# M/s Manish Engg. Entp v. Indian Farmers Fertilizer Coop. Ltd. & Ors

- **Citation:** (2022) 1 ILRA 851
- **Court:** High Court of Judicature at Allahabad
- **Decided:** 2021-12-17
- **Bench:** Suneet Kumar
- **Source:** https://unisonlegal.in/judgment/allahabad-high-court/m-s-manish-engg-entp-v-indian-farmers-fertilizer-coop-ltd-ors-47522
- **Pages:** 22

## Headnote

Ms. Sushmita Mukherjee, Sri Vivek Ratan
Agrawal, Sri Sanjay Grover, Sri Sunil Gupta

Application u/s 11 95)-for appointment of
arbitrator-no
original
contract/work
order
filed-non
existent
and
manufactured document-in its absenceApplication u/s 11 not maintainable-claim
of applicant is ex facie time barred by
more
than
fifteen
years-absence
of
pleading and proof of mode and manner of
giving or delivery-and receipt of noticepre condition of section 11 r/w section 3
and 21-not satisfied-

Application rejected. (E-9)

List of Cases cited:

## Text

_Characters 0–39,981 of 69,055. This is a partial read: ask again with offset=39981 for what follows._

1 All. M/s Manish Engg. Entp. Vs. Indian Farmers Fertilizer Coop. Ltd. & Ors.
851
the parties and case laws relied upon by the
facts that reliance on the provisions of the
Electricity Act 2003 is misplaced. The
Applicant is neither a licensee nor a
generating
company.
It
has
neither
generated Electricity not supplied it to the
Respondent and the Supply Agreement is a
contract for supply of materials and
equipment.
The
Applicant
has
not
undertaken any work of Transmission,
Distribution and Trading of Electricity as a
licensee, and the Respondent counsels'
reliance on Section 67 of the Electricity Act
is also misplaced. The judgements relied
upon
by
the
Respondent
have
no
application to the present case as these
judgements
deal
exclusively
with
Electricity disputes between distribution
companies and generating companies under
Power
Purchase
Agreements.
The
Arbitration application deserves to be
allowed and is allowed. This Court
proposes
the
name
of
Justice
O.P.
Srivastava (Retd.) to Act as Arbitrator.

50. Let the office issue notice to the
proposed Arbitrator seeking his consent
under Section 12 of the Act.
----------

(2022)01ILR A851
ORIGINAL JURISDICTION
CIVIL SIDE
DATED: ALLAHABAD 17.12.2021

BEFORE

THE HON'BLE SUNEET KUMAR, J.

Arbitration & Concili. Appl. U/S 11(4) No. 112 of
2004

M/s Manish Engg. Entp. ...Applicant
Versus
Indian Farmers Fertilizer Coop. Ltd. & Ors.
 ...Opp. Parties
Counsel for the Applicant:
Sri Vivekanand Srivastava, Sri Dharmendra
Shukla, Sri P.K. Ganguly, Sri Santosh Kumar
Tiwari, Sri Anil Tiwari

Counsel for the Opp. Parties:
Ms. Sushmita Mukherjee, Sri Vivek Ratan
Agrawal, Sri Sanjay Grover, Sri Sunil Gupta

Application u/s 11 95)-for appointment of
arbitrator-no
original
contract/work
order
filed-non
existent
and
manufactured document-in its absenceApplication u/s 11 not maintainable-claim
of applicant is ex facie time barred by
more
than
fifteen
years-absence
of
pleading and proof of mode and manner of
giving or delivery-and receipt of noticepre condition of section 11 r/w section 3
and 21-not satisfied-

Application rejected. (E-9)

List of Cases cited:

1. Vidya Drolia & ors. Vs Durga Trading
Corporation", reported in (2021) 2 SCC 1,

2. Velugubanti Hari babu Vs Parvathini Narasimha
Rao & anr., (2016) 14 SCC 126 para 23

3. Atul Singh & ors. Vs Sunil Kumar Singh &
ors.s(2008) 2 SCC 602

4. Geo Miller & Comp. Pvt. Ltd. Vs Chairman,
Rajsthan Vidyut Utpadan Nigam Limited, (2020)
14 Supreme Court 643 (paras 23-24, 29)

5. Inder Singh Rekhi Vs Delhi Development
Authority, (1988) 2 SCC 338

6. Reliance Asset Reconstruction Company
Limited Vs Hotel Poonja International Pvt. Ltd.
2021 SCC Online 289 (para 32)

7. Khan Bahadur Shapoor Fredoom Mazda Vs
Durga Prasad Chamaria & ors., AIR 1961 SC 1236

8. Bharat Sanchar Nigam Limited & anr. Vs M/S
Nortel Network India Pvt. Ltd. 2021 SCC online
SC 207
852 INDIAN LAW REPORTS ALLAHABAD SERIES
9. Secunderabad Cantonment Board. Vs B
Ramchandriah & Sons , (2021) SCC online SC
219 (para 20)

