Mukul Mudgal, J. - (1.) This is an appeal under Section 37(2)(a) of the Arbitration and Conciliation Act, 1996 (hereinafter referred to as the 'Act') against the order dated 24th July, 2003 by which the Arbitral Tribunal held the claim Nos. 1, 2, 3, 4, 7, 8, 9 and 10 of the respondent/contractor adjudicated by the Disputes Review Expert (hereinafter referred to as the 'DRE') beyond the scope of reference to the arbitration and thus declined to entertain the pleas of the appellant in respect of such claims.
(2.) The facts of the case as follows: The respondent/contractor was awarded on 29th December, 1995 the work of four laning of Km. 8000 to Km 24,000 of Agra-Gwalior Section of NH- 3 in the State of Uttar Pradesh (Contract Package No. NS-4/UP) by the appellant National Highway Authority of India (NHAI). Thereafter disputes arose between the parties. The DRE stood appointed on 8th February, 2001. On 16th October, 2001, 20 disputes were referred to Engineer for his decision by the respondent/contractor under Clause 24.1 which reads as follows- "24.1 If the Contractor believes that a decision taken by the Engineer was either outside the authority given to the Engineer by the Contract or that the decision was wrongly taken, the decision shall be referred to the Dispute Review Expert within 14 days of the Notification of the Engineer's decision."
(3.) The other relevant clauses of the contract between the parties read as follows: "4. Engineer's decision Except where otherwise specifically stated, the Engineer will decide contractual matters between the Employer and the Contractor in the role representing the Employer- 24 Disputes (already extracted) 25. Procedures for disputes 25.1 The Disputes Review Expert shall give a decision in writing within 28 days of the receipt of a notification of a dispute. 25.2. He shall be paid daily at the rate specified in the Contract Data together with reimbursable expenses of the types specified in the Contract Data and the cost shall be divided equally between the Employer and the Contractor, whatever decision is reached by the Disputes Review Expert. Either party may refer a decision of the Disputes Review Expert to an Arbitrator within 28 days of his written decision. If neither party refers the dispute to arbitration within the above 28 days, the Disputes Review Expert's decision will be final and binding. 25.3 The arbitration shall be conducted in accordance with the arbitration procedure stated in the Special Conditions of Contract." Even before the Engineer's decision had been arrived at under Clause 4 extracted hereinabove the respondent referred 20 disputes to DRE. The Engineer in the meanwhile on 6th November, 2001 had given his decision rejecting all the 20 disputes raised by the respondent/contractor. On 27th December, 2002 the DRE gave its decision by allowing claim Nos. 1, 2, 3, 4, 7, 8, 9 and 10 (called 'A' group for convenience) in favour of the respondents/contractor and rejecting the contractor's claim Nos. 5, 11, 12, 13, 15, 17, 19, 20 (called 'B' group). However, the remaining four claims were settled between the parties. On 23rd January, 2003 the respondent/contractor invoked the arbitration clause in respect of dispute Nos. 5, 11, 12, 13, 15, 17, 19, 20 (group 'B') which were rejected by the DRE within the period of 28 days of the DRE's order as stipulated by Clause 25.2. It is not in dispute that within 56 days of the order of DRE and beyond the period of 28 days stipulated in Clause 25.2, the appellant herein also referred the claims of the respondents which were allowed by the DRE for reference to the arbitration. On a plea raised by the respondent about the maintainability of the arbitration in respect of the 'A' group claims, the Arbitral Tribunal held that it did not have any jurisdiction in respect of the claims sought to be referred by the appellant on the 56th days as Clause 25.2 of the contract barred the reference of dispute to the arbitration beyond 28 days. The said order of the Arbitral Tribunal has been challenged before this Court under Section 37 of the Act. Section 37 of the Act reads as follows: "37. Appealable orders.-(1) An appeal shall lie from the following orders (and from no others) to the Court authorised by law to hear appeals from original decrees of the Court passing the order, namely: (a) granting or refusing to grant any measure under Section 9; (b) setting aside or refusing to set aside an arbitral award under Section 34. (2) An appeal shall also lie to a Court from an order of the Arbitral Tribunal- (a) accepting the plea referred to in Sub-section (2) or Sub-section (3) of Section 16; or (b) granting or refusing to grant an interim measure under Section 17. (3) No second appeal shall lie from an order passed in appeal under this section, but nothing in this Section affect or take away any right to appeal to the Supreme Court." The other relevant sections of the Act necessary for disposal of this appeal are Sections 5 and 43(3) which read as follows: "5. Extent of judicial intervention.-Notwithstanding anything contained in any other law for the time being in force, in matters governed by this Part, no judicial authority shall intervene except where so provided in this Part." "43. Limitations -(1)........... (2)............. (3) Where an arbitration agreement to submit future disputes to arbitration provides that any claim to which the agreement applies shall be barred unless some step to commence arbitral proceedings is taken within a time fixed by the agreement, and a dispute arises to which the agreement applies, the Court, if it is of opinion that in the circumstances of the case undue hardship would otherwise be caused, and notwithstanding that the time so fixed has expired, may or such terms, if any, as the justice of the case may require, extend the time for such period as it thinks proper." While there is no pleading in respect of the undue hardship specifically contained in the memo of appeal, the learned Counsel for the appellant has nevertheless relied upon paragraph (m) at Page 7 of the appeal which reads as follows to contend that Court can derive the plea of the undue hardship on the basis of averment contained in the appeal: "(m) For that the impugned order is highly prejudicial and exposes the appellant to the liability of more than Rs. 80 lakh." It is apparent that the pleadings are woefully deficient and do not even take note of the mandate and requirement of Section 43(3) of the new Act. Section 43(3) does not require a mere legal pleading but undue hardship has to be based on factual pleadings which are not properly present there in the present case. In the interest of justice, the Court could have adjourned the matter so as to permit the appellant to amend to the memo of appeal subject to the payment of the cost. This would have unnecessarily delayed the disposal of this matter and the pending arbitration between the parties. However, Mr. Sharma, the learned Counsel for the respondent was gracious enough not to insist upon this resort provided costs were paid to the respondent. In this view of the matter, in the event of appellant's succeeding in this appeal, the costs are required to be imposed on the appellant.;