GODAVARI MARATHWADA IRRIGATION DEVELOPMENT CORPORATION AURANGABAD THR EXECUTIVE ENGINEER JAYAKWADIversusS.S. DESHMUKH

2026:BHC-AUG:20987

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                      IN THE HIGH COURT OF JUDICATURE AT BOMBAY
                                BENCH AT AURANGABAD

                             ARBITRATION APPEAL NO. 29 OF 2021

              .      GODAVARI MARATHWADA
                     IRRIGATION DEVELOPMENT
                     CORPORATION, AURANGABAD,
                     Through the Executive Engineer,
                     Jayakwadi Irrigation Division (North),
                     Paithan, District: Aurangabad                    .. Appellant
                                                              (Original Respondent)

                                     VERSUS

              .      S. S. DESHMUKH,
                     Dnyanai, Plot No.25,
                     Saraswati Colony No.2, Georai,
                     Dist. Beed                                     .. Respondent
                                                                (Original Claimant)
                                                ...
                       Advocate for Appellant : Mr. Sudhir Govind Bhalerao
                         Advocate for Respondent : Mr. Amol K. Gawali
                                                ...

                                          WITH
                             ARBITRATION APPEAL NO. 30 OF 2021

                     GODAVARI MARATHWADA IRRIGATION DEVELOPMENT
                     CORPORATION THR EXECUTIVE ENGINEER JAYAKWADI
                                            VERSUS
                                       S. S. DESHMUKH
                                                …
                       Advocate for Appellant : Mr. Sudhir Govind Bhalerao
                         Advocate for Respondent : Mr. Amol K. Gawali

                                          WITH
                             ARBITRATION APPEAL NO. 31 OF 2021

                     GODAVARI MARATHWADA IRRIGATION DEVELOPMENT
                     CORPOATION THR EXECUTIVE ENGINEER JAYAKWADI
                                            VERSUS
                                       S. S. DESHMUKH
                                                …
                       Advocate for Appellant : Mr. Sudhir Govind Bhalerao
                     2                        Arba30.2021+

      Advocate for Respondent : Mr. Amol K. Gawali

                       WITH
         CIVIL APPLICATION NO. 7008 OF 2021
                  IN ARBA/30/2021

GODAVARI MARATHWADA IRRIGATION DEVELOPMENT
CORPORATION THR EXECUTIVE ENGINEER JAYAKWADI
                       VERSUS
                  S. S. DESHMUKH
                           …
  Advocate for Applicant : Mr. Sudhir Govind Bhalerao
    Advocate for Respondent : Mr. Amol K. Gawali

                       WITH
         CIVIL APPLICATION NO. 7007 OF 2021
                  IN ARBA/29/2021

 GODAVARI MARATHWADA IRRIGATION DEVELOPMENT
CORPORATION AURANGABAD THR EXECUTIVE ENGINEER
                      JAYAKWADI
                         VERSUS
                    S.S. DESHMUKH
                            …
   Advocate for Applicant : Mr. Sudhir Govind Bhalerao
     Advocate for Respondent : Mr. Amol K. Gawali

                       WITH
         CIVIL APPLICATION NO. 7009 OF 2021
                  IN ARBA/31/2021

GODAVARI MARATHWADA IRRIGATION DEVELOPMENT
CORPORATION THR EXECUTIVE ENGINEER JAYAKWADI
                       VERSUS
                  S. S. DESHMUKH
                           …
  Advocate for Applicant : Mr. Sudhir Govind Bhalerao
    Advocate for Respondent : Mr. Amol K. Gawali
                           ...

                     CORAM : ARUN R. PEDNEKER, J.
                     DATE     : 08.05.2026
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JUDGMENT:

1.         Heard Mr. Sudhir Govind Bhalerao, learned counsel for

the Appellant and Mr. Amol K. Gawali, learned counsel for the

Respondent.


2.         The matters are identical and involves similar issue, so

also, to avoid rigmarole are taken up together.


3.         The facts are taken up from Arbitration Appeal No.30 of

2021. Facts giving rise to the Arbitration Appeal are that the

tender notice bearing No.1/1995-96 was issued by the Executive

Engineer, Jayakwadi Irrigation Division (North), Paithan, Dist.

Aurangabad,    for   execution   of   work   for   renovation   and

improvement of minor and sub-minor of distributory-10 of Paithan

Left Bank Canal between Km.8.00 to 12.00. The estimated cost of

tender was Rs.6,82,505/- and the work was to be completed within

06 months from issuance of date of work order. In all the

Arbitration Appeals the work relates to renovation, improvement

of minors and sub-minors of distributary of P.L.B.C. canal from

from different Kilometers.


