Uoi vs Upper India Couper Paper Mills Co. ...
2012 Latest Caselaw 1920 Del

*    IN THE HIGH COURT OF DELHI AT NEW DELHI

%                           Date of Decision: March 20, 2012

+                      FAO(OS) 461/2007

     UOI                                       .....Appellant
            Represented by: Ms. Priya, Advocate.

                   Versus

     UPPER INDIA COUPER PAPER MILLS CO. LTD.
                                          .....Respondent
         Represented by: Mr.Shiv Khorana, Advocate.

      CORAM:
      HON'BLE MR. JUSTICE PRADEEP NANDRAJOG
      HON'BLE MS. JUSTICE PRATIBHA RANI

PRADEEP NANDRAJOG, J. (Oral)

1. Respondent had supplied paper to the appellant and in respect thereof, issue of excise duty, which admittedly was increased with effect from 01.3.1983 being reimbursed, became a subject matter of dispute. The contract between the parties had an arbitration clause and pertaining to the supplies made on various dates, including supplies made in the month of February, March and April 1984, the respondent served a notice seeking reference of dispute to arbitration on October 27, 1986 and since arbitrator was not appointed the respondent had to resort to an action under Section 20 of the Arbitration Act, 1940 on November 11, 1987.

2. The learned Sole Arbitrator held, and correctly so, that the buyer had to bear the burden of the additional excise duty which was paid by the seller to the Excise Department, but allowed only part claim; holding that the remainder was barred by limitation. Additional excise duty pertaining to the

deliveries made in the month of February, March and April 1984 was denied on the reasoning that claims qua them was raised in the High Court on November 11, 1987 and by said date three years period prescribed for limitation within which claim had to be enforced had lapsed.

3. As against claim in sum of `1,41,654.38/-, only `33,321.57/- was awarded.

4. In the objections filed by the respondent to the award, limited to where it was held against the respondent that the remainder claim was barred by limitation, learned Single Judge has, discussed the relatable evidence in paragraph 6 of the impugned decision and therefrom has concluded that in view of Section 37(3) of the Arbitration Act, 1940, the claim would not be barred by limitation for the reason as per Sub- Section (3) of Section 37 of the Arbitration Act, 1940, an arbitration is deemed to commence when one party to the arbitration agreement serves upon the other a notice requiring an arbitrator to be appointed.

5. The learned Single Judge has correctly noted that notice requiring arbitrator to be appointed was issued by the respondent on October 27, 1986 and by said date three years limitation period prescribed pertaining to the deliveries effected in the months of February, March and April 1984 had not expired.

6. The reasoning of the learned Single Judge is correct and adopting the same and wasting no further Government stationery, we dismiss the appeal.

7. The decretal amount deposited by the appellant pursuant to interim orders passed in the appeal is directed to be released to the respondent together with accrued interest

thereon and disbursement would be by endorsing the FDR in the name of the respondent and handing over the same to respondent's counsel on record.

8. No costs.

(PRADEEP NANDRAJOG) JUDGE

(PRATIBHA RANI) JUDGE MARCH 20, 2012 KA