10. Datar Switchgears Ltd. Vs Tata Finance Ltd.
& anr., 2000) 8 SCC 151

11. Goldbrush Sales & Services Ltd. Vs
Managing Director, U.P. St. Road Transport
Corporation & anr., 2019 SCC Online AII
5833

12. Udai Shankar Awasthi Vs. St. of U.P., (2013)
2 SCC 435
(Delivered by Hon'ble Suneet Kumar, J.)

1. The judgment is being structured in
the following framework to facilitate the
discussion:

A. Remand Order

B. Pleadings

(i) Application under section 11;

(ii) Further pleadings;

(iii) Objections by respondent-IFFCO

C. Existence of Arbitration Agreement

D. Claim - time barred, deadwood

(i). Limitation Act: Section 18

E.
Conditions
for
maintaining
application under Section 11

F.
Vexatious,
frivolous
dishonest
claim

G. Conclusion

2. Heard Sri Anil Tiwari, learned
Senior Counsel assisted by Sri Santosh
Kumar Tiwari and Sri Dharmendra Shukla,
learned counsels for the applicant/petitioner
and Sri Sunil Gupta, learned Senior
Counsel
assisted
by
Ms.
Sushmita
Mukherjee and Sri Sanjay Grover, learned
counsels appearing for the respondent.
Parties were heard at length for several
days.

A. Remand Order :

3. The instant application/petition has
been filed under Section 11(5) of the
Arbitration and Conciliation Act, 19961,
invoking the jurisdiction of this Court for
appointment of an arbitrator. The matter
was heard pursuant to remand order dated 9
March 20212. Relevant portion of the
Supreme Court order reads thus:

"Our attention has been invited to the
recent three Judge Bench decision of this
Court in "Vidya Drolia & Ors. vs. Durga
Trading Corporation", reported in (2021)
2 SCC 1, which is directly on the point.
Amongst others, it has been held that the
High Court in a given case while deciding
an application under Section 11(4) of the
Arbitration and Conciliation Act, 1996, can
undertake ''the prima facie test' examination
to check manifest cases of non-existent and
invalid arbitration agreements and ex facie
time barred and dead claims. This limited
exercise is to weed out and stop barefaced
and pellucid meritless, frivolous and
dishonest
litigation
at
the
threshold.
However, the principle ''when in doubt, do
refer'
applies.
Therefore,
when
the
contentions
are
arguable,
when
consideration in summary proceedings
would be insufficient and inconclusive,
when
facts
are
contested
etc.,
the
matter/disputes should be 3 referred to the
Arbitrator.

The counsel for the respondents
vehemently submitted that they have placed
on record the document, namely, the
arbitration agreement, which is a genuine
document. However, we need not elaborate
on the arguments advanced before us for
the nature of the order we propose to pass
as we are of the opinion that the issue and
contentions
require
reconsideration
in
accordance with law keeping in mind the
legal ratio in Vidya Drolia (supra). These
1 All. M/s Manish Engg. Entp. Vs. Indian Farmers Fertilizer Coop. Ltd. & Ors.
853
contentions can be considered by the High
Court in the remand proceedings.

We
accordingly
set
aside
the
impugned order and the judgment and
relegate the parties to the High Court by
restoring the application for appointment of
the arbitrator to its original number for
being considered afresh. The examination
would be in terms of the ratio in Vidya
Drolia (supra).

We may not be understood to have
expressed any opinion either way on any of
these contentions, or as may be available to
the parties in the remanded proceedings.
All contentions are left open."

4. Supreme Court directed that while
considering the application under Section
11 of the Arbitration Act, the Court to
prima facie, examine: (i) whether the
agreement exists; (ii) whether the litigation
is meritless, frivolous and dishonest; (iii)
whether the claim, ex facie, is time
barred/deadwood, and/or, the application
(Section 11) is itself barred under the
Limitation Act, 19633.

5. The instant application under
Section 11(5) of the Arbitration Act was
presented on 17 December 2004, the
application came to be disposed of vide
order dated 22 January 2019, appointing an
arbitrator. The respondent, Indian Farmers
Fertilizer Cooperative Ltd.4, a public sector
undertaking of the government, carried the
order in appeal to the Supreme Court,
which was set aside and remanded.

B. Pleadings :

(i) Application under Section- 11

6. It is pleaded that the applicant-firm
came to be awarded work order No.
36/0000/1060/12463 dated 29 March
1985, for complete cleaning and painting of
structures,
equipments,
vessels
and
pipelines etc. in different plants of
Phoolpur. The total value of the work order
was at Rs.3,60,000/-. It is asserted by the
applicant that the work order was executed
and completed as per the terms and
conditions to the satisfaction of the
respondent-authorities.
It
is,
further,
pleaded that after completion of the work,
the bills for the entire work was submitted
with the respondent-authority but the
payment was not made for the reasons best
known to the IFFCO authorities. It is
further pleaded that despite repeated
request for payment of the bills arising
from the work order and for various other
work order payment was not made.

