Vishram Varu & Co vs Union of India, represented by the General Manager, South Eastern Railway, Kolkata

Vishram Varu & Co vs Union of India, represented by the General Manager, South Eastern Railway, Kolkata

Landmark Cases of India / सुप्रीम कोर्ट के ऐतिहासिक फैसले

NON-REPORTABLE

IN THE SUPREME COURT OF INDIA

CIVIL APPELLATE JURISDICTION

CIVIL APPEAL NO. 2964 OF 2022

(Arising from SLP(Civil) No. 6386/2022)

Vishram Varu & Co. …Appellant

Versus

Union of India, represented by the

General Manager, South Eastern Railway, Kolkata …Respondent

J U D G M E N T

M.R. SHAH, J.

1. Feeling aggrieved and dissatisfied with the impugned order dated

19.03.2021 passed by the Calcutta High Court in Arbitration Petition No.

748/2019, by which the High Court has dismissed the said application

under Section 11(6) of the Arbitration and Conciliation Act, 1996

(hereinafter referred to as the ‘1996 Act’), preferred by the appellant

herein, the original applicant has preferred the present appeal.

2. That the appellant herein was issued work order in the year 1982.

That the work was executed in the year 1986. According to the

appellant herein, he executed excess quantity of work beyond the

schedule quantity of work to be done. Therefore, he was entitled to the

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additional amount for the excess quantity of work done. It is the case

on behalf of the appellant that a lot of correspondence was made by the

appellant, however, the amount due and payable with respect to the

excess quantity of work done was not paid. The appellant through letter

dated 31.05.2018 requested the General Manager of South Eastern

Railway to release the amount due or refer the dispute to the arbitrator

under clauses 63 & 64 of General Conditions of Contract (GCC) under

the 1996 Act, however, no action was taken on the said letter.

Thereafter vide letter/communication dated 22.10.2018, again the same

request was made to the General Manager, South Eastern Railway

either to pay the amount which was overdue or refer the dispute to the

arbitrator, which was repeated vide communications dated 11.01.2019

and 11.03.2019. According to the appellant, thereafter the appellant

sent the Statement of Claim which was payable to him as per the work

order dated 7.4.1982 issued by the railway authorities, which was

executed up to 11.05.1986 and the work order dated 15.01.1984, which

was executed up to 26.08.1985. According to him, as per the statement

of claim, the total amount due and payable was Rs. 1,19,46,297/-.

2.1 Thereafter, the appellant sent a legal notice through his advocate

on 31.07.2019 invoking the arbitration clause and seeking appointment

of an arbitrator by the office of the General Manager. However, the

arbitrator was not appointed as per clauses 63 & 64 of GCC. The

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appellant hereafter filed the present Arbitration Petition before the High

Court under Section 11(6) of the 1996 Act and prayed to appoint the

arbitrator to resolve the dispute between the parties. By the impugned

order, the High Court has dismissed the said application on the ground

that the arbitration petition in 2019 is hopelessly barred by limitation.

2.2 Feeling aggrieved and dissatisfied with the impugned order passed

by the High Court dismissing the arbitration petition under Section 11(6)

of the 1996 Act on the ground that it is barred by limitation, the original

applicant has preferred the present appeal.

3. Shri Pijush K. Roy, learned counsel appearing on behalf of the

appellant has vehemently submitted that the High Court has materially

erred in dismissing the arbitration petition under Section 11(6) of the

1996 Act on the ground of limitation.

3.1 It is submitted that from the date of issuing the legal notice

invoking the arbitration clause and after waiting for 30 days and

thereafter when the application under Section 11(6) of the 1996 Act was

made, the same cannot be said to be barred by limitation.

