Shree Joints International (P) Ltd. vs Ghaziabad Development Authority

Bharati Sapru, J.—Heard Sri R.C. Singh learned Counsel for the applicant and Sri Ashwani Kumar Misra learned Counsel appearing on behalf of the respondent Ghaziabad Development Authority (hereinafter referred as GDA).

This application has been moved by the applicant M/s. Shree Joints International (P) Ltd. with a prayer that an arbitrator be appointed to settle the dispute between the applicant and the respondent GDA.

The facts as stated in the application supported with the affidavit are that the applicant and the GDA entered into a memorandum of understanding for construction of ten storied two room apartments Block No. 10 and 11 as Alakhnanda and Bhagirathi at Vaishali Sahibabad-Ghaziabad and another related pocket development work.

The parties entered into a contract No. 332/AO/EE-7/89-90 dated 12.2.1990. The clause No. 36 of the contract contains the arbitration clause which is quoted hereinbelow:

Except where otherwise provided in the contract all questions and disputes relating to the meaning of the specifications de: designs, drawings and instructions herein mentioned and as to the quality of workmanship or materials used on the work or as to any other question, claim, right matter or thing whatsoever, in any way arising out of or relating to the contract, designs, drawings specification, estimates, instructions, orders or these conditions or otherwise concerning the works, or the execution of failure to execute the same whether arising during the progress of the work or after the completion of abandonment thereof shall be referred to the sole arbitrator of the Vice Chairman of the Authority or if he so pleases any person appointed by him. It will be no objection to any appointment that the arbitrator so appointed is a Government servant, that he had to deal with matters to which the contract relates and that in the course of his duties as Government servant or Vice Chairman he had expressed views on all or any of the matters in dispute or difference. In the event of arbitrator to whom the matter is originally referred being transferred or vacating his office or being unable to act for any such reason the Vice Chairman at the time of such transfer vacation of office or inability to act, shall appoint another person to act as arbitrator in accordance with the terms of the contract. Such person shall be entitled to proceed with reference from the stage at which it was left by his predecessor it is also a term of this contract that no person other than a person appointed by the Vice Chairman or the Vice Chairman himself should act as arbitrator and if for any reason that is not possible, the matter is not to be referred to arbitration at all.

The arbitrator may from time to time with the consent of the parties enlarge the time for making and publishing the award.

The contract was entered into on 12.2.1990 and was to be completed within a period of 18 months expiring on 14.6.1991.

It is stated in the affidavit that the work could not be completed for reasons that the GDA delayed in giving supplies of the materials by making changes in designs and various other reasons which are enumerated in para 8 of the affidavit.

The other reasons are also stated in the affidavit for delay in completion of work and thereafter it is finally stated in para 14 of the affidavit that the work which was delayed from time to time, was completed on 13.10.1996 and as such the contract was prolonged for 5 years and 4 months.

Thereafter it is once again stated in the para 16 of the affidavit that the work was completed in October, 1996 and finally in para 20, it is stated by the applicant that they have submitted 27th running bills in the year 2001.

From the facts as stated in the affidavit, it is the claim of the applicant that the work had continued on one reason or the other. They have tried to show that they have some kind of running account with the GDA.

In para 27 of the affidavit, it is stated that because the GDA did not pay heed to the representations and request of the applicant, they finally invoked the arbitration clause No. 36 by their application dated 14.12.2006 seeking appointment of the arbitrator. A copy of the application for appointment of the arbitrator as moved by the applicant has been appended as Annexure 1 to the affidavit, which reveals all the facts.

The date of contract as mentioned in the application dated 14.12.2006 shows 12.2.1990; the date of start of the work is 15.12.1989. The stipulated date of completion of work is 14.6.1991. The actual date of completion of work is 13.10.1996. The total number of claim made is 12. The date of intimation of final bill not communicated. The date for payment of final bill shows as not applicable and the amount of final bill as shown in item No. 15 is not applicable.

The facts as revealed in this application for appointment of the arbitrator itself makes abundantly clear that this application for appointment of arbitrator has been moved as an after-thought. It is a highly belated application. The work was to be completed by June, 1991. The date of completion of the work as noted in the application is 13.10.1996. Thus it has taken the applicant ten years to move to the respondent GDA to appoint an arbitrator. It is no doubt a highly belated claim.

This fact is also substantiated from the facts that the applicant had sent a letter to the GDA dated 18.12.2006, i.e. four days after the letter dated 14.12.2006 by which a request had been made to appoint arbitrator by which it has tried to cover up the lacuna of the submission of the final bill. The letter dated 18.12.2006 is also on record as Annexure 3 to the affidavit. This letter also however records that the work was completed on 13.10.1996.

Learned Counsel for the applicant has argued that there was a dispute which was subsisting right upto 2006 on account of the fact that no bill had been placed by the applicant before the respondent. For this purpose, he has relied on decision of the Hon''ble Supreme Court reported in the case of Chairman and M.D., N.T.P.C. Ltd. Vs. Reshmi Constructions, Builders and Contractors, . The facts of the present case are distinguishable from the decision relied on. In that case, a final bill was submitted under protest and thereafter the claimant had submitted yet another bill and there was no time loss in doing so. In the present case, the applicant has allowed 15 years to pass and has also accepted the fact that the contract was completed in the year 1996, even if the contract was deemed to be stretched upto the year 1996.

Learned Counsel for the applicant has also relied on another decision of the Hon''ble Supreme Court rendered in the case of Ambica Construction v. Union of India reported in (2006) 13 SCC 475. This is also distinguishable on facts.

Learned Counsel appearing for the GDA has argued that the application moved by the applicant is nothing but a stale claim, which is being raised almost 15 years and there is no requirement to appoint arbitrator in such a case as all payments have already been made by the GDA. He has argued that the claims raised in the letter dated 18.12.2006 are vague claims and have only been included for the purpose of curing the delay and to cover up the limitation.

Having heard learned Counsel for both sides and having perused the material on record, it is abundantly clear that this application has been moved after more than ten years from the date of finalisation of the construction and is nothing but a stale claim. The very purpose of the Arbitration Act is to give speedy and summary redressal to people who wish to settle their claim out of the court and not to extend limitation to stale and bogus claims which are no longer actionable claims. The submissions made by learned Counsel for the respondent have strength and are accepted by this Court.

The application is without merit and is, accordingly, dismissed. No costs.