7.

Aggrieved,
petitioner
was
compelled to institute a petition being Civil
Misc. Writ Petition No. No. 19922 of 2001,
for
another
work
order
No.43/57061/1916B1/35252,
dated
1
February 1996, and not for the present
work order. It is further asserted that
conduct of the applicant approaching this
Court invoking writ jurisdiction annoyed
the
IFFCO
authorities,
consequently,
applicants were subjected to harassment
and trouble causing hindrance in the
contract work and payment of bills already
submitted by the applicants.

8. It is further pleaded that applicant
was prohibited from entering the premises
at Phoolpur Unit of IFFCO and was not
permitted to look after the material and
documents kept by the applicant in their
store-cum-office
within
the
IFFCO
premises, nor was the applicant permitted
to remove the material and documents from
the premises. It is further pleaded that on
854 INDIAN LAW REPORTS ALLAHABAD SERIES
inspection of the site on 16 May 2003,
along with the arbitrator appointed in
another proceeding, (M/s S.K. Associates),
sister-firm of the applicant-firm, it is
alleged that the material and documents of
the applicant-firm lying in the store-cumoffice within the IFFCO premises was
missing/removed
by
the
respondentauthorities. It is consequently asserted that
the cause of action arose on 7 December
2001, 6 May 2003, thereafter, on 9 October
2004.

9.

In
paragraph
(14)
of
the
application, it is pleaded that despite
repeated approach and request, applicant
was not given payment of the bills in
respect of the work order, hence, a notice
dated
9
November
2004,
was
sent/dispatched on 16 November 2004, by
post requesting the IFFCO-authorities to
make payment, of the bills along with
compound interest @ 18% per annum,
and/or, to appoint an arbitrator to decide
the dispute.

10. It is, thereafter, pleaded that the
respondent- IFFCO neither made payment
nor appointed an arbitrator till filing of the
instant petition (17.12.2004) even after expiry
of the notice period. Hence, applicant was
compelled to invoke the jurisdiction of this
Court under the Arbitration Act. It is further
pleaded that as per clause-17 of the work
order, there is a provision for arbitration. It is
further asserted that the application filed
under Section 11 is well within limitation and
if there is any delay, the same may be
condoned. In para-19, it is unequivocally
pleaded that the bills at Rs.3,60,000/- plus
interest thereon, is lying pending with the
IFFCO-authorities w.e.f. 29 March 1986.

11. It would be apposite to reduce the
dates, as pleaded by the applicant in
Section-11 Application, in tabular form to
comprehend the time line of the case setup
by the applicant.

TABLE - I

Dates
Events
29.03.1985 Alleged Work Order No.
36/0000/1060 C/12463 for
complete
cleaning
and
painting
of
structures,
equipment,
vessels
&
pipelines of the plant in
Phoolpur unit. (Value of Rs.
3,60,000/-).
The
Work
Order had a duration of one
year.
29.03.1986
29.04.1986
29.05.1986
Taking the above allegation
at its face value, since the
Work Order period ended on
29.03.1986, the bill should
and
would
have
been
submitted in 30 days by
29.04.1986 & then paid in
30 days by 29.05.1986.
19.05.1989 Thus, cause of action, if any,
arose on 29.05.1986. The 3
years
limitation
started
running
&
expired
on
29.05.1989.
09.11.2004 Notice under clause 17 of
the Work Order to appoint
arbitrator.

17.12.2004 Petition filed under section
11 of Arbitration Act.

(ii) Further pleadings:

12. Supplementary affidavit dated 18
November 2014, came to be filed by the
applicant
bringing
on
record
the
correspondence with the respondent-IFFCO
with regard to the payment of the work
order. Letters written by the applicants are
1 All. M/s Manish Engg. Entp. Vs. Indian Farmers Fertilizer Coop. Ltd. & Ors.
855
dated 29 May 1993, 26 February 1994, 20
April 1996, wherein, reference is to several
work orders, including, the present work
order requesting IFFCO authorities to
release
the
pending
bills.
The
communication dated 20 April 1996
specifically pertains to the instant work
order, wherein, it has been noted that more
than 10 years have lapsed, an additional
work at Rs.3,51,590/- arising from the
work order was executed by the applicant
at behest of the IFFCO authorities but
despite on having completed the work,
payments
presently
standing
at
Rs.7,11,590/- along with compound interest
@ 18%, is due and pending.

