Karnataka High Court
Sri K V Prasad vs M/S V K Lalco Pvt Ltd on 5 August, 2016
Equivalent citations: 2016 (4) AKR 176
Author: A.S.Bopanna
Bench: A S Bopanna
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IN THE HIGH COURT OF KARNATAKA AT BENGALURU
DATED THIS THE 5TH DAY OF AUGUST, 2016
BEFORE
THE HON'BLE MR. JUSTICE A S BOPANNA
C.M.P.No.10/2014
BETWEEN:
SRI K V PRASAD
S/O SRI K.R. VENKATESULU,
AGED ABOUT 49 YEARS
R/A NO.128, I BLOCK
RAILWAY PARALLEL ROAD
KUMARA PARK WEST
BANGALORE 560020.
... PETITIONER
(BY SRI. G B NANDISH GOWDA, ADV.)
AND:
1. M/S V K LALCO (PVT.) LTD.,
HAVING ITS REGD. OFFICE
AT NO.1017/1018
DALAMAL TOWERS
NARIMAN POINT
MUMBAI 400021
REP. BY ITS CHAIRMAN &
MANAGING DIRECTOR
2. M/S. V.K. LALCO (PVT.) LTD.,
REP. BY ITS DIRECTOR
SRI HARESH KHISAMAL
NO.1017/1018, DALAMAL TOWERS
NARIMAN POINT
MUMBAI- 400021
... RESPONDENTS
(BY SRI. DYAN CHINNAPPA, SR.COUNSEL FOR
SRI. G NARAHARI & SRI KASHYAP N NAYAK, ADVs.)
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THIS PETITION IS FILED UNDER SEC.11(5, 6) OF THE
ARBITRATION AND CONCILIATION ACT 1996, PRAYING
THIS COURT TO APPOINT SRI N.S. SANGOLI, RETIRED
DISTRICT JUDGE, BANGALORE AS THE SOLE ARBITRATOR
OR ANY OTHER SUITABLE PERSON THAT THIS COURT
DEEMS FIT SO AS TO ENTER ON REFERENCE AND TO
RESOLVE AND DECIDE THE DISPUTE BETWEEN THE
PETITIONER AND THE RESPONDENTS AS PET MOU
DATED 06.01.2003 CLAUSE-19.
THIS PETITION COMING ON FOR PRELIMINARY
HEARING IN 'B' GROUP, THIS DAY, THE COURT MADE THE
FOLLOWING:
ORDER
The petitioner is before this Court seeking that the petition be allowed and a retired District Judge named in the petition be appointed as a Sole Arbitrator or any other suitable Arbitrator to resolve the dispute between the parties arising under the Memorandum of Understanding ('MOU' for short) dated 16.01.2003.
2. The petitioner and the respondents had entered into a MOU dated 16.01.2003. Since according to the petitioner, the respondents herein had not complied with the requirements as provided under the MOU and a dispute had arisen between the parties, the petitioner at 3 the first instance filed a suit in O.S.No.4655/2004 seeking for a judgment and decree therein. The respondent herein who entered appearance in the said suit as a defendant filed an application under Section 8(1) of the Arbitration and Conciliation Act, 1996 ('the Act' for short) seeking that the parties be referred to arbitration as agreed upon in the MOU dated 16.01.2003. The Court below on accepting the contention has by the order dated 27.06.2006 referred the parties to arbitration under the said MOU. Though the said order had been passed, the petitioner who had a grievance with regard to non-compliance of the terms of the MOU did not immediately take steps for appointment of an Arbitrator. Ultimately by the notice dated 25.07.2013, the petitioner on invoking the arbitration clause and referring to the order passed in O.S.No.4655/2004 suggested the name of the Arbitrator.
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3. The respondents through their reply dated 05.09.2013 did not accede to the request of the petitioner with regard to the name suggested and also contended that the action taken by the petitioner at that point to seek appointment of an Arbitrator is not sustainable in law as it is barred by limitation. It is in that background, the petitioner is before this Court seeking that an Arbitrator be appointed by this Court as per the name suggested by them.
4. The respondents have filed their objection statement contending that the claim as put forth by the petitioner is not justified. Though reference is also made to the claim as put forth and to contend that the claim is not sustainable, the contention with regard to the prayer made for appointment of the Arbitrator is that such relief cannot be granted by this Court at this point as it is barred by limitation.
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5. It is in that light, I have heard the learned counsel for the petitioner and the learned senior counsel appearing on behalf of the respondents.
