Delhi District Court
Show World Through Its Proprietor Arpit ... vs Jagran Solution on 17 November, 2023
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IN THE COURT OF SH. AJAY KUMAR JAIN:
DISTRICT JUDGE COMMERCIAL COURT 03 - SOUTH
EAST DISTRICT SAKET COURTS, NEW DELHI.
OMP (COMM) No. 113/2019
SHOW WORLD EVENTS PVT. LTD.
Through its Proprietor Sh. Arpit Dubey
Having its registered office at
307, Ratnamani Complex,
7/1, New Palasia,
Indore (MP)-452001 ... CLAIMANT/ PETITIONER
VERSUS
JAGRAN SOLUTIONS
(A Unit of Jagran Prakashan Ltd.)
Through its Director
Office at 84, Okhla Industrial Estate
Phase- III,
New Delhi - 110020 ...RESPONDENT
AND
OMP (COMM) No. 114/2019
SHOW WORLD
Through its Director Sh. Arpit Dubey
Having its registered office at
203-B, Nyay Nagar,
Sica School Road,
Indore (MP)-452001 ... CLAIMANT/ PETITIONER
VERSUS
JAGRAN SOLUTIONS
(A Unit of Jagran Prakashan Ltd.)
OMP (COMM) No.113/2019 .
Show World Events Pvt. Ltd Vs. Jagran Solution.
AND
OMP (COMM) No. 114/2019 Show World Vs. Jagran Solution dt. 17.11.2023 1 of 36
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Through its Director
Office at 84, Okhla Industrial Estate
Phase- III,
New Delhi - 110020 ...RESPONDENT
Date of Institution : 21.10.2019
Date when final arguments heard : 04.11.2023
Date of Judgment : 17.11.2023
JUDGMENT
1. Vide this common judgment, I shall decide both the above petitions filed by the petitioner/ claimant challenging the common award dated 18.07.2019 passed by Ld. Sole Arbitrator in case reference number DAC/1033/09-15 and case reference number DAC/1034/09-15 whereby the Ld. Arbitrator dismissed the respective claims of the claimant/ petitioner.
2. The claimant company in OMP (Comm) No. 113/2019 is represented through its Director and company registered under Companies Act. The claimant is the Sole Proprietorship concern of Sh. Arpit Dubey in OMP (Comm) No. 114/2019. The respondent is the unit of Jagran Prakashan Limited which is duly incorporated under Companies Act, 1956. Brief facts of the case are that the claimant had entered into a separate service agreement/ consultant agreement with the respondent for providing service for smooth operation of mobile medical units (MMU) for Bihar Govt. in 12 Districts, 13 blocks in district Khushi Nagar, UP and 10 blocks in district Ghazipur and 6 blocks in Balia, UP. The dispute arose between the parties OMP (COMM) No.113/2019 .
Show World Events Pvt. Ltd Vs. Jagran Solution.
AND OMP (COMM) No. 114/2019 Show World Vs. Jagran Solution dt. 17.11.2023 2 of 36 :3: in relation to the said agreement. As per the case of the claimant, the respondent failed to pay fee of the claimant in relation to various invoices raised within the stipulated period of time despite several requests and reminders, therefore arbitration was invoked.
3. Vide order dated 09.09.2015, the Hon'ble Delhi High Court appointed Retd. Justice Kailash Gambhir as a Sole Arbitrator to adjudicate the disputes arose between the parties including their claims and counter claims arising out of the said agreement/ consultant agreement in three arbitration matters.
4. Vide present impugned award dated 18.07.2019, the Ld. Arbitrator dealt with two claims filed by the claimant in DAC No. 1033/09-15 and 1034/09-15, both pertain to separate consultant agreement executed between the parties on the same date i.e. 01.04.2011. The claim of Rs. 1,27,91,480/- was raised in DAC No. 1033/09-15 and claim of Rs. 1,57,43,360/- was raised in DAC No. 1034/09-15. The Ld. Arbitrator found the issue of limitation at the heart of controversy in both the matters, and on analysing the said issue, dismissed both the petitions on the ground that both the claims are barred by limitation, therefore, also decided the issue of entitlement of claim as well as interest against the claimant. This impugned award is under challenge before this court.
5. Ld. Counsel for claimant/ petitioner stated that the statement of claim has been dismissed only on the ground of limitation, and Ld. Arbitrator has ignored the clear OMP (COMM) No.113/2019 .
Show World Events Pvt. Ltd Vs. Jagran Solution.
AND OMP (COMM) No. 114/2019 Show World Vs. Jagran Solution dt. 17.11.2023 3 of 36 :4: communication of acknowledgment through email dated 05.04.2012 and the admission of the respondent regarding the work done. Ld. Tribunal in para 37 of the impugned award has given the finding that the claimant in its statement of claim has not pleaded the acknowledgement vide email dated 05.04.2012 and relied upon the judgment of Deepak Mehta & Anr. Vs. Yashi Multimedia Pvt. Ltd. & Anr. reported in 211(2014) DLT 607 for interpretation of Section 18 of the Limitation Act, however, not considered the final written arguments and supplementary final written arguments of the claimant based upon the following cases :-
(i) Aries & Aries Vs. T. Nadu Electricity Board (AIR 2017 SC 1897);
(ii) Punjab State Vs. Dina nath (2007 AIR (SC) 2157, 2007(3) R.A.J. 214 (SC);
(iii) Major (Retd.) Inder Singh Rekhi Vs. DDA (1988)2 SCC 338;
(iv) Food Corporation of India Vs. Assam State Cooperative Marketing & Consumer Federation Ltd. (2004) 12 SCC 360;
(v) M/s Lakshmiratan Cotton Mills Co. Ltd. Vs. The Aluminium Corporation of India Ltd. AIR 1971 SC 1482;
(vi) Shapoor Freedom Mazda Vs. Durga Prasad Chamaria, AIR 1961 SC 1236.
Ld. Counsel submitted that the Ld. Arbitrator has not followed the principles that the acknowledgement can be implied and such an intention need not to be in express terms and OMP (COMM) No.113/2019 .
Show World Events Pvt. Ltd Vs. Jagran Solution.
AND OMP (COMM) No. 114/2019 Show World Vs. Jagran Solution dt. 17.11.2023 4 of 36 :5: can be inferred by implication from the nature of admission and surrounding circumstances. Ld. Counsel submitted that Ld. Tribunal lost sight of the fact that the respondent in its reply and in statement of witness Govind Parkash Pandey has fully admitted that the work was done and no payment was made by the respondent. Govind Parkash Pandey in cross examination also stated that no settlement took place between the parties. Ld. Counsel submitted that the judgments relied upon were not properly appreciated, as were, on the date of demand and implied acknowledgment, Ld. Tribunal has failed to consider judgments on the point of Section 25(3) of the Indian Contract Act. Ld. Tribunal failed to consider that by virtue of Section 28 of Indian Contract Act, no period of limitation can be curtailed and the Ld. Tribunal not considered the judgment of Pandit Construction Co. Vs/ DDA 2007(3) Arb. L.R. 205 Del as relied by the claimant. Ld. Counsel submitted that the Ld. Arbitrator did not appreciate the emails Ex.CW1/5 to Ex.CW1/11 and the testimony of CW1 Arpit Dubey and statement of RW1 Govind Parkash Pandey. Ld. Counsel submitted that the Ld. Arbitrator did not apply the law in proper prospective which has shocked the conscience of the court, therefore, the impugned award is liable to be set aside.
6. Ld. Counsel for respondent, on the other hand, submitted that Ld. Arbitral Tribunal had considered the email dated 05.04.2012 and gave a finding that the said email dated 05.04.2012 in no manner could be construed as an admission/ assurance with regard to the outstanding amount of unpaid OMP (COMM) No.113/2019 .
Show World Events Pvt. Ltd Vs. Jagran Solution.
AND OMP (COMM) No. 114/2019 Show World Vs. Jagran Solution dt. 17.11.2023 5 of 36 :6: invoices which are subject matter of present petition. The said email has no reference to any alleged payments of UP Projects for which the consultant agreement dated 01.04.2011 were executed between the parties. Furthermore, this court cannot re- appreciate the evidence under Section 34 of Arbitration and Conciliation Act.
7. Ld. Arbitrator also rightly appreciated the applicability of Section 15 of the Limitation Act. The finding of the fact that the claims are time barred is based on cogent reasons and warrants no interference. Ld. Arbitrator not ignored the email dated 05.04.2012, however, appreciated the said email in proper prospective. Perusal of statement of claim would demonstrate that the same was completely devoid of any single avernment as to how and in what manner the petitioner is entitled to claim benefit of Section 18 of Limitation Act. Ld. Counsel for respondent submitted that there is no infirmity in passing of the impugned award, hence, the present petition is liable to be dismissed.
8. Both the parties also filed written submissions.
9. Arguments heard. Record perused.
10. The relevant portion of the impugned award is re- produced as under :-
"I have heard Ld. Counsel for the parties and given my thoughtful consideration to the arguments advanced by them. I have also gone through the pleadings and documents filed on record, their written submissions and judgments cited by them in support of their arguments.
Before I proceed to analyse the contentions raised by contesting parties, it would be necessary to refer to some of the salient OMP (COMM) No.113/2019 .
Show World Events Pvt. Ltd Vs. Jagran Solution.
