Bombay High Court
Jayabharat Automobiles Limited ... vs B.R. International on 17 April, 2017
Bench: A.S. Oka
appeal 377-15 arbitration.doc
IN THE HIGH COURT OF JUDICATURE AT BOMBAY
ORDINARY ORIGINAL CIVIL JURISDICTION
APPEAL NO. 377 of 2015
IN
ARBITRATION PETITION NO. 167 OF 2008
Jayabharat Automobiles Limited
(Now known as Pramukh Car Riders Ltd.)
a company registered under the
provisions of the Companies Act, 1956
having its registered office at
Electric Mansion,
Lucas near Century Bazar,
Appasaheb Marathe Marg,
Prabhadevi, Mumbai 400 025 ..Appellants
(Org. Petitioners )
v/s.
B.R.International,
a proprietary firm
having its office at
20 Sunshine Building,
Dr. Annie Besant Road,
Worli, Mumbai 400 018 ..Respondents
(Org. Respondents)
Dr. Birendra Saraf a/w. Mr. Rohan Sawant, Mr. Arun Mehta, Mr.
Sanket Shah & Mr. Mayur Kadam i/b. Akshar Laws for the Appellant.
Ms. Mamta Sadh a/w. Mr. Yajuvendra Surendra Singh for the
Respondent.
CORAM : A.S.OKA & ANUJA PRABHUDESSAI, JJ.
JUDGMENT RESERVED ON : 15th NOVEMBER, 2016
JUDGMENT PRONOUNCED ON: 17th APRIL, 2017
pps 1 of 8
::: Uploaded on - 27/04/2017 ::: Downloaded on - 27/08/2017 23:39:03 :::
appeal 377-15 arbitration.doc
JUDGMENT (PER ANUJA PRABHUDESSAI, J):
1. The Appellants herein have challenged the order dated 29th
April, 2015 passed by the learned Single Judge of this Court in
Arbitration Petition No.167 of 2008 filed under Section 34 of the
Arbitration and Conciliation Act, 1996.
2. The appellants were the original petitioners whereas the
respondents were the original respondents in Arbitration Petition
No.167 of 2008. The appellant is a Public Limited Company
engaged in the business of selling car accessories and providing after
sale service, accidental repairs etc. The respondent is engaged in the
business of importing and selling car air conditioning system and
other accessories. Sometime in the month of June 2000 the
respondent approached the appellant to sell the accessories which
were required to be fitted in the cars and allowed the respondent to
occupy a portion of its premises to conduct the business activity of
car accessories in their premises. It was agreed between the parties
that the respondent would not be charged any compensation for
initial period of six months. The appellant, being the authorized
pps 2 of 8
appeal 377-15 arbitration.doc
dealer of Hyundai Company, the said company had offer accessories
to the appellant at very reasonable price. It was agreed between the
appellant and the respondent that the respondent would purchase
the car accessories from the appellant as per the requirement of the
customers and that the bills would be raised by either parties and
would be adjusted against each others bills towards the payment to
be made by either of the parties.
3. It was the case of the appellant that the business of the
respondent was not up to the mark and that the respondent was
liable to pay compensation of Rs.30000/- per month from July 2000.
It was also the case of the appellant that there was discrepancy in
their respective accounts towards outstanding and overdue bills.
The appellant also demanded increased compensation from
Rs.30,000/- to Rs.50,000/- from January 200_ onwards. The
appellant subsequently canceled the agreement and the respondent
left the showroom sometime in the year 2003. The appellant called
upon the respondent to pay a sum of Rs.26,38,2142/-.
4. The appellant filed a summary suit against the respondent for
recovery of Rs.24,70,038.50. The respondent filed winding up
pps 3 of 8
appeal 377-15 arbitration.doc
petition against the appellant for its claim of Rs.56,83,951.23. Both
the parties entered into consent terms on 18 th August, 2005, pursuant
to which by order dated 18 th August 2005 passed in Company
Petition No. 229 of 2005 a reference was made to Mr. Joseph
Fernandes, Sole Arbitrator to adjudicate the respective claims of the
parties. Both the parties filed their statement of claim before the
Arbitrator and led their evidence. By Award dated 14 th September,
2007 the Arbitrator allowed the claim of the respondent to the extent
of Rs.3871606.23 with interest @ 6 % per annum from the date of
the reference till the payment. The claim of the appellant in respect
of damages as well as claim for an amount of Rs.3,38,144/- towards
supply of car accessories was disallowed. However, the Arbitrator
allowed the claim of the appellant to the extent of Rs.1 lakh towards
compensation for five months at the rate of Rs.20000/- per month,
and directed the respondent to pay the said amount with interest at
the rate of 6% per annum.
