Late Sh Pramod Kumar Jain Proprietor of Ms Jain Enterprises Through His Legal Heirs Ors & Ors v. Municipal Corporation of Delhi & Anr

Judgment reserved on:

02.09 .2025

Judgment pronounced on:

17.09 . 2025

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LATE SH PRAMOD KUMAR JAIN PROPRIETOR OF MS JAIN ENTERPRISE S THROUGH HIS LEGAL HEIRS ORS

& ORS.

.Apelants

Through:

Dr. Amit George, Mr. Rajev Kumar, Mr. Kartikay Punesh, Mr. Adhishwar Suri,

Mr. Dushyant Kishan Kaul,

Ms. Rupam Jha, Ms. Ibansara and Ms. Medhavi Bhatia, Advocates.

v ersus

MUNICIPAL CORPORATION OF DELHI & ANR.

.Respondents

Through:

Mr. Sidhant Nath (Standing Counsel), Mr. Bhavishya Makhija and Mr. Aman Khan, Advocates.

CORAM:

HON'BLE MR. JUSTICE ANIL KSHETARPAL

HON'BLE MR. JUSTICE HARIS H VAIDYANATHAN SHANKAR

J U D G E M E N T

HARISH VAIDYANATHAN SHANKAR, J.

¶1The present A peal , under Section 37(1)(c) of the Arbitration and Conciliation Act, 196 1 , has ben filed to asail the Judgement

1 A&C Act

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dated 15.10.202 2 pased in Arbitration No. 84197/ 2015 titled —Late Sh. Pramod Kumar Jain & Ors. (through legal heirs) v. North Delhi Municipal Corporation & Anr." by the learned Aditional District Judge œ8, Tis Hazari Courts (Central), Delhi 3 .

¶2The Arbitral Award dated 30.03.2012 4 , pased by the learned Sole Arbitrator, was chalenged by the Apelants by filing a petition under Section 34 of the A&C Act. However, the learned Comercial Court, vide the Impugned J udgment, dismised the said petition and upheld the Arbitral Award .

¶3The dispute arises out of a contract betwen the Apelants and the Respondents concerning thre work orders for road -raising and alied works , two dated 17.1.20 and one dated 02.01.201 5 . The General Terms and Conditions aplicable to the work orders envisage resolution of the disputes by arbitration . T he relevant Arbitration Clause in the General Terms and Conditions is reproduced as under : -

—Clause 25

Setlement of Disputes & Arbitration

Except where otherwise provided in the contract al questions and disputes relating to the meaning of the specifications, design, drawings and instructions here - in - before mentioned and as to the quality of workmanship or materials as used - on the work or as to any other question, claim, right, mater or thing whatsoever in any way arising ou t of or relating to the contract, designs, drawings, specifications, estimates, instructions, orders or these conditions or otherwise concerning the works or the execution or failure to execute the same whether arising during the progres of the work or af ter the cancelation, termination, completion or abandonment thereof shal be dealt with as mentioned hereinafter :

(i)

If the contractor considers any work demanded of him to be outside the requirements of the contract, or disputes any drawings, record or deci sion given in writing by the Enginer - in - Charge on any mater in conection with or

2 Impugned Judgement

3 Comercial Court

4 Arbitral Award

5 Work Orders

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arising out of the contract of carying out of the work, t o be unaceptable, he shal promptly within 15 days request the Superintending Enginer in writing , for writen in struction or decision. Thereupon, the Superintending Enginer shal give his writen instructions or decision within a period of one month from the rec e ipt of the contractor's leter.

If the Superintending Engin e er fails to give his instructions or decis ion in writing within the aforesaid period or if the contractor is disatisfied with the instructions or decision of the Superintending Engin e er, the contractor may, within 15 days of the rec e ipt of Superintending Enginer's decision, apeal to the Chief E ngin e r who shal aford an oportunity to the contractor to be heard, if the later so desires, and to ofer evidence in suport of his apeal. The Chief Enginer shal give his decision within 30 days of rec e ip t of contracto r' s apeal. If the contractor is disatisfied with this decision, the contractor shal within a period of 30 days. from rec e ipt of the decision, give notice to the Comisioner M.C.D. for apointment of arbitrator failing which the said decision shal be final binding and conclusive an d not referable 10 adjudication by the arbitrator.