AND OMP (COMM) No. 114/2019 Show World Vs. Jagran Solution dt. 17.11.2023 6 of 36 :7: features of the Consultant Agreements dated 01.04.2011 which are identical in both these matters. The same are reproduced as under:
PAYMENT OF FEES 3.1 In consideration of rendering Services to Jagran Solutions under this Agreement, Jagran Solutions agrees to pay such fees as described in schedule IV ("Fees") to the Consultant, subject to deduction of tax at source, in accordance with the Applicable Laws.
The Fees shall be inclusive of all expenses, taxes, levies, cost expenses and charges, which may be incurred or paid by the Consultant during and with regard to rendering the Services.
3.2 In the event of unsatisfactory performance of Services by the Consultant Jagran Solutions reserves the right to withhold the Fees or part thereof.
3.3 The Consultant undertake not to make any claim from Jagran Solutions regarding any additional costs or expenses from Jagran Solutions save and except as agreed between the parties herein.
3.4 The Consultant shall send Monthly invoices to Jagran Solutions. Invoice for each Month shall be raised within three (3) days of the end of the Month. Only one invoice shall be entertained by Jagran Solutions for each Month.
3.5 All invoices approved b Jagran Solutions shall be paid within forty five (45) days.
3.6 Jagran Solutions shall not be liable for payment of invoices which have not been submitted within three (3) days of the end of the month unless Jagran Solutions has been notified in writing for the reasons for such delay and agreed to in writing by Jagran Solutions.
3.7 Jagran Solutions hereby reserves the right to deduct such amounts from the Fees as it may deem fit for any reason whatsoever including but not limited to failure of the Consultant to ensure timely payment to Jagran Solutions for the purpose of this Agreement from such government authority as directed by Jagran Solutions; unsatisfactory performance of Services.
5. COVENANTS OF THE SOLUTIONS CONSULTANT AND JAGRAN SOLUTIONS 5.1 Jagran Solutions covenants to the Consultant that:
(a) It shall provide Mobile Medical Units with a one (1) year warranty period, to the Consultant for the purpose of carying out the Services.
OMP (COMM) No.113/2019 .
Show World Events Pvt. Ltd Vs. Jagran Solution.
AND OMP (COMM) No. 114/2019 Show World Vs. Jagran Solution dt. 17.11.2023 7 of 36 :8:
(b) It shall communicate Targets to the Consultant.
(c) It shall conduct regular reviews with respect to the performance of Services.
5.2 The Consultant covenants to Jagran Solution that :
a It shall ensure that the Services shall be performed to the highest standards of professionalism, skill, expertise and care and also in accordance with instructions, specifications, procedures, standards, directions, as are issued from time to time, by Jagran Solutions for the performance of the Services to the satisfaction of Jagran Solutions.
b It shall perform the Services under this agreement in such manner as to not adversely affect the reputation and goodwill of Jagran Solutions and its business associates;
c .....
d .....
e It shall maintain the Mobile Medical Units in good working
condition during the Term of this Agreement and use the same degree of care that it uses to protect its equipments of similar nature and importance which shall in no event be less than reasonable care and shall also ensure that no damage / deterioration is caused to the Mobile Medical Units and the Drugs and Consumables. f It shall promptly repair / rectify and defect / malfunctioning in the Mobile Medical Units caused due to the negligence or otherwise of the Service Provider at its own cost.
a .....
b It shall fulfill the Target as laid out by Jagran Solutions from time to time.
c. It shall perform the Services in a timely, processional and workmanlike manner and in consonance with the Code of Conduct and instructions issued by Jagran Solutions from time to time in writing.
d .....
e. It shall ensure the Services are performed according to the instructions issued to them by Jagran Solutions;
6. TERM a. This Agreement shall commence on the date, of its execution of this Agreement and shall continue for a period of 03 years unless terminated earlier as provided in Article 7 ("Term"). b.
c. Jagran Solutions shall reserve the right to renew the term of this Agreement on such term and conditions as may be agreed upon by both the parties in writing.
OMP (COMM) No.113/2019 .
Show World Events Pvt. Ltd Vs. Jagran Solution.
AND OMP (COMM) No. 114/2019 Show World Vs. Jagran Solution dt. 17.11.2023 8 of 36 :9:
7. TERMINATION:
7.1 Jagran Solutions shall have the right to terminate this Agreement forth with on the happening of any of the following events:
a Unsatisfactory performance of Services; b Any death or serious injury caused due to the negligence of the Consultant;
b. The Consultant commits a breach of any provision or covenant under this Agreement and fails to remedy the breach within seven (7) Business Days of being notified about ihe breach; b. any representation or warranty given Consultant is found to be untrue;
c. The Consultant is ordered to be wound up by a court of law or is deemed to be unable to pay its debts; c. The Consultant voluntarily initiates any proceedings / takes any action for its winding up, liquidation, merger or compromise / arrangement with its creditors; and d. A receiver is appointed by a court of competent jurisdiction with respect to the assets or properties of the Consultant.
7.2 Notwithstanding any other provision of this Agreement either party may terminate this Agreement without cause on thirty (30) Business Days written notice.
7.3 The Articles 7, 9, 10, 14 and 15 shall survive the expiration or earlier termination of this Agreement.
7.4 Upon termination of the Agreement, the Consultant shall forthwith return:
a the Mobile Medical Units in the same condition as were handed over to the Service Provider at the time of start of Services;
b all documents or other material on which such trademarks, trade names, brands, designs, logos, etc. Of Jagran Solutions are affixed.
7.5 The Consultant shall promptly refund the advance paid by Jagran Solutions to the Consultant, if any lying with the Consultant on the ate of termination of the Agreement.
8 RELATIONSHIP
8.1 The relationship between Jagran Solutions and Consultant under this Agreement will be on a principal to principal basis. Nothing in this Agreement shall be taken as to constitute the Consultant or any of its Personnel, assignee, representative or any other person, as an employee or agent of Jagran Solutions. The OMP (COMM) No.113/2019 .
Show World Events Pvt. Ltd Vs. Jagran Solution.
AND OMP (COMM) No. 114/2019 Show World Vs. Jagran Solution dt. 17.11.2023 9 of 36 : 10 : parties undertake that none of their Personnel shall be construed in any manner, either expressly or by implication, as the employees or agents of Jagran Solutions.
8.2 The Consultant and Jagran Solutions acknowledge that:
a Neither is the legal representative, agent, joint venture or partner of the other for any purposes; and b Neither of them has any right or authority to assume or create any obligations of any kind or to make any representations or warranties, whether express or implied, on behalf of the other or to bind the other in any respect 8.3 The Consultant's further acknowledge that neither it nor its employees, agents or representatives shall be entitled to make representations or give or purport to give warranties either on their own behalf or on behalf of Jagran Solutions other than as authorized by Jagran Solutions in writing.
15. GOVERNING LAWAND DISPUTE RESOLUTION This Agreement will be governed by and construed in accordance with the laws of India. In the event that any dispute arises between the Parties in connection with this Agreement, the construction of any provision of this Agreement or the rights, duties or liabilities of the Parties under this Agreement, the parties shall conduct negotiations in good faith to solve such dispute. If mutual resolution cannot be reached within sixty (60) Business Days after the commencement of such negotiations, either of the parties shall be free to refer such dispute to arbitration under the Arbitration and Conciliation Act, 1996 by a sole arbitrator appointed by Jagran Solutions. The venue of arbitration shall be New Delhi. The arbitration proceedings shall be conducted in English. Any award made in such arbitration will be final and binding on the parties."
19. The issue of limitation is at the heart of the controversy in both these matters and, therefore, it would be better to deal with the same at the first instance. The fate of both the claims filed by the Claimant would depend on the fact as to whether the Claimant has filed these claims within the prescribed period of Limitation.
20. In DAC No. 1033/9-15, the Claimant has claimed that the Respondent made payment of all the invoices as were raised by the Claimant from time to time up to 30.10.2011 but thereafter Respondent failed to make any payment against three invoices raised from 30.11.2011 to 30.1.2012. Similarly, in DAC No.1034/9-15 raised, the case set up by the Claimant is that Respondent failed to make the payment of the invoices as raised by the Claimant w.e.f 30.11.2011 till 30.1.2012, although in relation to all previous invoices prior to 30.11.2011 the Respondent made no default in OMP (COMM) No.113/2019 .
Show World Events Pvt. Ltd Vs. Jagran Solution.
AND OMP (COMM) No. 114/2019 Show World Vs. Jagran Solution dt. 17.11.2023 10 of 36 : 11 : making the payments. As can be seen, the last date of invoice in both these cases is 30.1.2012 and, therefore, to reckon the limitation period, the date of last invoice will be relevant. To clarify, if the last invoice in both these matters is held to be time barred then inevitably all the invoices raised previous to said date cannot be held to be within limitation.
