M/S. R. R. Constructions vs. The Union Of INDIA

Facts

M/s. R.R. Constructions (Petitioner) filed a Civil Miscellaneous Petition under Section 11(5)(6) of the Arbitration and Conciliation Act, 1996, seeking the appointment of an independent arbitrator. The petition sought to refer disputes arising out of an Agreement for Works dated 15.06.2016, bearing agreement number CAO/CN/BNC/74100/A/719/VI/16, between the Petitioner and the Union of India, South Western Railways (Respondents). The Petitioner's claims reportedly arose in 2017 and continued until July 2021. The Respondents raised an objection that the Petitioner's claim was time-barred, as it should have been filed within four years of the claim arising in July 2017.

Held

The Court held that the facts of the case do not permit it to conclude that the Petitioner's claim is wholly time-barred or is 'dead wood'. The Court found that there are many issues that require consideration only after evidence is led by both parties. Therefore, the dispute is required to be decided by an arbitrator. The Court was satisfied that the Petitioner had fulfilled the requirements under Section 11 of the Arbitration and Conciliation Act, 1996. Consequently, the Court allowed the petition, appointing Hon'ble Justice Shri. Subhash B Adi, Former Judge, High Court of Karnataka, as the sole arbitrator. All contentions between the parties were left open for adjudication in the arbitration proceedings. The office was directed to communicate the order to the Arbitration and Conciliation Centre and the appointed arbitrator.

Key Issues

1. Whether the Petitioner's claim, arising from disputes related to tax components and the subsequent GST regime, is time-barred under Section 11(5)(6) of the Arbitration and Conciliation Act, 1996, considering the alleged delay in raising the claim? Petitioner's contention: The Petitioner argued that the claims pertain to tax components and the subsequent GST regime, and they were not aware of certain issues regarding tax payments that arose in 2017. As soon as these issues came to their knowledge, they obtained a certificate from a Chartered Accountant and raised the claim. Therefore, it cannot be determined at this stage whether the claim is time-barred. The Petitioner also noted that the claims continued until July 2021. Respondents' contention: The Respondents contended that the Petitioner's claim arose in 2017 and continued until July 2021. Based on a certificate annexed to Annexure-B, they argued that if the claim was raised in July 2017, it is clearly time-barred, as the claim petition should have been filed within four years from that date.