(i) Excep t where the decision has become final, binding and conclusive in terms of Sub Para (i) above disputes or diference shal be refered for adjudication through arbitration a sole arbitrator apointed b y the Comisioner M.C.D. If the arbitrator so apointed is unable or unwiling to act or resigns his apointment or vacates his ofice due to any reason whatsoever another sole arbitrator shal be apointed in the maner aforesaid. Such person shal be en titled to proced with the reference from the stage at which it was left by his predecesor.

It is a term of this contract that the party invoking arbitration shal give a list of disputes with amounts claimed in respect of each such dispute along with the notice for apointment of arbitrator and giving reference to the rejection by the Chief Enginer of the apeal.

It is also a term of this contract that no person other than a person apointed by such Comisioner M.C.D. as aforesaid should act as arbitrat or and if for any reason that is not posible, the mater shal not be refered to arbitration at al.

It is also a term of this contract that if the contractor does not make any demand for apointment of arbitrator in respect of any claims in writing as a foresaid within 120 days of rec e iving the intimation from the Engin e er - in - Charge that the final bil is ready

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for payment, the claim of the contractor sh a l be demed to have ben waived and absolutely bared and the M.C.D. shal be discharged and released of al liabilities under the contract in respect of these claims.

The arbitration shal be conducted in acordance with the provisions of the Arbitration and Conciliation Act, 196 ( 2 6 of 196) or any statutory modifications or re - e nactment thereof and th e rules made thereunder and for the ti m e being in force shal aply to the arbitration proceding under this clause.

I t is also a term of this contract that the arbitrator shal adjudicate on only such disputes as are refered to him by the apointing auth ority and give separate award against each dispute and claim refered 10 him and in al cases where the total amount of the claims by any party exce e ds Rs. 1,0,0/ - the arbitrator shal give reasons for the award.

It is also a term of the contract that i f any fes are payable to the arbitrator these shal be paid equaly by both the parties.

It is also a term of the contract that the arbitrator shal be demed to have entered on the reference on the date he isues notice to both the parties caling them t o submit their statement of claims and counter statement of claims. The venue of the arbitration shal be such place as may be fixed by the arbitrator in his sole discretion. The fes, if any, of the arbitrator shal, if required to be paid before the awar d is made and published, be paid half and h alf by each of the parties. The cost of the reference and of the award including the fe e s, if any, of the arbitrator) shal be in the discretion of the arbitrator who may direct to any by whom and in what maner, such costs or any part thereof shal be paid and fix or setle the amou nt of costs to be so paid. "

BRIEF FACTS :

¶4At the outset, it is necesary to set out a brief factual history of this mater. The Apelants are the legal representatives of Late Shri Pra mod Kumar Jain 6 , a government - aproved Contractor and Builder, who was awarded the aforesaid W ork O rders , by the Respondents. Admitedly, the contractualy stipulated period for completion of the work was 4 months. Shri Pramod Kumar Jain

unfortunately pas ed away on 08.05.201. Thereafter, the Apelants, being his legal representatives, sought to execute the awarded works .

6 Co ntractor

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¶5W ork in respect of only two of the thre work orders dated

17.1.20 and 02.01. 201 were executed til October 201 . T he third work or der remained unexecuted due to the non - availability of the site.

¶6Post October 201,

there apears to have ben no corespondence and it is the asertion of the Apelant that he met with the oficials of the Respondent. There apears to be nothing on recor d to substantiate this claim.

