- (1.) This arbitration application is arising out of agreement dated 31.3.2003 (Anx.2), which is to be governed by the General Condition of Contract issued by the Engineering Department of Western Railway, containing arbitration Clause 64.
(2.) Counsel for the applicant submits that the applicant deals with many types of projects in various matters with different government / non government organizations across the country and the applicant company has executed very effectively, satisfactorily and successfully such projects. In response of tender notice issued by the Chief (S&T) Engineer (Construction), North-Western Railway, Jaipur, the applicant accepted the work of supply of 4qd cable, way station, equipment, gate telephones, emergency communication boxes and telephone etc. and trenching laying jointing, back filling, termination along with the installation and commissioning of the HQ control and way station equipments, gate phones, emergency posts etc. for providing communication on 4qd cable in Jaipur Madar section of Jaipur Division of the North Western Railway, in respect of which, agreement was executed on 31.03.2003 between the parties. In the said agreement, the conditions with regard to the payment of final bill as well as Arbitration Clause 64 exists. The aforesaid work was executed by the Applicant satisfactorily but at the time of making payment of the final bill, the non applicants insisted for no claim certificate and after submission of the same, the non applicants passed the final bill when the Applicant came to know that the non applicants have deducted Rs.10,55,435.00 as liquidated damages. The Applicant gave representation and also invoked arbitration Clause 64 as envisaged in the agreement but the dispute was not resolved as per Clause 64. Counsel further submits that there is no dispute that this Court has territorial jurisdiction to decide the present application and further, there is also no dispute that the applicant is a party to the said agreement, therefore, as per first category referred in National Insurance Co. Ltd V. Boghara Polyfab (P) Ltd., 2009 1 SCC 267, para 22, the applicant is entitled to the appointment of Arbitrator. The objections of the Non Applicant taken in the reply are of second category and third category, therefore, the same have been left to be decided by the Arbitrator.
(3.) Counsel for the non-applicant has not disputed the territorial jurisdiction of this Court to entertain the arbitration application and further has also not disputed the fact that the Applicant is a party to the arbitration agreement as well as existence of Clause 64 of the General Conditions of Contract. Counsel has also not disputed the receipt of representation / notice given by the Applicant. However, he has raised the preliminary objection that the Applicant submitted the no claim certificate before passing of the final bill, which has been annexed as Annexure R-7 dated 10.4.2006 and the payment of the said final bill was accepted by him on 31.8.2006, therefore, as per Clause 43(2) of the General Conditions of Contract, since the contractor has filed no claim certificate in favour of the non-applicant after the works are finally measured, the Applicant is debarred from disputing the correctness of the items covered by the no claim certificate and demanding reference to the Arbitrator. On account of the said Clause 43(2), the Applicant is estopped from raising the said claim. In support of the aforesaid contention, counsel for the non-applicant has placed reliance on the judgment of the Supreme Court in Union of India & Ors. V. Onkar Nath Bhalla & Sons, 2009 2 DNJ 482) (2 learned Judges' Bench), paras 6, 7, 9, 10 and 11. Counsel for the non applicant further submits that in case this Court thinks that the present case has to be referred to the Arbitrator,then it may be referred to the Railway authority as per Clause 64 of the General Conditions of Contract.;