L.Asghar Ali … vs S.Jayakumari
2023 Latest Caselaw 11953 Mad

                                                                                    Arb.O.P.No.34 of 2023

                                   IN THE HIGH COURT OF JUDICATURE AT MADRAS
                                                       DATED: 07.09.2023
                                                            CORAM:
                                       THE HONOURABLE MS.JUSTICE R.N.MANJULA
                                                      Arb.O.P.No. 34 of 2023

                  L.Asghar Ali                                                          … Petitioner

                                                               Vs.

                  S.Jayakumari                                                         ... Respondent

                                  Arbitration Original Petition is filed under Section 11(5) of the

                  Arbitration and Conciliation Act, 1996, to pass an order to appoint an arbitrator

                  as per Clause 16 of the agreement dated 20.04.2011 existing between the

                  petitioner and the respondents.



                                     For Petitioner    : Mr. C.D.Sugumar

                                     For Respondent : Mr.J.Franklin



                                                            ORDER

This petition has been filed to appoint an Arbitrator as per Clause 16 of

the agreement dated 20.04.2011 existing between the petitioner and the

respondents.

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Arb.O.P.No.34 of 2023

2. The learned counsel for the petitioner submitted that the petitioner is

the managing partner of the partnership firm under the name and style “Aries

Venturies” and the respondent is the owner of the property mentioned in the

schedule; the petitioner and the respondent have entered into a joint venture

agreement dated 20.04.2011, wherein it was agreed between the parties thereon

to construct 31 individual houses in the above property under the name and

style “Priyadharsini Villas”; the respondent had executed a joint Power of

Attorney on 06.06.2011 in favour of the petitioner to deal with the above

property; due to some extraordinary reasons, the respondent had agreed for

entering into a supplementary deed dated 10.04.2013 to the above joint venture

agreement dated 20.04.2011 wherein it was agreed to extend the time limit for

construction up to 20.04.2015; the construction of houses could not be

completed even during the extended period due to non-cooperation by the

respondent by providing the individual patta; however the respondent

unilaterally cancelled the power of attorney dated 06.06.2011 and issued notice

to the petitioner as though he is the reason for the delay; the respondent issued

a legal reply to the petitioner and demanded a sum of Rs.1,90,69,868/- towards

expenses incurred to develop the property and for putting up construction.

2.1 As per the joint venture agreement executed between the parties, in

case of disputes, the same should be referred to arbitration; since the https://www.mhc.tn.gov.in/judis

Arb.O.P.No.34 of 2023

respondent refused to appoint an Arbitrator, the petitioners issued a notice to

call upon the respondent to refer the matter for arbitration by appointing an

Arbitrator as per Clause 16 of the agreement; the respondent had issued a

notice on 20.07.2022 by stating that one P.Rajendran has been appointed as a

Sole Arbitrator; the petitioner had also sent a reply dated 11.08.2022 by

accepting the appointment of the said Arbitrator; however the Arbitrator had

not commenced the arbitration proceedings and he had sent a letter dated

03.01.2023 by stating that he was not interested to act as an Arbitrator due to

his preoccupation; hence the petitioner had filed this petition seeking to

appoint an Arbitrator.

3. The respondent had filed his counter and in which it is stated that as

per the joint venture agreement dated 20.04.2011, the petitioner ought to have

completed the construction within a period of two years; despite extension of

time has been given by virtue of a supplementary agreement for further two

years, the petitioner did not complete the project; in the Power of Attorney

dated 06.06.2011, the petitioner himself has agreed to take necessary steps to

get necessary documents but the same was not done by him; the agreement got

lapsed as early as in the year 2015; after the lapse of eight years, the petitioner

has come forward with the present petition seeking appointment of Arbitrator https://www.mhc.tn.gov.in/judis

Arb.O.P.No.34 of 2023

for the claim which is not in existence; hence the petition is purely barred by

limitation and the arbitration clause also lapsed and hence it should be

dismissed.

4. The fact that the petitioner and the respondent had entered into a joint

venture agreement on 20.04.2011 was not denied. On perusal of the said

agreement, it is seen that the project term was agreed to be before 20.04.2013.

