Patanjali Ayurved Limited ...... ... vs Parth Patanjali Kendra & Another
2023 Latest Caselaw 2590 UK

     IN THE HIGH COURT OF UTTARAKHAND
                 AT NAINITAL

     THE HON'BLE THE CHIEF JUSTICE SRI VIPIN SANGHI


            ARBITRATION APPLICATION NO. 21 OF 2023


                        1ST SEPTEMBER, 2023


Between:


Patanjali Ayurved Limited                   ...... Applicant/Petitioner


Versus


Parth Patanjali Kendra & another            ......       Respondents


Counsel for the applicant         :   Ms. Sonam Gupta and Mr. Pankaj
                                      Semwal, learned counsels

Counsel for the respondents   :       Mr. Salvador Rebello    and Mr.
                                      Saswat    Adhyapak,       learned
                                      counsels


The Court made the following:

JUDGMENT:

I have heard learned counsel for the parties.

2) On 25.08.2023, the submission of the

respondent that the claim is barred by limitation was

taken note of. The said order reads as follows :

"1. Mr. Shobhit Jain and Mr. Pankaj Semwal, learned counsels for the applicant.

2. Mr. Salvador Rebello, learned counsel for the respondents.

3. The respondent has filed his counter affidavit, and counsels have also advanced their submissions.

4. The respondent has raised the issue that the claim of the applicant is clearly barred by limitation, and there is no disputed question of fact required to be determined to determine - whether the claim is barred by limitation, or not.

5. The agreement between the parties was entered into in the year 2012. The same was terminated on 22.02.2017. The first demand raised by the applicant was on 13.10.2021, i.e., well after the expiry of period of three years from the termination of the agreement.

6. Whatever right accrued to the applicant crystallized on the date of termination of the agreement, and it is not even stated - as to how cause of action arose on any date after the termination of the agreement.

7. The respondent sent a reply to the said demand notice on 27.10.2021, denying the claim of the applicant. The applicant thereafter again kept quite and invoked the arbitration agreement only on 12.03.2022. The said notice was again replied to by the respondent on the same day, where after the applicant has preferred this application after expiry of one year of the invocation of the arbitration agreement. Prima facie, it appears that the claim of the applicant is barred by limitation, since arbitration was not invoked within the period of limitation.

8. Counsel for the applicant seeks one weeks' time to get ready with his submissions.

9. At his request, list on 01.09.2023.

10. It is, however, made clear that no adjournment shall be granted."

3) Today, learned counsel for the applicant

submits that the applicant had terminated the

agreement between the parties vide notice dated

22.09.2017, w.e.f. 30.11.2017. Thereafter, the

applicant had issued a demand notice on 13.10.2021,

raising a demand of Rs.50,10,654/- on the respondent

as the outstanding amount due to the applicant. Since

the applicant did not comply with the said demand, the

applicant had invoked the arbitration agreement on

12.03.2022.

4) Learned counsel submits that since the

termination became effective w.e.f. 30.11.2017, the

applicant had three year's limitation to invoke the

arbitration agreement from the said date. However, the

COVID-19 pandemic intervened in the meantime. The

demand notice dated 13.10.2021 was issued by the

applicant during the period when the limitation was still

in force, and COVID-19 pandemic was raging. The

invocation notice was issued on 12.03.2022, when the

period of limitation stood suspended, by virtue of the

Suo Motu order passed by the Supreme Court in SMW

(C) No. 03 of 2020, dated 10.01.2022.

5) Counsel for the applicant has drawn my

attention to the order passed by the Supreme Court on

10.01.2022 in the aforesaid proceedings. The supreme

Court in those proceedings, inter alia, held that in cases

where the limitation would have expired during the

period between 15.03.2020 till 28.02.2022,

notwithstanding the actual balance period of limitation

remaining, all persons shall have a limitation period of

90 days from 01.03.2022. In the event, the actual

balance period of limitation remaining w.e.f. 01.03.2022

is greater than 90 days, that longer period shall apply.

6) Counsel for the applicant points out that within

90 days of 01.03.2022, the applicant had invoked the

arbitration agreement vide notice dated 12.03.2022.

The respondent has also replied to the said notice on the

same day.

7) In the light of the aforesaid, it appears that

arbitration commenced on 12.03.2022, which appears to

be within the period of limitation. I am, therefore, not

satisfied that the present claim is clearly barred by

limitation. The respondent neither disputes the

agreement between the parties - which contains the

arbitration agreement, nor the fact that the respondent

has invoked the same, though, it is the claim of the

respondent that the same has not been invoked within

the period of limitation.

8) Aforesaid being the position, I am inclined to

allow the present application. Accordingly, I appoint Mr.

K.S. Khurana, retired District Judge, Delhi, Mobile No.

9810257327, to act as the sole Arbitrator to adjudicate

all the disputes between the parties arising out of their

aforesaid super distributorship agreement dated

15.02.2012. All pleadings are left open to be raised by

the parties before the Arbitral Tribunal. The Arbitral

Tribunal shall hold the proceedings virtually, except with

the consent of the parties, in which case they may

appear physically.

9) Arbitration application stands disposed of.

________________ VIPIN SANGHI, C.J.

Dt: 1st SEPTEMBER, 2023 Negi