Alekha Behera vs State of Orissa and Others

P.K. Misra, J.—This is an application u/s 11 of the Arbitration and Conciliation Act, 1996, for appointment of Arbitrator to decide the claim of the petitioner as enumerated in Schedule-A of the petition.

The petitioner had undertaken the work of "Construction of extension to S.C.S. College at Puri" as per the Agreement No. 31-F2 of 1978-79. The petitioner has contended that the work could not be completed within the stipulated date fixed in the Agreement due to various hindrances caused by the opposite parties and appreciating the various difficulties, opposite party No. 4 had not taken any penal action against the petitioner under Clause 2 of the Agreement. It is further stated that though the petitioner had requested opposite party No. 4 for extension of time to complete the work, nothing was communicated to the petitioner. It is further claimed that the petitioner completed the work, but the work had not been measured as per rules and payment had not been made. Ultimately, the petitioner issued letter dated 8.2.1999 and no response having been received, the present petition has been filed under the new Act invoking the arbitration clause.

The opposite parties in counter affidavit, apart from denying the allegations made in the petition, have stated that the petitioner did not complete the work within the stipulated period and himself is guilty of breach of conditions of the contract. It is further claimed that in view of the conditions contained in Clause-23, the petitioner having not completed the work is not entitled to invoke any arbitration clause. It is also submitted that, at any rate, the claim of the petitioner is grossly barred by time.

It appears from the notice issued by the petitioner himself as per Annexure-3 that the Junior Engineer, Puri, by his letter No. 192 dated 1.1.1985 had intimated the petitioner that the final bill for the work had been prepared and final measurement had been taken in presence of the Contractor. It is thus, evident that the cause of action, for the petitioner had arisen long back in the year 1985. The petitioner claims that he had approached the authority on several occasions. Except the bare assertion which has been denied, no other correspondence has been produced. It appears that for over a decade, the petitioner had kept quiet and issued a notice only in February, 1999. In the above back-ground, the question arises as to whether the claim is barred by limitation and should not be referred to an Arbitrator.

The learned counsel appearing for the petitioner has relied upon the decisions reported in Executive Engineer, R.E. Division, Dhenkanal and Another Vs. J.C. Budharaj, (M/s. Oriental Structural Engineers Ltd. v. M/s. Rites and Anr.): 1984 (1) OLR 581 (Ghanashyam Behera v. Orissa State Co-operative Marketing Federation through its Secretary and Anr.) : Prafulla Kumar Singh Deo Vs. State of Orissa and Others, (Union of India and Anr. v. Prahallad Moharana) : 55 (1998) CUT 133 (National Aluminium Company v. Ganesh Ch. Kanungo and Anr.) and Wazirchand Mahajan and Another Vs. Union of India (UOI), and contended that the question as to whether the claim is barred by limitation should be referred to the Arbitrator and should not be decided by the Court while considering the application u/s 8 or Section 20 of the Arbitration Act, 1940. He has further contended that whatever might have been the position under the old Act of 1940, under the new Act of 1996, it is contemplated that all the disputes must be referred to the Arbitrator.

The learned counsel appearing for the State, on the other hand, ''submitted that where on the face of it, a claim is grossly barred by time, the Court need not refer the matter to Arbitrator. The learned counsel has relied upon the decisions reported in {1992) 3 Scc 608 (S.Rajan v. State of Kerala and Anr.) and Union of India Vs. M/s. Momin Construction Company, in support of such contention.

It is true that ordinarily the question of the claim being bared by limitation should be left to the Arbitrator. However, as has been" observed in the two decisions of the Supreme Court relied upon by the leanred counsel for the State, where the claim itself on the face of it is barred by limitation, the matter ned not be referred to Arbitrator. In the present case, it is evident that the cause of action for the petitioner arose more than a decade back. It would be a travesty of justice to rake up such old and stale claim by taking advantage of some provision contained in the new Act. Since the claim of the petitioner appears to be grossly barred by time, I do not consider it to be a fit case where the matter should be referred to an Arbitrator.

The M.J.C. is accordingly dismissed. There will be no order as to costs.