The respondent had also executed a Power of Attorney dated 06.06.2011 in

favour of the petitioner by giving him power to obtain necessary documents in

connection with plan approval and all other documents by making necessary

arrangements. Since the project could not be completed before the agreed time

limit, the parties have also executed a supplementary joint venture agreement

and through which the time for project has been further extended till

20.04.2015. It is learnt that the project was not completed even within the

extended time.

5. No doubt the original venture agreement dated 20.04.2011 does

contain an arbitration clause under Clause 16. That fact was not denied by the

respondent. However it is claimed by the respondent that the agreement got

lapsed due to efflux of time and hence the arbitration clause does not survive. https://www.mhc.tn.gov.in/judis

Arb.O.P.No.34 of 2023

In fact, the petitioner himself has given a consent letter dated 24.09.2014 by

stating that he does not have any objection to cancel the power of attorney

given to him. Consequent to that the power was cancelled on 01.10.2014.

While writing the letter dated 24.09.2014 the petitioner did not reserve any

right and subsequently the extended period of limitation also expired.

6. It is alleged by the petitioner that after he had sent a letter to the

respondent, the respondent had sent a legal notice by calling upon the

petitioner to appoint the Arbitrator. In fact the letter dated 16.05.2022 sent by

the petitioner is for certain demand of money towards the alleged loss sustained

by the respondent. In the said notice itself it is stated that the joint venture

agreement and the supplementary agreement stood terminated. The petitioner

sent a notice on 10.07.2022 to call upon the respondent to appoint Arbitrator.

On 20.07.2022 the respondent has sent a reply by stating that one P.Rajendran

has been appointed as Arbitrator and for which the petitioner had given his

consent.

7. However it is claimed by the learned counsel for the respondent that

giving consent for the appointment of Arbitrator at request made by the

petitioner, cannot save the claim from limitation. The agreement itself is not https://www.mhc.tn.gov.in/judis

Arb.O.P.No.34 of 2023

alive and it got extinguished. The agreement is dead for all purposes and that is

inclusive of arbitration clause as well.

8. In support of the above contentions, the learned counsel for the

respondent cited the decision of the Hon'ble Supreme Court of India in M/s.B

and T AG Vs. Ministry of Defence reported in 2023 LiveLaw (SC) 466. In the

said judgment it is held that mere consonance by way of writing letters /

reminders would not amount to extend the time of limitation. It is further stated

that if no time limit has been prescribed for appointment of arbitrator, the

maximum period should be three years from the date of cause of action and in

accordance with Section 137 of the Limitation Act.

9. According to Section 9 of the Limitation Act, once the time has begun

to run, no subsequent disability or inability to institute a suit or make an

application can stop it. In the case on hand, not only the agreement got expired

on 20.04.2015 but the limitation contemplated under Section 137 of the

Limitation Act also got expired due to lapse of several years subsequent to the

expiry of the agreement.

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Arb.O.P.No.34 of 2023

10. As stated already, in the letter issued by the petitioner to the

respondent by expressing his consent to cancel the power of attorney, he did

not reserve any right of claim. The Hon'ble Supreme Court has held in the

Bharat Sanchar Nigam Limited and Another Vs. Nortel Networks India

Private Limited, reported in (2021) 5 SCC 738 that the period of limitation for

issuing notice of arbitration would not get extended under mere exchange of

letters.

11. It is not the case of the petitioner that another supplementary

agreement has been executed subsequent to the expiry of the agreement dated

09.04.2013. Since the arbitration clause also got expired due to lapse of the

agreement itself, the petitioner is not entitled to the remedy of appointment of

arbitrator by giving fresh life to an already expired agreement between the

parties.

12. In view of the above stated reasons, I do not find any merit in the

petition filed by the petitioner and hence the petition is dismissed.

07.09.2023 bkn Index:Yes/No Speaking order / Non-speaking order Neutral citation : Yes / No https://www.mhc.tn.gov.in/judis

Arb.O.P.No.34 of 2023

R.N.MANJULA, J.

bkn

Arb.O.P.No. 34 of 2023

07.09.2023

https://www.mhc.tn.gov.in/judis