UNION OF INDIA Vs. POPULAR BUILDERS CALCUTTA

JUDGEMENT

(1.) Leave granted.

(2.) This appeal by the Union of India is directed against the judgment dated 28th of January, 1999 of the Division Bench of Calcutta High Court, dismissing the appeal of the Union of India, arising out of an arbitration proceeding. The undisputed facts are that the respondent had entered into an agreement with the appellant for construction of Annex Building to Telephone Bhawan at Calcutta. The agreement between the parties contained an arbitration clause therein. After the completion of work, the final bill was drawn and was sent to the respondent and he agreed to accept the final bill and in fact did receive the money under the final bill without any objection. But thereafter, he wrote a letter to the concerned Chief Engineer, indicating several items of claim and additional works which the respondent had executed pursuant to the directions of the appropriate authority and the said work had not been included in the final bill. He, therefore, requested the Chief Engineer, the authority under Clause 25 of the agreement to appoint an arbitrator and pursuant to the said request, the Chief Engineer by his letter dated 25-11-93 did appoint an arbitrator. Subsequently, the appointed arbitrator was changed. Pursuant to an order of the High Court and before the arbitrator, the respondent filed his claim on different heads. The Union of India-appellant herein, filed his objection as well as filed a counter claim before the arbitrator. The learned Arbitrator ultimately passed an award and that award was filed before the High Court, for being made a rule of Court under Section 14 of the Arbitration Act, 1940. The Union of India filed an objection under Sections 30 and 33 for setting aside the award. The learned single Judge considered the objections filed by the Union of India and rejecting the same, made the award a rule of Court. Against the aforesaid order of the learned single Judge, an appeal was carried to the Division Bench under Section 39 of the Arbitration Act. The Division Bench having dismissed the Union's appeal by the impugned order, the present appeal has been preferred by the Union of India. From the judgment of the learned single Judge, rejecting the objections of the Union of India as well as the impugned judgment of the Division Bench, it appears that the Union of India had urged the sole point of limitation and the same had been negatived by the Courts below and in our view rightly.

(3.) Mr. A. Subba Rao, the learned counsel for the Union of India however raised the question that the final bill having been accepted by the respondent-contractor, without any objection, there did not subsist any arbitrable dispute to be referred to arbitration, invoking Clause 25 of the agreement and, therefore, the impugned award has to be set aside. In support of the contention, reliance has been placed on two decisions of this Court - M/s. P. K. Ramaiah and Company v. Chairman and Managing Director, National Thermal Power Corpn., (1994) 3 Suppl. SCC 126 as well as a three Judge Bench decision of this Court in Nathani Steels Ltd. v. Associated Constructions, (1995) 3 Suppl. SCC 324.