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TMI Blog2016 (7) TMI 51X X X X Extracts X X X X X X X X Extracts X X X X ..... 3. Brief facts giving rise to Appeal No. 7184 of 2008 now need to be noted. The appellant a partnership firm was allotted a contract on 10.11.1998 for providing additional security fencing at Mullanpur. The work was completed on 10.7.2000. Work completion certificate was issued. Final bill was prepared on 20.2.2001 and the payment of final bill was made to the petitioner on 10.04.2001. Payment of the undisputed part of the final bill was made by cheque dated 10.04.2001. 4. Although Clause 67 of general conditions of contract contemplated for recovery from contractor in several contingencies one of which as referred in sub-Clause (f) was that if as a result of any audit and technical examination, any over payment is discovered in respect of work done under this contract, the contractor shall on demand make payment of a sum equal to the amount of over-payment. Sub-Clause (g) further provided that the Government shall not be entitled to recover any over-payment beyond a period of two years from the date of payment of the undisputed portion of the final bill. 5. Even though, two years period expired after payment of final bill, no demand for any recovery was issued by the Governme ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... (f) and (g) is with regard to the right of the Government for effecting recovery from the contractor which clause does not extend the period of limitation in favour of the contractor. 11. Shri O. P. Gupta, the partner of the appellant firm has appeared in-person and made his submission. We have also heard the learned counsel appearing for the respondents. 12. The appellant's case is that the claim raised by contractor by notice dated 23.02.2005, was not barred by time and was a live claim which ought not to have been rejected by the Chief Justice in exercise of his power under Section 11 of the Act. It is contended that the issues as to whether the claim is barred by time are the issues which ought to have been left for decision of arbitrator. It is contended that payment in respect to the final bill made on 10.04.2001, was payment with regard to undisputed amount. Apart from undisputed amount there were other claims of the contractor and the 'No Liability' certificate given by the appellant was only with regard to undisputed claim. Payment made on 10.04.2001 was the payment only in reference to undisputed claim and that in no manner precluded the appellant from raising claim. 1 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... Section 11(8) of the Act if the need arises but the order appointing the arbitrator could only be that of the Chief Justice or the designated Judge." 17. The Chief Justice exercises the judicial power while passing an order under Section 11 of the Act thus can examine the question as to whether the claim which has been raised before him survives and needs to be adjudicated. It goes without saying that if Chief Justice finds that claim is a dead claim, he can exercise jurisdiction in rejecting the application. 18. A two Judge Bench of this court in Indian Oil Corporation Limited vs. SPS Engineering Limited, 2011 (3) SCC 507, had occasion to consider what is a 'live claim' within the meaning of Section 11 of the Act. Elaborating the jurisdiction of the Chief Justice, under Section 11 of the Act following was laid down by this court in para 14 of the judgment: "14. .......The Chief Justice or his designate may however choose to decide whether the claim is a dead (long-barred) claim or whether the parties have, by recording satisfaction, exhausted all rights, obligations and remedies under the contract, so that neither the contract nor the arbitration agreement survived. When ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... s, he should consider the issue whether the claim is a dead one (long time-barred) or whether there has been satisfaction of mutual rights and obligation under the contract, he should record his intention to do so and give an opportunity to the parties to place their materials on such issue. Unless the parties are put on notice that such an issue will be examined, they will be under the impression that only questions of jurisdiction and existence of arbitration agreement between the parties will be considered in such proceedings." 20. From the above, it is clear that Chief Justice may chose to hold a claim as a dead claim only when the claim is evidently and patently long time barred claim and there is no need for any detailed consideration of evidence. An illustration have been given in para 14 as extracted above. The above illustration becomes relevant for the facts of the present case. In the present case also, the appellant has raised the claim beyond the three years of completing of the work but within five years of completion of the work. 21. In the present case, the appellant has also contended that there is a defect liability period of two years during which any recovery ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... amounts due to him by Government. If however, he refuses or neglects to make the payment on demand or does not agree for effecting adjustment from any amounts due to him, Government shall be entitled to take action as in sub-para (a) hereinbefore. If as a result of such audit and technical examination any under payment is discovered, the amount of under payment shall be duly paid to the Contractor by Government. (g) Provided, that, nothing hereinbefore contained shall entitled the Government to recover any over-payment in respect of any price agreed between the C.W.E or the G.E. and the Contractor under the circumstances specifically prescribed for such method of assessment and that the said right of the Government to adjust over-payment from any sum due or from any sum which may become due to the Contractor or from Security Deposit or Security Bond amount and adjust under payment, shall not extend beyond a period of two years from the date of payment of the undisputed portion of the Final Bill or in the case of minus Bill, from the date, the net amount of the final bill is communicated to the Contractor. " 25. In sub-Clause (g) the period of two years under which the Governmen ..... X X X X Extracts X X X X X X X X Extracts X X X X
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