Punjab-Haryana High Court
Cress Propbuild Private Limited vs Ishwar Singh on 21 October, 2024
Author: Suvir Sehgal
Bench: Suvir Sehgal
Neutral Citation No:=2024:PHHC:139305
ARB-267--2019 (O & M),
ARB-269--2019 (O & M) &
ARB-270--2019 (O & M) --1-
IN THE HIGH COURT OF PUNJAB AND HARYANA AT
CHANDIGARH
110-3 cases
1. ARB-267-2019 (O & M)
Date of decision:21.10.2024
.2024
CRESS PROPBUILD PRIVATE LIMITED ...PETITIONER
VERSUS
ISHWAR SINGH ...RESPONDENT
2. ARB-269-2019 (O & M)
CRESS PROPBUILD PRIVATE LIMITED ...PETITIONER
VERSUS
CHARAN SINGH ...RESPONDENT
3. ARB-270-2019 (O & M)
CRESS PROPBUILD PRIVATE LIMITED ...PETITIONER
VERSUS
ANGOORI DEVI & ORS. ...RESPONDENTS
CORAM: HON'BLE MR. JUSTICE SUVIR SEHGAL
Present: Ms. Rupa Pathania, Advocate
for the petitioner in all cases.
Mr. S.P. Chahar, Advocate
for the respondent(s) in all cases.
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Neutral Citation No:=2024:PHHC:139305
ARB-267--2019 (O & M),
ARB-269--2019 (O & M) &
ARB-270--2019 (O & M) --2-
SUVIR SEHGAL,
SEHGAL J.
1. This order shall dispose of the above-noted three petitions as
they involve common questions of law and facts.
2. For the sake of convenience, factual position is being taken
from ARB-267-2019
ARB .
3. This petition under Section 11(5
11(5)) of the Arbitration and
Conciliation Act, 1996 (for short "the Arbitration Act") has been filed by the
petitioner before this Court on 18.07.20199 for appointment of an Arbitrator.
4. Counsel for the petitioner submits that the petitioner, who is
engaged in the business of colonizing,
ing, purchasing, developing and selling
land, entered into an agreement to sell dated 20.02.2013, Annexure P-1,
1, with
the respondent for purchase of 43 kanals 01 marla land situated in revenue
estate of village Kasar, Tehsil Bahadurgarh, District Jhajjar
Jhajjar. An amount of
Rs.1.11 crore was paid to the respondent as earnest money and respondent
was to get the land partitioned. Counsel submits that vide letter dated
04.06.2013, Annexure P-2,
P petitioner called upon the respondent to comply
with the terms of the agreement and it was followed by a legal notice dated
14.10.2013,
.2013, Annexure P-3, demanding that the land be not alienated to any
third party. Counsel submits that by a subsequent legal noti
notice
ce dated
27.01.2016,
.2016, Annexure P-4,
P 4, petitioner invoked Arbitration Clause No.28 of
the agreement, Annexure P-1
P and nominated an Arbitrator
Arbitrator. Apprehending
that the petitioner may dispose of the land, a petition dated 10.02.2016,
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Neutral Citation No:=2024:PHHC:139305
ARB-267--2019 (O & M),
ARB-269--2019 (O & M) &
ARB-270--2019 (O & M) --3-
Annexure P-5,
P was filed before the District Court at Jhajjar for restraining
the respondents from
from alienating the land under the agreement, Annexure P-1,
P
and from changing its nature by raising any construction. Counsel submits
that this petition was disposed of on 02.03.2016, Annexure P
P-7, on the
statement of the counsel for the respondents, who stated that the property in
question shall not be disposed of till its partition. Counsel has asserted that
as various meetings
meeting between the parties failed to yield any result, the prayer
made in the petition be acceded to.
5. Upon notice by this Court,
t, petition has been contested by the
respondents by filing a written statement, wherein it has been submitted that
the petition is barred by limitation and that there is no dispute between the
parties. Counsel for the respondent has placed reliance upon the judgment of
the Supreme Court in B and T AG Vs. Ministry of Defence (2024) 5 SCC
358 in support of his submission.
6. I have heard counsel for the parties and considered their
respective submissions besides examining the documents placed on the
record.
