1985 PLP 1449 (MLD)

F. K. Kureishy for Appellant. The WAPDA awarded a building contract to the appellant. On the ground that the latter failed to complete work, in accordance with the terms of the contract, the respondent Authority proceeded under clause 13 of the agreement and vide its letter dated 30-10-1974 Exh. R.12, deleted the unexecuted quantity of work from the contract. The remaining work was got done departmentally. The appellant applied to the Department for enhancement of rates on account of devaluation of the Pakistan currency but his request was turned down on 9-12-1975 vide Exh. R.13.

2. The contract agreement embodied an arbitration clause, whereby the disputes arising between the parties, touching the contract, were to be decided through arbitration. On 14-2-1979, the appellant filed an application under section 20 of the Arbitration Act, praying that the arbitration agreement be got filed in the Court and an arbitrator appointed for decision of the disputes. The description of the disputes given in the application was that enhanced rates on account of devaluation, and cost of extra work done by the appellant were not paid. The learned Civil Judge maintained that the contract was rescinded on 30-10-1974 and the appellant's request for payment of enhanced rates, rejected on 9-12-1975. He took the view that the application under section 20 having been brought within three years of the cancellation of the contract was barred by time.

3. In the written statement the Authority raised an objection that the disputes sought to be referred to arbitration, were not in respect of the subject-matter of the agreement, entered into between the parties. Accordingly, issue No.2 was formulated to the effect as to whether or not the matter in dispute was liable to be referred for arbitration. On this issue, the learned Civil Judge took the view that the appellant's claim for payment of enhanced rates was discarded by the Authority on 9-12-1975 and that the contract was awarded to him after the devaluation of the currency. As regards the extra work, clause 12 of the contract agreement permits execution of such work, provided a direction in this behalf is given in writing by the Engineer- Incharge. On this point the learned lower Court came to the conclusion that there was no proof that the work was executed under the instructions of the Engineer Incharge. On the basis of these findings, the learned lower Court answered issue No.2 against the appellant. Consequently, the application was dismissed. Hence this appeal.

4. I have heard the learned counsel and examined the record. He argued that the final bill was paid to the appellant in February, 1977 and, that therefore, the period of limitation would commence from the date of said payment. With regard to the extra work, his submission was that such work was actually done, and the existence of such work at the spot, was the proof of execution thereof. He heavily relied on Karachi Shipyard and Engineering Works Ltd. v. Muhammad Aslam Khan P L D 1979 Kar. 635 in which it has been held that period of limitation for an application under section 20, commences when dispute arises between the parties. In the submission of the learned counsel, the dispute arose when the final bill was paid. He also placed reliance on Messrs, Electric and Radio Corporation v. Messrs, Pakistan Steel Mill Corporation 1982 C L C 1679. In this ruling on the basis of the arbitration clause, which fell for consideration therein, the application under section 20 was held as premature.

5. After the perusal of the record, in the light of the submissions made by the learned counsel, I propose to dismiss this appeal in limine.

6. Deletion of the unexecuted work from the appellant's contract vide Exh. P.12 dated 30-10-1974, had -the effect of cancellation of the agreement embodying the arbitration clause. The application under section 20 as observed above, was instituted on 14-2-1979. There is no quarrel that Article 181 would govern the period of limitation. It was for the A appellant to have shown that some dispute covered by the arbitration agreement, subsisted between the parties, within three years of such institution. The appellant's claim for payment of enhanced rate, was unequivocably rejected by the respondent on 9-12-1975 (Exh. 11.13). Obviously, when the application under section 20 was filed, the prayer for adjudication of such a dispute had become barred by time.

7. Regarding the claim for execution of the extra work, it is to be noticed that there is nothing on the record to establish that within three years before filing for payment of such work. Even the final bill has not been tendered in evidence. It, therefore, cannot be ascertained that the payment said to have been made in February, 1977 relates to which of the items of the work and that whether any item was refused. As a matter of fact, the appellant has not produced any document and his entire evidence consists of his sketchy and solitary statement, which does not make mention of execution of any extra work. Furthermore, as stated earlier, clause 12 of the agreement visualized only the extra work done under the written authority of the Engineer, Incharge. During arguments, it was impliedly conceded that such a written direction was not in existence. Even the measurement book showing execution of extra work was not produced in evidence. A dispute arises when a demand is raised by the contractor and it is denied by the Department. The trial Court's file does not suggest that any demand for payment of extra work was made during the currency of the contract or thereafter, within a period of three years before filing of the application under section

20. The two precedents cited by the learned counsel do not advance the appellant's cause in any manner.

8. In this view of the matter, I uphold the decision of the learned trial Court for somewhat different reasons and dismiss this F.A.O. in limine . H.B.T. Appeal dismissed.