M/S. T.O. ITTOOP & ASSOCIATES ENGINEERS & CONTRACTORS v. Chief Engineer (CCW) AIR PRASAR BHARATI; Superintending Engineer (CCW) TV Centre; Executive Engineer (Civil Construction Wing) Akashwani & Dooradarshan, C.S.E.Z., Kochi

# **IN THE HIGH COURT OF KERALA AT ERNAKULAM** # **PRESENT** **THE HONOURABLE MR.JUSTICE N.NAGARESH** **FRIDAY, THE 14[TH] DAY OF OCTOBER 2022/ 22ND ASWINA, 1944** **AR NO. 150 OF 2022** ## **PETITIONER** **M/S. T.O. ITTOOP & ASSOCIATES ENGINEERS & CONTRACTORS, CHITTOOR ROAD, PACHALAM, KOCHI REPRESENTED BY ITS MANAGING PARTNER, SHRI. GEORGE ITTOOP, PIN – 682012** **BY ADVS. JOY THATTIL ITTOOP BIJISH B.TOM BHANU THILAK JACOB TOMLIN VARGHESE NEVIS CASSANDRA L CAXTON LORETTA BABY SONIA** ## **RESPONDENTS** **1 THE CHIEF ENGINEER (CCW) AIR PRASAR BHARATI, 6TH FLOOR, SOOCHANA BHAVAN, CGO COMPLEX, LODHI ROAD, NEW DELHI, PIN – 110003 2 SUPERINTEND ENGINEER (CCW) TV CENTRE ANNEX, SWAMY SIVANANDA SALAI, CHENNAI-5, PIN – 600005** A.R.No.150 of 2022 ] **3 EXECUTIVE ENGINEER (CIVIL CONSTRUCTION WING) AKASHWANI & DOORADARSHAN, C.S.E.Z, KOCHI, PIN – 682037** **BY ADV S. BIJU** **THIS ARBITRATION REQUEST HAVING COME UP FOR ADMISSION ON 14.10.2022, THE COURT ON THE SAME DAY DELIVERED THE FOLLOWING:** A.R.No.150 of 2022 ] ## **O R D E R** Dated this the 14[th] day of October, 2022 The petitioner entered into an agreement with the respondents for construction of 12 numbers of flats for Punjab National Bank at Panniankara, Kozhikode, Kerala. The petitioner completed the construction by 31.08.2018. The petitioner's bill for payment was not honoured. The respondents are disputing the claim. 2. The petitioner states that Clause 25 of Annexure A10 agreement entered into between the parties contemplates arbitration for resolution of disputes. 3. The petitioner sent Annexure A11 to the respondents seeking to appoint an Arbitrator. Though Annexure A12 reply was issued by the respondents, the respondents took a stand in the said notice that arbitration is not maintainable as the petitioner did not make any demand for appointment of an A.R.No.150 of 2022 ] Arbitrator in respect of any claims in writing within 120 days. Therefore, the claim of the petitioner shall be deemed to have been waived and absolutely barred. 4. I have heard the learned counsel for the petitioner. It is evident from the pleadings that the petitioner has entered into Annexure A3 agreement with the respondents. There is a dispute regarding the payment of dues to the petitioner. 5. Annexue A10 general conditions of the Contract at Clause 25 reads as follows: “25. Except where otherwise provided in the contract, all 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 used on the work or as to any other question, claim, right, matter or thing whatsoever in any way arising out 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 progress of the work or after the cancellation, termination, completion or abandonment thereof shall 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 decision given in writing by the Engineer-in-Charge on any matter in connection with or arising out of the contract or carrying out of the work, to be unacceptable, he shall promptly within 15 days request the ## A.R.No.150 of 2022 ] Superintending Engineer in writing for written instruction or decision. Thereupon, the Superintending Engineer shall give his written instructions or decision within a period of one month from the receipt of the contractor's letter. If the Superintending Engineer fails to give his instructions or decision in writing within the aforesaid period or if the contractor is dissatisfied with the instructions or decision of the Superintending Engineer, the contractor may, within 15 days of the receipt of Superintending Engineer's decision, appeal to the Chief Engineer who shall afford an opportunity to the contractor to be heard, if the latter so desires, and to offer evidence in support of his appeal. The Chief Engineer shall give his decision within 30 days of receipt of contractor's appeal. If the contractor is dissatisfied with the decision of the Chief Engineer, the contractor may within 30 days from the receipt of the Chief Engineer decision, appeal before the Dispute Redressal Committee (DRC) along with a list of disputes with amounts claimed in respect of each such dispute and giving reference to the rejection of his disputes by the Chief Engineer. The Dispute Redressal Committee (DRC) shall give his decision within a period of 90 days from the receipt of Contractor's appeal. The constitution of Dispute Redressal Committee (DRC) shall be as indicated in Schedule 'F'. If the Dispute Redressal Committee (DRC) fails to give his decision within the aforesaid period or any party is dissatisfied