LexUNION OF INDIA & ANR. versus L.K. AHUJA & CO.
Open in Lexace · Ask the AI about this caseJudgment (excerpt)
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A
UNION OF INDIA & ANR.
v.
L.K. AHUJA & CO.
APRIL 5, 1988
B
A
[SABYASACHI MUKHARJI AND S. RANGANATIIAN, JJ.)
Arbitration Act, 1940-Whether application for appointment of
Arbitrator under Section 20-0f-Is barred by limitation-Whether the
trial Court is right in dismissing that application as such.
'f:
c
Four agreements were entered into between the respondent and
the appellant Union of India through the Executive Engineer, Northern
Railway, followed by a supplementary agreement. All the four con-
tracts were executed and completed by the respondent on diverse dates.
The respondent accepted four final bills and gave no-claim declaration
D in respect of the four contracts. Thereafter, the respondent wrote to the
Additional Chief Engineer, R.E.N.R., that Rs.1,91,137 were due on
account of work executed and asked for a reference of the dispute to the
Arbitrator. A reply was sent to the respondent that there was no dispute
between the parties and no question of appointment of any Arbitrator
)..
arose. The respondent then filed an application in the Court of Civil
E Judge for the appointment of an Arbitrator under Section 20 of the
Arbitration Act, 1940 ('the Act'). The application was dismissed as
being barred by limitation. An appeal from the decision of Civil Judge
was allowed by the High Court. The appellants then moved this Court
for relief by this appeal.
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F
Dismissing the appeal, the Court,
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HELD: The sole question involved in this appeal was whether the
Civil Judge was right in dismissing the application and whether the
application under section 20 was within time. l404H)
G
It is well-settled in view of the decision of this Court in Kera/a
State Electricity Board, Trivendrum v. T.P.K.K. Amsom and Besom,
,l
Kera/a, [1977] l SCR 996 that Article 137 would apply to any petition or
application filed under any Act in a Civil Court. The words "any other
application", this Court held under Article 137, cannot be read on the
principle of ejusdem generis to be applications under the Civil Proce-
H
du re Code other than those mentioned in Part Iof the third division. l405A-B I
402
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/
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U.0.1. v. L.K. AHUJA
403
There are two aspects of the matte. One is whether the claim
made in the arbitration is barred by limitation under the relevant provi-
sions of the limitation Act, and secondly, whether the claim made for
application under section 20 is barred. To be a valid claim for reference
under section 20 of the Arbitration Act, 1940, it is necessary that there
should be an arbitration agreement and secondly, differences must
arise to which the agreement in question applied, and thirdly, that must
be within time as stipulated in section 20 of the Act. In this case, there
was an arbitration agreement as found by the High Court, covering the
disputes. It was also obvious that differences had existed. There was
assertion of claim and denial of it. As such, the dispute was liable to be
referred to arbitration in terms of the agreements between the parties.
The question was whether there was a valid claim under section 20 of
the Act to be referred iu accordance with law. [407C-E, G-H]
Jn view of the well-settled principles, it would be entirely wrong to
mix up the two aspects, namely, whether there was any valid claim for
reference under Section 20 of the Act and, secondly, whether the claim
to be adjudicated by the arbitrator was barred by lapse of time. The
second is a matter which the arbitrator would decide unless on admitted
facts a claim is found at the time of making an order under Section 20 of
A
B
c
D
the Act, to be barred by time. To be entitled to ask for a reference under
section 20 of the Act, there must be entitlement to money and a differ-
ence or a dispute in respect of the same. It is true that on completion of E
work the right to get payment would normally arise and it is also true
that on settlement of the final bill, the right to get further payment gets
weakened but the claim subsists, and whether it does subsist.is a matter
which is arbitrable. In this case, the claim for reference was made
within three years commencing from April 16, 1976, and the applica-
tion was filed on December 18, 1976. [408A-D I
F
The High Court was right in this case. See in this connection the
observations of this Court in Major (Retd.) Inder Singh Rekhi v.
D.D.A., [1988] 3SCR35J. The appeal failed_. [4080]
Kera/a State Electricity Board, TrivExcerpt shown. Read the full judgment & AI analysis in Lexace.