B PATEL AND COMPANY Vs. STATE OF GUJARAT

JUDGEMENT

(1.) Both these Revision Applications under Sec. 12 of the Gujarat Public Works Contract Act, 1992, (In short, 'the Act of 1992') are filed against the order of the Tribunal rejecting the reference barred by lapse of time. As a common question of law arises, they are disposed of by this common order. The necessary facts are set out as follows :- C.R.A. No. 1283 of 1996 The petitioner-contractor was granted contract for construction of rural roads upto S. T. stage including C. D. works in Mehsana District. The work order was issued on 11-9-1989. He did not complete the work within the stipulated period, i.e., by 10-3-1991 but completed on 31-7-1992. The petitioner's Advocate served a notice dated 7-9-1994 on the Executive Engineer to settle the disputes under clause 51 of the General Conditions of the contract. The petitioner also addressed an appeal to the Chief Engineer on 22-10-1994 under clause 51. The Executive Engineer, by his letter dated 16-12-1994 informed the petitioner that there was no dispute covered by clause 51 required to be decided by him. The plea was also taken that clause 51 is intended to be resorted promptly while the work is in progress so that the work may not be unnecessarily hampered. The Tribunal held that cause of action arose on 15-7-1993, the date on which the full and final payment was made. The Tribunal further held that even if the time taken by the Executive Engineer in replying the petitioner's notice is excluded, the reference is time-barred, as the same was not filed before 31-12-1994. Thus, the Tribunal rejected the reference by the impugned order dated 15-3-1996. C.R.A. 1284 of 1996

(2.) The petitioner firm was awarded contract for construction of rural roads upto S. T. stage including C. D. works in Mehsana District, with a stipulation to complete within 18 month, i.e., upto 26-10-1990. However, the work could be completed only on 31-7-1992. The petitioner represented to the Executive Engineer on 7-9-1994 to settle the claims to the tune of Rs. 62,71,936.00 under clause 51 of the General Conditions of the contract. The Executive Engineer replied on 7-10-1994 stating that resort to clause 51 of the General Conditions of the contract is misconceived as none of his claims arises under clause 51. It was further stated that the purpose of clause 51 is that the contractor may rush to the Engineer in-charge promptly in order that the Engineer may issue immediate written instructions to avoid crisis so that the work in process may not be hampered. It was further stated that the final bill was paid to the petitioner on 14-7-1993. The reference was filed on 1-9-1995. The Tribunal rejected the claim by the impugned order dated 15-3-1996 as barred by limitation holding that the cause of arbitration had arisen on 14-7-1993, the day on which the final bill was paid.

(3.) The question is whether the Tribunal was right in rejecting the Reference Application under Sec. 8 of the Act of 1992 barred by lapse of time ? Section 8 of the Act provides limitation of one year to make a reference within one year from the date when the dispute has arisen. Under the Arbitration Act, 1940, the limitation for application under Sec. 20 of the Act is of 3 years, in view of the decision of the Apex Court in the case of Kerala State Electricity Board v. T. P. Kunhallumma, reported in AIR 1977 SC 282. In the said case, the Apex Court held that Art. 137 of the Limitation Act, 1963 would apply to any petition or application filed in civil Court under sub-sec. (1) of Sec. 20 of the Arbitration Act. Thus, the core question arises for consideration is -