M/s Vijay Kumar Mahesh Kumar vs Punjab Water Supply and Sewerage Board and others

L. N. Mittal, J.—Contractor-claimant M/s Vijay Kumar Mahesh Kumar Constructing Company, aggrieved by order dated 19.03.2010 (Annexure P-10) passed by respondent no.3 sole Arbitrator, holding the reference to Arbitrator as time barred, has approached this Court by way of instant revision petition filed under Article 227 of the Constitution of India. Petitioner as Contractor executed the works of respondents no.1 and 2. After payment of final bill, disputes arose between the parties. The petitioner referred the disputes to respondent no.3 as sole Arbitrator. Respondent no.3, vide order dated 19.03.2010, held the reference to be time barred because the reference was not made within 60 days of rejection of the claim made by the petitioner Contractor in second running bill and eighth final bill, which were rejected by Engineer-in-charge vide letters dated 21.06.2005 and 03.04.2006.

I have heard learned counsel for the parties and perused the case file.

Counsel for the petitioner contended that as per clause (xiv) of arbitration clause no. 25, reference to arbitration may be made within six months of receiving intimation regarding payment of final bill and in the instant case, final bill was paid on 30.06.2006, and therefore, reference to Arbitrator made on 05.12.2006 i.e. within six months of payment of final bill, is within limitation. It was also argued that curtailed limitation period specified in the agreement is null and void and ineffective because limitation period cannot be curtailed by contract. Reliance in support of this contention has been placed on two judgments of this Court namely M/s Garg Construction Company vs. State of Punjab and another reported as 2010 (2) RCR (Civil) 40 and Narendra Vs. Usha, . On the other hand, counsel for respondents defended the impugned order by submitting that the reference was not made within 60 days of rejection of claims made in second running bill and eighth final bill, as stipulated in clause (ii) and (iv) of arbitration clause no. 25, and therefore, the reference has been rightly held to be time barred.

I have carefully considered the rival contentions.

Final payment of bill was made on 30.06.2006 and according to clause (xiv) of arbitration clause no. 25, the reference could be made within six months thereof and was so made within six months and the reference is, therefore, within limitation. In addition to it, limitation period prescribed by the Limitation Act cannot be curtailed by contract between parties and reference to the Arbitrator can be made even after expiry of agreed time limit, but within limitation period prescribed in the Limitation Act. This view finds support from judgments of this Court in the cases of M/s Garg Construction Company (supra)and Sunil Goyal (supra). No judgment to the contrary has been cited by counsel for the respondents.

For the reasons aforesaid, I find that reference made to Arbitrator is within limitation. Impugned order (Annexure P-10) passed by the Arbitrator is illegal and suffers from jurisdictional error because the Arbitrator refused to exercise jurisdiction which vested in him to adjudicate upon the disputes between the parties. Accordingly, the instant revision petition is allowed. Impugned order (Annexure P-10) passed by respondent no.3 sole Arbitrator is set aside. The matter is remitted to the Arbitrator for adjudication on merits in accordance with law.