This court dismissed an appeal challenging an award under Section 34 of the Arbitration Act. The court held the claim was not barred by limitation and noted the Appellant ought to have raised the plea before the tribunal.
Respondent entitled to withdraw the deposited decretal amount and interest.
This page shows the compact analysis of this judgement. The full analysis — procedural history, issue-by-issue holdings with ratio and obiter, advocates, and paragraph-level evidence for every claim — is being added to the record in batches and will appear here when this judgement has been through it.
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IN THE HIGH COURT OF JUDICATURE AT BOMBAY ORDINARY ORIGINAL CIVIL JURISDICTION
APPEAL NO. 116 OF 2013 IN ARBITRATION PETITION NO. 693 OF 2012
The New India Assurance Co.Ltd. ..Appellant vs M/s.Mehta Plastics ..Respondent
Ms.Kalpana R. Trivedi for Appellant. Mr.Harshad H. Trivedi for Respondent.
CORAM : DR.D.Y.CHANDRACHUD, AND S.C. GUPTE, JJ.
4 JULY 2013
P.C. :
On the request of Counsel appearing on behalf of the Appellant and Counsel appearing on behalf of the Respondent, the appeal is taken up for hearing and final disposal.
2 The learned Single Judge by an order dated 15 October 2012 dismissed a petition filed by the Appellant under Section 34 of the Arbitration and Conciliation Act, 1996 for challenging an award of an arbitral tribunal dated 23 September 2011.
3 The claim before the arbitral tribunal was based on an insurance policy issued by the Appellant for the period between 25 September 2003 and 24 September 2004. The incident occurred on 3 August 2004. Admittedly, the Appellant offered a sum of Rs.2,41,526/- to the Respondent by a letter dated 26 November 2005. The Respondent declined to accept the discharge vouchers by
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its communication dated 12 December 2005. On 13 February 2007, the Appellant addressed a communication to the Respondent dealing with the grievances of the Respondent. The Respondent was informed by the Chief Manager of the Grievance Cell of the Appellant that the Divisional Office had written to the surveyor asking for certain clarifications and on receipt of a reply, a communication would be addressed to the Respondent. Meanwhile, it was stated that the Mumbai Region Office was also examining the grievance of the Respondent. A copy of the letter was marked to the Grievance Cell of the Mumbai Region Office to expeditiously examine the claim. The Respondent invoked arbitration by a letter dated 9 September 2008. The arbitral tribunal has allowed the claim in the amount of Rs.23.93 lakhs together with interest at the rate of 10% per annum. In view of an interim payment made, due adjustments were granted.
4 The only point which has been addressed by Counsel for the Appellant at the hearing of this appeal is that the claim in arbitration was not within limitation.
5 Counsel appearing on behalf of the Appellant fairly states that in the reply which was filed before the arbitral tribunal to the statement of claim, no defence on the ground of limitation was raised. The question of limitation was raised before the learned Single Judge in the petition under Section 34. The learned Single Judge held that limitation raises a mixed question of law and fact and the Appellant ought to have led the foundation in respect of the plea of limitation before the arbitral tribunal. On these grounds, the learned Single Judge declined to entertain the challenge on the ground of limitation while dismissing
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the arbitration petition.
6 In our view, there is no substance whatsoever in regard to the plea of limitation. The incident occurred on 3 August 2004 and it was on 26 November 2005, that the Appellant sought to offer an amount of Rs.2,41,526/- in full and final settlement which the Respondent declined on 12 December 2005. As a matter of fact, as noted above, on 13 February 2007, the Appellant informed the Respondent that his grievance was being examined both by the Divisional Office and by the Mumbai Region Office. The Appellant invoked arbitration on 9 September 2008. Even if limitation is held to commence on 26 November 2005 when the Appellant offered to pay an amount of Rs.2,41,526/- in full and final settlement, the invocation was within a period of three years thereafter on 9 September 2008. There is, therefore, absolutely no merit in the defence that the claim was barred by limitation. But quite apart from that, the learned Single Judge was justified in finding fault with the appellant for not raising the issue of limitation before the arbitral tribunal and for raising it for the first time in the petition under Section 34 without any factual foundation before the arbital tribunal. Both the commencement and the terminal point for the purpose of limitation would raise a mixed question of law and fact. However, in order to obviate any grievance, we have addressed the issue of limitation on the basis of the facts as they are admitted before the Court and find that there is no substance in the ground. No other point has been pressed at the hearing. For these reasons, we do not find any merit in the appeal. The appeal is accordingly dismissed.
Counsel appearing on behalf of the Appellant states that the
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Appellant has deposited the entire decretal amount together with interest. The Respondent, in consequence of the dismissal of the appeal, is entitled to withdraw the amount deposited together with the accrued interest, if any, thereon.
(Dr. D.Y.Chandrachud, J.)
(S.C. Gupte, J.)
2 issues framed by the court
Whether the arbitral claim was barred by limitation.
Whether an Appellant may raise the plea of limitation for the first time under Section 34 of the Arbitration Act without raising it before the tribunal.
1 provisions across 1 enactments
The New India Assurance Co. Ltd.
M/s. Mehta Plastics
DR. D.Y. Chandrachud
S.C. Gupte
As recorded by the court registry
Judgements on the same questions, provisions and authorities, from every court
