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TMI Blog1966 (9) TMI 134X X X X Extracts X X X X X X X X Extracts X X X X ..... y clause thereunder or in any manner connected with or arising out of the agreement or the operation thereof, or the rights, duties or liabilities of either parties thereunder including the dispute or difference as to the construction of the agreement shall be referred to the sole arbitration of the Deputy Commissioner, Mandi District, Himachal Pradesh, and if that officer be unable or unwilling to act, to such Assistant as the Deputy Commissioner shall appoint as the sole arbitrator. Triloknath Mahajan transferred all his rights, title and interest under the agreement to Wazirchand Mahajan-the first appellant-with the permission of the State of Himachal Pradesh. Disputes arose in October 1950 between the appellants and the State of Himach ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... , Himachal Pradesh, declined to make a reference, it was not barred. The Court accordingly ordered that the agreement be filed and the disputes be referred to the arbitrator named in the agreement. During the pendency of this application before the Trial Court, the Part 'C' State of Himachal Pradesh became Union Territory, and the Union of India was substituted as a party in place of the State of Himachal Pradesh. In appeal by the Union of India, the Judicial Commissioner, Himachal Pradesh, reversed the order of the Trial Court. In the view of the Judicial Commissioner an application for filing an arbitration agreement under s. 20 of the Arbitration Act is governed by Art. 181 of the Limitation Act, and since the period of three yea ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... Code' in the first column of that article (Art. 181).", and in Bombay Gas Company Ltd. v. Gopal Bhiva & Others this Court observed : "It is well settled that art. 181 applies only to applications which are made under the Code of Civil Procedure.........." It is true that in Hansraj Gupta's case,( L. R. 60 1. A. 13.) the Judicial Committee was dealing with the period of limitation for filing an application under s. 186(1) of the Indian Companies Act, 1913, to order a contributory in a winding-up to pay a debt; and Sha Mulchand's case([1953] S. C. R. 351.) related to an application under the Indian Companies Act, 1913, for rectification of the share-register and restoration of the name of a member whose shares were forfeited fo ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... Civil Procedure, 1908. By the enactment of Act 10 of 1940, Sch. 11 of the Code of Civil Procedure and the Indian Arbitration Act, 1899, were repealed and an Act dealing with all arbitrations was enacted, and it was found necessary on that account to amend Arts. 158 and 178 so as to make them consistent with the legislative changes. The reason which persuaded the Courts to hold that the expression "under the Code" was deemed added to Art. 181 has now disappeared, but on that account the expression "applications for which no period of limitation is provided elsewhere in this Schedule" in Art. 181 cannot be given a connotation different from the one which prevailed for nearly 60 years before 1940. If Art. 181 of the Limitation Act only gover ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... rimarily with suits, appeals and applications made in law courts and\ makes no reference to arbitration proceedings and, therefore, the Limitation Act does not in terms apply to arbitrations in mercantile references, it would be "an implied term of the contract that the arbitrator must decide the dispute according to the existing law of contract, and that every defence which would have been open in a Court of law can be equally proposed for the arbitrator's decision unless the parties have agreed to exclude that defence. Were it otherwise, a claim for breach of a contract containing a reference clause could be brought at any time, it might be twenty or thirty years after the cause of action had arisen although the Legislature had prescr ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... dispute has arisen with regard to the subject matter of the agreement which is within the jurisdiction of the Court. But the Court is not concerned in dealing with that application to deal with the question whether the claim of a party to the arbitration agreement is barred by the law of limitation : that question falls within the province of the arbitrator to whom the dispute is referred. The Judicial Commissioner was, in our judgment, in error in rejecting the application of the appellants for filing the arbitration agreement as barred under Art. 181 of the Limitation Act, 1908. We direct that the appeal be allowed, the order passed by the Judicial Commissioner be set aside and the order passed by the Trial Court for filing the arbitra ..... X X X X Extracts X X X X X X X X Extracts X X X X
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