Telangana High Court
M/S. Pvp Ventures Limited vs Mr. Vinay Chilakapati on 11 July, 2024
Author: T. Vinod Kumar
Bench: T. Vinod Kumar
THE HON'BLE SRI JUSTICE T. VINOD KUMAR
ARBITRATION APPLICATION No.202 of 2023
ORDER:
This Arbitration Application is filed under Section 11(5) and (6) of the Arbitration and Conciliation Act, 1996 (hereinafter 'the Act, 1996') for appointment of a sole arbitrator to refer the disputes that have arisen between the applicant and the respondent.
2. It is the case of the applicant that originally an agreement was entered into between the applicant and the respondent, vide 'loan agreement' dated 27.06.2012 for advancing certain amounts as loans; that the applicant had advanced a sum of Rs.63,50,000/- to the respondent under the aforesaid agreement; and that the same was to be repaid by 31.12.2015.
3. It is the further case of the applicant that the aforesaid agreement entered into between the parties provided for resolution of disputes by reference to Arbitration. The relevant Clause in the Loan Agreement dated 27.06.2012 reads as under:
"Any dispute or difference or claim that arises between the parties touching or concerning this Agreement or any condition herein/therein contained or as to the rights, 2 duties or liabilities of parties hereto shall be referred to Arbitration by a sole Arbitrator appointed by the Lender and it shall be in accordance with the provisions of Arbitration & Conciliation Act, 1996 and rules thereunder and any amendment thereto from time to time."
4. It is the further case of the applicant that relationship between the applicant and the respondent continued beyond the agreement period also, and since the respondent had failed to make good the amounts paid, the applicant issued a legal notice dated 15.07.2023, claiming the said amounts along with interest.
5. Since, the respondent by its reply dated 11.08.2023 had denied its liability, the applicant issued notice dated 06.09.2023 invoking Clauses 14 and 15 of the agreement dated 27.06.2012 referring the dispute to Arbitrator and nominated Sri T. Lakshmana Rao, Retired Principal District Judge, as the Arbitrator for the aforesaid parties.
6. The respondent, by its reply notice dated 23.09.2023, while denying its liability also refuted the claim that the subject disputes can be referred to Arbitration, since the claims are ex facie barred by limitation and also refused for submitting to the Arbitration. Thus, the present application is filed. 3
7. Heard learned Counsel for the Applicant and the learned Counsel for the respondent and perused the record.
8. It is a settled position of law that, mere negotiation between the parties does not extend the date from when right to sue accrues, unless concrete proof of such negotiations is placed on record. (See: B and T AG Vs. Ministry of Defence 1). In the facts at hand, though the applicant claims that the Loan Agreement dated 27.06.2012 was extended from time to time, no material is placed before this Court to show that the respondent had agreed for such extension of the validity of the Loan agreement dated 27.06.2012. Further, it is equally well settled that silence of the respondent to the applicants claims amounts to denial (See: Terra Infra Development Limited Vs. NCC Limited 2), therefore, merely addressing unilateral communications to the respondent herein without receiving any confirmation from the other party does not extend the currency of an expired contract. Further since the respondent had denied its liability and also taking into the fact that there has been no demand from the applicant atleast during the period between 31.12.2015 to 2018 or immediately thereafter the sudden 1MANU/SC/0601/2023 2 MANU/TL/1125/2022 4 demand raised by the applicant for the first time in December, 2015 and then in 2021 would not make the agreement subsisting all through this period.
9. This Court had an occasion to consider as to whether merely having an agreement consisting an Arbitration Clause would confer a right on the applicant to invoke the dispute resolution clause M/s. Genten Infra Projects Private Limited v. Sri Balagoni Balraj Goud 3. This Court while taking into considering the law laid down by the Hon'ble Apex Court in Bharat Sanchar Nigam Ltd. and Ors. Vs. Nortel Networks India Pvt. Ltd 4, had rejected the reference therein holding that the claims were ex facie deadwood. The aforesaid view expressed by this Court was affirmed by the Hon'ble Supreme Court in S.L.P.(C). No. 14292 of 2023 dated 31.03.2023 5.
10. In the facts of the case, as it is not shown to this Court that the applicant had raised a claim any time before 2021 with regard to the amounts being claimed under the Loan agreement dated 27.06.2012 and that the refusal of the same by the respondent giving rise to a dispute, in order to invoke the 3 MANU/TL/0529/2023 : Arbitration Application No.5 of 2021 dated 31.03.2023 4 (2021)5SCC738 5 MANU/SCOR/87333/2023 5 dispute resolution Clause, this Court is of the view that the claims of the applicant are ex facie barred by limitation.
11. Accordingly, the Arbitration Application is dismissed.
12. Pending miscellaneous petitions if any shall stand closed. No Costs.
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Date: 11.07.2024 T. VINOD KUMAR, J
MRKR