TMI Blog1995 (12) TMI 374X X X X Extracts X X X X X X X X Extracts X X X X ..... . ORDER K. Ramaswamy, J. These appeals arise from the orders of the High Court of Orissa dated February 15, 1982 made in Miscellaneous Appeal No. 65 of 1982 etc. The respondent-contractor was entrusted with the work "construction of sump and pump chamber etc. for pipes W/S to village determination as per agreement dated September 21, 1967, "Village Kentile water supply scheme construction of 20,000 gallons capacity R.R. masonary underground Reservoir" as per agreement dated July 19, and "Piped water supply to Kentile -Construction of 0.135 M.G.D. Treatment Plant" as per agreement dated October 6, for the years 1967-68, 1975-76 and 1976-77 respectively. In respect of latter two contracts, after executing some work, he abandoned the contract and accepted the measurements and payment of the fourth running bill without any objection on July 19, 1976 and October 6, 1977 respectively. With regard to the first, he accepted the measurement and payment of the bill without raising any objection. On September 15, 1980, the respondent wrote a letter to the Chief Engineer, Public Health, Orissa alleging that disputes had arisen out of and relating to the aforesaid agreement for the ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... an arbitration of the dispute. The claim was made on September 15, 1980 and the applications are immediately filed thereafter. Therefore, the claims are not barred by limitation. The diverse contentions give rise to the question whether the claims are barred by limitation and whether the clause in the contract gives rise to an arbitration. Section 37(1) of the Arbitration Act, 1940 (for short, 'the Act') provides that all the provisions of the Indian Limitation Act, 1908 (since repealed and adopted by Limitation Act 1963) shall apply to arbitrations as they apply to the proceedings in Court. Sub-section (2) with a non obstante clause provides that "a cause of action shall, for the purpose of limitation, be deemed to have accrued in respect of any such matter at the time when it would have accrued but for that term in the agreement". An arbitration shall be deemed to have commenced under Sub-section (3) when one party to the arbitration agreement serves on the other parties thereto a notice requiring the appointment of an arbitrator, or where the arbitration agreement provides that the reference shall be to a person named or designated in the agreement requiring that the differen ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... hat right by the respondent. It must, therefore, be clear that the claim for arbitration must be raised as soon as the cause for arbitration arises as in the case of cause of action arisen in a civil action. In Panchu Gopal Base v. Board of Trustees for Port of Calcutta [1993] 4 SCC 338, this Court had held that the provisions of the Limitation Act would apply to arbitrations and notwithstanding any term in the contract to the contrary, cause of arbitration for the purpose of limitation shall be deemed to have accrued to the party, in respect of any such matter at the time when it should have accrued but for the contract. Cause of arbitration shall be deemed to have commenced when one party serves the notice on the other party requiring the appointment of an arbitrator. The question is when the cause of arbitration arises in the absence of issuance of a notice or omission to issue notice for long time after the contract was executed Arbitration implies to charter out timorous commencement of arbitration availing the arbitral agreement, as soon as difference or dispute has arisen. Delay defeats justice and equity aids promptitude and resultant consequences. Defaulting party should ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... on, claim, right, matter or thing, whatsoever in any way arising our of, or relating to, the contract, drawings specifications estimates, instructions, orders or these conditions, or otherwise concerning the works or the execution or failure to execute the same, whether arising during the progress of the work or after the completion or the sooner determination thereof of the contract. Section 2(a) of the Act defines "Arbitration agreement" to mean "a written agreement to submit present or future differences to arbitration, whether an arbitrator is named therein or not". Indisputably, there is no recital in the above clause of the contract to refer any dispute or difference present or future to arbitration. The learned Counsel for respondent sought to contend from the marginal note, viz., "the decision of Public Health Engineer to be final" and any other the words "claim, right, matter or thing, whatsoever in any way arising out of the contract, drawings, specifications, estimates, instructions, orders or these conditions, or otherwise concerning the works or the execution or failure to execute the same, whether arising during the progress of the work or after the completion or th ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... t be split into two parts so as to consider one part to give rise to difference or dispute and another part relating to execution of work, its workmanship etc. It is settled now that clause in the contract must be read as a whole. If the construction suggested by the respondent is given effect then the decision of the Public Health Engineer would become final and it is not even necessary to have it made rule of the Court under the Arbitration Act. It would be hazardous to the claim of a contractor to give such instruction and give power to the Public Health Engineer to make any dispute final and binding on the contractor. A careful reading of the clause in the contract would give us an indication that the Public Health Engineer is empowered to decide all the questions enumerated therein other than any disputes or differences that have arisen between the contractor and the Government. But for Clause 25, there is no other contract to refer any dispute or difference to an arbitrator named or otherwise. This Court was called upon to consider similar clause in State of U.P. v. Tipper Chand [1980] 2 SCC 341. The clause was extracted therein. After consideration thereof, this Court held ..... X X X X Extracts X X X X X X X X Extracts X X X X
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