21. As per the Claimant all the said invoices were timely submitted by the Claimant in terms of Clause 3.4 of Consultant Agreement but the Respondent failed to make the payment of these invoices within a period of 45 days in terms of Clause 3.5 of the said agreement. It is also the case of the Claimant that after raising the said invoices, the Claimant through its various communications dated 5.4.2012, 12.4.2012, 15.4.2012, 14.5.2012, 18.5.2012, 21.5.2012, 22.10.2012 and 23.3.2015 made repeated requests to the Respondent to make payment of the said outstanding invoices and settle the account of the Claimant in respect of the services rendered by the Claimant under the said agreements but the Respondent failed to liquidate its liability to pay the amount of all the said outstanding invoices. It is also the case of the Claimant that vide email dated 5.4.2012 the Claimant made a specific demand for payment by giving details of outstanding payments and the Respondent in its reply sent vide email on the same date i.e. 5.4.2012 duly acknowledged its liability to pay the outstanding dues of the Claimant but despite the understanding and assurance that the events payments would be cleared by max. Tuesday and Bihar payments within next week, it failed to make any payment towards the outstanding dues. It is also the case of the Claimant that Respondent gave further assurances to the Claimant vide letter dated 15.4.2012 sent through its auditors, emails dated 1.5.2012, 14.5.2012 , 18.5.2012 and 21.5.2012 but despite these assurances the Respondent did not come forward to make any payment. It is also the case of the Claimant that finally the Respondent Sent a legal notice dated 23.3.2015 to invoke the arbitration in terms of Clause 15 of the Consultant Agreement and When this was also not responded, the Claimant was left with no option but to file an application under Section 11(6) of the Arbitration and Conciliation Act, 1996 before the Hon'ble Delhi High Court to seek appointment of an Arbitrator.
22. The contention raised by the Ld. Counsel for the Claimant on the issue of limitation was that the Respondent had unambiguously and unequivocally acknowledged its liability to pay the outstanding amount of invoices, in its reply sent by email dated 5.4.2012 at 6.42 PM in response to the email dated 5.4.2012 sent by the Claimant at 12.38 PM. It is also the case of the Claimant that along with the said email dated 5.4.2012, the Claimant had also forwarded an inter- departmental email dated 3.4.2012 at 2.07 PM exchanged between the Accounts Dept. of the Claimant and Mr. Arpit Dubey, Sole Proprietor of the Claimant wherein complete details of pending amounts of both the projects i.e. UP and Bihar and in relation to OMP (COMM) No.113/2019 .
Show World Events Pvt. Ltd Vs. Jagran Solution.
AND OMP (COMM) No. 114/2019 Show World Vs. Jagran Solution dt. 17.11.2023 11 of 36 : 12 : events was detailed and it is only after going through these details mentioned in forwarding email dated 3.4.2012, the Respondent had acknowledged its liability in its email dated 5.4.2012 to pay the outstanding amount of the Claimant. Ld. Counsel thus submitted that the period of three years of limitation has to be reckoned from 5.4.2012, on which date the Respondent had duly acknowledged and admitted its liability to pay the outstanding dues of the Claimant in terms of Section 18 of the Limitation Act, and thus limitation period is to be reckoned from 5.04.12 and not from the date of last invoice. As per Ld. Counsel of the Claimant, the Respondent has acknowledged and admitted its liability to pay the entire outstanding amount of the Claimant within a three years period of limitation and therefore, from 5.4.2012, fresh period of limitation should be computed and Consequently both the claims filed by the Claimant were filed within the period of three years of limitation to be reckoned from 23.3,2015, when the legal notice or invoking the arbitration clause was sent by the Claimant to the Respondent. In support of his arguments Ld. Counsel of the Claimant placed reliance on the following judgments:
i. State Bank of India vs Kanhiya Lal & Ors, RSA No. 248/2015 decided by Delhi High Court on 26.04.2016, ii. Arga Sen vs. Interra Information Technologies (India) Pvt. Ltd., CP No. 244 of 2004 and Consultant Agreement 1046 of 2004, decided by Delhi High Court on 12.09.2005.
iii. Sudarshan Cargo Private Limited VS Techvac Engineering Private Limited, CO.P. No. 11 of 2013, decided by High Court of Karnataka on 25.06.2013.
iv. Pandit Construction Company vs DDA, (2007) 3 Arb.LR 205 (Delhi)
23. Per contra, the Respondent has seriously refuted the said stand taken by the Claimant to bring its claims within the period of limitation. As per the Respondent, the payment of invoices as were raised by the Claimant became due and payable upon completion of period of 45 days from the date of invoice in terms of Clause 3.5 of the Agreement and, therefore, the cause of action, at best, would have arisen on the expiry of period of 45 days from the respective dates of the invoices and if the last date of invoice in both these matters is taken, into consideration i.e. Invoice invoice No. SW/300112/D/A dated 30.01.12 in DAC/1033/9-15 and invoice No.SWPL/ 300112D dated 30.1.2012 in DAC/1034/9-15 then clearly both these claims in respect of the unpaid invoices would be beyond the period of limitation after adding 45 days to the respective dates of the invoices.
OMP (COMM) No.113/2019 .
Show World Events Pvt. Ltd Vs. Jagran Solution.
AND OMP (COMM) No. 114/2019 Show World Vs. Jagran Solution dt. 17.11.2023 12 of 36 : 13 :
24. It is also the contention raised by Ld. Counsel for the Respondent that if three years period is reckoned from the date of individual invoices, then also the claims raised by the Claimant in relation to the unpaid invoices would become time barred as on the date of Service of legal notice dated 23.3.2015 through which the Claimant had invoked arbitration in both these matters.
25. The other argument raised by the Ld. Counsel for the Respondent was that in the facts of the present case the Claimant cannot get the benefit of Section 18 of the Limitation Act, as at no stage, the Respondent had acknowledged and admitted its liability, nor even through its email dated 5.4.2012, which could entitle the Claimant a fresh lease of life of three years period from this date. Ld. Counsel for the Respondent also seriously contested that the Respondent had gone through the said inter-departmental email dated 3.4.2012 before sending its response vide email dated 5.4.2012 at 6.42 pm. Contention raised by the Ld. Counsel for the Respondent was that unless the sender of the mail makes a clear reference to the text of the mail being forwarded therewith, it was not obligatory on the part of the recipient of the mail to go through such forwarded/trail mail. Ld. Counsel for the Respondent also pointed out that in the email dated 5.4.2012 sent by the Claimant, there was no reference made by the Claimant to the trail mail dated 3.4.2012 and, therefore, the Claimant cannot rely upon project-wise detail of payments set out in the said trail mail. It was also argued that in its email dated 5.4.2012 the Respondent nowhere referred to any of the payments with regard to UP projects which are under consideration in the present claims and, therefore, the Claimant cannot take advantage of the alleged admission made by the Respondent in its email dated 5.4.2012 which pertained to Bihar payments as well as the payments pertaining to Events. It was also argued by the Ld. Counsel for the Respondent that none of the Communications on which reliance has been placed by the Claimant can amount to an acknowledgement within the meaning and scope of Section 18 of the Limitation Act. Giving explanation for each of the communication as has been relied upon by the Claimant, as an act of acknowledgement and assurance on the part Of Respondent, it was submitted that in the email dated 5.4.2012 there is no acknowledgement on the part of the Respondent to pay any debt or outstanding amount in relation to the alleged outstanding invoices and, therefore, the said email dated 5.4.2012 cannot extend the period of limitation under Section 18 .of the Limitation Act. As regards letter dated 15.4.2012 sent by auditors of the Respondent, it was submitted that in this letter the Respondent has in fact claimed that it was the Claimant who owed an amount of Rs.70,41,601/- to the Respondent and, therefore, this letter by no stretch of imagination can be construed as an acknowledgement of debt by the Respondent. The email dated 1st May, 2012 is an email addressed by the Claimant to the Respondent and thus the same cannot amount an acknowledgement of debt by the Respondent. In the email dated 18.5.2012 there is a request made by Mr Gobind.
OMP (COMM) No.113/2019 .
Show World Events Pvt. Ltd Vs. Jagran Solution.
AND OMP (COMM) No. 114/2019 Show World Vs. Jagran Solution dt. 17.11.2023 13 of 36 : 14 : Pandey of Respondent to the Claimant to come for a meeting on 21.5.2012 with COO and, therefore, this mail also cannot be construed any kind of admission on the part of the Respondent. The last email on which the Claimant has placed reliance is email dated 22.10.2012, the same pertains to the works being executed in the State of Bihar and not in respect of any of the works relating to districts in State of UP and therefore this emails also of no help to the Claimant. Ld. Counsel for the Respondent submitted that the Claimant has wrongly misconstrued the said emails sent by the Respondent as a kind of assurance on its part or an acknowledgement to pay the alleged outstanding amounts of the Claimant in relation to the said invoices. In support of his argument Ld. Counsel for the Respondent placed reliance on the following judgments:
i. Deepak Mehta & Anr vs. Yashi Multimedia Pvt Ltd & Ors, MANU/DE/0937 /2014.
ii Ghulam Murataza vs. Farih-un-nissa Bibi, AIR 1935 ALL 129.
iii. Warner Bros Entertainment Inc & Anr vs Harinder Kohli &s Ors (22.09.2008-Delhi): ILR (2009) 1 Delhi 722.
iv. Ramjas Foundation & Anr vs. Union of India (UOI) & Ors (09.11.2010-SC): (2010) 14 SCC 38
26. Under Section 3 of the Limitation Act every suit if not filed within he prescribe period of limitation shall be dismissed even if the limitation has not been set up as a defense by the contesting party. Under section 37 of the Arbitration and Conciliation Act, all the provisions of the Limitation Act 1908 have been made applicable to arbitrations as they apply to proceedings in Court. Under Section 37(3) of the Arbitration and Conciliation Act, it is provided that for the purposes of this section and under the Indian Limitation Act, 1908 an arbitration shall be deemed to be commenced when one party to the arbitration agreement serves on the other party thereto a notice requiring the appointment of an Arbitrator. Under Section 21 of the Arbitration Act, it has been laid down that unless otherwise agreed by the parties, the arbitral proceedings in respect of a particular dispute commence on the date on which a request for that dispute to be referred to arbitration is received by the Respondent.
