu and that the said agreement contains an arbitration clause to resolve the disputes interse the parties in connection thereof. The petitioner had issued a legal notice dated 01.07.2005 invoking the arbitration clause and asking for the appointment of an arbitrator for adjudicating the disputes but till date despite direction of this Court, no arbitrator has been appointed.
9. The court in the matter of appointment of an arbitrator is to ensure the existence of a written arbitration agreement between the parties and that the parties before it are also parties to it and that the court has jurisdiction in the matter.
10. In the case at hand, there is no dispute to any of the above conditions but the only objection taken from the side of the respondent vide paragraph 8 of the objections is that the present petition is barred by time.
11. The contention of learned counsel for the petitioner is that the petitioner had invoked the arbitration clause well within time and the court without any hesitation in this regard had disposed of its earlier petition with the direction to the Secretary to Government, Housing and Urban Development Department to nominate an arbitrator within four weeks. At that time, no such objection of limitation was raised and therefore, the respondent is not justified in taking objection to the limitation at this stage. The petitioner has filed the present petition without losing time after the contempt petition was dismissed as withdrawn with liberty to file fresh proceedings under the Act. The present petition has been filed with the liberty of the court and is within time from the date of the liberty so granted.
12. In defence, learned counsel for the respondent submits that the limitation has to be counted from the date of the cause of action and that the earlier orders