7. The issue involved in the present case is as to whether the
present petition is barred by limitation. The law has been summarized by the
Supreme Court in Arif Azim Company Ltd. Versus Aptech Limited (2024) 5
SCC 313.. It has been held that although limitation is an admissibility issue,
yet it is the duty of the Courts to prima facie examine and reject non-
non
arbitrable or dead claims so as to protect the other party from being drawn
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Neutral Citation No:=2024:PHHC:139305
ARB-267--2019 (O & M),
ARB-269--2019 (O & M) &
ARB-270--2019 (O & M) --4-
into a time consuming and costly arbitration process. Whil
While considering the
issue of limitation in relation to a petition under Section 11(6) of the
Arbitration Act, Supreme Court has held that the Courts should satisfy
themselves on two aspects by employing a two pronged test, firstly whether
the petition under Section 11(6),
11(6) ibid,, is barred by limitation and secondly,
whether the claims sought to be arbitrated are ex facie dead claims and are
thus barred by limitation on the date of commencement of the arbitral
proceedings. The Court came to the conclusion that if either of these issues
are answered against the party seeking referral of dispute
disputes to arbitration,
arbitration
court may refuse to appoint an arbitral tribunal
ribunal. Holding that a plain reading
of Section 11(6) of the Arbitration Act indicates that no time limit has been
prescribed for filing an application under the said section,, but Section 43 of
the Arbitration Act provides that the Limitation Act, 1963, w
would
ould apply to
arbitrations as it applies to proceedings in the Court and by virtue of Article
137 of the Limitation Act, 1963,, which is the residual provision, the
limitation for filing a petition under Section 11(6) will be three years from
the date when the right to apply accrues. The relevant observations of the
Supreme Court are reproduced hereunder:
hereunder:-
"51. Having traversed the statutory framework
and case law, we are of the clear view that there is no
doubt as to the applicability of the Limitation Act
Act,, 1963
to arbitration proceedings in general and that of Article
137 of the Limitation Act, 1963 to a petition under
Section 11(6) of the Act, 1996 in particular. Having held
thus, the next question that falls for our determination is
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Neutral Citation No:=2024:PHHC:139305
ARB-267--2019 (O & M),
ARB-269--2019 (O & M) &
ARB-270--2019 (O & M) --5-
whether the present ppetition
etition seeking appointment of an
arbitrator is barred by limitation.
52.. The determination of the aforesaid question is
an exercise involving both law and facts. As is evident
from Article 137 of the Limitation Act, 1963, the
limitation period for making an application under
Section 11(6) of the Act, 1996 is three years from the date
when the right to apply accrues. Thus, to determine
whether the present petition is barred by limitation, it is
necessary to ascertain when the right to file the present
petition
tion under Section 11(6) of the Act, 1996 accrued in
favour of the petitioner.
(a) When does the right to apply under Section
11(6) accrue?
53.. It has been held in a catena of decisions of this
Court that the limitation period for making an
application seeking appointment of arbitrator must not
be conflated or confused with the limitation period for
raising the substantive claims which are sough
soughtt to be
referred to an Arbitral
rbitral Tribunal.
ribunal. The limitation period
for filing an application seeking appointment of
arbitrator commences only after a valid notice invoking
arbitration has been issued by one of the parties to the
other party and there has been either a failure or refusal
on part of the other party to make an appointment as per
the appointment procedure agreed upon between the
parties."
8. In Vidya Drolia and others vs. Durga Trading Corporation
(2021) 2 SCC 1,
1, Supreme Court has held that while exercising power under
Section 11, ibid, as the judicial forum, the Court may exercise the prima
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ARB-267--2019 (O & M),
ARB-269--2019 (O & M) &
ARB-270--2019 (O & M) --6-
facie test to screen and knockdown ex facie meritless, frivolous and
dishonest litigation. Limited jurisdiction of the Courts would ensure
expeditious and efficient disposal at the referral stage. At the referral stage,
the Court can interfere "only" when it is "manifest" that the claims are ex
facie time barred and dead or there is no subsisting dispute.
9. Applying the aforesaid judgments to the facts of the present
case,, so far as the applicability of Article 137 of the Limitation Act, 1963,
1963 to
the present petition is concerned, it is clear that the demand for arbitration
was made by the petitioner vide legal notice dated 27.0
27.01.2016,
.2016, Annexure
P-4. The clock begins to tick after the expiry of period of 30 days from the
date of the service of the notice,
notice, Annexure P
P-4.
4. In other words, the limitation
would start in the end of the month
onth of February or March, 2016
2016.
10. On the expiry of period of 30 days, when no Arbitrator was
appointed the cause of action for appointment of an Arbitrator accrued to
appointed,
the petitioner. Once the time started running, it would not come to a halt
hal
even if meetings
meeting were held between the parties to resolve the dispute.
Negotiations may continue for years together after the cause of action had
arisen,, but it will not postpone the cause of action for the purpose of
limitation as has been held by the Supreme Court in M/s B and T AG
(supra). The present petition having been instituted by the petitioner on
18.07.201 is clearly delayed and hopelessly barred by limitation as it has
18.07.2019
been filed beyond a period of three years from the day the cause of action
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Neutral Citation No:=2024:PHHC:139305
ARB-267--2019 (O & M),
ARB-269--2019 (O & M) &
ARB-270--2019 (O & M) --7-
arose.. The petition therefore, cannot be entertained and is dismissed being
time barred.
11. Liberty is, however, granted to the petitioner to take recourse to
any other remedy available to it under the law.
12. Pending
ending applications, if any, shall also stand disposed of
of.
21.10.2024
2024 (SUVIR SEHGAL)
sheetal JUDGE
Whether Speaking/reasoned Yes/No
Whether Reportable Yes/No
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