FAO-589-2006 1 202 IN THE HIGH COURT OF PUNJAB AND HARYANA AT CHANDIGARH FAO-589-2006 Date of Decision: 14.07.2026 DHARAM CHAND ......... Appellant Versus EXE. ENGINEER AND ORS. ..... Respondents CORAM: HON’BLE MS. JUSTICE LAPITA BANERJI Present : Mr. Anshul Gupta, Advocate for the appellant. Mr. Surya Kumar, AAG, Punjab. **** LAPITA BANERJI , J. (Oral) 1. The short question in the present appeal is whether the parties could contract out of a statute. 2. Learned counsel appearing on behalf of the appellant submits that under Section 28(b) of the Indian Contract Act, 1872 (for short ‘the 1872 Act’), the parties could not enter into an agreement which would extinguish their right or discharge their liability under or in respect of any contract on the expiry of a specified period so as to restrict a party from enforcing its rights. 3. Vide award dated July 02, 2002, the learned Arbitrator relying upon Clause 25(xiv)(e) of the Agreement held that the claims of the appellant-petitioner were time-barred since the same were not raised within six months from the date of release of payment of the final bill on July 26, 2000. He submits that the claim petition was filed within three ASGAR ALI 2026.07.17 10:08 I attest to the accuracy and integrity of this document FAO-589-2006 2 years from the date of release of the final bill and under the provisions of the Limitation Act, 1963 such claims should have been entertained. 4. He also refers to the judgment dated October 30, 1998 passed by a Coordinate Bench of the Delhi High Court in ‘M/s Hindustan Construction Corporation Vs. Delhi Development Authority’, reported in 1999 (77) DLT 165, to submit that claims could not be extinguished by specifying a shorter period of limitation against Section 28(b) of the 1872 Act. 5. Per contra, learned counsel appearing on behalf of the respondents submits that Clause 28(b) of the 1872 Act was incorporated in the statute w.e.f. January 1, 1997. Since the contract was entered into between the parties before the cut-off date, therefore, the said provision is not applicable to the facts of the present case. 6. This Court has heard the learned counsel for the parties and perused the material on record. 7. Vide the Amendment Act, 1997, Section 28(b) of the 1872 Act was incorporated w.e.f. January 1, 1997. The award is dated July 02, 2002. The learned Arbitrator should have considered the provisions of the statute before holding the claim of the petitioner-appellant to be time- barred. It is a settled principle of law that no party can be allowed to contract out of the statute. 8. Therefore, this Court is of the view that the award dated July 02, 2002, is perverse and erroneous on the face of the record. The same is also against the public policy of India. 9. Vide the impugned judgment dated March 04, 2005, the ASGAR ALI 2026.07.17 10:08 I attest to the accuracy and integrity of this document FAO-589-2006 3 learned District Judge, Faridkot, also misdirected himself by not appreciating the said provision of law and dismissing the claim as time- barred. Accordingly, the impugned judgment dated March 04, 2005, and the impugned award dated July 02, 2002, are set aside. The learned Arbitrator will adjudicate the claims of the appellant-claimant afresh on merits. 10. Disposed of. (LAPITA BANERJI) JUDGE 14.07.2026 Ali Whether speaking/reasoned Yes/No Whether Reportable Yes/No ASGAR ALI 2026.07.17 10:08 I attest to the accuracy and integrity of this document