4.         On 26.02.1996, the claimant was accepted as the lowest

and most competent bidder who had accepted to execute the work

at estimated cost of Rs.6,82,505/-. Work order was issued in favour
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of the claimant on deposit of earnest amount of Rs.13,650/- and

Rs.34,125/- in the form of initial security deposit.


5.          On 31.12.1998, one time extension was granted. Final

bill payment was made on 01.09.1999.


6.          On 28.10.1999, the contractor called upon the Chief

Engineer, with copy to the Executive Engineer and Superintending

Engineer seeking settlement of various claims raised in the letter

under different heads.


7.          On 19.02.2000, notice under Section 21 invoking

arbitration clause i.e. Clause No.53 of the tender condition was

issued seeking appointment of Arbitrator.


8.          On 02.05.2000, Shri. D. B. Murkute, (Sole Arbitrator),

Retired Superintending Engineer was appointed as Sole Arbitrator

by the claimant contractor.


9.          On 06.06.2001, Shri. D.B. Murkute (Sole Arbitrator)

along with a forwarding letter addressed to the Executive

Engineer, sent a copy of Arbitration Award which was passed by

him in favour of the claimant contractor.
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10.        The Arbitration Award passed by Shri. D. B. Murkute

(Sole Arbitrator) was challenged under Section 34 of Arbitration

and Conciliation Act, 1996 by the appellant (Department) by filing

MARJI No. 201/2021 on 30.08.2001 and the learned Principle

District Judge Shri. T. V. Nalawade on 17.08.2009 allowed the

Application, thereby setting aside the Arbitration Award.


11.        On 09.08.2010, the Hon'ble High Court (Coram: Shri. B.

R. Gawai J.) by common judgment and order passed in Arbitration

Appeal No.14/2009, 18/2009 and 19/2009 partly allowed the

appeals thereby set aside the Judgment dated 17.08.2009 passed

by the Principle District Judge setting aside the Arbitration Award,

and also set aside the Arbitration Awards. The Hon'ble High Court

appointed Shri. A. S. More (Superintending Engineer and

Administrator, Command Area Development Authority, Jalgaon) to

act as Sole Arbitrator and decide the Arbitration within 06 months

from the date of appearance.


12.        On 24.08.2010, Claim Statement were filed by the

claimant contractor.


13.        On 23.09.2010, Written Statement was filed by the

appellant /original opponent Department.
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14.           On 15.11.2010, Rejoinder was filed by the claimant

contractor.


15.           Since the Sole Arbitrator Shri. A. S. More could not

deliver the Arbitration Award within 06 months as directed by the

Hon'ble High Court, and his mandate had been terminated by efflux

of time, in exercise of powers under Sec. 11 (6) the Hon'ble High

Court appointed Hon'ble Shri. N. P. Chapalgaonkar, Retired High

Court Judge as Sole Arbitrator.


16.           On 10.10.2012, pursis was filed by both the parties

adopting the pleadings filed before the earlier Arbitrator Shri. A. S.

More. Affidavit of Examination in Chief was filed by the claimant

Shri. S. S. Deshmukh in support of his claim.


17.           On 12.11.2012, the Executive Engineer Jayakwadi

Irrigation Division (North), Paithan, Dist. Aurangabad filed

affidavit of examination in chief in support of his defense.


18.           On 19.05.2013, both the claimant and the respondent

filed their written notes of argument before the Hon'ble Sole

Arbitrator.


19.           On 10.07.2013, the Hon'ble Sole Arbitrator declared the

Arbitration Award. On an application under Section 33 a corrected
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final award was declared on 08.08.2013. The Sole Arbitrator had

considered and decided the following claims:

     Claim No.1- Relates to non payment of cost of clearing and

     removing bushes, shrubs and jungle from site work, claiming

     Rs. 45,000/-. The claim of Rs. 45,000/- was allowed under

     this head.

     Claim No.2- The said claim relates to three items of Schedule-

     B quantity for which higher rates were demanded as per

     tender conditions for quantities executed above 130%.

     1) Item No.3- excavation of soil, silt and soft murum. The

     Arbitrator rejected the claim under this head.

     2) Item No.9- In respect of construction of embankment in

     casing zone, including transportation of material with leads.

     The Arbitrator awarded Rs. 22,170.40 under this head.

     Claim No.3- The claimant had claimed Rs. 3,00,000/- for

     repairs which he was required to carryout from 04.07.1997

     till 31.03.1999 as per the direction of the respondent

     Department.      The Sole Arbitrator based on evidence

     before him recorded that, the claimant was required to

     maintain the work and continuously carryout the repair

     work till 31.03.1999, since the Department was making

     inquiry about the finalization of bill. The Sole Arbitrator

     granted Rs. 1,50,000/- under this head.
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      Claim No.4- For refund of security deposit amounting to Rs.

      53,639/- towards initial security deposit. The Hon'ble Sole

      Arbitrator awarded Rs. 53,639/-.