6. At the outset, on taking note of the fact that the respondents themselves had filed an application under Section 8(1) of the Act in a suit filed by the petitioner in O.S.No.4655/2004 and since the Civil Court had allowed such application by the order dated 27.06.2006, the issue that there existed an arbitration clause in the MOU between the parties and if any dispute had arisen, it was to be resolved only through arbitration is a concluded position and as such, this Court need not advert into those aspects to consider the existence of the arbitration clause or the dispute existing between the parties. Since the contention with regard to limitation has been taken, that aspect of the matter requires consideration. 6
7. Learned counsel for the petitioner in that regard would refer to the provision contained in Section 43 of the Act and in that light would refer to Section 25 thereof. Hence, it is contended that the arbitration proceedings would commence only when a notice is issued invoking the arbitration clause. In that regard, the notice dated 25.07.2013 at Annexure-E is referred to point out that the filing of the instant petition seeking appointment of the Arbitrator is not barred by limitation as it has been filed on 28.01.2014, only after about six months after issue of notice.
8. In respect of such contention, learned counsel for the petitioner has relied on the decisions in the case of Indian Oil Corporation Ltd. -vs- M/s SPS Engineering Ltd (AIR 2011 SC 987); Wazir Chand Mahajan and Another -vs- The Union of India (AIR 1967 SC 990); Jammu Forest Co. -vs- State of J and K (AIR 1968 Jammu and Kashmir 86) and in the case of 7 M/s Disha Impex Pvt. Ltd -vs- M/s Srinivasa Minerals and Traders Ltd., and Others (ILR 2011 KAR 4259).
9. Insofar as the first three decisions referred to above, a perusal of the same would indicate that the issue which was essentially considered in the said decisions is with regard to the limitation that had been urged with reference to the subject matter of claim as made by the parties and also with regard to a contention relating to, whether the claim was barred by limitation as well as res judicata. In that circumstance, the Hon'ble Supreme Court as well as the High Court of Jammu & Kashmir had held that those are issues which will have to be considered by the Arbitrator and a Court appointing the Arbitrator need not go into that aspect of the matter. In the last of the decisions referred to above, a learned Judge of this Court has held with regard to the commencement 8 of proceedings only on issue of a notice. Therefore in the background of the question that would arise for consideration herein with regard to whether an application filed under Section 11 of the Act before this Court seeking appointment of an Arbitrator itself is beyond the time provided in law, the noted decisions would not be of assistance.
10. In that regard, it is pointed out by the learned senior counsel appearing for the respondents that in the absence of the time period being prescribed under Section 11 itself and since the Limitation Act being made applicable under Section 43 of the Act, the provision contained in Article 137 of the Schedule to Limitation Act will have to be kept in view to compute the period within which a petition under Section 11 would have to be filed before this Court in the facts and circumstances arising in each of the case.
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11. In the instant case, as already indicated, the question is not as to whether the claim as put forth by the petitioner relating to the subject matter in the MOU is 'live' at this juncture and as to whether a decision is to be rendered on the same or not. As noticed, since the issue relating to the delay in filing the instant petition from the date on which the parties were referred to arbitration by the trial Court in the suit is to be considered, it is made clear that in any event, the petitioner should have taken steps to seek for appointment of an Arbitrator within a period of three years from 27.06.2006. In that light, if the notice dated 25.07.2013 at Annexure-E whereunder the said right is exercised is taken into consideration, the notice is nearly after seven years from the date on which the order had been passed.
12. On that aspect of the matter, the decision in the case of M.D. Enterprise -vs- Whirlpool of India Ltd., [(2014) 2 WBLR (Cal) 151] rendered by the High Court 10 of Calcutta would be of assistance. While considering a similar contention, the High Court of Calcutta was of the opinion that in a case where reference has been made by the Court under Section 8 of the Act, steps to appoint an Arbitrator will have to be taken within a period of three years from the date on which the Court had held that invoking of the clause was justified. Hence, the consideration as made therein if kept in view and in the instant case, the dates as noted are taken into consideration, the very notice dated 25.07.2013 issued by the petitioner is beyond the period of three years from the date of the order made under Section 8 of the Act and consequently the petition filed before this Court is also beyond the period of limitation.
13. Therefore in such circumstance, neither the application filed in I.A.No.1/2016 would merit consideration before this Court nor the prayer made in 11 the petition seeking appointment of an Arbitrator also can be acceded to.
In that view, the petition stands disposed of as barred by limitation.
Sd/-
JUDGE hrp/bms