State of J&K vs Adil Construction Co.

Mr. Ali Mohammad Magrey, J. - By the instant writ petition petitioner, State of J&K, seeks writ of certiorari to the effect that i) Arbitral

Award dated 17th November, 2012, ii) the order dated 30th December, 2013, passed on an application filed in terms of Section 34 and iii) the

order dated 30th December, 2013, passed on an application filed in terms of Order 21, Rule 11 of the Code of Civil Procedure, passed by

learned District Judge, Srinagar, be quashed.

The case of the petitioner, in nutshell, is that a dispute, in respect of a work executed pursuant to allotment of contract in favour of respondent,

arose vis-a-vis the rates and the matter was sent to Arbitrator for arbitral proceedings.

It is stated that learned Arbitrator passed an Award on 17th November, 2012, for short 'impugned award'; holding respondent entitled to 150%

above the allotted rates for item no. 1 to 22 of the NIT and also to 150% above the rates for mechanical transportation of material from advertised

source to the actual dumping area.

The impugned award is stated to have been objected to by the petitioners by filing objections before this Court after the Award was sent by the

learned Arbitrator to it.

This Court, it is averred, in terms of Order dated 16th August, 2013, disposed of an application bearing AA no. 6/2009 observing that no

further proceedings on the objections can be undertaken as the power of appointment of independent Arbitrator stands since exhausted. It was

further observed therein that Executive Engineer can take steps in accordance with law by filing a separate application.

It is further averred that pursuant to order dated 16th August, 2013, petitioner filed a petition under and in terms of Section 34 of the Arbitration

and Conciliation Act before the Principal District Judge, Srinagar, seeking setting aside of the impugned award. The petition was accompanied by

an application seeking condonation of delay.

The learned District Judge, Srinagar, in terms of its order dated 30th December, 2013, dismissed the application for condonation of delay and in

consequence whereof dismissed the petition filed in terms of Section 34 of Arbitration and Conciliation Act.

Now through the instant petition, petitioner seeks quashment of both the impugned award as also the order dated 30th December, 2013, on the

ground that the order passed by the learned District Judge, is devoid of merit; has been passed without application of mind; is bereft of reasons; is

whimsical.

Respondent, upon notice, appeared and raised a preliminary objection as regards the maintainability of the writ petition vis-a-vis the

competence of Executive Engineer to file the instant petition on behalf of State.

Learned counsel for petitioner, in the said background, in terms of order dated 7th August, 2015, was asked to justify the maintainability of the

writ petition and this is how the matter was heard.

Learned counsel for petitioner satisfied the court as regards the competence of Executive Engineer to file the writ petition on behalf of State,

for, he submits that it is the Executive Engineer only who is involved in the issue right through. He submits that the NIT has been issued by him,

contract is allotted by him, Arbitration Award is against him; the application before this Court in the earlier round is filed on his behalf, therefore, it

is only the Executive Engineer who is, in the circumstances, competent to file a writ petition on behalf of State. He submits that it has been a

consistent view of the Courts of Country that technicality shall not be preferred over substantial justice. He submits that even if it is assumed that

Executive Engineer is not competent to file the writ petition on behalf of State, still the Court has to see that large public interest while adjudicating

upon the merits of the case. And in the instant case the public exchequer is sought to be overburdened by the petitioner through the impugned

award and this Court has to interfere to save the State exchequer from getting unnecessarily drained. Mr. Q.R. Shamus, learned Deputy Advocate

General, though supplied reasons for maintainability of the writ petition has finally made a submission with reference to treating the writ petition as

Appeal in terms of Section 37 of the Arbitration and Conciliation Act.

Subsequently, with the consensus of learned counsel for parties, the writ petition was finally heard.

Learned counsel for petitioner submits that the impugned order dated 30th December, 2013, is bad in law, for, the learned District Judge has

held that principle of limitation is not applicable to the Arbitration and Conciliation Act, therefore, dismissed the application.

He further submits that law on this score is well settled and the petitioner cannot be punished for having chosen a wrong forum. Elaborating his

contention, he submits that petitioner instead of approaching the District Court with the objections/ arbitration application, has approached this

court under the guise that learned Arbitrator has submitted his Award to this Court. He submits that since the application/ objections were

disposed of by this Court on 16th August, 2013 affording liberty to petitioner to file a separate application, therefore, it was not open for the

District Judge to seek further justification of the delay caused in approaching it. Therefore, he would pray that since the State Exchequer is sought

to be overburdened with the sum that is more than the contract amount, the writ petition may be allowed and impugned award as also the order

dated 30th December, 2013, be set-aside. In support of his submissions learned counsel for petitioner referred to and relied upon a judgment of

the Apex Court reported as (2006) 6 SCC 239 delivered in case titled State of Goa v. M/s Western Builders.

On the other hand Mr. Z.A. Qureshi, learned senior counsel for respondent, submits that there is no scope for applying the principle of

limitation on the arbitration proceedings, therefore, the order passed by the learned District Judge is well reasoned and needs no interference. In

support of his submissions learned senior counsel referred to and relied upon a Division Bench Judgment of this Court reported as 2003 (3) JKJ

305 [HC] delivered in case titled State of J&Kand Anr., v. Gh. Nabi Bhat and Ors. He would, therefore, pray that writ petition be

dismissed with costs.

Considered the submissions made and went through the entire material placed on record.

Court while dealing with the issue having bearing on the public exchequer cannot remain a silent spectator in ignoring the decision on merits.

True that the writ petition is not the remedy available to the petitioner, but a remedy of appeal is very much available to the petitioner to challenge

to the impugned order. Therefore, keeping in view the interest of public exchequer this court has no hesitation in treating the writ petition as Appeal

and is treated as such.

The only issue that is now required to be determined is, as to whether the impugned order dated 30th December, 2013, is based on the sound

principles of law or not i.e. whether the principle of limitation is or can be made applicable to the Arbitration proceedings as well?

The principle of limitation is very much applicable to the Arbitration application and the submission made by learned counsel for petitioner in

this behalf carries weight. The law on the point is also no more res integra. The Hon'ble Apex Court in a case reported as (2006) 4 SCC 658

titled Hari Shankar Singhania and others v. Gaur Hari Singhania and others has in unambiguous terms held that principles of Limitation Act

are very much applicable in the arbitration proceedings.

In another judgment reported as (2006) 6 SCC 239 delivered in case titled State of Goa v. M/s Western Builders the Hon'ble Apex

Court has quite clearly made applicable the Section 14 of Limitation Act to the Arbitration and Conciliation Act, 1996. It is held by the Hon'ble

Apex Court as under:-

If two acts can be read harmoniously without doing violation to the words used therein, then there is no prohibition in doing so. As the result of the

above discussion we are of the opinion that the view taken by the court below excluding the applicability of Section 14 in this proceeding is not

correct. We hold that section 14 of the Limitation Act, 1963 is applicable in the Arbitration and Conciliation Act, 1996.

Having regard to what has been said hereinbefore I hold that Section 14 of the Limitation Act, 1963 is applicable in the Arbitration and

Conciliation Act, 1996. The order impugned dated 30th December, 2013 is set-aside; the delay that has accrued in filing the petition before the

District Court is condoned. The court below/District Court is directed to decide the arbitration petition on merits after hearing both the parties. The

appeal, therefore, is allowed.

There shall be no order as to costs.