13. The document dated 1 July 19985,
purportedly to have been issued by IFFCO
(Joint General Manager Maintenance), the
subject reads, ''submission of final bills'. It
is a typed, partially legible document with
interpolations by hand. The document
refers to work order of the year 1983, 1984,
1985 and 1993. It appears that the
document has been filed to mislead and
misrepresent the Court. It is not clear
whether the document pertains to the
present work order.

14. In the rejoinder affidavit dated 6
November 2017 filed by the applicant (to
the counter affidavit filed by IFFCO to the
application under Section 11), it is
pleaded6 that the application under Section
11 of the Arbitration Act is within time and
not barred by limitation. It is further
pleaded that, "the crucial date for invoking
the limitation is 17 April 2002 when
respondent sought no claim certificate from
the applicant for release of the payment.
The applicant invoked the arbitration
clause on 09 November 2004 and the
petition was filed on 17 December 2004
and hence the claim of the applicant is
well within time".

15. The purported notice dated 9
November 20047, for appointment of
arbitrator with respect to the present work
order (29 March 1985) reads thus:

"Sir,

The above work order was awarded to
M/s Manish Engineering Enterprises and
was completed within time whose bills
for payment were submitted. On the
instructions of IFFCO authorities, bills
were again submitted.

Most of the relevant papers in respect
of the above said work order and other
work orders were lying in the store-cumoffice within IFFCO plant maintained by
the M/s Manish Engineering Enterprises,
wherein the entry of undersigned has
been banned by IFFCO authorities
about for the last 3-4 years.

In compliance of IFFCO letter dt.
07.12.2001 the reply dt. 07.12.2001 i.e. on
the same day was given that the bills
already submitted are lying in your
office for payment with a prayer to make
the payment thereof with interest @
18% per annum (Compound Interest)
Date : 09.11.2004
 M/s Manish Engineering Enterprises"
 (emphasis supplied)

16. The notice was dispatched by
speed post on 16 November 2004.

17. On perusal of the notice, it
categorically states that the firm had
completed the work order within time and
the bills for payment were submitted. In the
subsequent paragraph it is stated that the
relevant papers in respect of the work order
was lying in the store-cum-office within
856 INDIAN LAW REPORTS ALLAHABAD SERIES
IFFCO plant maintained by the firm,
wherein, entry was banned by IFFCO
authorities about 3-4 years ago. It is further
stated that pursuant to and in compliance of
IFFCO's letter dated 7 December 2001, a
reply was submitted by the firm on the
same day that bills already submitted are
lying in the office of IFFCO for payment
along with compound interest @ 18% per
annum. Since nothing has been done,
hence, the instant notice, as per clause 17
of the work order, for appointment of
arbitrator.

18. The applicants have further
referred to several letters written by the
respondent authorities in response to the
communications of the applicant. The letter
written by the IFFCO authorities is dated
13 January 1997, wherein, it is certified
that applicants carried out substantial
painting work in IFFCO plant at about Rs.
20 lakh. The work and performance was
found satisfactory. The letter dated 3 March
2000, is again in the same tenor certifying
that the firm (applicant) had executed
several civil work and painting at IFFCO. It
is certified that the firm is technically and
financially sound and their work is
satisfactory. The next communication dated
20 March 2000, is in reference to the
present work order (29.03.1985), wherein,
it is stated that the firm has already
informed through earlier correspondence
(05.10.1999,
21.10.1998,
03.01.1997,
05.04.1996 and 29.12.1995) that it is not
possible for the IFFCO to pay Rs.
3,51,519/- towards the additional work
executed
by
the
firm
without
amendment/modification of the work order.
After modified/amended work order is
issued the payment would be released.

19. The next communication placed
on record, alleged to have been issued by
the respondent, is communication dated 30
November 2001, which is hand written on a
rough note sheet. The letter has been signed
by one Rashid Iqbal. The designation of the
officer is not indicated and the copy of the
letter is marked to Senior Manager (civil).
The communication refers to six bills
pertaining to different works undertaken
and executed by the applicant firm. There
is reference to the instant work order, as
well as, other work orders since 1985 to
1996. The letter merely records that the
work orders noted therein is in the Account
department for verification. The firm was
directed to contact the Senior Manager
(civil) for no claim certificate etc. so that
necessary action may be taken for release
of payment.

20. The applicants have placed on
record letter dated 17 April 2002, issued
by the respondent authority, addressed to
the applicant-firm. The subject refers to
the present work order. The contents of
the letter is in reference to the earlier
communication dated 30 November 2001,
issued by the civil department asking the
firm to submit no claim certificate so as
to enable the authorities to release the
payment against the work order. The
letter further communicates that the
amendment to the work order has already
been
issued
vide
letter
dated
23
November 2001, accordingly, the firm
was requested to submit no claim
certificate to the Senior Manager (civil)
for necessary action to be taken thereon
for release of payment.