5. The appellant had challenged the above order dated 14 th
September, 2007 by filing Arbitration Petition No. 167 of 2008 under
Section 34 of the Arbitration and Conciliation Act, 1996. By
pps 4 of 8
appeal 377-15 arbitration.doc
impugned order dated 29th April, 2015 the learned Single Judge
dismissed the petition No.167 of 2008. Being aggrieved by the said
order, the appellant has preferred this appeal.
6. Mr. Saraf, the learned Counsel for the Appellant has submitted
that the claim of the Respondent for Rs.38,71,606.23 is barred by
limitation. He has submitted that though the point of limitation was
not raised in the Arbitration Proceeding, it can be raised in the
Appeal. In support of his contention he has relied upon the decision
of Punjab High Court in Santa Singh Gopal Singh v. Rajinder
Singh Bur Singh1. The aforesaid decision is not applicable to the
facts of the present case as a plain reading of para 8 of the said
decision makes it clear that in the said case the point of limitation
was not raised for the first time and that it was raised before the trial
Court.
7. At this stage, it would be relevant to make reference to the
decision of the Division Bench of this Court in Vimal G. Jain v.
Vertex Financial Services Pvt. Ltd. 2, wherein the Division Bench has
observed as under:
1 AIR 1965 Punjab 415
2 2007(Vol 5) BCR 478
pps 5 of 8
appeal 377-15 arbitration.doc
"Further, the Section 16(2) of the said Act clearly
provides that a plea that the arbitral tribunal does not
have jurisdiction shall be raised not later than the
submission of the statement of defence; however, a party
shall not be precluded from raising such a plea merely
because he has appointed, or participated in the
appointment of, an arbitrator. Conjoint reading of the
above provisions of law would disclose that a party to the
arbitration proceedings seeking to raise the point of bar
of limitation for initiating the arbitration proceedings
should raise the issue at the earliest opportunity and in
any case not later than the submission of the statement of
defence, otherwise it would be deemed to have been
waived. The law in that regard is well-settled by the
decision of the Apex Court in Narayan Prasad Lohia v.
Nikunj Kumar Lohia and Ors. wherein it has been clearly
held that unless the objection in terms of Section 16(2) is
raised within the time prescribed under the said Section,
it would be deemed to have been waived in terms of
Section 4 of the said Act"
8. In the instant case, it is not in dispute that the respondents had
not raised the issue of limitation either before the Arbitrator or before
the learned Single Bench of this Court. The said plea has been
pps 6 of 8
appeal 377-15 arbitration.doc
raised for the first time in the present appeal without laying any
foundation in the Arbitration Proceeding or in the application under
Section 34 of the Arbitration Act. The issue of limitation which is a
mixed question of law and facts cannot be introduced for the first
time in an appeal.
9. In the light of the above and also considering the decision of
the Division Bench of this Court in Vimal G. Jain (supra), it is not
necessary to refer to the judgment of Punjab & Haryana High Court
in Santa Singh (supra) which is otherwise distinguishable and not
applicable to the facts of the present case.
10. The learned Counsel for the Appellant has further submitted
that the learned Single Judge has erred in holding that the claim of
Rs.26.50,000/- was not proved. It is submitted that the respondents
had admitted their liability for Rs.26,50,000/- in their letter dated
27.3.2004.
11. As far as the claim for Rs.26,50,000/- is concerned, the learned
Arbitrator as well as the learned Judge has held that the Appellant
has not only failed to produce the demand notice but had also failed
to prove the entries in the ledger account. The learned Arbitrator as
pps 7 of 8
appeal 377-15 arbitration.doc
well as the learned Judge after having gone through the entire
evidence held that the appellant is not entitled for the said claim. We
find no error in the said view taken. We find no merit in the
contentions raised by the Appellant. Accordingly, we dismiss the
Appeal with no order as to costs.
(ANUJA PRABHUDESSAI, J.) (A.S.OKA, J.)
pps 8 of 8
