S.K. Agarwal, J.
1. This is a petition under Section 16(3) read with Section 41 of the Indian Arbitration Act, 1940 (for short, "the Act"), praying that the award remitted under Section 16(1) by this Court vide order dated 20.12.1994, has become void on failure of the Arbitration Tribunal to submit the decision within the reasonable time.
2. Facts in brief are: that petitioner is a partnership firm; respondents 1 & 2 awarded the work of construction of Central Boards' Building Complex at Shahdara Delhi Sub Head Electrical Installation and entered into a contract agreement No. EE/BP/87-88/2 dated 31.8.1987. The tendered amount was Rs. 22,28,075/- and the estimated cost put to tender was Rs. 20,28,921/-. The subject works contract was governed by the General conditions of the Contract providing for settlement of all disputes and claims by way of Arbitration under Clause 38 thereof. The stipulated date of start of work was 10.3.1987 and the date of completion was 9.9.1988. It is alleged that respondent violated the terms of the contract by not making payment timely and correct despite repeated requests. Petitioner invoked arbitration clause and filed a petition under Section 20 of the Arbitration Act. The disputes were referred to arbitration. Respondents appointed three arbitrators on 17.5.1989 for adjudication of disputes between the parties. The arbitrators (respondent Nos. 3-5) published the Award on 17.8.1990.
3. Respondent No. 2 challenged the Award (by Suit Nos. 2959/90 and Suit No. 2964/90), vide order dated 20.12.1994. The objections of respondent No. 2 were partly allowed by this Court, so far as it related to counter claim No. 1 of the respondent No. 2, with regard to termination of the contract and risk and cost amount and ordered the remittance of the matter back to the three arbitrators for fresh adjudication. During the pendency of the objections of the respondent Nos. 1 and 2 to the award dated 17.8.1990 in Suit No. 2964/90, the respondent had deposited Rs. 1,61,669/-, being the amount of final bill of the petitioner, which is lying in the form of FDR in the name of Registrar of this Court, in terms of order dated 27.4.1994 and 27.3.1995.
4. It is, further pleaded that after the award was remitted back under Section 16(1) on 20.12.1994, the petitioners have been repeatedly visiting the office of respondent Nos. 1 and 2, and praying for processing of the case. The Secretary of the respondent No. 2 vide letter dated 1.8.96, informed the arbitrators that the High Court was being approached for sending arbitration proceedings and the record of the arbitrators. Copy of the letter was also sent to the petitioners; from this letter the petitioner came to know about the address of the arbitrator. The petitioner by letter dated 9.12.1996 requested the Secretary of respondent No. 2 to expedite the sending of the record and commencement of the arbitration proceedings. By letter dated 28.1.1997 petitioner was informed that a petition (OMP No. 19/97), was filed in the High Court for sending back the record to the arbitrator; and on 5.12.1997 the petition was allowed and the respondent Nos. 1 and 2 were directed to furnish the addressed of the new arbitrators. On 19.9.1999, the petitioner addressed a letter to the arbitrators requesting them to enter upon the reference within 15 days, copy of the letter was sent to the Executive Engineer of respondent No. 2, Delhi and Member Secretary of respondent No. 1. The respondents did not reply form more than two months and it became evident that the arbitrator was not interested in proceedings with the reference and have neglected the proceedings. The petitioner was thus left with no alternative and by notice dated 4.12.1999, respondent No. 3 under Section 8 of the Act, constituting fresh arbitral tribunal and appointing new arbitrator in place of earlier arbitrator under Clause 38 of the General consideration of the Contract, within fifteen (15) days for adjudication of the disputes remitted back to the arbitrator vide order dated 20.4.1994, by the High Court. It was made clear that if the needful was not done it would be taken that the respondent No. 3 was not interested with the same. The respondents failed and neglected to enter upon the reference and proceed with the reference with a reasonable dispatch, as per law. On these grounds it is prayed that the award dated 17.8.90 remitted vide order dated 20.12.1994 by this Court has been rendered void under Section 16(3) of the Act, in respect of counter-claim of the respondent No. 1 and the amount of Rs. 1,61,669/- for final bill of the petitioner is liable to be released in his favor.
5. Notice in this petition was issued on 28.4.2000. Respondents have filed short reply, opposing the application.
6. I have heard learned counsel for the parties and have been taken through the record. Facts in this case are not in dispute. Learned counsel for the respondents argued that the time when the Award was set aside and remitted back, no time limit was fixed by the Court for submitting his decision to the Court under Section 16(2) of the Act, therefore, period of limitation does not apply; and respondent is a public body and any reasonable time may be fixed by this Court so as to enable the arbitrators to adjudicate upon the counter claim of the respondent. Reliance is sought to be placed on the decision in Ganpatrai & Sons v. Ramgopal Nanda Kishore, AIR 955 Calcutta 302. Learned counsel for the petitioner argued to the contrary.
7. I have considered the rival contentions. To recall the facts, the contract agreement dated 31.8.1987; initial reference was made under Section 20 of the Arbitration Act by this Court vide order dated 17.5.1989. The Award rendered by the arbitrators on 17.8.1990, rejecting the claims of the respondent. On the objections filed by the respondent, the matter was remitted back to the arbitrators for fresh decision under Section 16(1) vide order dated 20.12.1994. And for the last about eight years nothing has so far happened. As per the law laid down by the Supreme Court in Panchu Gopal Bose v. Board of Trustees for Port of Calcutta , the period of limitation for the
commencement of an arbitration runs from the date on which, had there been no arbitration clause, the cause of action would have accrued. Para 12 reads as under:
"Therefore, the period of limitation for the commencement of an arbitration runs from the date on which, had there been no arbitration clause, the cause of action would have accrued. Just as in the case of civil actions the claim is not to be brought after the expiration of a specified number of years from the date on which the cause of action accrued, so in the case of arbitrations, the claim is not to be put forward after the expiration of the specified number of years from the date when the claim accrued."
8. In this case at the risk of repetition it may be recalled that the initial reference was made on 17.5.1989; the matter was remitted back to the arbitrator for fresh decision under Section 16(1) of the Act on 20.12.1994. Thereafter no action was taken by respondent Nos. 1 and 2 to secure the records for more than two years, and the petitioner wrote to the respondent Nos. 1 and 2, vide letter dated 1.8.1996 that the High Court is being approached for the record of the arbitration proceedings, the petition for securing the record was filed sometime in 1997. Even after the record was received, the inaction or neglect at the part of the respondents is writ large, as even after filing of this # petition, there was till date on decision has been taken. It is true that while remitting the matter back to the arbitrators by order dated 20.12.1994 no time was fixed for fresh decision under Section 16(2) of the Act. Even in such a case period of limitation has to be reasonable and cannot be construed to be more than the period available for invocation of the arbitration, which is three years from the date when the cause of action arises, as held by the Supreme Court in Panchu Gopal Bose (Supra). Want due diligence in prosecuting the matter disentitles the respondents from any indulgence. In view of the facts noted above this court has no option but to supersede the reference in respect of the counter-claim of the respondent Nos. 1 and 2 under Section 19 of the Act.
9. For the foregoing reasons, the petition is allowed. Registry is directed to release the amount of Rs. 1,61,669/- along with the interest deposited by the respondents lying in the fixed deposit in Suit No. 2964/1990, in favor of the petitioner.
Petition stands disposed of.