21. The additional pleadings and the
communication referred therein by the
applicant, for the sake of convenience, is
reduced in a tabular form.

TABLE - II
1 All. M/s Manish Engg. Entp. Vs. Indian Farmers Fertilizer Coop. Ltd. & Ors.
857
DATES
EVENTS
29.05.1993
26.02.1994
20.04.1996
Three letters, 7 years after
end
of
the
period
of
completion of the alleged
Work Order, are stated to be
the Applicant's requests for
payment.
These letters have seen the
light of day for the first time
after 20 years only in the
2015
Supplementary
Affidavit.

13.01.1997 The
letter
by
IFFCO
recording
successful
completion of work by the
Applicant
21.10.1998
28.10.1998

The
letters
demanding
payment
again
but
not
pertaining
to
or
making
reference to the present Work
Order.

03.03.2020 A Certificate of Manager of
IFFCO to the effect that the
Applicant
has
completed
work
including
painting
work, written 14 years after
alleged completion of the
work order.
The document having no
reference to the present Work
Order.
25.03.2000

IFFCO's alleged reply to the
Applicant's
letter
dated
22.02.2000
acknowledging
that
the
Applicant
has
completed additional painting
work to the tune of Rs.
3,51,590 payment of which
would be done after extension
of amendment of the Work
Order. The communication is
14 years after the alleged
completion
10.05.2001
09.10.2001

The letters of the Applicant
regarding release of payment
which are dated 15 years after
the alleged completion of
work.
30.11.2001

7.12.2001
17.4.2002

Alleged letter by IFFCO
asking the Applicant to give
No Claims certificate for
release
of
outstanding
payment is alleged.

Protest letter by Applicant
seeking
18%
compound
interest
also.
IFFCO,
referring
to
letter
dated
30.11.2001 again asked for
NOC. The letters are 15 years
after the alleged completion.

17.12.2004 Application under Section-
11 filed before the Court.

(iii) Objections by the respondent-IFFCO

22. Respondents in response to the
application filed under Section 11 and the
other affidavits have categorically pleaded
and setup a case that the claim is malicious,
false based on non existing work order. The
communications/correspondence from the
period 1992 to 2002 were not filed along
with original application presented in 2004.
It is further pleaded that proprietor of the
firm (Shri S.K. Pandey) is a person of
questionable intent, who has filed series of
fraudulent litigations against the respondent
IFFCO and the instant litigation is one such
matter which has been filed after twenty
years of the alleged date of work order (29
March 1985). The respondents have denied
of having an employee in the name ''Rashid
858 INDIAN LAW REPORTS ALLAHABAD SERIES
Iqbal'. The respondents have further denied
existence of the work order and have
insisted
that
the
original
arbitration
agreement be placed on record by the
applicant. It is further pleaded that
respondents are not party to the alleged non
existent agreement. The document and the
correspondence is forged, manufactured
with interpolations visible to naked eye.

23. A preliminary objection has been
raised with regard to the maintainability of
the application being highly belated and
prima facie suffers from delay and laches.
The work order was for a period of one
year for cleaning and painting. Issue of
non-payment is being raised after twenty
years, which according to the respondents
is barred by laches, even if the work order
is to be taken on face value.

24. In the backdrop of the pleadings
noted herein above in detail, this Court has
been called upon, to return a finding on: (a)
existence of the arbitration agreement; (b)
whether claim is ex-facie time barred,
and/or, dead claim; (c) whether the
application under section 11 is meritless,
frivolous and dishonest litigation; (d)
whether the application under Section 11
itself is barred by limitation.

C.
Existence
of
Arbitration
Agreement :

25. The work order is dated 29 March
1985 as per the case of the applicant. The
quotation no. is nil dated 27 October 1984,
and discussions held on 7 January 1985.
The document on face value appears to be
cyclostyled/typed. The reference number of
the work order date and the description of
the applicant firm is hand written. Clause
(3) of the agreement specifies that the total
value of the contract as per schedule rates
is at Rs. 3,60,000/-. The document further
clarifies that the maximum value will not
exceed Rs. 3,60,000/-. After clause 3.0/3.1,
as visible to naked eye, some interpolation
has been made in the work order. Between
clause 3.1 and 4.0 a new clause (8) has
been interpolated/inserted which mandates
that the contractor shall ensure payment of
minimum
wages.
The
interpolated
clause(8) is an extract of page 2 of some
other document. On bare perusal of the first
page of the work order the clauses therein
is as follows:

1.0 ---- Scope of Work

1.1 ---- .....

2.0 ---- Contractor's Delegation

3.0 ---- Rates & Total Work Order
Value

3.1 ---- .....

- 2 -

8. ---- Interpolation i.e. cut/paste

4.0 ---- Safety

26. In between clause 3.1 and 4.0,
clause (8) has been interpolated, partially
effacing clause 3.2 i.e. payment of
minimum wages, which is clearly visible to
naked eye. An attempt has been made to
efface clause 3.2 and clause (8), contained
in page -2-, of another document has been
superimposed.