with the decision of Dispute Redressal Committee (DRC), then either party may within a period of 30 days from the receipt of the decision of Dispute Redressal Committee (DRC), give notice to the Chief Engineer for appointment of arbitrator on prescribed proforma as per Appendix XV failing which the said decision shall be final binding and conclusive and not referable to adjudication by the arbitrator. It is a term of contract that each party invoking arbitration must exhaust the aforesaid mechanism of settlement of claims/disputes prior to invoking arbitration. ## A.R.No.150 of 2022 ] (ii) Except where the decision has become final, binding and conclusive in terms of Sub Para (i) above, disputes or difference shall be referred for adjudication through arbitration by a sole arbitrator appointed by the Chief Engineer, CPWD, in charge of the work or if there be no Chief Engineer, the Additional Director General of the concerned region of CPWD or if there be no Additional Director General, the Special Director General or the Director General, CPWD. If the arbitrator so appointed is unable or unwilling to act or resigns his appointment or vacates his office due to any reason whatsoever, another sole arbitrator shall be appointed in the manner aforesaid. Such person shall be entitled to proceed with the reference from the stage at which it was left by his predecessor. It is a term of this contract that the party invoking arbitration shall give a list of disputes with amounts claimed in respect of each such dispute along with the notice for appointment of arbitrator and giving reference to the rejection by the Chief Engineer of the appeal. It is also a term of this contract that no person, other than a person appointed by such Chief Engineer CPWD or Additional Director General or Special Director General or Director General, CPWD, as aforesaid, should act as arbitrator and if for any reason that is not possible, the matter shall not be referred to arbitration at all. It is also a term of this contract that if the contractor does not make any demand for appointment of arbitrator in respect of any claims in writing as aforesaid within 120 days of receiving the intimation from the Engineer-inCharge that the final bill is ready for payment, the claim of the contractor shall be deemed to have been waived and absolutely barred and the Government shall be discharged and released of all liabilities under the a contract in respect of these claims. The arbitration shall be conducted in accordance with the provisions of the Arbitration and Conciliation Act, 1996 A.R.No.150 of 2022 ] (26 of 1996) or any statutory modifications or reenactment thereof and the rules made thereunder and for the time being in force shall apply to the arbitration proceeding under this clause. It is also a term of this contract that the arbitrator shall adjudicate on only such disputes as are referred to him by the appointing authority and give separate award against each dispute and claim referred to him and in all cases where the total amount of the claims by any party exceeds Rs. 1,00,000/-, the arbitrator shall give reasons for the award. It is also a term of the contract that if any fees are payable to the arbitrator, these shall be paid equally by both the parties. It is also a term of the contract that the arbitrator shall be deemed to have entered on the reference on the date he issues notice to both the parties calling them to submit their statement of claims and counter statement of claims. The venue of the arbitration shall be such place as may be fixed by the arbitrator in his sole discretion. The fees, if any, of the arbitrator shall, if required to be paid before the award is made and published, be paid half and half by each of the parties. The cost of the reference and of the award (including the fees, if any, of the arbitrator) shall be in the discretion of the arbitrator who may direct to any by whom and in what manner, such costs or any part thereof shall be paid and fix or settle the amount of costs to be so paid. 6. Therefore, it is clear that disputes arising out of the contract have to be resolved through arbitration proceedings. The petitioner has sent Annexure A11 notice for appointment A.R.No.150 of 2022 ] of Arbitrator invoking Clause 25 of the General Conditions of Contract. Annexure A11 would show that the respondents have taken a stand that arbitration is not maintainable since the petitioner has not made the claim within 120 days. It is for the said reason alone that the respondents did not appoint an Arbitrator. 