MISRA, J. - (1.) THESE three applications have been filed by the applicant M/s. Geo Miller & Company under Section 11 (c) of the Arbitration & Conciliation Act, 1996 (hereinafter shortly referred to as ``the Act of 1996") seeking the order for appointment of an arbitrator in order to adjudicate the disputes between the applicant M/s. Geo Miller & Co. Pvt. Ltd. and the Chairman, Rajasthan Vidyut Utpadan Nigam Ltd.
(2.) IT has been stated by the applicant that the respondent- Rajasthan Vidyut Utpadan Nigam Ltd. had floated a tender for execution of the work known as Water Clarification Plant at KTPS, Stage-I, at Kota and the applicant after having participated in the tender process eventually succeeded in securing an order in its favour for execution of Water Clarification Plant. An agreement, which finally culminated into a contract, was executed between the parties which apart from other clauses, contained clause No. 31 which envisaged an arbitration clause laying down therein specifically that "if at any time a question/dispute/difference whatsoever arose between the purchaser and supplier or in relation to the contract, either party may forthwith give to the other one question (s), dispute or difference and the same shall be referred to the Chairman, Rajasthan State Electricity Board, or any person appointed by him for the purpose of arbitration. " Such a reference was to be referred to the arbitrator within the meaning of the Indian Arbitration Act, 1940. IT was further land down therein that the award of the arbitrator shall be binding on both the parties upon conclusion of such reference. The case of the applicant is that the respondent failed to make the payments due to the applicant and as such a dispute arose between the parties for which the applicant sent a communication No. SSM/arbn/4248 dated 22nd November, 2002 and called upon the respondent to appoint an arbitrator in view of clause 32 for adjudication of the disputes within the stipulated period. It is further stated that the communication was delivered to the office of the respondent personally on 26th November, 2002 and as such the respondent has duly received the said invocation letter for appointment of an arbitrator. In view of the aforesaid facts it was submitted on behalf of the applicant that after receipt of the communication dated 22nd November, 2002 the respondent had the contractual obligation to appoint an arbitrator as per the agreement between the parties within the stipulated period of 30 days which expired on 26th December, 2002. The respondent however, failed to discharge this obligation and hence cause of action arose for the applicant to approach this Hon'ble Court for appointing an arbitrator under Section 11 (c) of the Act of 1996. It was further submitted that the respondent was under an obligation to appoint an arbitrator within the stipulated period in view of Clause 31 of the agreement, but the respondent failed to exercise the jurisdiction vested in it and therefore, after expiry of a period of one month the respondent has lost its right to appoint an arbitrator and therefore, this Court should appoint an arbitrator for which these applications have been filed. On a show cause notice being issue to the respondent, a reply came to be filed by the Rajasthan Vidyut utpadan Nigam Ltd. wherein it has been stated that the contract between the parties had been executed in the year 1979 and the final bill was allegedly raised in the year 1983 which, according to the appellant's own version fell due for payment on expiry of 6 months processing period from the date of handing over i. e. 8-2-1983. Hence, it was contended that the claim as well as the present applications under Section 11 of the Act, 1996 after expiry of three years from the date of alleged communication dated 8-2-1983 is clearly barred by limitation and hence, these applications for appointment of an arbitrator should be rejected. In this context it was further elaborated that the cause of action which is alleged to have arisen as per the applicant's version on 26th December, 2002 is without any basis as the alleged claim of the applicant relating to demand of price of goods supplied and work done upto the year 1982-83 is without any basis and the respondent is not liable to pay any amount to the applicant as no amount is outstanding. It is further stated that the claim cannot be held to have arisen in the year 2002 and if at all the cause of action arose in the year 2002 for the transaction of the year 1982-83 the same is clearly barred by the statutory period of limitation. These, in substance, are the submissions of the respondent before this Court objecting the applications for appointment of an arbitrator. Having tested the contesting claim of the parties to the dispute, in the light of the facts and existing circumstances of the matter, it could be noticed even at a cursory glance that the agreement between the parties had been executed in the year 1979 and even as per the case of the applicant the work had been completed in the year 1983 and if infact there was a dispute between the parties it is not clear as to why the applicant did not take any step for referring the dispute to the chairman, Rajasthan State Electricity Board, Jaipur or any person appointed by him for the purpose which is the specific condition laid down under Clause 31 of the contractual agreement which further states that such a reference to the arbitrator shall be deemed to be a reference within the meaning of Indian Arbitration Act, 1940 and statutory modifications thereof. Thus, if infact a dispute arose between the parties in the year 1983 after completion of the project, the applicant was under an obligation to raise the dispute before the chairman, Rajasthan State Electricity Board, Jaipur which admittedly had not been done and if at all it had been done, the said reference would have been held to have been initiated under the Indian Arbitration Act,1940. As already stated, the applicant did not take any step in the year 1983 as per his own averment, but filed an application for the first time in the year 2002 for appointment of an arbitrator by which time the Arbitration & Conciliation Act, 1996 had already been enacted which also came into force in the year 1996 wherein Section 43 has been incorporated which clearly lays down that the Limitation Act, 1963 shall apply to arbitrations as it applies to proceedings in Court and an arbitration shall be deemed to have commenced on the date referred to in Section 21 of the Act of 1996. Sub-section (3) of Section 43 further envisages that where an arbitration agreement to submit future disputes to arbitration provides that any claim to which the agreement applies shall be barred unless some steps to commence arbitral proceedings is taken within the time fixed by the agreement, and a dispute arises to which the agreement applies and if the Court is of the opinion that in the circumstances of the case undue hardship would otherwise be caused, and notwithstanding the time so fixed has expired, may on such terms, if any, as the justice of the case may require, extend the time for such period as it thinks proper. Section 43 of the Act of 1996 thus clearly lays down that the period of limitation shall apply to arbitration proceeding, but at the same time discretion has been left to the Court to extend such period if a case of gross injustice is noticed by the Court.