27. The next page of the work order is
again marked page -2- and is with regard to
terms of payment which, inter alia,
provides that 100% payment shall be made
against rest/final payment submitted to
Manager (Finance and Accounts) within 30
days of submission of temporary verified
bills. It further provides that if a bill is not
submitted within 30 days after completion
of work then IFFCO will not take any
responsibility
for
measurement/sheet
verification.
1 All. M/s Manish Engg. Entp. Vs. Indian Farmers Fertilizer Coop. Ltd. & Ors.
859

Clause 6.0 ---- Effective Date

Clause 6.1 ---- The duration of the
contract shall be valid for a period of one
year from the effective date. The effective
date will be the date of issue of work order.
However, it will be at the discretion of
IFFCO to extend the validity for another
one year at same terms and conditions on
mutual consent.

28. The last page of the work order
(page-6) bears the signature of the
''Materials Manager', whereas, the columns
for the signature and seal of the contractor
''received and accepted' is not sealed,
stamped nor bears the signature of the
applicant firm. In other words, there is no
endorsement of having received and
accepted the work order by the firm with its
seal and signature.

29. The applicant filed a counter
affidavit in response to an affidavit filed
by Sanjay Kudesia on behalf of IFFCO. In
paragraph
6,
it
is
stated
that
the
respondents
are
guilty
of
denying
existence of their own document (work
order) and the subsequent correspondence.
It is further pleaded that applicant would
produce the original work order in the
Court, "the applicant is in possession of
the original work order which will be
produced on the order of the Hon'ble
Court". In the subsequent paragraph (7) it
is stated that the "work order dated 29
March 1985 was subsequent revise in
2001 and due to increase in following of
the work and it was amended in 2001[....]
the applications filed pertaining to the
work order was kept in store/office
maintained in IFFCO Phoolpur Branch
which was subsequently misappropriated
by IFFCO, when the applicants' entry was
banned."

30. In other words the original
work order, is in possession of the
applicant as claimed, but was not placed on
the record, nor, produced during the course
of arguments.

31. The plea of non-existence of
arbitration agreement in an application
under Section 11, if raised, is to be decided
by the Court. In Velugubanti Hari babu v.
Parvathini
Narasimha
Rao
and
another8,
Supreme
Court
made
the
following observations:

"The High Court ought to have
decided the questions itself and recorded a
finding as to whether the MoU dated
27.05.2013
is
a
valid
and
genuine
document or it is a forged and fabricated
document and then depending upon the
findings,
appropriate
directions,
if
necessary, should have been passed for
disposal
of
the
application
finally.
Unfortunately, it was not done."

32. In Atul Singh and others v.
Sunil
Kumar
Singh
and
others9,
Supreme Court held on Section 8(2) as
follows:

"There is no whisper in the petition
dated 28.2.2005 that the original arbitration
agreement or a duly certified copy thereof
is being filed along with the application.
Therefore,
there
was
a
clear
non-
compliance of sub-section (2) of Section 8
of 1996 Act which is a mandatory
provision and the dispute could not have
been referred to arbitration."

33. The applicant, admittedly, has not
filed the original but photocopy of the
contract/work order dated 29 March 1985
with arbitration clause 17. Keeping in view
860 INDIAN LAW REPORTS ALLAHABAD SERIES
the contested nature of ''existence' of the
agreement, it was incumbent in law on the
applicant to produce the original as claimed
and pleaded by them. In the absence of the
original, the application under Section 11,
read with Section 8, of the Arbitration Act
is per se not maintainable.

34. The ratio of Supreme Court in
Vidya Drolia10 is that the same standard,
parameters and mandate as apply to Section
8 are applicable also to Section 11 for the
purposes of determining the issue of
''existence'
and
''genuineness'
of
the
arbitration agreement and deciding whether
the parties should be referred to arbitration.
Therefore, the Court cannot entertain any
application under Section 11, unless as per
the mandate of Section 8, the original
arbitration agreement is accompanying it.
Section 8 reads thus:

"8. Power to refer parties to
arbitration where there is an arbitration
agreement

(1) A judicial authority, before which
an action is brought in a matter which is the
subject of an arbitration agreement shall, if
a party to the arbitration agreement or any
person claiming through or under him, so
applies not later than the date of submitting
his first statement on the substance of the
dispute,
then,
notwithstanding
any
judgment, decree or order of the Supreme
Court or any Court, refer the parties to
arbitration unless it finds that prima facie
no valid arbitration agreement exists11.

