UNION OF INDIA Vs. RAJENDER KUMAR

JUDGEMENT

(1.) The petitioner, the Union of India, has challenged the legality of Order, dated 31.07.2015, passed by the learned I Additional Chief Judge, City Civil Court, Secunderabad, whereby the learned Judge has allowed Arbitration O.P.No.120 of 2011 filed by respondent No.1, Mr.Rajender Kumar, under Section 34 of the Arbitration and Conciliation Act, 1996 (for short 'the Act'), has set aside the Award dated 03.09.2010, and remanded the case back to the learned Arbitral Tribunal for fresh decision.

(2.) Briefly, the facts of the case are that, the appellant had issued a tender notice for deep screening of ballast between KMs.366.86 to 376.20 and between KMs. 377.60 to 389.00 upline between KZJ-CLE, for a quantity of 20,028 rmt. On 16.06.1986, the respondent No.1 had submitted his tender. On 22.09.1986, the said tender was accepted by the appellant. According to the work contract, the work was to be completed within a period of one year from 22.09.1986. Thus, the work had to be completed by 21.09.1987. However, due to administrative reasons, the work could not be completed within the stipulated period of one year. Therefore, by executing a subsidiary agreement, dated 28.09.1987, between the appellant and respondent No.1, the due date for completion of the work was extended upto 30.04.1988. The period was further extended upto 15.06.1988. However, in May, 1987, the concerned AEN advised the respondent No.1 to stop the work. The work was restarted from 10.06.1987 by the respondent No.1. Due to the delay in execution of the work, by letter dated 18.09.1987, the respondent No.1 requested the appellant to enhance the existing rates against the work agreement at par with the prevailing rates. It also expressed its inability to execute the balance work on the original rates. After due negotiations, the rates were duly enhanced, and the work recommenced in the second week of October, 1987. Eventually the work was completed in June, 1988. Having completed the work, the respondent No.1 was entitled to receive Rs.3,10,049/- as full and final payment. However, the same was never paid.

(3.) This began a long series of correspondence between the respondent No.1 and the appellant. On 25.04.1988, the respondent No.1 raised a claim for payment of the final amount. However, the said letter went unheeded. Thus, a dispute arose between the parties with regard to payment of final amount. On 05.10.2006, the respondent No.1 filed a claim before the Chief Engineer, Rail Nilayam. Eventually, the Arbitrator was appointed on 02.04.2009. Therefore, the learned Arbitral Tribunal had a claim before it on 02.04.2009. Thus, the issue that arise before the Arbitral Tribunal was whether the claim was hit by limitation or not. For, according to item No.18 in the schedule attached to the Limitation Act, a suit or arbitrary proceeding have to be commenced within a period of three (3) years from the date when the work was done by the plaintiff for the defendant. By award dated 03.09.2010, the learned Tribunal dismissed the claim filed by the respondent No.1, inter alia, on the ground that the claim was hit by limitation as it was lodged beyond the period of three (3) years from the date of completing the project or even from the date of raising the claim for full and final claim.