                  The Sole Arbitrator granted 18% interest from

      31.03.1997 on the awarded amount (Total Rs. 2,70,809.40)

      i.e. Rs. 6,75,643.30. Thus the Sole Arbitrator awarded

      amount of Rs. 9,46,425/- to be paid before 10.07.2013 and in

      the eventuality of non payment directed that, the same would

      carry at the rate of interest @ 18% till realization. By virtue of

      the corrected award dated 08.08.2023 the Sole Arbitrator

      rejected the objection as to jurisdiction raised by the

      respondent.


20.         On 25.11.2013, MARJI No.596/2013 was filed by the

appellant Department challenging the Arbitration Award under

Section 34 of the Arbitration Act. The paragraph No.9 of the

Appeal Memo records that, for the purpose of court fees and

jurisdiction the claim is valued at Rs. 11,31,441/-.

            On 22.02.2016, the challenge to the Arbitration Award

under Section 34 of the Arbitration and Conciliation Act, 1996, in

the form of MARJI No. 596/2013 was rejected by the Learned

Principle District Judge, Aurangabad.
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21.        On 23.01.2020, by common judgment and order passed

by the Hon'ble High Court (Coram: Shri. Rohit B. Deo J.) in

Arbitration Appeal No. 5/2017, 6/2017 and 7/2017, while hearing a

appeal under Section 37 of the Arbitration and Conciliation Act,

1996, the same was partly allowed, remitting the matters to the

Principle District Judge, Aurangabad to decide the Arbitration

Application under Section 34 on its own merits within a period of

90 days from date of appearance. The amount of Rs. 60,00,000/-

which was deposited by the appellant Department, out of which

50% was allowed to be withdrawn by the respondent on

undertaking. The undertaking given by the Contractor to

reimburse the said amount was continued till decision of

application under Section 34.


22.        On 04.01.2021, the learned Principle District Judge,

Aurangabad as per directions of the Hon'ble High Court reheard the

advocate for both the parties and decided the Civil Misc.

Application No. 596/2013.


23.        In March-2021, the judgment and decree dated

04.01.2021 passed by the Principal District Judge, Aurangabad in

Civil Misc. Application No. 596/2013 was challenge by filing

Arbitration Appeal No. 30/2021 i.e. the present Arbitration Appeal
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before the Hon'ble High Court under section 37 of the Arbitration

and Conciliation Act, 1996.


{1} JURISDICTION:

A) Contention of Advocate for Appellant:-

24.        The Principal District Judge, Aurangabad while passing

impugned judgment dated 04.01.2021, while deciding the Civil

Miscellaneous Application No. 596/2013 did not have jurisdiction

to decide the same, since the Arbitration Award under challenge

under Section 34, being in the nature of commercial dispute, ought

to have been placed before the commercial court, which had

exclusive jurisdiction to decide the Civil Miscellaneous Application

No. 596/2013.


25.        Thus, in the light of the fact that, by placing reliance on

the Government Notification dated 03.07.2019, issued by the Law

and Judiciary Department, whereby in exercise of power conferred

under Section 3-A of the Commercial Courts Act, 2015 (as amended

in 2018), the District Judge-1 at the District Head Quarter, was

recognized as 'Commercial Court' in Maharashtra, the jurisdiction

of the Principal District Judge, Aurangabad was impliedly barred.

The impugned judgment was therefore passed without jurisdiction.
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B) Submissions of Advocate for the Respondent :-

26.         The Advocate for the respondent placed on record the

notification dated 03.07.2019 issued by the Law and Judiciary

Department under the signature of the Secretary Legal Advisor

Cum Joint Secretary to the Government, which was issued under

powers conferred under Section 3 (1A) of the Commercial Courts

Act, 2015 (as Amended in 2018), wherein the Government of

Maharashtra in consultation with the High Court of Bombay had

specified the pecuniary value of the Commercial Courts as Rs.

50,00,000/-within whole of Maharashtra.


27.         He has further placed a office order issued by the

Principal District and Sessions Judge, Aurangabad bearing No. B-2

(10/2019), dated 22.08.2019, wherein the learned Principal

District Judge exercising administrative power in furtherance of

the above notification has bestowed the power of Commercial Court

on the Civil Judge, Senior Division (Senior most), Aurangabad to

decide Commercial Dispute at District Level of specified value

above Rs. 50,00,000/- (Rupees Fifty Lacs) and upto and inclusive

of Rs. 1 Crore.


28.         The Advocate for the respondent Contractor pointed out

from the Appeal Memo of MARJI No. 596/2013 that the valuation

for the purpose of court fees and jurisdiction in the present appeal
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is Rs.11,31,441/- (Rupees Eleven Lacs Thirty One Thousand Four

Hundred Forty one), which is below Rs. 50,00,000/-lacs.