¶7After a period of almost a year and 7 months, the Apelant apears to have coresponded vide leter dated

20.06.203, which reads as folows: -

—Sub: - Work done in WAZIRPUR, WORK ORDER NO. E.E

XVI/TC/20 - 201/536, 426, 427. Til not get PAYMENT . Sir,

My Father was Runing the firm JAIN ENTERPRISE aproved as a clas I Contractor. He take a tender in your division. Work order no above. My father expired on 8 th May 201 in the betwen of wo rk. I son of Mr. Late Shri Pramod Kumar Jain, completed this work . At The time of work my site JE was Mr. Garg. After completed work Mr. Garg was transfer, This I go to new JE Mr. P.K. Jindle. He said to me that he don't know any thing. I go to ofice many time and asistant Mr. Jintender said me to go out met with Gurmet for your M.B. I come and met with Gurmet and he found my name in M.B . Today I met with Mr. Garg and he told me that he hand over 24 MB to Mr. P.K. Jindal and in that MB your Bil is t here but P.K. Jindal did not sumit this MB in the ofice . So kindly se to this case as a very important and Solve my problem.

Thanking you

Your faithfuly,

SACHIN JAIN

S/d"

(emphasis Suplied)

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¶8By th e leter dated 20.06.203, the Apelants r aised a formal grievance regarding non - receipt of payment for the work done .

¶9Post this corespondence, there was a prolonged silence for almost four years , broken by a series of leters dated 16.05.207,

12.07.207, and 1.12.207 . This was folowed by re presentations adresed to the Superin tendant Enginer on 28.12.207 and to the Chief Enginer on 14.01.208 .

10.

T he Apelants invoked the arbitration clause vide leter dated

¶180 2.208 and thereafter , fil ed a petition under Section 1 of the A&C Act before this Court. By order dated 02.04.209, a learned Single Judge apointed the learned Sole Arbitrator to adjudicate the disputes , inter se the parties.

1.

The learned Sole Arbitrator, vide Arbitral Award dated

30.03.2012, rejected the monetary claims of the Ap pelants, holding them to be bared by limitation. Agrieved, the Apelants filed a petition under Section 34 of the A&C Act before the learned Comercial Court, seking to set aside the Arbitral Award. The learned Court, however, dismised the petition v ide the Impugned Judgment , upholding the learned Sole Arbitrator's rea

12.

The Apelants , being disatisfied with the dismisal of their Section 34 petition, have prefered the present apeal under Section 37 of the A&C Act.

CONTENTIONS OF THE APELA NTS :

13.

Learned Counsel for the Apelants would contend that both the learned Sole Arbitrator and the learned Comercial Court ered in holding that the claims were bared by limitation .

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14.

It would be submited that the Judgment in Major (Retd.) Inder Singh Re khi v. Delhi Development Authority 7 has ben wrongly aplied in the facts and circumstances of the present case.

15.

It would also be submited that limitation begins only when a dispute actualy arises , that is, upon asertion and denial of a claim , and not merely on completion of the work and since no final bil was ever prepared or intimated and only entries were made in the Measurement Bok, which canot be treated as final bils, limitation had not comenced.

16.

In suport, reliance would further be placed o n Ram Dita Mal v. Fod Corporation of India and Oriental Building and Furnishing Co. Ltd. v. Union of India 9 , where this Court held that limitation comences only on preparation or intimation of the final bil and that a dispute arises only when a claim is expresly refuted, and that these principles squarely aply to the present case.

17.

Learned Counsel would submit that the leter dated 20.06.203 was merely an enquiry about the Measurement Bok and not a claim for payment, and that the first asertion of claim was made only on

16.05.207, folowed by a detailed representation on 1.12.207 and further leters to the Superintendent Enginer on 28.12.207 and to the Chief Enginer on 14.01.208, and since arbitration was invoked thereafter on 18.02.208, it was in strict compliance with the pre - reference procedure under Clause 25 of the General Terms and Conditions . Learned Counsel for the Apelant would also place reliance on the judgement of this Court in Welspun Enterprises Ltd.

7 (198) 2 SC 38

8 1985 SC OnLine Del 589

9 1981 SC OnLine Del 140

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v. NC Ltd. 10 to contend th at the limitation canot comence until the contractual procedure ha d ben completed.

18.

It would further be urged that the Respondents themselves acknowledged their liability in their reply leter dated 30.07.208 to the query of the Apelant under the Righ t to Information 1 Act , by admiting that sums of Rs. 2,84,214/ - and Rs. 2,6,565/ - were payable, and such acknowledgment extended limitation under Section 18 of the Limitation Act, 1963 12 .

19.