3.2 It is submitted that the cause of action to file the application under

Section 11(6) of the 1996 Act can be said to have arisen after

completion of 30 days of service of legal notice invoking the arbitration

clause and the request to appoint the arbitrator was made. It is therefore

submitted that from the date of issuance of legal notice invoking the

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arbitration clause and after expiry of period of 30 days, the limitation

would start from the date of completion of 30 days from the date of

serving the legal notice invoking the arbitration clause. Heavy reliance is

placed on the decision of this Court in the case of Bharat Sanchar

Nigam Limited v. Nortel Networks India Private Limited, (2021) 5 SCC

738 (paragraphs 14 & 15). Relying upon the aforesaid decision, it is

submitted that as observed and held by this Court, none of the Articles in

the Schedule to the Limitation Act, 1963 provides a time period for filing

an application under Section 11(6) of the 1996 Act and therefore it would

be covered by the residual provision Article 137 of the Limitation Act

which provides the period of limitation of three years from the date when

the right to apply accrues.

3.3 It is submitted that in the present case, right to apply under Section

11(6) of the 1996 Act can be said to have accrued when the legal notice

invoking arbitration clause and the request to appoint the arbitrator by

the General Manager was made and the period of limitation would

commence after 30 days of serving the legal notice invoking the

arbitration clause and making a request to appoint arbitrator.

3.4 Making the above submissions, it is prayed to set aside the

impugned order passed by the High Court.

4. We have heard Shri Pijush K. Roy, learned counsel appearing for

the appellant at length.

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At the outset, it is required to be noted that in the present case,

work order was issued on 7.4.1982 and the work/excess work was

completed in the year 1986. Even as per the statement of claim, the

amount due and payable was under work order dated 7.4.1982, which

was executed up to 11.05.1986 and work order dated 15.01.1984 which

was executed up to 26.8.1985. Therefore, right to claim the amount, due

and payable, if any, can be said to have accrued in the year 1985/1986.

Thereafter, the correspondences under the RTI Act had taken from the

year 2012 onwards. Thereafter, for the first time, the appellant served a

legal notice upon the General Manager, South Eastern Railway on

22.10.2018 requesting either to release the amount which was overdue

or to refer the dispute to the arbitrator under clauses 63 & 64 of GCC

under the 1996 Act. The aforesaid legal notice is thereafter followed by

three to four letters/communications and thereafter the appellant herein

filed the present application under Section 11(6) of the 1996 Act before

the High Court in the year 2019. Merely because for the claim/alleged

dues of 1985/1986, the legal notice calling upon the respondent to pay

the amount due and payable or to refer the dispute to the arbitrator is

made after a period of approximately thirty-two years, the appellant

cannot be permitted to say that the cause of action to file the application

under Section 11(6) of the 1996 Act had accrued in the year 2018/2019.

In the present case, the legal notice has been served and the arbitration

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clause is invoked and request to appoint the arbitrator was made after a

period of approximately thirty-two years from the date of completion of

work. Therefore, the appellant, who served the legal notice invoking the

arbitration clause and requesting for appointment of an arbitrator after a

period of approximately thirty-two years, cannot contend that still his

application under Section 11(6) of the 1996 Act be considered as the

limitation would start from the date of serving the legal notice and after

completion of 30 days from the date of service of the legal notice and

invoking arbitration clause.

5. Now, so far as the reliance placed upon the decision of this Court

in the case of Bharat Sanchar Nigam Limited (supra) is concerned, the

said decision shall not be applicable to the facts of the case on hand. In

the aforesaid decision, the Court was not dealing with such a situation

where the legal notice was issued and served and the arbitration clause

was invoked after a period of thirty-two years. In the aforesaid decision,

this Court has not stated and/or observed and/or held that despite the

fact that the legal notice invoking the arbitration clause and/or request for

referring the dispute to the arbitrator is made after 20/30 years, still the

application under Section 11(6) of the 1996 Act can be entertained.

6. Therefore, in the facts and circumstances of the case, narrated

hereinabove, the High Court has not committed any error in dismissing

the application under Section 11(6) of the 1996 Act on the ground that it

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is hopelessly barred by limitation and is a stale claim. We are in

complete agreement with the view taken by the High Court.

7. In view of the above and for the reasons stated above, the present

appeal fails and the same deserves to be dismissed and is accordingly

dismissed. There shall be no order as to costs.

……………………………….J.

[M.R. SHAH]

NEW DELHI; ……………………………….J.

APRIL 21, 2022. [B.V. NAGARATHNA]

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