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TMI Blog1995 (8) TMI 353X X X X Extracts X X X X X X X X Extracts X X X X ..... to an Arbitrator. C.S. Nos. 144 to 149 of 1992 are the various suits filed by him. O.S.A. No. 136 of 1992 is preferred against the judgment in C.S. No. 144 of 1992; O.S.A. No. 137 of 1992 is preferred against the judgment in C.S. No. 145 of 1992; O.S.A. No. 138 of 1992 is preferred against the judgment in C.S. No. 146 of 1992; O.S.A. No. 139 of 1992 is preferred against the judgment in C.S. No. 148 of 1992 and O.S.A. No. 141 of 1992 is preferred against the Judgment in C.S. No. 149 of 1992. Since the parties are the same, it is sufficient if we make mention of the parties as appellant and respondent. 3. In C.S. No. 144 of 1992, which is the subject matter of O.S.A. No. 136 of 1992, demand for final payment was made on 28.2.1985 and the reply was issued on 21.3.1986. In C.S. No. 145 of 1992, against which O.S.A. No. 137 of 1992 is filed, demand for final payment was made on 19.7.1985 and the reply was on 9.10.1985, 8.12.1985 and 3.2.1986. In C.S. No. 146 of 1992 against which O.S.A. No. 138 of 1992 is filed, demand was made on 18.6.1985 and the reply was given on 16.10.1985. In C.S. No. 147 of 1992 from which O.S.A. No. 139 of 1992 arises, demand was made on 12.9.1985 and the reply ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... that Article 137 of the Limitation Act is applicable in respect of arbitration proceedings as well. 10. In A.I.R.1988 S.C.I 172 (Union of India and Anr. v. L.K. Ahuja and Co.), it was held thus:- "In order to be entitled to ask for a reference under Section 20, there must be an entitlement to money and a difference or dispute in respect of the same. It will be entirely wrong to mix up the two aspects, namely, whether mere was any valid claim for reference under Section 20 and, secondly, whether the claim to be adjudicated by the arbitrator, was barred by lapse of time. The second is a matter which the arbitrator would decide unless, however, if no admitted facts a claim is found at the time of making an order under Section 20, to be barred by limitation. In matters of this nature, the main question is whether the application under Section 20 was within time." 11. In [1988]3SCR351 (Inder Singh v. Delhi Development Authority), it was held thus:- "It is now well-settled that Article 137 of the Limitation Act, 1963 would apply to any petition or application filed in a Civil Court. In order to be entitled to order of reference under Section 20, it is necessary th ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ng party should bear the hardship and should not transmit the hardship to the other party, after the claim in the cause of arbitration was allowed to be barred. In view of Section 37 of the Arbitration Act, the provisions of the Limitation Act would apply to arbitrations. The arbitrator was entitled and bound to apply the law of limitation. Section 3 of the Limitation Act applied by way of analogy to arbitration proceedings, and like interpretation was given to Section 14 of the Limitation Act. The proceedings before the arbitration are like civil proceedings before the Court within the meaning of Section 14 of the Limitation Act. By consent the parties have substituted the arbitrator for a Court of law to arbiter their disputes or differences. It is, therefore, open to the parties to plead in the proceedings before him of limitation as a defence. For the purpose of Section 37(1) 'Action' and 'cause of action' in the Limitation Act should be construed as arbitration and cause of arbitration. The cause of arbitration, therefore, arises when the claimant becomes entitled to raise the question, i.e., when the claimant acquires the right to require arbitration. The lim ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... enting on that, in the last decision of the Supreme Court [1993]3SCR361 (Supra), it was held that the 'action' and 'cause of action' in the Limitation Act should be construed as arbitration and cause of arbitration. The cause of arbitration, therefore, arises when the claimant becomes entitled to raise the question i.e., when the claimant acquires the right to require arbitration. In paragraph 10 of the judgment, their Lordships of the Supreme Court have followed the decision reported in (1957) 1 All.E.R. 669 (West Riding of Yorkshire County Council v. Hudders filed Corporation) and held that the period of limitation for commencing an arbitration runs from the date on which the cause of arbitration accrued, that is to say, from the date when the claimant first acquired either a right of action or a right to require that an arbitration takes place upon the dispute concerned. Their Lordships further held in paragraph 11 thus- "Therefore, the period of limitation for the commencement of an arbitration runs from the date on which, had there been arbitration clause, the case of action would have accrued. Just as in the case of actions the claim is not to be brough ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 993. Therefore, in my judgment, the answer to the arbitrator's question is that the claim is barred by the Limitation Act, 1939, and I so declare." 15. R.S. Bachawat in his 'Law of Arbitration' -First Edition (1983) has held (at pages 532 and 533) thus:- "...For the purposes of Section 37(1) "action" and "cause of action" in the "Limitation Act should be construed as "arbitration" and "cause of arbitration 41. The Cause of arbitration arises when the claimant becomes entitled to raise the question, that is, when the claimant acquires the right to require arbitration. An application under Section 20 is governed by Article 137 of the Limitation Act, 1963 and must be made within three years of the date when the right to apply first accrues......." 16. In the last decision of the Apex Court [1993]3SCR361 (supra), their Lordships also followed the principles enunciated by Russell on Arbitration which read thus:- "Disputes under a contract may also be removed, in effect, from the jurisdiction of the court, by including an arbitration clause in the contract, providing that any arbitration under it must be comm ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... arise but where the final bills as in this case have not been prepared as appears from the record and when the assertion of the claim was made on 28th Feb.1983. and there was non- payment, the cause of action arose from that date, that is to say, 28th of February, 1983'. Their Lordships have held that since final bill was not prepared, cause of action arose while demand was made. Impliedly it follows that when final bills are passed, cause of action has to follow from that date. Learned counsel relied on the various demands made by the respondent on 17.9.1990 and submitted that the suits were filed within three years from that date. 20. The said submission cannot be accepted in view of the same decision [1988] 3 SCR 351 (supra) where it is stated that 'a party cannot postpone the accrual of cause of action by writing reminders or sending reminders'. Therefore, the notice dated 17.9.1990 can be treated only as a reminder. In all these cases, it was thereafter the respondent received final bills. He received the same without protest. The cause of action has arisen only when the liability is repudiated. The respondent cannot after receipt of the final payment, issue noti ..... X X X X Extracts X X X X X X X X Extracts X X X X
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