SUPREME COURT OF INDIA

Before:- S. Rajendra Babu and Shivaraj V. Patil, JJ.

Civil Appeal No. 2512 of 1997. D/d. 1.3.2001.

Mohta Alloys Steel Works - Appellant

Versus

Mohta Finance and Leasing Co. and others - Respondents

Arbitration Act, 1940, Section 33 - Limitation Act, 137 - Limitation - Cause of action - Challenging the existence and validity of arbitration clause forming part of lease agreement - Letter dated 8 Jan. 1990 sent by respondent to Registrar, of Tribunal of Arbitration indeed invoked the clause relating to settlement of the disputes by arbitration under Rules of Arbitration - Idle to contend that notice did not disclose the intention to invoke arbitration clause as providing lease deed - Application filed by appellant in March 1993 barred by limitation.

[Para 4]

ORDER

The appellant filed an application under Section 33 of the Arbitration Act, 1940 challenging the existence and validity of the arbitration clause forming part of lease agreement entered into between the first respondent and the appellant Company.

2. The application was filed before the High Court of Delhi and the matter was dealt with by the learned single Judge. The learned Judge raised several issues to be considered in the matter. So far as the present matter is concerned, it is not necessary for us to examine other aspects of the matter except to concentrate on the question of limitation and that issue reads as follows :

"Whether the claim of the petitioner and the petition under Section 33 of the Arbitration Act is barred by limitation ?

3. On this aspect of the matter the learned single Judge held that Article 137 of the Limitation Act would be attracted and that the period would commence when the right to apply under Section 33 would accrue and recorded a finding that the application was filed in the month of March 1993 which is a period beyond the period of 3 years from the several dates referred to by the learned Judge. Firstly, he referred to certain claims made towards rent and certain legal notices exchanged between the parties.

4. It is unnecessary to refer to all these details if we take into consideration the claim putforth by Shri Gopal Subramanium, learned Senior Advocate appearing on behalf of the appellant that the cause of action would accrue under Section 33 of the Arbitration Act when the clause for arbitration is disclosed to the appellant and the same is invoked. In the letter dated January 8, 1990 sent by the respondent to the Ragistrar, Tribunal of Arbitration indeed invoked the clause relating to settlement of the disputes by arbitration under Rules of Arbitration of PHD Chamber of Commerce and Industry. It would be idle to contend that this notice did not disclose the intention to invoke the arbitration clause as provided in the lease deed. Therefore, reckoning the period as the date of receipt of the said notice, we have no hesitation to hold that the learned single Judge is perfectly right in his order to state that the application filed by the appellant is barred by limitation.

5. The learned single Judge, however, proceeded further to examine certain other contentions raised by the parties which was wholly unnecessary for the purpose of the case having held that the application is barred by time. Those questions could be thrashed out only upon adducing proper evidence in the matter and such an opportunity was not available to the learned single Judge to have examined the matter and reach a conclusion. Hence the conclusions reached by the learned single Judge on other aspects of the matter cannot be sustained and the same shall stand vacated. It is, therefore, open to the P.H.D. Chamber of Commerce and Industry-Arbitrators now to proceed further in the matter in accordance with law. The appeal shall stand partly allowed as stated above.

6. The apprehension of the parties that whatever we have stated will affect the merits of the matter is unfounded as we have not examined claims in dispute.

Order accordingly.