27. The dispute in both these matters pertain to outstanding amount of invoices raised by the Claimant for the work carried out by it for providing health care services to the inhabitants of various districts of U.P. through deployment of MMUs fully equipped with doctors, staff and requisite medical equipments. As per the OMP (COMM) No.113/2019 .
Show World Events Pvt. Ltd Vs. Jagran Solution.
AND OMP (COMM) No. 114/2019 Show World Vs. Jagran Solution dt. 17.11.2023 14 of 36 : 15 : Claimant Payment was due in relation to three invoices and the last being of dated 30.1.2012in DAC/1033/9-15 and in relation to six invoices and last being dated 30.1.2012 in DAC/1034/9-15.
28. The execution of Consultant Agreements dated 1.4.2011 between the parties is not in dispute between the parties and it is also not in dispute that both these agreements pertain to various districts of U.P. Clause 3 of the Consultant Agreement is a covenant which deals with the subject 'payment of fees'. Clause 3.4 stipulates that the Consultant shall send monthly invoices to Jagran Solutions and invoice for each month shall be raised within three (3) days of the end of the month. It further lays down that only one invoice shall be entertained by the Jagran Solutions for each month. Clause 3.5 which is more relevant to decide the controversy in hand, lays down that all invoices approved by Jagran Solutions shall be paid within forty-fiye (45) days. Clause 3.6 is no less important a clause as it lays down that Jagran Solutions shall not be liable for payment of invoices which have not been submitted within three (3) days of the end of the month, unless Jagran Solutions has been notified in writing for the reasons for such delay and agreed to in writing by Jagran Solutions.
29. In both these matters, the Claimant has not averred as to how it had submitted the invoices in question with the Respondent. In the Statement of Claim, the Claimant has only averred that it has raised its invoices on different dates which were duly received by the Respondent but the payment of last three invoices (in DAC 1033/9-15) and last six invoices (in DAC 1034 /9-15)was not made by the Respondent. CW-1 during his cross examination when asked through Question no. 10, as to whether the Claimant has placed on on record any document to show the delivery of invoices as were raised by then and in his answer, he candidly admitted that the Claimant has not placed on record any such document. He also volunteered to depose that as per the practice the Claimant used to raise invoice at the end of each month, the same were sent to the Respondent by courier. When this witness by Question no. 11 was asked as to whether he can now place on record the courier receipts, he spontaneously answered in the 'negative'. It is thus quiet manifest that the Claimant has neither pleaded nor placed on record any document to show that the said outstanding invoices were submitted by it with the Respondent in terms of Clause 3.4 of the Consultant Agreement. Further the Claimant has also not raised any plea in its pleadings that the payment of the said outstanding invoices was not made by the Respondent within a period of 45 days (refer to Clause 3.5 of Consultant Agreement) or any reasons were given by the Claimant in terms of Clause 3.6 of the Consultant Agreement for the delay if any, in the submission of the said invoices.
30. Let me now proceed on the assumption that the Claimant had submitted the said invoices on the same very dates when the same OMP (COMM) No.113/2019 .
Show World Events Pvt. Ltd Vs. Jagran Solution.
AND OMP (COMM) No. 114/2019 Show World Vs. Jagran Solution dt. 17.11.2023 15 of 36 : 16 : were raised and then to examine whether the payment of these invoices do not become time barred. Indisputably, the Respondent was to make the payment of these invoices within a period of 45 days in terms of Clause 3.5 of the Consultant Agreement and if these 45 days' period is added to the respective dates of unpaid invoices, then manifestly, all these unpaid invoices become time barred as on the date of legal notice dated 23.03.2015 when the Claimant had invoked the arbitration in these matters.
31. Now to test the other argument on which strong emphasis was laid by Ld. Counsel for the Claimant that the time period of three years should be reckoned from 05.04.2012, when the Respondent through their email had unequivocally admitted, their liability to Pay the entire outstanding dues of the Claimant with regard to both the projects in UP and Bihar and also the amount outstanding towards the events. To appreciate this argument, it would be worthwhile to reproduce the text of said emails dated 05.04.2012 exchanged between the parties:
Email dated 05.04.2012 sent by Mr. Arpit Dubey of the Claimant to Francis and Pankaj of Jagran Solutions "arpit dubey, [email protected] Thu, Apr 5, 2012 at 12:38PM To: "[email protected]"
<[email protected]> pankaj <[email protected]> "ac.swevenis"
<[email protected]> Respected Sir, Please clear my all pending...
Now I am really out of fund..
Vendors and staff are calling daily for money...
It's a very big amount for me..
And please clear the bihar van servicing matter...
Thanks"
[Quoted text hidden] The trail mail dated 03.04.2012 forwarded by Mr. Arpit Dubey along with the saidemail dated 05.04.2012 "From:"Account Show World"< [email protected]> Date: Apr 3, 2012 2:07 PM OMP (COMM) No.113/2019 .
Show World Events Pvt. Ltd Vs. Jagran Solution.
AND OMP (COMM) No. 114/2019 Show World Vs. Jagran Solution dt. 17.11.2023 16 of 36 : 17 : Subject: Balance Payment Detail Dear To: "arpitdubey307" [email protected] Dear Sir, Sir my total pending amount of both the projects UP, Bihar & Events Rs. 2,48,15,338/ Details--------
(1) UP MMU Gazipur &s BALIA total pending from Nov to Jarl is 8160O00/--
(2). UP MMU Kushinagar Total pending from Nov, Dec And Jan, is 6630000)---
(3) Bihar MMU Total pending from Oct Nov, Dec Jan, Feb & Mar is 7296912/--
(4) Bihar Draft Jamui, Lakisarai, And Begusarai Purnea Total Pending amount is 699923/-
(5) Events ERD, Microsoff, Casio And Beng Conference. Total amount pending is 876506/-
(6) Bihar MMU Dhanwantary Total Pending from Oct Nov Dec Jan Feb & March is 1152000/-
GRAND TOTAL of all projects 2,48, 15,338/- Thanks .........
For any queries feel free to revert.
Thanks & Regards...
Manohar Muwel Show World Events Pvt. Ltd.
III-Floor, 307 Ratnamani Complex, 7/1 New Palasia, Indore-452001 +91-9770207178 Off 0731-4275559 Visit: WWW.SHOWWORLD.CO Profle Link-
http://www.sendspace.com/file/h8nnzc"
The email dated 05.04.2012 sent by Mr. Francis of Jagran Solutions to Mr. Arpit Dubey and Others "Francis <[email protected]> Thu, Apr 5, 2012 at 6:42 PM To: arpit dubey <[email protected]>,pankaj <[email protected]>, ac.swvevents <[email protected]> OMP (COMM) No.113/2019 .
Show World Events Pvt. Ltd Vs. Jagran Solution.
AND OMP (COMM) No. 114/2019 Show World Vs. Jagran Solution dt. 17.11.2023 17 of 36 : 18 : Dear Arpit, Your events payments would be cleared by_max Tuesday? And Bihar payments would be cleared within next week.
And all the MMU'S will reach there respective districts by 11th of April to re start the activity.
Warm Regards, Francis Anthony"
32. Ld. Counsel for the Claimant placed strong reliance on the admission made by the Respondent in its email dated 05.04.2012 Wherein the Respondent made a categorical admission that they would clear all events payments by maximum Tuesday and Bihar Payments within next week. The contention raised by Ld. Counsel for the Claimant was that before making the said admission, the Respondent had gone through the text of trail mail dated 03.04.2012 wherein complete details were given of all outstanding payments as were due from the Respondent in respect of both the projects i.e. UP and Bihar and also the outstanding payment Concerning the events. The stand of the Ld. Counsel for the Respondent on the other hand was that before sending the reply through his email dated 05.04.2012 at 06.42PM, The respondent had not gone through the text of inter departmental trail mail Dated 03.04:2012, which was exchanged between the Accounts Department of the Respondent and Mr. Arpit Dubey of Claimant. It was also argued that in its email dated 05.04.2012, the Respondent had only referred to the events payments and the Bihar payments and nowhere there is a mention of the alleged outstanding payment of U.P. Projects and therefore, by no stretch of logic, the text of the said email dated 05.04.2012 can be taken as an admission on the part of the Respondent to extend the period of limitation under Section 18 of the Limitation Act for the unpaid invoices of UP Projects. It was also argued that the Respondent was not obligated to open the trail mail dated 03.04.2012, which was a hidden text sent -along with email dated 05.04.2012 at 12.38 PM by the Claimant.
33. To carry on further discussion on this contentious issue let me first refer to Section 18 of the Limitation Act which is reproduced as under:
*18. Effect of acknowledgment in writing:-
(1) Where, before the expiration of the prescribed period for a suit of application in respect of any property or right, an acknowledgment of liability in respect of such property or right has been made in writing signed by the party against whom such property or right is OMP (COMM) No.113/2019 .
Show World Events Pvt. Ltd Vs. Jagran Solution.