(3.) WHILE examining the case of the applicant in the light of Clause 31 of the agreement as also Section 43 of the Act of 1996, it could be noticed that although the applicant as per his own averment had completed the work in the year 1983 it has not been stated as to why he kept mum from the year 1983 upto the year 2002 and why he never raised any claim in regard to any payment which he claims to be due to him and is payable by the respondent-Rajasthan State Electricity Board. If the case of the applicant is decided in the light of the agreement then it was under an obligation to raise the dispute before the Chairman, Rajasthan State Electricity Board, Jaipur and that reference had to be adjudicated within the meaning of earlier Indian Arbitration Act, 1940. But the applicant admittedly had taken no steps in regard to any dispute which could be referred to the Chairman, Rajasthan State Electricity Board in view of Clause 31. The applicant Company from 1983 upto the year 2002 do not appear to have taken any steps raising any dispute which could be construed as commencement of the arbitral proceeding and suddenly at the fag end of the year 2002 sent a communication on 22nd November, 2002 calling upon the respondent to appoint an arbitrator in view of clause 32 of the agreement fro adjudication of the dispute within the stipulated period completely missing that such clause admittedly states that the matter can be referred to the arbitrator only within the meaning of Indian Arbitration Act, 1940. But the applicant ignoring that aspect filed the applicants in the year 2002 under Section 11 (c) of the Act of 1996 which clearly lays down that the Limitation Act, 1963 shall apply to arbitration as it applies to proceedings in Court. Although under sub-section (3) of Section 43 discretion has been left to the Court to extend the time for such period if a grave hardship is noticed by the Court which essentially is the principal underlying Section 5 of the Limitation Act, 1963 due to which applications for condonation of delay are filed and are entertained in case sufficient cause is shown for such condonation yet in the instant case nothing has been stated by the applicant as to why it did not take any steps for reference of a dispute right from 1983 to 2002 nor any plea of hardship has been brought to the notice of this Court as to why such alarmingly long years of delay should be condoned by this Court in absence of any step having been taken by the applicant for initiating the arbitration proceeding. Thus, there was no occasion for this Court to consider as to whether it was a fit case for condoning such unusual delay for appointing an arbitrator. It cannot be ignored that it would be wholly unrealistic and impractical to allow a party to raise a dispute after more than a decade to raise a dispute and urge that an arbitrator be appointed under the Act of 1996 although such dispute even under the agreement had to be raised under the old Indian Arbitration Act, 1940 when the Act of 1996 was not in existence at all. This reflects on the basic requirement of a bonafide nature of dispute which is a condition precedent for appointment of an arbitrator and also compounds the failure and inactivity on the part of the party seeking an order for appointment of an arbitrator for the simple and obvious reason that it does not make out even a case of hardship and injustice to the party which has failed to disclose as to why he did not take any step for appointment of an arbitrator for almost 19 years as in this case the non payment is alleged of the year 1983 whereas the applications for the first time were filed in the year 2002. An inference therefore, is bound to be drawn that the applicant-company has filed these applications merely by way of a gamble in order to try his luck by getting an arbitrator appointed laying down monetary claim after unusually long number of years without a bonafide dispute. Thus, these applications for appointment of arbitrator are hopelessly barred by limitation under Section 43 of the Act of 1996 and also leads to the inference that there is absence of existence of a bonafide dispute between the applicant and the respondent which could persuade the Court to condone such unusually long delay by appointing an arbitrator. Thus, these applicants are wholly devoid of substance and merit and hence, the same are dismissed. .;