Genetic Construction Pvt. Ltd. vs Krishilok Co-operative Group Housing Society Ltd.

Hemant Gupta, J.—The Petitioner has invoked the jurisdiction of this Court u/s 11 of the Arbitration and Conciliation Act, 1996 (for short ''the Act'') for appointment of an Arbitrator in respect of the disputes arising out an Agreement dated 23.05.2004. Vide the aforesaid Agreement, the Petitioner was awarded work for construction of 50 Dwelling Units of the Respondent-Society at approximate cost of Rs. 2.10 crores.

As per the Petitioner, it completed the work on 16.02.2005 with a certificate issued by Shri Munish Verma, Architect of the Society. The Petitioner submitted final bill amounting to Rs. 34,39,495/- , but on 08.06.2007, the Respondent sought to recover an amount of Rs. 29,88,797/- from the Petitioner on account of poor workmanship of construction of flats and that the Respondent has failed to appoint an Arbitrator to settle the disputes between the parties even though notice to this effect was issued by the Petitioner.

In response to the notice of the petition, the Respondent has filed its reply, wherein it was, inter alia, pleaded that the final bill dated 04.08.2005 was received on 21.08.2005. The duly verified bill was sent to the Architect of the Society on 10.10.2005 for final certification. The Architect has issued the certified final bill on 30.10.2005. A copy of the bill was sent to the Petitioner vide letter dated 17.11.2005 (Annexure R/2). In the said communication, it was alleged that an excess amount of Rs. 7,93,952 has been made to the Petitioner and after adjusting the amount of security, an excess amount of Rs. 1,35,498/- is liable to be refunded by the Petitioner to the society.

Learned Counsel for the Petitioner has vehemently argued that even though the Petitioner has served a notice for referring the disputes to an Arbitrator on 20.10.2007, still the Respondent has not appointed an Arbitrator in terms of Clause 37 of the Agreement, therefore, this Court should appoint an Arbitrator to adjudicate upon the disputes between the parties.

Mr. Manuja, learned Counsel for the Respondents has submitted that in terms of Clause 37 of the Agreement, disputes could be raised by the Petitioner within 28 days of the communication of the rejection of the claim of the Petitioner. Such claim was rejected on 17.11.2005. It is contended that even from the communication dated 08.06.2007 referred to by the Petitioner, the disputes have been sought to be raised after 28 days, therefore, the present petition for appointment of an Arbitrator is barred by limitation.

Having heard learned Counsel for the parties, I am of the opinion that the disputes in respect of the fact; whether the claim of the Petitioner is within the period of limitation, is also a disputed question of fact, which is required to be adjudicated upon by an Arbitrator. As per the Agreement between the parties, all disputes and differences even after the completion of the work shall be referred to and settled by the Architects of the Society, who shall state their decision in writing. It is the said decision, which can be disputed by either of the parties within 28 days. Though the Petitioner has submitted final bill on 04.08.2005, but whether the communications dated 17.11.2005 and 08.06.2007, falls within the first part of Clause 37 of the Agreement, requires to be adjudicated upon by an Arbitrator. It is so held by Hon''ble Supreme Court in Shree Ram Mills Ltd. Vs. Utility Premises (P) Ltd., that dispute regarding period of limitation is also a dispute which can be referred for decision by an Arbitrator.

In view of the above, all the disputes between the parties including that whether the claim of the Petitioner is within the period of limitation or not, are referred for adjudication through an Arbitrator. Shri M.K. Bansal, District Judge (Retd.), resident of 175, Hope Apartment, Jharsa Road, Gurgaon, is appointed as an Arbitrator to adjudicate upon all the disputes arising between the parties. The Arbitrator shall be entitled to charge fee not exceeding Rs. 11,000/- per hearing and for more than 10 hearings apart from expenses of Rs. 25,000/-.