AND OMP (COMM) No. 114/2019 Show World Vs. Jagran Solution dt. 17.11.2023 18 of 36 : 19 : claimed, or by any person through whom he derives his title or liability, a fresh period of limitation shall be computed from the time when the acknowledgment was so signed.
(2) Where the writing containing the acknowledgment is undated, oral evidence may be given of the time when it was signed; but subject to the provisions of the Indian Evidence Act, 1872 (1 of 1872), oral evidence of its contents shall not be received.
Explanation. - For the purposes of this section-
(a) an acknowledgment may be sufficient though it omits to specify the exact nature of the property or right, or avers that the time for payment, delivery, performance or enjoyment has not yet come or is accompanied by a refusal to pay, deliver, perform or permit to enjoy, or is coupled with a claim to set-off, or is addressed to a person other than a person entitled to the property or right;
(b) the word "signed" means signed either personally or by an agent duly authorized in this behalf; and
(c) an application for the execution of a decree or order shall not be deemed to be an application in respect of any property or right."
34. The said provision in the Limitation Act does not create any new right but it only extend the period of limitation for a pre-existing right. To derive benefit of this Section, the acknowledgment must be made before the expiration of the period of limitation as any acknowledgment made after the expiry of the period of limitation will be of no help to keep the debt alive.
35. Adverting back to the text of the said email dated 05.04.2012 exchanged between the parties, it is manifestly clear that in the text of email sent by the Claimant, there is no clear reference to the Payments that were outstanding in relation to UP projects. As regards, the text of inter-departmental email dated 03.04.2012 is concerned, it does refer to the payments that were outstanding in relation to UP projects ,Bihar projects- and the amount pending with regard to the events. Now, even if it is assumed, that the Respondent had sent its reply through email dated 05.04.2012 after going through the text of the said inter-departmental trail mail dated 03.04.2012. Then also I fail to understand as to how and in what manner the admission made by the Respondent with regard to Bihar payments and events payments can be taken as an admission to extend the period of limitation under Section 18 of the Limitation Act for the unpaid invoices of UP projects. The Hon'ble High Court in the matter of Deepak Mehta & Anr. Vs. Yashi Multimedia Pvt. Ltd, & Anr. reported in 211 (2014) DLT 607 very aptly held that acknowledgment of liability within the meaning of Section 18 of Limitation Act has to be clear, unambiguous, OMP (COMM) No.113/2019 .
Show World Events Pvt. Ltd Vs. Jagran Solution.
AND OMP (COMM) No. 114/2019 Show World Vs. Jagran Solution dt. 17.11.2023 19 of 36 : 20 : unequivocal' and unconditional. Relevant para of said judgment is reproduced as under:
19. Moreover, acknowledgment of liability within the meaning of Section 18 of The Act has to be clear, unambiguous, unequivocal and unconditional. The communications aforesaid though clearly admit the receipt of amounts for refund of which the suit is filed, but nowhere clearly admit a jural relationship of debtor and creditor with the plaintiffs or admit any liability to the plaintiffs. The willingness to adjust the advance received in subsequent transactions on certain terms cannot be said to be acknowledgment of liability within the meaning of Section 18 of the Act. Not only so, the communications are predicated with clarification that the same be not construed as a representation or agreement and are only in an attempt to resolve the controversy. The said communications rather deny that there was any breach by the defendant and place the blame for the shows not materialized on other factors."
36. As can be seen from the email dated 05.04.2012 sent by the Respondent it contained no admission with regard to outstanding amount of unpaid invoices which are subject matter of these two matters, in so far as UP Projects are concerned. It is quite ludicrous to find that the Claimant has relied upon the said email Other Respondent in all the three matters without appreciating the fact that there is no reference to outstanding payments of UP Projects, for which Consultant Agreements dated 01.04.2011 were executed between the parties. As regards the contention raised by the Ld. Counsel for the Claimant that 'events payments' as mentioned in the email of the Respondent refer to those payments Which are in relation to UP Projects, it is suffice to mention that the argument raised is totally unfounded and devoid of any merit. Manifestly, in the inter-department email dated 03.04.2012 there is a separate mention of the total amount pending with regard to the events at Sl.
No. 5 of the same which reads as "Events ERD, Microsoft, Casio and Benq, Conference, Total amount pending is 876506/-. Further in the beginning of this trail mail there is a separate reference to both the projects of UP and Bihar and then of Events. For the sake of repetition the very first line of the said email dated 03.04.2012 reads as "Sir my total pending amount of both the projects UP, Bihar & Events Rs.2,48,15,338/-". It is thus quite obvious that Event payments are quite separate from the Bihar and UP Projects but the Claimant has cleverly tried to link the event payments with the UP Projects with a view to take advantage of Section 18 of the Limitation Act.
37. It is important to note here, that in the Statement of Claims filed by. the Claimant in both these matters it has not pleaded that it became entitled to claim fresh period of limitation from the date of the said acknowledgement made by the- Respondent in its email dated 05.04.2012 and therefore the said claims filed by the Claimant were within the limitation period. Surprisingly, even in OMP (COMM) No.113/2019 .
Show World Events Pvt. Ltd Vs. Jagran Solution.
AND OMP (COMM) No. 114/2019 Show World Vs. Jagran Solution dt. 17.11.2023 20 of 36 : 21 : the legal' notice dated 23.03.2015 sent by the Claimant to the. Respondent there is not even a whisper to the said email dated 05.04.2012 sent by the Respondent and it is only during the course of arguments lot of emphasis was laid on the said email. In my considered view, it was incumbent upon the Claimant to have made Specific averments in the Statement of Claim as to how and in what manner it was entitled to claim benefit of Section 18 of Limitation Act so as to bring its claims within the period of limitation. In the Statement of Claims filed by the Claimant, the Claimant has merely averred that through various emails the Respondent had given assurances in response to communications sent by the Claimant raising demands for outstanding payments. The Claimant has thus, not specifically pleaded that from the date of alleged acknowledgement of outstanding payments by the Respondent through its email dated 05.04.2012, the Claimant became entitled to reckon the period of limitation under Section 18 of Limitation Act from the said date of 05.04.2012 and not from the date of unpaid invoices after adding 45 days period in terms of Clause 3.5 of Consultant Agreements. I therefore, do not find any force in the contention raised by the Ld. Counsel for the Claimant that the Statement of Claims filed by the Claimant were within the prescribed period of limitation of three years, if the period of limitation is reckoned from the date of expiry of 45 days from the date of unpaid invoices and the date of last invoice being 30.01.12 in both these matters. The Judgments cited by the Ld. Counsel for the Claimant in support of his contention do not help the case of Claimant because of totally distinguishable facts of the present two matters.
38. To bring its case within the period of limitation, the Claimant also .raised an alternative plea that the admission of liability to pay the outstanding dues of the Claimant made by the Respondent in its email dated 05.04.2012 was not merely an acknowledgement of their liability to pay the outstanding amount but was in the nature a promise to pay a debt which may be otherwise barred by limitation. The contention raised by the ld. Counsel for the Claimant was that under Section 25(3) of Indian Contract Act the. Promise need not be expressed and the same can be implied or inferred as well. It was also argued that unlike under Section 18 of the Limitation Act Section 25(3) of Indian Contract Act gives a fresh lease of life to the Claimant to sue the Respondent within the period of three years' from the date when the said promise was made which in the present case was made on 05.04.2012. In Support of his arguments the Ld. Counsel for the Claimant placed reliance on the following judgments:
i. Aries &s Aries Vs. T. Nadu Electricity Board (AIR 2017 SC 1897), ii. Punjab State Vs. Dina Nath (2007 AIR (SC) 2157; 2007 (3)R.A.J. 214 (SC), iii. Major (Retd.) Inder Singh Rekhi Vs. DDA (1988) 2 SCC 338, OMP (COMM) No.113/2019 .
Show World Events Pvt. Ltd Vs. Jagran Solution.
AND OMP (COMM) No. 114/2019 Show World Vs. Jagran Solution dt. 17.11.2023 21 of 36 : 22 : iv. Food Corporation of India Vs. Assam State Cooperative Marketing & Consumer Federation Ltd. (2004) 12 SCC 360, v. M/s. Lakshmiratan Cotton Mills Co. Ltd.
Vs. The Aluminium Corporation of. India Ltd., AIR 1971 SC 1482, vi. Shapoor Freedom Mazda Vs. Durga Prasad Chamaria, AIR 1961 SC 1236, vii. Muddasani Venkata Narsaiah (D) Th. Lrs.
Vs Muddasani Sarojana, AIR 2016 SC 2250
39. The said contention raised by the Ld. Counsel for the Claimant is equally devoid of any merit. Section 25(3) of the Indian Contract Act deals with a entirely different situation i.e. where the debtor make a promise to pay debt which has already become barred by limitation. For better appreciation Section 25(3) of the Indian Contract Act with relevant illustration (e) of the same is reproduced as under:
"Section 25(3) in The Indian Contract Act, 1872 (3) It is a promise, made in writing and signed by the person to be charged therewith, or by his agent generally or specially authorized in that behalf, to pay wholly or in part a debt of which the creditor might have enforced payment but for the lawfor the limitation ofsuits.
In any of these cases, such an agreement is a contract.
Explanation 1.-Nothing in this section shall affect the validity, as between the donor and donee, of any. Gift actually made.
