An application for the appointment of an arbitrator is not time-barred merely because a final bill was signed earlier. The limitation period begins when the claim is denied or final payment is made, and a no-dues certificate does not bar arbitration for legitimate, subsisting disputes.

ORDER

This application under Section 11(6) of the Arbitration and Conciliation Act (for short "the Act") has been filed for appointment of substituted arbitrator.

2. The undisputed facts are that there was an agreement between the parties. It is the case of applicant that original copy of agreement is with the respondent, therefore, the same could not be filed. The applicant submitted a letter to respondent on 21.03.2023 thereby invoking the arbitration clause. However, no action has been taken necessitating the filing of this application.

3. It is the case of applicant that respondent had floated a tender for Provn. Of Certain Technical Accommodation And Allied Services at Maharajpur, Gwalior. The work was allotted to the respondents vide letter of acceptance dated 10.08.2006. Work order was also issued on 19.08.2006. Applicant completed the work on 30.07.2010, which is evident from the completion certificate issued by respondents on 05.08.2010. After several/multiple requests were made by applicant, deviation orders were issued by the department on 17.12.2019 and the respondents called upon the applicant to sign the final bill. Applicant, vide letters dated 09.06.2020, 22.8.2020 requested the respondents to include certain pending payments in final bill, and that the final bill signed by him be treated as under protest. Applicant, again wrote letter dated 07.09.2020 and requested for attaching his protest in the final bill. Ultimately, the payment of final bill was made by respondents after making certain deductions on 22.10.2020 and the said amount has been credited in the bank account of the applicant. Again, applicant vide letter dated 27.10.2020 requested the respondent for release of retention money lying with them. Pursuant to that, respondent No. 3 informed his superior authority that final bill has already been paid to the applicant on 27.10.2020. Now the respondents, taking aid of no-claim certificate, have denied the admissibility of the claims of applicant vide letter dated 10.03.2023. Accordingly, it is the case of applicant that denial of payment gives rise to dispute for the first time on 10.03.2023. As per the contract, competent Authority to appoint arbitrator vested with the Engineer-in-Chief. Therefore, applicant by invoking Clause 70 of IAFW 2249 requested the respondents to appoint sole arbitrator. However, respondents have not appointed sole arbitrator within a period of 30 days, therefore, the right of respondents to appoint sole arbitrator has stood extinguished, and accordingly, applicant has approached this Court under Section 11 of the Act.

4. Respondents have filed their return and have claimed that the application filed under Section 11(6) of Act is barred by time. By referring to the final bill (Annexure R/1), it is submitted that on 16.05.2019 the applicant had certified that they had performed the work under the condition of the CA for which payment is claimed and that it has no further claim under this CE(AF)/MJR/14 of 2006-07 beyond the net amount of this bill. It is submitted that once this no-objection certificate has already been given by the applicant, then now it cannot be withdrawn. If the period of limitation is counted from 16.05.2019, then it is clear that the period of 3 years had expired on 15.05.202, whereas this application under Section 11 of the Act has been filed on 21.07.2023 and thus the application is barred by time.

5. Per contra, it is submitted by counsel for applicant that the cause of action arose for the first time when actual payment was made. The final bill