TMI Blog2008 (12) TMI 803X X X X Extracts X X X X X X X X Extracts X X X X ..... ll furnish to the Executive Engineer, a release of claims against the Government arising out of the contract, other than claims specifically identified, evaluated and expected from the operation of the release by the contractor. 54. Settlement of Dispute (For works costing less than ₹ 50 lakhs). If the contractor considers any work demanded of him to be outside the requirements of the contract, or considers any drawings, record or ruling of the Executive Engineer, KIP Dn. No. VII, Shrigonda on any matter in connection with or arising out of the contract or the carrying out of work to be outside the terms of contract and hence unacceptable he shall promptly ask the Executive Engineer, in writing, for written instructions or decision. Thereupon the Executive Engineer, shall give his written instructions or decision within a period of 30 days of such request. Upon receipt of the written instructions or decision the contractor shall promptly proceed without delay to comply with such instructions or decision. If the Executive Engineer fails to give his decision in writing within a period of 30 days after being requested, ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... bitration proceedings and payments due to the contractor shall not be withheld unless they are subject matter of the arbitration proceedings. All awards shall be in writing and in case of award amounting to Rs. One lakh and above, such awards shall state the reasons for the amount awarded. Neither party is entitled to bring a claim to arbitrator if the arbitrator has not been appointed before the expiration of 30 days after defects liability period. 4. A work order was issued on the same day. The said contract was to be completed by 8.1.1989, i.e. within a period of about 11 months. Appellant failed to complete the work within the stipulated time. He applied for extension which was granted first upto 09.07.1989 and thereafter upto 30.09.1990. Within the said period the work was completed. The measurements of the work undertaken by the appellant were recorded on 26.11.1990. Final bill prepared and paid by the respondent was accepted by the appellant without any demur. 5. Inter alia, on the premise that appellant was asked to do extra items of work, it raised its claims by a letter dated 27.2.1991, which was rejected. ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... However, its earlier decision of rejecting the claim was repeated. 8. Treating the same to be an order rejecting his claim, appellant herein preferred an appeal thereagainst before the Superintending Engineer in terms of its letter dated 26.11.1991; pursuant whereto a meeting was held between the representatives of the parties; the minutes whereof read as under: Since the contractors have not submitted their claims under Clause 54 of the General conditions of the contract along with documentary evidences within the stipulated period i.e. before the expiry of 30 days after defect liability period and as per Clause 55 which states `Neither party is entitled to bring a claim to arbitrator if the arbitrator has not been appointed before the expiration of 30 days after defect liability period. Defect liability period of this contract expired on 31st May 1991 and the stipulated period of 30 days expired on 30th June 1991. Hence the contractor s appeal for arbitration is hereby rejected 9. A copy of the said minutes of the meeting was sent by the Superintending Engineer along with his letter dated 30.12.1991. ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... r query in respect of proof of claim was called for by the respondents by their letter dated 29/4/91. Accordingly, the proof was submitted by letter dated 10/6/91 and details of claim were given on 26/9/91. The petitioner also apprised about `settlement of dispute as contemplated in clause No. 54 of the contract agreement. therefore practically there is compliance by the petitioner as contemplated under clause No. 54 of the contract agreement. The record also reveals that the respondents on 5/10/91 i.e. after lapse of three months replied the notice of petitioner dated 10/6/91 and first time it was agitated that the petitioner has not taken steps under clause No. 55 under defect liability and before expiration of 30 days. The clause No. 19(a) of the contract agreement is in respect of material and workmanship and it defines the defect liability in respect of workmanship and materials and so also the defect liability period is to be counted from the certified date of completion certificate. Under clause No. 26 of the contract agreement, it is the respondents who are required to issue such certificate to the petitioner. The notices were issued by the petitioner under clause Nos. 54 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... without any demur, the contract came to an end, wherewith the arbitration agreement which was a part thereof also perished. iii. Appellant having not sought for extension of time in terms of Sub-section (4) of Section 37 of the Act and in any event no sufficient cause having been made out therefore, even no extension of time could be granted. 15. Indisputably, the parties are governed by the Act. Arbitration Agreement has been defined in Section 2(a) of the Act to mean a written agreement to submit present or future differences to arbitration, whether an arbitrator is named therein or not. An arbitration is a private dispute resolution mechanism agreed upon by the parties. The arbitration agreement is contained in a commercial document; it must be interpreted having regard to the language used in it. A bare perusal of clauses 37, 54 and 55 of the General Conditions of Contract clearly shows that the arbitration agreement entered into by and between the parties is not of wide amplitude. In a case where arbitration clause is of wide amplitude, the same may cover also the claims arising during the tenure of contract or ther ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... hus, could be invoked only in a case where the decision has not become final and conclusive as per Clause 54. 20. A plain reading of the aforementioned provisions clearly shows that Clause 54 does not envisage raising of a claim in respect of extra or additional work after the completion of contract. 21. The jurisdiction of the civil court under Section 8 of the Act or under Section 20 thereof can be invoked if the disputes and differences arising between the parties was the one to which the arbitration agreement applied. 22. The contractual clause provides for a limitation for the purpose of raising a claim having regard to the provisions of Section 28 of the Indian Contract Act. It is no doubt true that the period of limitation as prescribed under Article 137 of the Limitation Act would be applicable, but it is well settled that a clause providing for limitation so as to enable a party to lodge his claim with the other side is not invalid. In The Vulcan Insurance Co. Ltd. v. Maharaj Singh and Anr. reported in [1976]2SCR62 , the arbitration clause read as under: 18. If any difference arises as to the amount ..... X X X X Extracts X X X X X X X X Extracts X X X X
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