Explanation 2.-An Agreement to which the consent of the promisor is freely given is not void merely because the consideration is inadequate; but the inadequacy of the consideration may be taken into account by the Court in determining the question whether the consent of the promisor was freely given.
Illustration:
(e) A owes B Rs. 1,000, but the debt is barred by the Limitation Act. A signs a written promise to pay B Rs. 500 on account of the debt. This is a contract."
40. As can be seen from the said provision, it is applicable only where there is a fresh Agreement or a promise made by the debtor to the creditor to pay the debt which has otherwise become time barred under the Limitation Act. In other words, a debt which has become time barred under the Limitation Act can again became alive with a fresh promise made by the debtor to pay the debt which has otherwise become time barred. In the matter of State Bank of India Vs. Kanhiya Lal & Ors. (supra) Justice Ashutosh Kumar has beautifully drawn the distinction between Section i8 of the Limitation Act and a promise OMP (COMM) No.113/2019 .
Show World Events Pvt. Ltd Vs. Jagran Solution.
AND OMP (COMM) No. 114/2019 Show World Vs. Jagran Solution dt. 17.11.2023 22 of 36 : 23 : made under Section 25 (3) of the Indian Contract Act. Relevant paras of the said Judgment are reproduced as under:
"24. No doubt, there is. A distinction between an acknowledgement under Section 18 off the Limitation Act and a promise under Section 25(3) of the Indian Contract Act inasmuch as though both have the effect of giving a fresh lease of life to the creditor to sue the debtor, but, for an acknowledgement under Section 18 of the Limitation Act to be applicable, the same must be made on or before the date of expiry of the period of limitation whereas such a condition is nonexistent so far as the promise under Section 25 (3) of the Indian RSA No.248/2015 Page 9 of 10 Contract Act is concerned. A promise under Clause 3 of Section 25 of the Indian Contract Act, even made after the expiry of the period of limitation would be applicable and would cause revival of the claim, notwithstanding the limitation. Under Section 25/3) of the Indian Contract Act, a promise in writing to pay in whole or in part, a time barred debt is not void.
25. For ascertaining whether the nature of the aforesaid letters (Ex.PW2/2 & ExPW2/3) are of a promise to pay', it would be necessary to examine the definition of the word "promise"
under Section 2(b) of the Indian Contract Act.
26. Section 2(b) of the Indian Contract Act reads as hereunder: "(b) when the person to whom the proposal is made signifies his assent thereto, the proposal is said to be accepted. A proposal, when accepted, becomes a promise;"
27. Section 9 of the Indian Contract Act provides that if the proposal of acceptance is made in words, the promise is said to be express but under other circumstances it remains an implied promise. "9. Promises, express and. implied.--In so far as the proposal or acceptance of any promise is made in words, the promise is said to be express. In so far as such proposal or acceptance is made otherwise than in words, the promise is said to be implied.
28. Thus implied promise is not unknown under the Indian Contract Act. "
41. In the facts of the present case, the said provision of the Indian contract Act is not applicable at all as it gives a fresh remedy to the Creditor to file a suit / claim based on the fresh promise made by ne debtor after the period of limitation as laid down under the Limitation Act for a relief claimed in the matter, has already expired indisputedly, on 05.04.2012 the limitation period never Came to an end as the Claimant was well within its right to raise a dispute by invoking arbitration in terms of Section 21 .of the Arbitration and. Conciliation Act, 1996 within three years period from the date of unpaid invoices by adding 45 days period as stipulated under Clause 3.5 of the Consultant Agreements which came to an end in DAC OMP (COMM) No.113/2019 .
Show World Events Pvt. Ltd Vs. Jagran Solution.
AND OMP (COMM) No. 114/2019 Show World Vs. Jagran Solution dt. 17.11.2023 23 of 36 : 24 : 1033/09-15 on 6.03.2012 by taking the last date of the unpaid invoice dated 30.01.2012and on same date i.e. 16.03.2012 in DAC 1034/09- 15 by taking the last date of unpaid invoice i.e. dated 30.01.2012. Taking into consideration, the facts of both these matters, it is beyond my comprehension as to how Section 25 (3) of the Indian Contract Act can be attracted. The contention raised by Ld. Counsel for the Claimant on this aspect is highly misconceived and the same is outrightly rejected.
42. Another contention which was raised by the Ld. Counsel for the Claimant was that final demand notice for payment was sent by the Claimant vide email dated 04.2012 to the Respondent and therefore, cause of action to file the said claims rose in favour of the Claimant on 05.04.2012 and from this date the period of three years to be counted till the date of notice dated 23.03.2015 sent by the Claimant invoking arbitration in these matters and therefore, both these claims filed by the Claimant are within the period of limitation of three years. In support of this argument Ld. Counsel for the Claimant placed reliance on the judgment of State of Punjab Vs. Dina Nath (supra) and judgment of the Hon'ble Supreme Court of India in Inder Singh Rekhi (Supra).
43. Ld. Counsel for the Respondent on the other hand argued that both the parties are bound with the terms of the' contract which is the "Consultant Agreement dated 01.04.201 1" and in terms of clause 3.5, period of 45 days was agreed upon for the Respondent to make Payment of all invoices as were raised by the Claimant and thus the period of limitation will be governed by Article 15 of the Limitation Act which prescribed three years period after the expiry of fixed period of credit. In support of his argument, Ld. Counsel Tor the Respondent placed reliance on the following judgments:
(i) Shri Satender Kumar and other connected matters Vs. Municipal Corporation of Delhi, Arb. P. No. 253/2009 decided by High Court of Delhi on 04.02.2010.
(ii) J.K. Lakshmi Cement Ltd. Vs. Amit Plastic (Payment) Ltd. And Ors., MANU/DE/1216/2009.
(iii) Micrographics India Vs. The Govt. of NCT of Delhi, MANU/DE/1459/2018
44. Article 15 of the Limitation Act which is applicable to the facts of these matters, is reproduced as under:
Description of Suit Period of Time from which Limitation period begins to run
15. For the price Three years. When the period of goods sold and of credit expires.
delivered to be OMP (COMM) No.113/2019 .
Show World Events Pvt. Ltd Vs. Jagran Solution.
AND OMP (COMM) No. 114/2019 Show World Vs. Jagran Solution dt. 17.11.2023 24 of 36 : 25 : paid for after the expiry of a fixed period of credit.
45. Manifestly, the cause of action to file these claims arose in favour of the Claimant and against the Respondent on the expiry of 45 days period to be reckoned from the date of each individual invoice which was raised by the Claimant in accordance with the Article 15 of the Limitation Act. The Claimant has raised claim for the respective amounts of three unpaid invoices in DAC No. 1033/09 lo and in respect of six unpaid invoices in DAC No. 1034/09-15. The last date of invoice in both these matters is 30.01.2012 and if a period of 45 days is added in terms of clause 3.5 of the Consultation Agreement, then the cause of action to file the claims even in respect to the last invoice, arose in favour of the Claimant on 16.03.2012. Now to count three years period from this date under Article 15 of the Limitation Act, then the same would expire on 16.03.2015 but admittedly notice to invoke arbitration in these matters was sent by the Claimant on 23.03.2015 and therefore, both these claims became time barred in relation to all the invoices which remained unpaid as per the Claimant.
46. In Micrographics India ('supra) the Hon'ble High Court of Delhi was dealing with a case where the invoices were raised by the Claimant between the period, 1995 to 1997 and the suit was filed on 08.05.2002 after serving a legal notice dated 09.01.2002 and the court after placing reliance on Articles 14, 15 and 18 of the Limitation Act held the suit to be barred by limitation. Relevant paras of this judgment are reproduced as under:
7.5 In the present case, the plaintiff is seeking payment for the services provided by him to the defendant department as well as for the goods supplied.by him to the defendant department, therefore, the relevant article which shall determine the limitation of present suit are Articles-14, 15 and 18 of Limitation Act, which are reproduced as under:-
14 For the price of goods sold and delivered 3 The where no fixed period of credit is agreed years date of upon the delivery of the goods 15 For the price of goods sold and delivered to 3 When be paid for after the expiry of a fixed period years the of credit period of credit expires 16 For the price of work done by the plaintiff 3 When OMP (COMM) No.113/2019 .
Show World Events Pvt. Ltd Vs. Jagran Solution.
AND
OMP (COMM) No. 114/2019 Show World Vs. Jagran Solution dt. 17.11.2023 25 of 36
: 26 :
for the defendant at his request, where no years the
time has been fixed for payment. work is
done
7.6 As per all the three articles re-produced above, the period of
limitation for filing the suit is three years from the date of delivery of goods or completion of work or when there is fixed period of credit from the date when the said period expires. In the present case, the invoices were raised between 1995- 1997, as is admitted by the plaintiff himself in para-16 of the plaint which relates to cause of action (as reproduced earlier), and even if the period of three years is prescribed by the aforesaid articles is counted from the last day of 1997, still the limitation expired in the year 2000, whereas the suit has been filed in the year 2002.