7. A similar issue was considered by the Honourable Apex Court in _**Grasim Industries Limited v. State of Kerala**_ [2018 (14) SCC 265]. In the said judgment, the Honourable Apex Court held that a clause in the agreement, specifiyng a lesser period of limitation than that is statutorily available, is unenforceable and void. This Court has followed the said judgment of the Honourable Apex Court in A.R. No.31 of 2020. This Court held therein as follows: “4. It is contended that, in terms of the agreement as above, the request for arbitration should have been made within 90 days of intimation from the employer regarding final bill. The same having not been done, the petitioner is dis-entitled to raise any further claim, is the contention. 5. The contention urged by the respondents is unsustainable in view of the decision of the Apex Court in _**Grasim Industries Limited v. State of Kerala**_ [2018 (14) ## A.R.No.150 of 2022 ] SCC 265]. Therein it was held that, a clause in the agreement, specifying a lesser period of limitation than that is statutorily available, is unenforceable and void. In Arbitration Request No.78 of 2021, this Court held that, a clause in the General Conditions of contract stipulating that the decision by the authority shall be final, does not prohibit invocation of legal remedies. In the light of the above, the contention of the respondents is negatived.” 8. In the present case, the respondents have refused to co-operate with the Arbitration Request made by the petitoner on the ground that the petitioner has not invoked the Arbitration Clause within 120 days. 9. In view of the judgment of the Honourable Apex Court in _**Grasim Industries**_ (supra), the stand taken by the respondents is unsustainable. Therefore, the Arbitration Request made by the petitioner is liable to be allowed. 10. The Arbitration Request is therefore ordered as follows: (i) Sri.P.R. Shaji, CC 42/1569D, Apartment No.1, First Floor, Kallath Apartments, Mathai Manjooran Road, Kochi-18 is appointed as the sole Arbitrator, to arbitrate upon the disputes that have arisen between the applicant and the respondents arising out of Annexure A3. A.R.No.150 of 2022 ] (ii) The learned Arbitrator is at liberty to rule on his own jurisdiction, if the parties raise such a dispute. (iii) The Registry is directed to communicate a copy of this order to the learned Arbitrator within a period of ten days from today and to obtain a Statement of Disclosure from the learned Arbitrator as provided under Section 11(8) read with Section 12(1) of the Act. (iv) Once the Disclosure Statement is obtained from the learned Arbitrator, the Registry shall issue the certified copy of this order to the learned Arbitrator, with a copy of the said statement appended to it, retaining the original of the same by this Court. (v) The fees of the learned Arbitrator shall be governed by the Fourth Schedule of the Act. (vi) The learned Arbitrator shall decide the manner in which the fees and expenses of the arbitration proceeding has to be paid by the parties. (vii) The parties will appear before the learned Arbitrator on such date and place as decided by the learned Arbitrator. A.R.No.150 of 2022 ] (viii) All contentions of the parties are left open to be raised before the learned Arbitrator. Sd/- **N. NAGARESH, JUDGE** smm A.R.No.150 of 2022 ] ## **APPENDIX OF AR 150/2022** ## **PETITIONER ANNEXURES** |**Annexure A1**|**TRUE COPY OF THE PRESS NOTICE INVITING**| |---|---| ||**E-TENDER**| |**Annexure A2**|**A TRUE COPY OF THE LETTER DATED 09-09-**| ||**2016, ISSUED BY THE 1ST RESPONDENT TO**| ||**THE PETITIONER**| |**Annexure A3**|**TRUE COPY OF THE CERTIFIED COPY OF THE**| ||**AGREEMENT HAVING NO. 17/EEC/KOCHI/2016-**| ||**2017 DATED 09-09-2016 ENTERED INTO**| ||**BETWEEN THE PETITIONER AND THE SID**| ||**RESPONDENTS**| |**Annexure A4**|**TRUE COPY OF THE WORK COMPETITION**| ||**CERTIFICATE DATED 31-08-2018 ISSUED BY**| ||**THE RESPONDENTS**| |**Annexure A5**|**TRUE COPY OF THE JUDGEMENT IN WP(C) NO.**| ||**2365/2020 DATED 16-03-2020 OF THIS**| ||**HON'BLE COURT**| |**Annexure A6**|**TRUE COPY OF THE LETTER DATED 22-10-**| ||**2021 ISSUED TO THE 3RD RESPONDENT**| |**Annexure A7**|**TRUE COPY OF THE LETTER DATED 16-07-**| ||**2021 ISSUED TO THE 3RD RESPONDENT**| |**Annexure A8**|**TRUE COPY OF THE LETTER DATED 23-03-**| ||**2021 ISSUED TO THE 3RD RESPONDENT**| |**Annexure A9**|**TRUE COPY OF THE LETTER DATED 02-12-**| ||**2020 ISSUED TO THE 3RD RESPONDENT**| |**Annexure A10**|**TRUE COPY OF THE RELEVANT PAGES OF**| ||**CLAUSE 25 OF GCC**| |**Annexure A11**|**TRUE COPY OF THE LETTER DATED 19-03-**| ||**2022 IN TOI/CON/F31/770/21 ALONG WITH**| ||**NOTICE OF APPOINTMENT OF ARBITRATOR AND**| ||**THE CLAIM STATEMENT**| ## A.R.No.150 of 2022 ] **Annexure A12 TRUE COPY OF THE LETTER DATED 25-052022 ISSUED BY THE 3RD RESPONDENT WITH FILE NO. EEC/CHN- 2(1)(10)/AC/2022-23/**