(2) The application referred to in subsection (1) shall not be entertained unless
it is accompanied by the original
arbitration agreement or a duly certified
copy thereof:

Provided that where the original
arbitration agreement or a certified copy
thereof is not available with the party
applying for reference to arbitration under
sub-section (1), and the said agreement or
certified copy is retained by the other party
to that agreement, then, the party so
applying shall file such application along
with a copy of the arbitration agreement
and a petition praying the Court to call
upon the other party to produce the original
arbitration agreement or its duly certified
copy before that Court12."

(emphasis supplied)

35. Applying the ''prima facie' test of
Vidya Drolia, it follows:

(i) In the absence of the original
arbitration agreement, the application under
Section 11(5) is on the face of it not
maintainable and cannot be entertained.

(ii) The question of the original not
being available with the applicant does not
arise. The applicant has, in its reply to
IFFCO's application for production of the
original,
categorically
accepted
and
asserted on 15 November 2018 that it is in
possession of the original:

"6 ... The applicant is in possession
of the original work order which will be
produced on the order of the Hon'ble
Court."13

(emphasis supplied)

(iii) Since the original is admittedly in
the possession of the applicant and still not
filed, the mandate of Section 11 read with
Section 8(2) is that the Court shall draw an
adverse inference against the applicant and
dismiss its application summarily.

(iv) Act 3 of 2016, inserted a Proviso
in Section 8(2), even in a case where the
original is not available with the applicant,
the applicant is required to -

(a) make that averment on pleading in
its application under Section 11 and
1 All. M/s Manish Engg. Entp. Vs. Indian Farmers Fertilizer Coop. Ltd. & Ors.
861

(b) also file a petition ''praying to the
court to call upon the other party to
produce the original' before the Court.

 (emphasis supplied)

(v) In the present case, rather than the
applicant, it is the respondent which filed a
petition (August 2018) before this Court
that the applicant be directed to produce the
original
work
order/agreement.
The
applicant's reply to the same is that the
original is in its possession. But the original
contract has not been produced, nor, placed
on record.

36. Having regard to the work order
dated 29 March 1985, and taking it on face
value, the document, ex facie, is a forged/
manufactured
work
order
with
interpolations writ large to naked eye. The
applicant failed to produce the original
work order. The work order which is the
basis of the application filed under Section11 of the Arbitration Act, ex facie, is a non
existent and manufactured document.

D. Ex facie - time barred, deadwood
claim :

37. It is submitted by the learned
counsel for the respondent that the alleged
claim of the applicant is ex facie time-barred,
dead-wood and not maintainable. It has been
filed long after the expiry of the three years
limitation period. In paras 10-11 of Section11 Application, applicant itself states:

"10. That after.... Writ petition, the
entry of the applicant within IFFCO.... Was
banned and he was not permitted to look
after his... documents... in hs store-cumoffice... and... remove them from there.

11. That a letter dated 5.8.2000 was
handed over to the applicant written by one
of the employees of IFFCO Sri S.K.
Pandey, Junior Officer (Civil) and C.R.
Joshi asking the applicant to remove his
store from IFFCO premises.... The true
copy.... Annexure No. 3..."

38. As per the applicant, respondent-
IFFCO,
admittedly,
disengaged
the
applicant well before 5 August 2000, where
was
the
occasion
of
the
alleged
extensions/amendments of work order
(29.3.85) being granted to the applicant by
subsequent alleged letters written after
fifteen years. It is improbable, even taking
that letters were written, as is being
asserted by the applicant, that would not
overcome the bar of limitation. The time
commences to run as the cause occurs.

39. In the alleged work order dated 29
March 1985, the payment terms, therein,
reads thus:

"5.0 PAYMENT TERMS

Subject to Clause 7 and 8, 100%
payment
shall
be
made
against
running/final bills submitted to Manager
(Finance & Accounts) within 30 days of
submission of duly verified bills. If a bill
is not submitted within 30 days after
completion of work, then IFFCO will not
take any responsibility for measurement
sheet verification."
(emphasis supplied)

40. Cause of action, if at all, would
have accrued to the applicant legally is in
May 1986. Under clause 5.0 Payment
Terms, applicant was required to submit
bill within 30 days after completion of
work. The work order being valid for one
year only i.e. up to 28 March 1986, the bill
could have been submitted within thirty
days i.e. latest by 28 April 1986. Had bill-
862 INDIAN LAW REPORTS ALLAHABAD SERIES
compliance been done, the entire payment
due to the applicant should have been made
by IFFCO within further thirty days latest
by 28 May 1986 and, if not so made, cause
of action would have arisen and right to sue
for its dues would have accrued to
applicant on 29 May 1986. (See Table-I)

41. In paras 4 and 14 of the present
application under Section 11, applicant has
asserted:

"4. That after the completion of the
work, the bills for the entire job of the
work order were submitted but the
payments were not made on one count or
the other deferring the matter for reasons
best known to the IFFCO authorities.