(ii) In my opinion, even this argument is misconceived because even assuming for the sake of arguments that instead of Articles 14, 15 and 18 the residuary Article 113 of the Limitation Act applies as contended on behalf of the appellant/plaintiff yet the residuary Article 113 also provides a period of three years, and once invoices are raised after work is done, then limitation would definitely commence from the date of the invoices; if not earlier. In fact, the date of the invoices were from the year 1995 and therefore for the different dates of invoices as stated in para 2.3 of the impugned judgment and for the dates otherwise stated by this Court above with respect to upgradation RFA No. 320/2018 Page 11 of 11 of equipment, periods of limitation would have expired after three years of raising of the invoices, and trial court as also this Court is taking this issue liberally in favour of the appellant/plaintiff of limitation commencing only on raising of the last invoice on 24.1.1997/25.6.1997, but even taking that date as the date of commencement of limitation, the suit filed on 8.5.2002 would be barred by limitation.
47. In Satender Kumar (supra) Hon'ble High Court was also dealing with the case where issue of limitation had arisen and after placing reliance on many previous judgments on the subject, it Summarized the legal principals in para 16 of the judgment which is reproduced as under:
"16. A summary of the conclusions on reading of the aforesaid relevant clauses of the contract in question and the judgments as dealt with above, bring out the following salient points: (i) Limitation commences when the cause of action accrues/arises. (ii) Accrual/ arising of cause of action necessarily varies as per facts and circumstances of each case and the nature of jural relationship between the parties viz contractual or otherwise and so on. (iii) As regards contracts for execution of building work, Article 18 comes into play in that when no specific date for payment is fixed, limitation commences and the cause of action accrues for the purpose of limitation on the completion of work. Arb.P Nos. 253&:254&345/09 Page 20 (iv) In its application, Article 18 will cause different dates for accrual of causes of action in building works when a time period is fixed for submitting of a bill by the OMP (COMM) No.113/2019 .
Show World Events Pvt. Ltd Vs. Jagran Solution.
AND OMP (COMM) No. 114/2019 Show World Vs. Jagran Solution dt. 17.11.2023 26 of 36 : 27 : contractor and to which there is no response of the Owner. Where a final bill is Submitted and liability under the same, even ý, in part, is admitted or some payment is made then such actions extend limitation in terms of Section 18 of the Limitation Act. (u) No fresh period of limitation can arise simply because letters and reminders are written time and again, attempting to keep the claim alive, although the claim b virtue of Article 18 of the Limitation Act, has become clearly time barred,"
48. Reference is also made to another judgment of Delhi High Court in the Judgment of J.K. Laksmi Cement Ltd. (supra) where it was held as under:
"10. The plaintiff is claiming price of goods sold and delivered to the defendants. Under Article 14 of the Limitation Act, 1963 for the price of goods sold and delivered where no fixed period of credit is agreed upon, the period of limitation is three years from the date of delivery of goods. Plaintiff has not averred any fixed period of credit. Though the plaintiff has alleged that he had a current account with the defendants, however, limitation for filing suit is not be computed under Article I of the Limitation Act, 1 963 from the close of the year in which last item was entered in the account because a mutual open and current account contemplates reciprocal demands between the parties. There has not been any allegation of reciprocal demands by the defendants in the plaint; therefore, the limitation cannot be computed under Article1 of the Act. The limitation has to be computed on the basis of Article 14 of the Act and the period of limitation starts from the date of delivery of goods. The plaintiff has not alleged any date of delivery but has given the date of invoices and. in the circumstances, the date of delivery of goods will be date of invoices especially since no allegation has been made that the goods used to be supplied much after raising the invoices. So for purposes of limitation of the goods sold and delivered, the limitation will be three years from the date of invoice in the present case.
49. In M/S. Hindustan Thermo Prints Ltd. In Liquidation v. D.R.G. U.K. Ltd. the Hon'ble High Court held that the invoices under which the goods were sold required the buyer to make payment within thirty days on receipt of goods / machineries, then in view of Article 15of the Limitation act, 1963, suit for recovery of price could be filed within three years from the date of expiry of thirty days from the date of sale. Relevant para of said judgment is reproduced as under:
"21.... Since the payment was allegedly not made with in thirty days by the company as contemplated by the invoices, the first Respondent could have fled a suit to recover the same within three years of the expiry of the same, i.e. by December, 22/24, 1984 as the suit would be governed by Art. 15 of the Limitation Act, 1963. In view of the stipulation contained in the invoices the first Respondent could not have filed a civil suit for repossession of the machinery. Therefore, the decisions cited by the learned counsel have no application."
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50. In the light of the aforesaid legal position, I have no hesitation to hold that Article 15 of the Limitation Act is applicable with all force to the facts of both these matters and therefore, the three years period-for- limitation- period is to be reckoned from the date of cause of action which accrued in favour of the Claimant on 16.03.2012, as already discussed above and the said limitation period to invoke the arbitration came to an end on 16.03.2015 and thus, these claims became time barred as on 23.03.2015, when the Claimant had send the legal notice to invoke the arbitration in these matters. The judgments cited by the Ld. Counsel for the Claimant are of no help to the facts of these matters which are totally distinguishable to the facts of the said referred judgments. The issue of limitation is accordingly decided in favour of the Respondent and against the Claimant in both these matters and consequently it is held that the claims filed by the Claimant in both these, matters i.e. DAC No. 1033/09-15 and DAC No. 1034/09-15 even if they are reckoned from the date of legal' notice dated 23.03.2015 are barred by limitation. The issue No. 3 is accordingly decided in favour of the Respondent and against the Claimant in both the matters.
51. With the said finding on Issue No. 3 which goes to the very root to decide the maintainability of these claims preferred by the Claimant against the Respondent,. The Claimant fails in maintaining the said claims against the Respondent and therefore, the Issue Nos. 1 and 2 are also decided against the Claimant and in favour of the Respondent.
52. As a result of the above discussion, both the claims filed by the Claimant against the Respondent in these two arbitration matters are dismissed with parties to bear their own cost.
53. The common award in both the matters is passed and published on this 18th day of July, 2019 at New Delhi and scanned copy of the same is being sent to the Ld. Counsel for the parties and the DIAC through email. The Counsels/ parties may collect the Certified True Copy of the Award from the office of the DIAC."
11. The claim of the claimant was dismissed on the ground that it is barred by limitation. Ld. Arbitrator observed that the last invoice in both the claim petition is of 30.01.2012 and in case last invoice in both the matters is held to be time barred then inevitably all the invoice raised previous to said date cannot be held to be within limitation. It is also observed by the Ld. Arbitrator that claimant's case vide email dated 05.04.2012 that the claimant made a specific demand for claimant by giving details of outstanding OMP (COMM) No.113/2019 .
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AND OMP (COMM) No. 114/2019 Show World Vs. Jagran Solution dt. 17.11.2023 28 of 36 : 29 : payments and the respondent in reply through email dated 05.04.2012 duly acknowledged its liability towards the outstanding dues. The claimant's case is also that the respondent made further assurance vide letter dated 15.04.2012 sent through auditors, emails dated 01.05.2012, 14.05.2012, 18.05.2012 and 21.05.2012 and finally through legal notice dated 23.03.2015. Ld. Arbitrator also observed the contentions of the respondent that the email dated 05.04.2012 is not the acknowledgement on the part of the respondent, therefore, the said email dated 05.04.2012 cannot extend the period of limitation U/s 18 of Limitation Act. The letter dated 15.04.2018 sent by the auditors of the respondent to show that the claimant owned the amount of Rs. 70,41,601/- to the respondent, therefore, cannot be considered as an acknowledgement. The email dated 18.05.2012 is request made by Govind Pandey of respondent to the claimant for meeting, therefore, cannot be considered any kind of admission. The last email dated 22.10.2012 pertains to work executed in the State of Bihar and not in respect of the works relating to district in States UP, thus, no help to the claimant.
12. Ld. Arbitrator observed that Section 3 of the Limitation Act prescribed the period of limitation and the suit can be dismissed even if the limitation has not been set up as a defence. The dispute in present case pertained to outstanding amount of invoices carried out to the services provided in various district of UP. In statement of claim, the claimant only averred that it has raised its invoices on different dates. CW1 Arpit Dubey in cross OMP (COMM) No.113/2019 .
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AND OMP (COMM) No. 114/2019 Show World Vs. Jagran Solution dt. 17.11.2023 29 of 36 : 30 : examination stated that claimant has not placed on record any document to show the delivery of invoices. He also stated that he cannot place any courier receipt, therefore, the Ld. Arbitrator observed that the said invoices were of the dates when raised, therefore, the payment is to be made within 45 days, hence, become time barred as on the date of legal notice i.e. 23.03.2015, the date when claimant had invoked the arbitration in these three matters. However, the contentions raised that the three years is to be counted from 05.04.2012, when the respondent admitted their liability to pay the entire outstanding dues of the claimant.
13. Ld. Arbitrator has duly repelled this contention by re- producing the email dated 05.04.2012 in the impugned award and examined it in detail. It is also observed that Section 18 of Limitation Act does not create any new rights but it only extend the period of limitation. There is no clear reference to the payment that were outstanding in relation to the UP project. The inter- departmental email dated 03.04.2012 refers to the payment in respect to UP projects and Bihar projects, however, that does not mean that the respondent made admission in email dated 05.04.2012 towards the unpaid invoices of UP projects which are the subject matter of the present case. It is categorically observed that the email dated 05.04.2012 do not in any manner relates to the UP projects, therefore, no benefit could be given to extend the period of limitation.
14. Ld. Arbitrator also dealt the plea of the claimant in alternative that email dated 05.04.2012 was not merely an OMP (COMM) No.113/2019 .