It would be submited that moreover, the Apelants disputed the qua ntified amounts by their reply dated 24.07.209, which further demonstrated that disputes were alive and resultantly not bared by limitation .

20.

Learned Counsel would further argue that both the learned Sole Arbitrator and the learned Comercial Court misap lied Major (Retd.) Inder Singh Rekhi (supra) by treating silence after asertion as denial, whereas the law, as clarified in State of Orisa v. Damodar Das 13 , requires unequivocal denial or repudiation for limitation to comence, and since no such denial o cured and, on the contrary, there was acknowledgment of liability, the period of limitation could not have ben said to comence . Learned Counsel would place reliance on Sham Sunder v. MCD & Ors 14 to contend that the cause of action arose only upon invoca tion of Clause 25 and that limitation does not run where the final bil was not prepared.

10 202 SC OnLine Del 3296

1 RTI

12 Limitation Act

13 (196) 2 SC 216

14 13 (206) DLT 540

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21.

Further reliance would be placed on Avinash Sharma v. MCD 15 , where this Court held that under Clause 25, a comunication that the final bil is ready for payment is a sine qua non for limitation to begin or for waiver to aply, and since in the present case no such comunication was ever isued and even later , the department admited that bils were pending with the acounts section, limitation had not comenced; and th erefore, the claims canot be treated as time - bared.

2.

It would also be submited that the delay in execution was entirely atributable to the Respondents, since sites were not made available and materials were delayed, and one site was never handed over at al; yet, despite acepting several claims on merits, the learned Sole Arbitrator denied relief solely on the ground of limitation, which, it would be urged, was manifestly unjust.

23.

Learned Counsel would further urge that Section 28(3) of the A&C Act requi red the learned Sole Arbitrator to decide disputes in acordance with the terms of the contract and trade usage, and Clause 25 made it incumbent upon Respondent No. 2 to notify preparation of the final bil, which was admitedly not done, and this fact was

confirmed by the Respondents' own - examination; therefore, the finding of limitation was eroneous.

24.

Lastly, it would be contended that the learned Comercial Court contradicted itself, for while it treated the leters of 203, 207, and 20 08 as asertions of claim for limitation purposes, it simultaneously held, when dealing with interest, that there was no record of any aproach by the Apelants for verification of the

15 207 SC OnLine Del 797

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Measurement Bok, and such inconsistency undermines the conclusion on limitation.

CONTENTIONS OF THE RESPONDENTS :

25.

Per contra , learned Counsel for the Respondents would suport

the concurent findings of the learned Sole Arbitrator and the learned

Comercial Court and would submit that the claims were hopelesly bared by li mitation, as runing bils had ben prepared in November 201 for two work orders sanctioning sums of Rs. 2,84,214/ - and Rs. 2,6,565/ - , but arbitration was invoked only in February 208 , more than six years later , wel beyond the thre - year period under A rticle 137 of the Limitation Act.

26.

It would further be argued that the Appella

20.06.203 constituted asertion of a claim, and silence thereafter amounted to denial; therefore, the limitation comenced in 203 and expired long before arbit ration was invoked in 208.

27.

Learned Counsel for the Respondents would deny the alegation of non - availability of sites and submit that site changes were reflected in the work orders themselves, and that the plea of non - availability was a fabricated excuse to justify non - performance; since the work orders were required to be completed within four months and the Apelants failed to adhere to contractual timelines, their atempt to reopen concurent findings of fact amounts to an abuse of proces of law and a n efort to revive stale claims.

28.

It would finaly be urged that the scope of interference under Section 37 of the A&C Act is very limited, for unles an award is contrary to the fundamental policy of Indian law, in conflict with basic notions of justice an d morality, or sufers from patent ilegality on the

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face of the record, the apelate court canot reapreciate evidence or disturb concurent findings; reliance was placed on MTC Ltd. v. Vedanta Ltd . 16 to butres this submision.

ANALYSIS :

29.

Having heard the submisions advanced by learned Counsel for both parties, and upon a careful consideration of the pleadings, documents, and the impugned findings, this Court now proceds to adres the questions arising for determination.

30.

The foremost isue that aris

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