HASAN, J. - (1.) THIS is an appeal under Section 39 of the Arbitration Act, 1940, (in short, the Act) against an order of the District Judge, Jaipur City passed on 1. 11. 1980, rejecting the appellant's application moved under Section 20 of the Act.
(2.) ADMITTED facts are that, the respondent-Railway invited tenders for construction works at Dabla; for the appellant- Company tendered its offer which was accepted by the respondent-Railway and consequently, an agreement bearing No. C & S/exen/c/jp/ds/3/ dated the 7/3/1973, was entered into between the appellant and the respondent for the construction of following structures : (i) 8 Units type II Quarters; (ii) 12 Units type I Quarters (since increased to 16); (iii) Approach Road for staff quarters; (iv) External sanitary and drainage arrangements; (v) Three signalling cabins including cabin near K. 220 (long afterwards abandoned on railway account); (iv) ELF's Duty room (long afterwards abandoned on railway account ). As admitted by the respondent in reply, the required work was completed by the appellant. It had been averred in the application moved under Section 20 of the Act that the appellant Company sent its draft bill alongwith letter dated the 19. 01. 1974 to the respondent-Railway, for a sum of Rs. 30827. 80 p. , only for the scheduled items carried out by the appellant reserving its right of claim for expenses-that were incurred on railway account incidental to the portion of main work abandoned on railway account after efflux of time, besides Rs. 26,000/- odd of the Company's security deposit having been blocked with the Railway. The appellant Company asserted that no correct measurements and assessment of the work duly done by the appellant-Company, which were required for the purpose of making full payments, so also to prepare final bill, have been made by the respondent-Railway despite persistent requests, nor any record thereof had properly been maintained by the respondent Railway, nor any heed was paid to the Company's demand to do so. The appellant-Company, further asserted that on account of lack of proper measurements and assessment of the works duly done by it, it resulted in making payment of an amount far less then what was actually due to the appellant Company, and that being so, it submitted itemwise joint measurements to the Railway authority alongwith bills for payment under its letter dated the 19. 01. 1974. The appellant-Company then asserted that the Railway authority did not prepare correct final bill based on actual measurements at site and they prepared final bill worth Rs. 11,885. 60 p. only, as against draft bill of Rs. 30,827. 40p. for the items worked, without recording complete measurements of the works done. No doubt, the said amount of final bill was accepted by the appellant-Company but, under protest reserving all its rights for further claims and disputes. Thereafter, the appellant Company presented its list of under payments to the railway authority under its letter dated the 11/1/1975, and that apart, followed by its reminders. But , ultimately, the appellant-Company presented its claim to the Chief Engineer (S&c), Western Railway, Bombay through his advocate's letter dated the 31/1/1976 but it too was rejected under railway authority's letter N. WC/401/3/40/1/12 dated the 10/2/1976. Then, the appellant-Company through its Advocate sent a registered notice dated the 23/3/1976, under Section 80 of the Indian Railways Act and the Code of Civil Procedure, demanding a reference of all the questions in dispute and differences, to the arbitration in accordance with condition of the contract. Such a demand was turned down by the respondent authority for referring the disputes to the arbitration, vide letter dt. the 14. 04. 1976. Again, the appellant Company persuaded the matter with the respondent for reference of the disputes & differences to the arbitration under clause 63 of the General Conditions of Contract, vide letters dated 5. 3. 77, 30. 8. 77, 16. 03. 1978 and 27. 10. 1978. Here again, the appellant Company failed in its efforts while the Railway authority communicated the appellant Company under its letter dated the 31. 03. 1978, that there was no case for reference to arbitration. The last effort was resorted to persuade again the matter of reference to the arbitration, by the appellant-Company but it also resulted in vain under communication dated the 8. 01. 1979 of the Railway authority. Therefore, finally, the appellant-Company presented its application under Section 20 of the Act before the District Judge, Jaipur City Jaipur. In reply to the application of the appellant-Company, the respondent Railway reiterating its averments made by it in its communication sent to the appellant-Company, contended that the payment of final bill has been made in full and final; that no amount stood due against the Railway nor any dispute remained to be decided nor was any controversy so as to refer the matter to the arbitration. It had also been pleaded in the reply that the application under Section 20 of the Act was time barred.
(3.) TWO issues were framed (1) Whether the appellant-Company has issued 'no dues certificate under protest, and if so, what is its effect? (2) Whether the application is within time? (3) What relief? After hearing both the parties, the subordinate court vide its order dated the 1/11/1980 rejected the appellant-Company's application under Section 20 of the Act holding it to be barred by limitation as contained in Art. 137 of the Indian Limitation Act and further holding that the cause of action for filing such an application had arisen on 28. 9. 1974 when the payment of the said final bill was received by it. Issue No. 1 was decided against the appellant-Company. Hence this appeal.;