            Similarly,   the    claim   in   MARJI    No.   594/2013

(Arbitration Appeal No.29 of 2021) is valued at Rs.10,56,107/- and

in MARJI No. 595/2013 (Arbitration Appeal No.31 of 2021) is

valued at Rs.11,87,541/-, which is also below Rs. 50,00,000/-lacs.


29.         This court finds that in view of the Notification dated

03.07.2019 issued by Law and Judiciary Department and

administrative order passed by the Learned Principal District

Judge on the administrative side, ‘the commercial dispute’ of

specified value above Rs. 50,00,000/- are to be decided by the

Commercial Court. Since the value of the dispute in the Arbitration

Appeal under challenge is much below Rs. 50,00,000/-, the regular

court i.e. the Principal Court of civil jurisdiction i.e. the Principal

District Judge had the jurisdiction to decide the Arbitration

Application under Section 34.


30.         Thus the impugned judgment and order does not suffer

any jurisdictional error, since it is passed by a court having

jurisdiction to pass the impugned judgment and order.


02. Limitation:-
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A) Contention of the Advocate for the appellant Department:

31.          The Advocate for the appellant Department by placing

reliance on the unreported Judgment passed in Arbitration Appeal

No. 6/2007 (State of Maharashtra V/s Hindustan Construction

Company and others), wherein this Hon'ble Court (Coram: Shri. R.

D. Dhanuka, J.) had pronounced the judgment on 01.02.2013,

contended that, the limitation would be governed by Article 18 of

the Limitation Act, which reads as under-

Article     Description of application    Period of   Time from which
                                         limitation   period begins to
                                                            run
18        For the price of work done by Three years   When the work
          the plaintiff for the defendant             is done.
          at his request, where no time
          has been fixed for payment.



32.          Placing reliance on the above Judgment it was

contended that, the last extension was granted to the contract

awarded to the respondent was 31.12.1998, therefore the

Arbitration Proceedings initiated by the claimant are barred by

limitation, and therefore, the award deserves to be set aside.


33.          It is his contention that, neither the learned Sole

Arbitrator nor the Learned District Judge has considered the

objection as to limitation which had been raised by the appellant

Department.
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B) Submissions of Advocate for the Respondent :-

34.        The Advocate for the respondent, pointed out that, it is

a admitted fact that, the final bill has been paid on 01.09.1999.


35.        The Advocate for the respondent by drawing attention

of the court to the discussion while granting Claim No.3 (Para No.

12 of the Arbitration Award, Page No. 17 to 19 of the Appeal

Memo), pointed out that, the Sole Arbitrator had held that, in

absence of final bill the contractor was required to work beyond the

contract period (including extensions) from 04.07.1997 to

31.03.1999 and the Arbitrator under this head had paid Rs.

1,50,000/- to the contractor.


36.        It was also pointed out from the record that, the notice

under section 21 invoking Arbitration Clause was issued on

19.02.2000.


37.        He has placed reliance on several Judgments, which lay

down that, the limitation would start from the date of final bill,

since the point of dispute would only arise after the contractor

becomes aware of the fact that, his claims have been finally

rejected on account of non payment of the same in the final bill.
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38.           This court in the case of Executive Director, G.M.I.D.C.

and others Vs. M/s Gurunanak Industries and another, dated

17.01.2026, at Paragraph No.40, has observed as under:

              “40. Article 18 of the Schedule to the Limitation Act, 1963
              would apply only where the amount payable is known and
              becomes payable on completion of work. However, in the
              present case, although the physical work may have been
              completed on 30/06/2013, the measurement of the work
              and the escalated price was yet to be computed. The final bill
              was required to be prepared after joint measurement and
              after working out the escalation under the contractual
              clause. Therefore, limitation would commence only upon
              denial or partial payment of the final bill which occurred on
              12/04/2016. The suit is filed on 21/12/2017 and is within
              three years of payment of partial final bill and is thus within
              limitation and would be covered under Article 55, of the
              Limitation Act.”

39.           In Arbitration Appeal No.30 of 2021, the date of

payment of final bill is 01.09.1999 and the notice under Section 21

was issued on 19.02.2000 and on 02.05.2000 the Arbitrator was

appointed.

              In Arbitration Appeal No.29 of 2021, no final bill was

prepared or paid and the notice under Section 21 was issued on

19.02.2000 and on 02.05.2000 the Arbitrator was appointed.

              In Arbitration Appeal No.31 of 2021, no final bill was

prepared or paid and the notice under Section 21 was issued on

19.02.2000 and on 02.05.2000 the Arbitrator was appointed.

              As such, the claims filed before the Arbitrator are in

limitation.
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40.          In view of the above, the Arbitration Appeals are

dismissed.



                                     [ARUN R. PEDNEKER, J.]
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