In works contracts with dispute resolution clauses, Tribunal jurisdiction requires prior approach to the designated authority. For claims regarding final bill payments before contract rescission, the limitation period commences from the date the final bill is prepared.

ORDER

Pradeep Mittal, J.

1. This Civil Revision, filed under Section 19 of the Madhya Pradesh Madhyastham Adhikaran Adhiniyam, 1983, is directed against the award dated 13.02.2009 passed by the Madhya Pradesh Arbitration Tribunal, Bhopal, in Reference Case No. 19/2005, whereby the appellant was directed to pay a sum of Rs.35,96,314/- to the petitioner along with interest @ 6.5% per annum from 15.11.2001.

2. The petitioner/Nigam floated a tender for construction of Dastkari Haat at Gwalior Trade Fair Complex, Gwalior, which was initially awarded to M/s Plant Builders, Gwalior. After execution of part of the work, the said contractor abandoned the project. Thereafter, respondent No.1 offered to complete the remaining work on the same tender rates and terms. Accordingly, an agreement was executed between the petitioner and respondent No.1 on 23.10.1996 and a work order was issued on 24.10.1996, stipulating completion of the work, including handing over of at least 50 shops, by 15.12.1996.

3. The respondent No.1 commenced the work but failed to complete it within the stipulated time. Disputes arose about payment of the running account bills. The respondent No.1 submitted the 5th, 6th and 7th running account bills and claimed that an amount of Rs. 35,65,366/- remained outstanding after adjustment of payments made. Correspondence was exchanged between the parties, and the respondent No.1 treated the 7th running account bill as the final bill.

4. Earlier, the respondent No.1 had filed a civil suit, which came to be dismissed for want of prosecution on 15.03.1999. Subsequently, a notice under Section 80 of the CPC was issued on 26.12.2000. Thereafter, the respondent No.1 raised a dispute before the authority under Clause 29 of the agreement and ultimately filed a reference petition before the Madhya Pradesh Arbitration Tribunal, which was registered as Reference Case No.19/2005. The petitioner raised an objection regarding limitation under Section 7-B of the Madhya Pradesh Madhyastham Adhikaran Adhiniyam, 1983.

5. After recording evidence and hearing the parties, the learned Arbitration Tribunal allowed the claim of respondent No.1 in its entirety and passed the impugned award dated 13.02.2009, directing payment of the claimed amount with interest.

6. Learned counsel for the petitioner submitted that the impugned award passed by the Arbitration Tribunal is ex facie illegal and unsustainable, as the reference petition filed by respondent No.1 was clearly barred by limitation. It was contended that the Tribunal committed a grave error of law in entertaining a time-barred reference petition and thereby exercised jurisdiction not vested in it under the Madhya Pradesh Madhyastham Adhikaran Adhiniyam, 1983.

7. It was argued that the cause of action, if any, arose on 22.02.1998 when the pre-final measurements were recorded and accepted by respondent No.1. However, the respondent approached the Final Authority only on 08.08.2001 and thereafter filed the reference petition after an inordinate delay of nearly nine years, which was patently beyond the permissible period of limitation. Even the claim before the Final Authority was barred by several months. Despite specific objection raised under Section 7-B of the Adhiniyam of 1983, the Tribunal failed to consider the issue of limitation in its proper perspective.

8. Learned counsel further submitted that the Tribunal erred in treating the alleged completion certificate dated 22.12.1999 as the starting point of limitation. Reliance was placed upon the judgment of this Court in M/s Serman India Road Makers Private Limited , wherein it has been categorically held that the date of completion of work cannot be treated as the date of cause of action for the purpose of arbitration. Since Clause 29 of the agreement does not prescribe any time limit for approaching departmental authorities, the limitation of three years would apply, which stood clearly exhausted in the present case.

9. It was also submitted th