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AND OMP (COMM) No. 114/2019 Show World Vs. Jagran Solution dt. 17.11.2023 30 of 36 : 31 : acknowledgement but promise to pay a debt. Section 25(3) of Indian Contract Act also states that the promise need not be expressed and can be implied. However, it is observed by Ld. Arbitrator that this Section 25(3) of Contract Act applied when the debt become time barred under limitation act. Therefore, in present case the said provision is not applicable. Ld. Arbitrator held that the limitation period begins on 16.03.2012 and expired on 16.03.2015 and thus, time barred on 23.03.2015 when the claimant had sent the legal notice to invoke the arbitration in these matters, therefore, decided the issue no. 3 in favour of the respondent and against the claimant as both the matters are barred by limitation, therefore, also held that the claimant failed in maintaining the claim. The issue nos. 1 and 2 also decided against the claimant and in favour of the respondent.
15. The main contention of the ld. Counsel for the claimant is that the email dated 05.04.2012 is the acknowledgment of the liability, however, on the bare reading of the said email, it does not acknowledged the liability of the UP territory which is under dispute. Admittedly by 05.04.2012, the claim was not time barred, therefore, there is no applicability of Section 25(3) of Indian Contract Act. The other emails as relied are also do not extend the limitation period. The limitation begin from 16.03.2012 which expired on 16.03.2015 prior to issuance of notice dated 23.03.2015 invoking arbitration, hence, claims barred by limitation.
16. Scope of interference under section 34 of Arbitration and Conciliation Act with Arbitrator's award is very limited. The OMP (COMM) No.113/2019 .
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AND OMP (COMM) No. 114/2019 Show World Vs. Jagran Solution dt. 17.11.2023 31 of 36 : 32 : Court would not be justified in reappraising the material on record and substituting its own view in place of the view taken by Arbitrator. Once the Arbitrator has applied his mind to the matter before him, the Court cannot reappraise the matter as if it were an appeal and even if two views are possible, the view taken by the Arbitrator would prevail as held by Hon'ble Supreme Court in the case of Navodaya Mass Entertainments Ltd. v. J.M. Combines reported in (2015) 5 SCC 698.
17. Hon'ble Supreme Court in the case of 'Sutlej Construction Ltd. v. State (UT of Chandigarh) reported in (2018) 1 SCC 718' has held that when it comes to setting aside of an award under the public policy ground, it would mean that the award should shock the conscience of the court and would not include what the court thinks is unjust on the facts of the case seeking to substitute its view for that of the arbitrator to do what it considers to be "justice. Paragraph nos. 10 to 13 of the said judgment are extracted below:-
"10. We are not in agreement with the approach adopted by the learned Single Judge. The dispute in question had resulted in a reasoned award. It is not as if the arbitrator has not appreciated the evidence. The arbitrator has taken a plausible view and, an in our view, as per us the correct view, that the very nature of job to be performed would imply that there has to be an area for unloading and that too in the vicinity of 5 km as that is all that the appellant was to be paid for. The route was also determined. In such a situation to say that the respondent owed no obligation to make available the site cannot be accepted by any stretch of imagination. The unpreparedness of the respondent is also apparent from the fact that even post-termination it took couple of years for the work to be carried out, which was OMP (COMM) No.113/2019 .
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AND OMP (COMM) No. 114/2019 Show World Vs. Jagran Solution dt. 17.11.2023 32 of 36 : 33 : meant to be completed within 45 days. The ability of the appellant to comply with its obligations was interdependent on the respondent meeting its obligations in time to facilitate appropriate areas for unloading of the earth and for its compacting. At least it is certainly a plausible view.
11. It has been opined by this Court that when it comes to setting aside of an award under the public policy ground, it would mean that the award should shock the conscience of the Court and would not include what the Court thinks is unjust on the facts of the case seeking to substitute its view for that of the arbitrator to do what it considers to be "justice".
12. The approach adopted by the learned Additional District Judge, Chandigarh was, thus, correct in not getting into the act of re-appreciating the evidence as the first appellate court from a trial court decree. An arbitrator is a chosen Judge by the parties and it is on limited parameters can the award be interfered with. 13. The learned Single Judge ought to have restrained himself from getting into the meanderings of evidence appreciation and acting like a second appellate court. In fact, even in second appeals, only questions of law are to be determined while the first appellate court is the final court on facts. In the present case, the learned Single Judge has, thus, acted in the first appeal against objections dismissed as if it was the first appellate court against a decree passed by the trial court."
18. The scope of interference with an arbitral award under Section 34 of the Act has been considered and discussed by Hon'ble Supreme Court in a judgment rendered in the case of 'MMTC Ltd. v. Vedanta Ltd. reported in (2019) 4 SCC 163'. Paragraph nos. 11 to 14 of the said judgment are extracted below:
"11. As far as Section 34 is concerned, the position is well-settled by now that the Court does not sit in appeal over the arbitral award and may interfere on merits on the limited ground provided under Section 34(2)(b)(ii) i.e. if the award is against the public OMP (COMM) No.113/2019 .
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AND OMP (COMM) No. 114/2019 Show World Vs. Jagran Solution dt. 17.11.2023 33 of 36 : 34 : policy of India. As per the legal position clarified through decisions of this Court prior to the amendments to the 1996 Act in 2015, a violation of Indian public policy, in turn, includes a violation of the fundamental policy of Indian law, a violation of the interest of India, conflict with justice or morality, and the existence of patent illegality in the arbitral award. Additionally, the concept of the "fundamental policy of Indian law" would cover compliance with statutes and judicial precedents, adopting a judicial approach, compliance with the principles of natural justice, and Wednesbury reasonableness. Furthermore, "patent illegality" itself has been held to mean contravention of the substantive law of India, contravention of the 1996 Act, and contravention of the terms of the contract.
12. It is only if one of these conditions is met that the Court may interfere with an arbitral award in terms of Section 34(2)(b)(ii), but such interference does not entail a review of the merits of the dispute, and is limited to situations where the findings of the arbitrator are arbitrary, capricious or perverse, or when the conscience of the Court is shocked, or when the illegality is not trivial but goes to the root of the matter. An arbitral award may not be interfered with if the view taken by the arbitrator is a possible view based on facts.
13. It is relevant to note that after the 2015 Amendment to Section 34, the above position stands somewhat modified. Pursuant to the insertion of Explanation 1 to Section 34(2), the scope of contravention of Indian public policy has been modified to the extent that it now means fraud or corruption in the making of the award, violation of Section 75 or Section 81 of the Act, contravention of the fundamental policy of Indian law, and conflict with the most basic notions of justice or morality. Additionally, sub-section (2-A) has been inserted in Section 34, which provides that in case of domestic arbitrations, violation of Indian public policy also includes patent illegality appearing on the face of the award. The proviso to the same states that an award shall not be set aside merely on the ground of an erroneous application of the law or by re- appreciation of evidence.
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14. As far as interference with an order made under Section 34, as per Section 37, is concerned, it cannot be disputed that such interference under Section 37 cannot travel beyond the restrictions laid down under Section 34. In other words, the court cannot undertake an independent assessment of the merits of the award, and must only ascertain that the exercise of power by the court under Section 34 has not exceeded the scope of the provision. Thus, it is evident that in case an arbitral award has been confirmed by the court under Section 34 and by the court in an appeal under Section 37, this Court must be extremely cautious and slow to disturb such concurrent findings."
19. In the case of 'Maharashtra State Electricity Distribution Company Ltd. v. Datar C.C.L. Ltd. reported in (2018) 3 SCC 133' it has been held by Hon'ble Supreme Court that "the proposition of law that the Arbitral Tribunal is the master of evidence and the findings of fact which are arrived at by the arbitrators on the basis of evidence on record are not to be scrutinized as if the Court was sitting in appeal now stands settled by catena of judgments pronounced by this Court without any exception thereto."
20. Ld. Sole Arbitrator has passed the award upon consideration of material placed before him. There is nothing perverse or patent illegality in the findings of the Ld. Arbitrator.
21. The Ld. Sole Arbitrator has drawn inferences and conclusions after the factual appreciation in the light of the legal principles. The views of the Ld. Sole Arbitrator can not be found OMP (COMM) No.113/2019 .
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AND OMP (COMM) No. 114/2019 Show World Vs. Jagran Solution dt. 17.11.2023 35 of 36 : 36 : fault with only for the reason that some other views can emerge by appreciating the same set of facts and evidence, until and unless it is shown that such a view is totally obnoxious and unsupported by the sound legal principles.
22. This Court cannot substitute its own views or the views of the parties with the view taken by the Ld. Arbitral Tribunal, if the view taken by the Ld. Arbitrator is not in conflict with the settled legal position. There is nothing to suggest that the findings and conclusions rendered by the Ld. Arbitrator are per- se perverse, illegal or non- sustainable or against public policy.
23. Accordingly, the present petition under Section 34 of the Arbitration and Conciliation Act as pressed into service by the petitioner is therefore not sustainable within the scope and ambit of the provision, therefore, liable to be dismissed and accordingly dismissed and disposed of.
24. Copy of judgment be placed in original in both the files.
25. File be consigned to record room after necessary compliance.
Announced in the open court
on 17th November, 2023 (Ajay Kumar Jain)
District Judge, Comm-03
South-East, Saket Courts, Delhi
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