M/s Ishvakoo (India) Pvt. Ltd. Vs The State Urban Development Agency and Anr.

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Page No.# 1/7

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GAHC040003652022

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THE GAUHATI HIGH COURT (HIGH COURT OF ASSAM, NAGALAND, MIZORAM AND ARUNACHAL PRADESH)

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Case No. : Arb.P./5/2022

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M/s Ishvakoo (India) Pvt. Ltd

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A Company duly incorporated Indian Companies Act, having its Registered Office at H 105, Connaught Circus, New Delhi 110001. Represented by its Director, Mr. Kamal Radhu. Mobile No. 9810031015

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VERSUS

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The State Urban Development Agency and Anr. Urban Development Department, The Director of Housing, Govt. of Arunachal Pradesh, Itanagar 791111. Represented by its Director.

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2:Dishi Milhu Mallo Age: 0 Occupation : W/o Lt. Mallo Tarin

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R/o Near Helipad Road Naharlagun

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PO/PS Naharlagun District Papum Pare Arunachal Pradesh

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Advocate for the Petitioner : Ninnong Ratan, Abhinav Prakash,Tamo Taggu,Jartum Gadi

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Advocate for the Respondent : , GA (AP),Gimi Tarak,Taja Garam,Byabang Ganga

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Page No.# 2/7

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BEFORE HONOURABLE MR. JUSTICE SANJAY KUMAR MEDHI

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JUDGMENT

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Advocate for the petitioner : Shri Abinav Prakash, Advocate.

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Advocate for the respondents : Ms. G. Ete, Govt. Advocate, A.P.;

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Shri G. Trak, Advocate, R/2.

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Date on which judgment is : NA Reserved. Date of pronouncement of : 11.02.2026. Judgment. Whether the pronouncement : NA. is of the operative part of the judgment? Whether the full judgment : Yes. has been pronounced?

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JUDGMENT & ORDER (Oral)

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The instant petition has been filed under Section 11(6) of the Arbitration and Conciliation Act, 1996 (Act) for appointment of an Arbitrator.

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2. I have heard Shri Abhinav Prakash, learned counsel for the petitioner appearing online. I have also heard Ms. G. Ete, learned State Counsel, A.P. as well as Shri G. Tarak, learned counsel for the respondent no. 2.

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Page No.# 3/7

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3. Shri Prakash, learned counsel for the petitioner has submitted that though the connected work had started in November, 2011, due to certain factors beyond the control of the petitioner, the same could not be executed. He has drawn the attention of this Court to a communication dated 26.06.2017 issued by the respondent no. 1 demanding refund of a huge amount which was replied to by the petitioner. Reference has also been made to a communication dated 26.12.2017 whereby, a request was made for adjudication of the dispute through arbitration which was a part of the Agreement dated 17.02.2010. He has added that if the notice seeking arbitration is taken to be the date from which the limitation would apply, the limitation would be there till 25.12.2020. However, in between there was the intervention of Covid 19 and the Hon’ble Supreme Court in Suo Moto WP(C)/3/2020 had extended the limitation up-to 01.03.2022 with additional 90 days. He has submitted that the present application was presented on 31.03.2022 which is within the period of limitation. The learned counsel has relied upon the case of Arif Azim Company Ltd. Vs. Aptech Ltd. , reported in (2024) 5 SCC 313 and the following observations made by the Hon’ble Supreme Court are pressed into service:

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“46. The plain reading of Section 11(6) of the 1996 Act, which provides for the appointment of arbitrators, indicates that no time-limit has been prescribed for filing an application under the said section. However, Section 43 of the 1996 Act provides that the Limitation Act, 1963 would apply to arbitrations as it applies to proceedings in court. The aforesaid section is reproduced hereinbelow:

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‘43. Limitations.—(1) The Limitation Act, 1963 (36 of 1963), shall apply to arbitrations as it applies to proceedings in court.

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Page No.# 4/7

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(2) For the purposes of this section and the Limitation Act, 1963 (36 of 1963), an arbitration shall be deemed to have commenced on the date referred to in Section 21.

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(3) Where an arbitration agreement to submit future disputes to arbitration provides that any claim to which the agreement applies shall be barred unless some step to commence arbitral proceedings is taken within a time fixed by the agreement, and a dispute arises to which the agreement applies, the Court, if it is of opinion that in the circumstances of the case undue hardship would otherwise be caused, and notwithstanding that the time so fixed has expired, may on such terms, if any, as the justice of the case may require, extend the time for such period as it thinks proper.

