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4. The Andhra Pradesh Transmission Corporation Limited, (hereinafter referred to as APTRANSCO), invited tenders for assigning works relating to fabrication, supply and erection of 400 K.V. transmission lines from Visakhapatnam to Khammam. The applicant and the respondent entered into a joint-venture agreement dated 18.5.2000 for execution of these works. The joint-venture agreement was subjected to modification on 27.5.2000 whereby profits accrued were to be shared in the ratio of 40% to the applicant and 60% to the respondent. APTRANSCO awarded a part of the work, for supply and erection of a total length of 92.246 Km stretch, in two separate orders dated 21.11.2000 for an aggregate value of Rs. 13,04,62,684/-. Both the applicant and the respondent formed a partnership in the name of "Bhanu IVRCL Associates" and a partnership deed was executed on 14.12.2000. The said partnership firm was registered with the Registrar of firms on 26.06.2001.

5. Applicant would allege that the respondent had committed several defaults in execution of the contract thereby committing breach of the terms and conditions of the joint-venture agreement/partnership deed and, in order to keep up its reputation and good will, it had undertaken and executed the work to the satisfaction of APTRANSCO. However, on account of the wrong specifications, designs and material supplied by the respondent, in addition to other breaches, the joint venture/partnership sustained huge losses. Applicant would claim that, material worth Rs. 1,21,07,980-70 ps supplied towards execution of the contract has not been accounted for by the respondent till date, that the joint venture/partnership had sustained a loss of Rs. 4,56,89,086/- and that, as per the agreement, the respondent was liable to share 60% of the loss amounting to Rs. 2,74,13,452/-. Applicant would contend that it was making rigorous efforts for realizing various amounts due from APTRANSCO, that the respondent did not cooperate as it was the applicant which had invested enormous funds for execution of the contract, and that, as per the audited accounts, the respondent was due and payable a total sum of Rs. 3,95,21,370-70, representing material supplied by the applicant worth Rs. 1,21,07,918-00 and 60% of the loss incurred of Rs. 2,74,13,452.

11. Applicant would contend that, though the work was executed on 23.7.2002, settlement of accounts and payment of money due was not yet finalized with APTRANSCO. According to the applicant there arose disputes with regards excise duty payable, that the matter was carried in appeal to the Central Excise Tribunal, that the appeal was ordered recently in favour of the applicant, it was only after audit of the accounts for the year 2005-2006 that the applicant could ascertain the extent of loss incurred by the joint-venture on account of the defaults committed by the respondent and that it was not open to the respondent to contend that there was no whisper about the loss as they were well aware of the proceedings and settlement with APTRANSCO. Applicant would contend that, under Clause 12 of the agreement, accounts of the joint-venture were always available for inspection and that the respondent was, therefore, precluded from contending that the applicant had not furnished accounts or that it was not aware of the settlement of accounts with APTRANSCO. On the question of limitation, applicant would submit that, while execution of work was completed, settlement of accounts was not yet completed and the limitation period would begin only after settlement of accounts and only from the date on which the cause of action arose i.e., when the right to claim money crystallized. According to the appellant, as the issue pertaining to central excise was outstanding, A.P. TRANSCO did not make payment to the applicant till October, 2005 and, only thereafter, could the cause of action be said to have arisen for the applicant to ascertain the loss/damage suffered for it to make a specific claim against the respondent and that invocation of the arbitration clause was well within limitation.

12. Sri S. Niranjan Reddy, learned Counsel for the applicant, would place before this Court a copy of the certificate issued by the Chief Engineer, APTRANSCO dated 23.7.2002 to the effect that the joint-venture had executed the Vizag - Kathipudi section of Vizag - Khammam 400 KV D/C line and that the line was commissioned on 10.5.2002. Learned Counsel would submit that as the issue, pertaining to central excise, was pending and, as APTRANSCO did not make payment to the applicant till October, 2005, it was only thereafter did the cause of action arise for the applicant to ascertain the loss/damage for it to make a specific claim against the respondent and since the application was filed before this Court on 31.8.2006, less than a year after payments were made by APTRANSCO in October, 2005, it was well within limitation. While admitting that the defect liability period of one year also expired on 10.5.2003, learned Counsel would, nonetheless, contend that this Court would only decide whether the claim was a dead one or was a long barred claim sought to be resurrected and since, in the present case, there was a genuine dispute on the question whether or not the claim was barred by limitation, it could not be said that either the claim was a dead one or that it was a long barred claim which was sought to be resurrected.