Recently, the single-judge bench of the Calcutta High Court held that a referral court need not conduct a mini trial in order to ascertain whether the claim was time barred or not, but the referral court should also restrain itself from referring ex facie time barred disputes, instead of relegating a party to litigate in respect of evidently inadmissible claims.
Brief facts:
The factual matrix of the case is that the Petitioner offered to purchase some land from the Respondent for a consideration of Rs 16 lakhs, being the cost of land and development charges for the land. The vendor/respondent accepted such proposal and agreed to sell the land to the petitioner upon development of the same. Clause 14 of the agreement between the parties deals with the settlement of disputes and provides that all disputes and differences between the parties shall be settled amicably, failing which the matter shall be referred to the arbitration, in accordance with the Arbitration and Conciliation Act, 1996. The arbitrator shall be appointed by the company. The present application has been filed for the appointment of the learned arbitrator pertaining to the dispute arising out of a notarized agreement for sale dated June 12, 2015, which was entered into between the parties.
Contentions of the Petitioner:
The learned counsel appearing on behalf of the Petitioner submitted that although an amount of Rs 16 Lakh has already been paid the agreement has not been executed. It was furthermore submitted that the amicable settlement was attempted but the same was failed. Also, the complaint was that the men and agents of Paul Construction were threatening the petitioner with dire consequences. After two years therefrom, the petitioner filed an application under Section 9 of the Arbitration and Conciliation Act, 1996 in the Court of the learned District Judge for interim protection. The respondent was restrained from alienating the scheduled property to any other person and the parties were directed to maintain status quo.
Observations of the court:
The Hon’ble Court observed that it is well settled that the period of limitation to invoke arbitration is three years from the date of accrual of the cause of action.
The court furthermore observed that the Petitioner for the first time approached the respondent by invoking arbitration on December 24, 2024. The petitioner sat in silence for 9 years.
The court noted that a referral court need not conduct a mini trial in order to ascertain whether the claim was time barred or not, but the referral court should also restrain itself from referring ex facie time barred disputes, instead of relegating a party to litigate in respect of manifestly inadmissible claims. The court furthermore noted that in the present case, limitation is not a mixed question of law and fact.
The court relied upon the judgments titled Arif Azeem Co. Ltd. vs Aptech Ltd. 2024 Latest Caselaw 129 SC, and SBI General Insurance Co. Ltd. vs Krish Spinning 2024 Latest Caselaw 452 SC.
The decision of the court:
Based on these considerations, the court dismissed the application.
Case Title: SRI SWAPAN PAUL VS M/S. PAUL CONSTRUCTION
Coram: Hon’ble Mr. Justice Shampa Sarkar
Case No.: AP NO. 28 OF 2025
Advocates for the Petitioner: Mr. Partha Chakraborty, Adv. Mr. Rishabh Dutta Paul, Adv.
Picture Source :
