Karnataka High Court
Mr Raghunandan Rao B vs Mr. Mithun Maroli on 1 February, 2023
Author: R Devdas
Bench: R Devdas
-1-
CMP No. 820 of 2022
IN THE HIGH COURT OF KARNATAKA AT BENGALURU
DATED THIS THE 1ST DAY OF FEBRUARY, 2023
BEFORE
THE HON'BLE MR JUSTICE R DEVDAS
CIVIL MISC. PETITION NO. 820 OF 2022
BETWEEN:
1. MR RAGHUNANDAN RAO B
S/O MR RAMESH RAO B
AGED ABOUT 29 YEARS
FLAT NO.106
BHASKERS COCONUT GROVE
MAROLI THARETHOTA
POST KULSHEKAR MANGALURU-575005
REPRESENTED BY G P A HOLDER
MR B RAMESH RAO
S/O MR SADASHIVA
AGED ABOUT 72 YEARS,
NO.1-40-1 SAI KRISHNA VIHAR
NEAR PARADISE READY WEAR, ALPE PAIL
MANGALURU-575007
...PETITIONER
Digitally
signed by
JUANITA (BY SRI. K SHASHIKANTH PRASAD., ADVOCATE)
THEJESWINI
Location:
HIGH AND:
COURT OF
KARNATAKA
1. MR. MITHUN MAROLI
S/O MR M BALAKRISHNA SUVARNA
NATTI HOUSE MAROLI VILLAGE
POST KULSHEKAR, MANGALURU-575005
...RESPONDENT
(BY SRI. JEEVAN K., ADVOCATE)
THIS CMP IS FILED UNDER SEC.11(6) OF THE
ARBITRATION AND CONCILIATION ACT 1996, PRAYING TO
PASS AN ORDER OF APPOINTING THE ARBITRATOR UNDER
-2-
CMP No. 820 of 2022
SECTION 1(6) OF THE ARBITRATION AND CONCILIATION ACT,
1996 TO RESOLVE THE DISPUTE BETWEEN THE PETITIONER
AND RESONDENT AS SPECIFIED IN THE AGREEMENT FOR SALE
DATED 11.07.2018 AS PER CLAUSE NO.18 BY ALLOWING THIS
PETITION IN THE INTEREST OF JUSTICE AND EQUITY.
THIS CMP COMING ON FOR ADMISSION, THIS DAY, THE
COURT MADE THE FOLLOWING:
ORDER
R.DEVDAS J., (ORAL):
The petitioner has filed this civil miscellaneous petition under Section 11(6) of the Arbitration and Conciliation Act, 1996, seeking appointment of an arbitrator to resolve the dispute between the parties arising out of an agreement for sale dated 11.07.2018.
2. Learned counsel for the respondent submits that the respondent does not dispute the fact that he entered into an agreement with the petitioner on 11.07.2018 agreeing to sell the property in question, i.e., residential apartment No.301, 3rd floor in the building known as 'M B Nest Apartment Complex' situated at Maroli Kulshekar Post, Mangaluru Taluk, within limits of Mangaluru City Corporation. However, learned counsel for the respondent -3- CMP No. 820 of 2022 submits that in terms of the agreement, the purchaser agreed to pay the sale consideration of Rs.41 lakhs, (Rupees Forty One Lakhs only) out of which Rs.10 lakhs (Rupees Ten Lakhs only) were paid at the time of execution of the agreement and the balance was required to be paid at the time of execution and the registration of the sale deed. In paragraph No.3 of the agreement, it is clearly stated that the vendor agrees to execute and register the sale deed conveying the 'B' schedule property to the purchaser by 31.10.2018 and to deliver vacant possession of the property and that the purchaser would pay the balance sale consideration. Learned counsel would therefore submit that time is the essence of contract and the cause of action for the petitioner would arise immediately after 31.10.2018 i.e., on 01.11.2018.
3. Learned counsel submits that the petitioner got issued a legal notice dated 25.03.2021 well within the period of three years. However, the petitioner got issued a notice of arbitration only on 25.04.2022 beyond the period -4- CMP No. 820 of 2022 of limitation. Learned counsel draws the attention of this Court to a decision of the Hon'ble Supreme Court in the case of BHARAT SANCHAR NIGAM LIMITED AND ANOTHER VS. M/S NORTEL NETWORKS INDIA PRIVATE LIMITED reported in (2021) 5 SCC 738.
4. Having regard to the admitted facts, this Court finds that the Hon'ble Supreme Court considered the issue as to whether the Court may refuse to make the reference under Section 11 where the claims are ex-facie time barred, in the judgment referred by the learned counsel for the respondent. The Hon'ble Supreme Court held that the period of limitation for issuing notice of arbitration would not get extended by mere exchange of letters or by mere settlement discussions, where a final bill is rejected by making a deduction or otherwise. Sections 5 to 20 of the Limitation Act, 1963, do not exclude the time taken on account of settlement discussions. It was noticed that Section 9 of the limitation act, makes it clear that where once the time has begun to run, no subsequent disability -5- CMP No. 820 of 2022 or inability to institute a suit or make an application stops it. The Hon'ble Supreme Court held that the period of limitation that filing an application under Section 11 of the Act, would be governed by Article 137 of the 1st schedule of the Limitation Act, 1963. In terms of Article 137, the period of limitation prescribed is three years.
5. Having regard to the settled position of law, this Court is of the considered opinion that the petitioner issued the arbitration notice on 25.04.2022 beyond the period of three years as prescribed in Article 137 of the Limitation Act. That being the position, the prayer made by the petitioner to appointment an arbitrator to resolve the dispute under the agreement dated 11.07.2018 cannot be granted.
Accordingly, the civil miscellaneous petition stands dismissed.
Sd/-
JUDGE rv