Jagdish Rai, Contractor vs The Executive Engineer and Others

Hemant Gupta, J.—Present is the petition for appointment of an Arbitrator u/s 11 of the Arbitration and Conciliation Act, 1996 (for short the ''Act'').

Petitioner has sought appointment of an Arbitrator in respect of the dispute arising out of a Contract awarded to the Petitioner for lining of water course 14616/TC Ladwa minor. The agreement was executed on 12.6.1996. It is the case of the Petitioner that the payment was made on 9.1.1999 i.e. after gross delay but without interest. It is the case of the Petitioner that the Petitioner is entitled to interest @ 24% in terms of tender documents. Present petition for appointment of an Arbitrator was filed on 29.10.2007.

Learned Counsel for Respondents has pointed out that the payment of final bill was released on 20.11.1998 and that present petition is barred by limitation.

As per the records, vide the communication 31.8.1994 (Annexure P-4), the claim of the interest @ 24% was denied.

The question which is required to be examined is whether the dispute regarding the claim of interest @ 24% is required to be referred to an Arbitrator in terms of the agreement between the parties or not. Learned Counsel for the Petitioner argues that earlier the Petitioner has filed a petition u/s 8 of the Arbitration and Conciliation Act, 1996 before the Civil Court on 13.4.2000. The same was returned only on 20.9.2000. Therefore, the period spent in such proceedings is required to be excluded while determining the period of limitation u/s 11 of the Act.

The period spent in proceedings before the wrong Forum can be excluded u/s 14 of the Limitation Act, 1963 only if the Petitioner was bona fide and with due diligence prosecuting the proceedings before the wrong Forum. After the Act came into force on 25.1.1996, the power of appointment of an Arbitrator was either before the learned District Judge or this Court depending upon the jurisdictional value of the claim in terms of the scheme framed. However, the judgment of Hon''ble the Supreme Court rendered in S.B.P. and Co. Vs. Patel Engineering Ltd. and Another, , the power of appointment of an Arbitrator came to be vested with the Hon''ble Chief Justice or his delegate.

The petition u/s 8 of the Act was filed by the Petitioner. Such provision bars the judicial authority to proceed with the proceedings other than before the Forum agreed by the parties. Therefore, such application u/s 8 of the Act cannot be said to be bona fide in exercise of the jurisdiction with due diligence availed before the wrong Forum and thus, the period spent by the Petitioner in such proceedings cannot be excluded.

Consequently, present petition is dismissed being barred by limitation.