- (1.) THIS is an application filed u/s 11(5) and 11(6) of the Arbitration and Conciliation Act, 1996 (for short 'the Act of 1996') for appointment of the Arbitrator.
(2.) BRIEF facts of this case are that an Agreement No.1/95-96 dated 13.10.1995 was executed between the parties for laying, jointing, etc. 1100 mm dia PSCC pipeline between treatment Plant Dharnasar to Sardarshahar under Package PL-01 NIT No.08/94-95 Work Order No.CE/PMC/TECH/F.(32)95-96/1516-29 dated 06.09.1995. A dispute arose between the parties with regard to the deduction of a total amount of Rs.54,69,959/- by the Executive Engineer from IInd price variation bil vide voucher / dated No.14/11.7.2003 Rs.35,89,383/- and from security deposit voucher / date 7/09.02.2004 Rs.18,80.576/-, totalling to Rs.54.69,959/-, on the basis of Audit Report. There is no dispute between the parties that this Court has the territorial jurisdiction and further that both ? the Applicant and the Non-applicants ? are parties to the Agreement No.1/95-96 dated 13.10.1995. Counsel for the Applicant submits that the audit report simply can not be made the basis for deduction of the amount and in support of the said submission, counsel for the Applicant cited the judgment of the Supreme Court in State of Bihar V. Industrial Corporation (2003) 11 SCC 465 Para 18). Counsel further submits that the Applicant had given notice dated 21.1.2008(Anx.3) for arbitration. On the issue of limitation, counsel for the Applicant placed reliance on the judgment of the Supreme Court in National Insurance Co. Ltd. V. Boghara Polyfab (P) Ltd. (2009) 1 SCC 267) (Para 22) based on the 7 Judges' larger constitution Bench judgment in SBP & Co. V. Patel Engineering Ltd. (2005) 8 SCC 618). Counsel for the Non-applicants submits that the claim is barred by time, therefore, the same is required to be decided by this Court.
(3.) I have gone through record of the arbitration application and further considered the aforesaid submissions of counsel for the parties and the relevant paras of the aforesaid judgments of the Supreme Court. Before proceeding further, it is necessary to quote Para 18 of State of Bihar V. Industrial Corporation (2003) 11 SCC 465) and para 22 of National Insurance Co. Ltd. V. Boghara Polyfab (P) Ltd. (2009) 1 SCC 267). The same are as under: Para 18 of State of Bihar V. Industrial Corporation (2003) 11 SCC 465 "18. The statutory authorities also could not have sought to levy penalty relying on or on the basis of the audit report only. They were required to apply their own independent mind for the purpose of finding out as to whether the respondents in law had committed any breach of the terms and conditions of the licence or the provisions of the 1947 or 1915 Act so as to make them liable for levy of penalty. The authorities concerned acting in terms of the statutory provisions, therefore, without any further investigation could not have acted mechanically on the audit report." (emphasis supplied) Para 22 of National Insurance Co. Ltd. V. Boghara Polyfab (P) Ltd. (2009) 1 SCC 267) "22. Where the intervention of the court is sought for appointment of an Arbitral Tribunal under Section 11, the duty of the Chief Justice or his designate is defined in SBP & Co. (2005) 8 SCC 618. This Court identified and segregated the preliminary issues that may arise for consideration in an application under Section 11 of the Act into three categories, that is, (i) issues which the Chief Justice or his designate is bound to decide; (ii) issues which he can also decide, that is, issues which he may choose to decide; and (iii) issues which should be left to the Arbitral Tribunal to decide. "22.1. The issues (first category) which the Chief Justice/his designate will have to decide are: (a) Whether the party making the application has approached the appropriate High Court. (b) Whether there is an arbitration agreement and whether the party who has applied under Section 11 of the Act, is a party to such an agreement. 22.2 The issues (second category) which the Chief Justice/his designate may choose to decide (or leave them to the decision of the Arbitral Tribunal) are: (a) Whether the claim is a dead (long-barred) claim or a live claim. (b) Whether the parties have concluded the contract/transaction by recording satisfaction of their mutual rights and obligation or by receiving the final payment without objection. 22.3 The issues (third category) which the Chief Justice/his designate should leave exclusively to the Arbitral Tribunal are: (i) Whether a claim made falls within the arbitration clause (as for example, a matter which is reserved for final decision of a departmental authority and excepted or excluded from arbitration). (ii) Merits or any claim involved in the arbitration." (emphasis supplied) According to Clause 22.2 of the judgment of the Supreme Court in National Insurance Co. Ltd. V.Boghara Polyfab (P) Ltd. (supra), it is discretionary for the Chief Justice / his designate to decide the issue of limitation, therefore, I leave the issue of limitation to the decision of the Arbitrator along with other objections, if any raised by the parties. ;