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(4) Where the Court orders that an arbitral award be set aside, the period between the commencement of the arbitration and the date of the order of the Court shall be excluded in computing the time prescribed by the Limitation Act, 1963 (36 of 1963), for the commencement of the proceedings (including arbitration) with respect to the dispute so submitted.’

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It has been held in a catena of decisions of this Court that the limitation period for making an application seeking appointment of arbitrator must not be conflated or confused with the limitation period for raising the substantive claims which are sought to be referred to an Arbitral Tribunal. The limitation period for filing an application seeking appointment of arbitrator commences only after a valid notice invoking arbitration has been issued by one of the parties to the other party and there has been either a failure or refusal on the part of the other party to make an appointment as per the appointment procedure agreed upon between the parties.

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Page No.# 5/7

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Thus, from an exhaustive analysis of the position of law on the issues, we are of the view that while considering the issue of limitation in relation to a petition under Section 11(6) of the 1996 Act, the Courts should satisfy themselves on two aspects by employing a two-pronged test — first, whether the petition under Section 11(6) of the 1996 Act is barred by limitation; and secondly, whether the claims sought to be arbitrated are ex facie dead claims and are thus barred by limitation on the date of commencement of arbitration proceedings. If either of these issues are answered against the party seeking referral of disputes to arbitration, the Court may refuse to appoint an Arbitral Tribunal.

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E. Conclusion

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The present arbitration petition having been filed within a period of three years from the date when the respondent failed to comply with the notice of invocation of arbitration issued by the petitioner is not hit by limitation.”

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4. Per contra, Ms. Ete, learned State Counsel has submitted that normally in an application for appointment of an Arbitrator filed under Section 11 of the Arbitration and Conciliation Act, there is no resistance. However, the instant petition is barred by time as the cause of action had arisen sometime in May, 2014. She has submitted that the work was allotted to the applicant in November, 2011 and abruptly, the work was stopped and the applicant had left the place of work at Itanagar. She has also drawn the attention of this Court to Clause 22 of the Agreement dated 17.02.2010 and has contended that unless, the said condition is fulfilled, an arbitration cannot be demanded. The learned State Counsel has submitted that in any case, the application which was presented on 31.03.2022 is beyond the prescribed period of limitation of 3 years

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Page No.# 6/7

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as provided in Article 137 of the Limitation Act.

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5. Shri Tarak, learned counsel for the respondent no. 2 has submitted that the present dispute is not connected with the respondent no. 2 who has been unnecessarily arrayed as party. He has submitted that he represents the owner of the plot of the land over which the Housing Colony was to be constructed for which, there is a different agreement with the applicant.

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6. The rival submissions have been duly considered and the materials on records have been carefully examined.

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7. The aspect of applicability of the Limitation Act, 1963 in an application seeking appointment of an Arbitrator has been settled by the Hon’ble Supreme Court in the case of Arif Azim Company Ltd. (supra), the relevant observation having extracted above. The Hon’ble Supreme Court in the said case has discussed that since there is no Article in the Schedule of the Limitation Act qua an application made under Section 11 of the Arbitration Act, the same would be covered by Article 137 of the Limitation Act, 1963 for which, the limitation has been prescribed as 3 years from the date when the right to apply accrues.

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8. In the instant case, a communication dated 26.06.2017 was issued by the respondent no. 1 demanding refund which was replied to with a request for arbitration made on 26.12.2017. If the limitation applies from 26.12.2017 vis-avis the date of presentation of the instant petition on 31.03.2022 read with orders of the Hon’ble Supreme Court in Suo Moto WP(C)/3/2020, the instant application appears to have been filed within the period of limitation.

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Page No.# 7/7

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9. The objective of an application filed under Section 11 of the Arbitration and Conciliation Act is for appointment of an Arbitrator and not for any adjudication of the dispute on merits. The Hon’ble Supreme Court has, however, made certain observation that such application should not be made where for ‘dead claim’ which does not appear to be applicable in the instant case.

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10. In the aforesaid discussion, the present application is allowed.

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11. This Court accordingly appoints Hon’ble Mr. Justice Brojendra Prasad Katakey, former Judge of the Hon’ble Gauhati High Court to be the Arbitrator. The seat of the Arbitrator may be at Guwahati which would be convenient for both the parties.

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12. The learned Arbitrator may accordingly fix the date(s) for convening of the same in accordance with law.

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13. Registry is directed to transmit a copy of this order to the learned Arbitrator expeditiously.

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JUDGE

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Comparing Assistant

M/s Ishvakoo (India) Pvt. Ltd. v. The State Urban Development Agency and Anr.

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M/s Ishvakoo (India) Pvt. Ltd. v. The State Urban Development Agency and Anr.

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