GHANASHYAM BEHERA Vs. ORISSA STATE CO OPERATIVE

JUDGEMENT

(1.) THIS Revision is directed against an order, dated 21. 7. 80, passed by the Sub -Judge, Bhubaneswar, in Misc. Case No. 242 of 1978 (A) holding that the application under Section 8 of the Arbitration Act is barred by limitation and consequently dismissing the application.

(2.) THE petitioner's case before the Sub -Judge was that he is a registered Government contractor and was entrusted with some construction work and two agreements were separately executed in that behalf. He contended that in course of the execution of the work he was made to execute various extra items of work and the final bill which was prepared and said to not contain the extra items of work. He made demands for payment for the extra items of work in various letters which was refused by the concerned department. Ultimately he gave a notice under Section 8(1) of the Arbitration Act to appoint Arbitrator within 15 days and when no appointment was made within the prescribed period he came up with an application under Section 8(2) of the Arbitration Act. The opposite parties in their rejoinder disputed all questions of fact raised by the petitioner in the application under Section 8 of the Act. One of the points taken in the rejoinder was that the petition under Section 8(2) of the Act having been made more than 3 years after the cause of action arose, the same is barred by limitation. According to the opposite parties the cause of action arose for filing an application under Section 8 on the date on which the payment under the final bill was made.

(3.) IT is not in dispute that in any of the cases falling under Clauses (a), (b) and (c) of Sub -section (1) of Section 8 of the Arbitration Act any party may serve the other parties with a written notice to concur in the appointment of Arbitrator, Sub -section (2) of Section 8 provides that if the appointment is not made within 15 clear days after service of the said notice, the Court may, on the application of the party who gave the notice and after giving the other parties an opportunity of being heard, appoint an arbitrator who shall have the power to enter the reference and make an award as if he has been appointed by consent of the parties. Therefore, the notice contemplated under Sub -section (1) of Section 8 is a condition precedent to the filing of an application under Section 8(2) of the Act. It is well settled in law that Limitation Act applies to applications to be filed in the Court and not to the notice contemplated under Sub -section (1) of Section 8 of the Act. Therefore, the cause of action for filing an application under Sub -section (2) arises only after a written notice is served as per the provisions of Sub -section (1) of Section 8 and fifteen clear days lapse thereafter. Even if the Article 137 applies to applications under Sub -section 8(2) of the Arbitration Act, it would begin to run on expiry of fifteen clear days, after the service of notice under Section 8(1). It is one thing to say that the claim made by the petitioner is barred by limitation and it is another thing to say that the application under Section 8(2) is barred by limitation. In the impugned order, the Sub -Judge has not appreciated that the limitation for filing application under Section 8(2) of the Arbitration Act does not have any relation with the cause of action for preferring a claim for realisation of the dues. It may be that the claim of the contractor has been barred by limitation, yet he may usue a notice under Section 8(1) of the Act and pray for appointment of an Arbitrator under Section 8(2) of the Act on expiry of fifteen clear days after the service of notice. In such a situation the Court is not called upon to decide about the merits of the claim which the claimant might If y for adjudication by the Arbitrator or to decide as to whether the claim is barred by limitation. It is for the Arbitrator to decide those questions. In this view of the matter the application under Section 8(2) cannot be said to be barred by limitation.