14.
That
in
spite
of
repeated
approaches and requests, the applicant was
not given payment of his bills in respect of
the work order dated 29.3.1985. Hence,
vide notice dated 9.11.2004 sent on
16.11.2004 by post requested the IFFCO
authorities to make the payment of the bills
with interest @ 18% per annum (compound
interest) or to appoint an arbitrator to
decide the dispute at the earliest..."

(emphasis supplied)

42. The present case is not one of any
contractual term of ''finalization' of bills by
the employer as asserted by the applicant.
The process of finalization of bills is a
different concept from a final bill. [See
Geo
Miller
and
Company
Private
Limited Versus Chairman, Rajsthan
Vidyut Utpadan Nigam Limited]14

43. Clause 5 of the work order
mentions running bills and a ''final bill'.
The final bill is the last bill submitted by
the contractor. Clause 5 does not provide
for any act of finalization of bills by IFFCO
after the submission of bills by the
contractor.
It
provides
only
for
measurement sheet verification by IFFCO
and that too before submission of bills by
the contractor to Manager (Finance &
Accounts).
The
submission
of
bills,
including the final (last) bill, along with
such verification is to be done within thirty
days of completion of work.

44. Clause 5 provides that once the
verification bills are submitted, 100%
payment shall be made against the running
/final bills submitted to the Manager
(Finance and Accounts) within thirty days
of submission of duly verified bills. Thus,
even verification precedes the submission
of bills and there is no process of
finalization of bills but only payment of
bills automatically after their submission by
the contractor.

45. Applicant has categorically
stated15 in the Section-11 application that
"after the completion of the work, the bills
for the entire job of the work order were
submitted but the payments were not
made....". The case pleaded by the
applicant is simply of submission of bills
followed
by
non-payment,
not
of
finalization of bills pending at the end of
IFFCO. Thus, there is neither any term of
finalization of bills in the contract, nor even
any plea of finalization of bills in the S.11
application. On the other hand, the
allegations by the applicant are that it
continued to send reminders to IFFCO for
payment but still payment was not done by
IFFCO.

46. It has been submitted by the
learned counsel for the respondent-IFFCO,
relying on Geo Miller16 that unlike a case
with contractual term of ''finalization of
bills' as in Major (Retd.) Inder Singh
Rekhi
v.
Delhi
Development
1 All. M/s Manish Engg. Entp. Vs. Indian Farmers Fertilizer Coop. Ltd. & Ors.
863
Authority17, in a case where bills are
''handed
over'
by
claimant
to
the
respondent but respondent has failed to
make payment, the right to sue accrues
from "the date on which the final bills was
raised".

47. Hence, as per the terms of the
work order/contract, the right to apply
accrued to the applicant latest on 29 May
1989, and, the notice for arbitration being
allegedly sent on 16 November 2004, the
claim of applicant is ex facie time barred
by
more
than
fifteen
years.
The
correspondence
and
communications,
thereafter, is of no avail to the applicant.

(i). Limitation Act : Section 18

48. The learned counsel for the
applicant strenuously attempted to impress
upon the Court that the case of the
applicant would fall under Section 18 and
not under Article 137 of Limitation Act.
The
law
requiring
conditions
of
''acknowledgement'
under
Section
18,
including its timing and pleading, has been
laid
down
in
Reliance
Asset
Reconstruction Company Limited v.
Hotel
Poonja
International
Private
Limited18. Under Section 18 of the
Limitation Act, the acknowledgement of
liability in writing, signed by a party in
respect of any right or property claimed by
such party within the prescribed period of
limitation to file a suit, and/or application,
leads to computation of the period of
limitation afresh, from the time when the
acknowledgement is so signed. In the
present case, both the said conditions of
Section-18 are not satisfied. The provision
is extracted:

49. Section 18, Limitation Act
provides that-

"where, before the expiration of the
prescribed period for a suit application ...,
an acknowledgement of liability .... has
been made ...., a fresh period of limitation
shall be computed from the time when the
acknowledgement was so signed."

50.

Thus,
it
is
only
if
an
acknowledgement is made before the
expiration of the prescribed period of
limitation that limitation will start from the
date of acknowledgement. For that purpose,
as per Art. 137, Limitation Act, the date of
commencement of limitation i.e. the date
when the right to apply accrues to the
plaintiff or applicant is the first necessity.

51. In the present case, as noted above
and also admitted by the applicant in para
19 of the Section 11 application, the said
date of right to apply accrued to the
applicant is latest on 29 May 1986. That
being so, the three years' limitation expired
on 29 May 1989. There is not even a
whisper in pleadings of acknowledgement
of liability by IFFCO until 29 May 1989. In
fact, the first alleged letter from IFFCO to
the applicant is only eight years later of the
date, 13 January 199719 which too along
with all subsequent alleged letters, are
denied as non-existent by IFFCO (See
Table II).