2015 Supreme(Bom) 1758

IN THE HIGH COURT OF BOMBAY AT GOA
C.V. BHADANG, J.
Tulip Hotels Pvt. Ltd. & Anr. - Petitioners
Vs.
Trade Wings Ltd. - Respondents
Civil Revision Application No. 7 of 2015
Decided on : 1-10-2015

Headnote:

Whether an issue of limitation can be examined in an application filed under Section 16 of the Act by the learned Arbitrator. In other words, whether the power of the learned Arbitrator to rule on his own jurisdiction would include the examination of the issue of limitation?

Fact of the Case:

The petitioners filed a statement of claim before the learned Arbitrator with the following reliefs: 1. Specific Performance: A. that the Respondents, their directors, servants and agent be directed to specifically perform their obligations under the SHA: (i) To transfer 50% shares in Trade Wings Hotel to the Claimants or its nominees; (ii) To order the Respondents to clean up the Balance Sheets of the Trade Wings Hotels of any intra group and any other liabilities; (iii) To order the Respondents to conduct the business of the running of the hotel along with the Claimants in terms of the SHA and in particular in terms of Clauses 6,7 and 8 of the SHA; (iv) To determine if any amounts are payable to the Respondents as interest. (v) To order the Respondents to accept payment of the balance principle share purchase price and transfer 50% shares of Trade Wings Hotel in pursuance of the Agreement; (vi) To order the reinstatement of the Claimants representative on the Board of Directors of Trade Wings Hotels equivalent in number to the representatives of the Respondents. The Claimants pray that the Respondents be directed to extinguish all inter-corporate loans and all other loans and liabilities in the books of Trade Wings Hotels which were not present at the commencement of the arbitration. Without prejudice to the above and in the alternative: B. to order Repayment of Rs.16.25 (Sixteen Crore Twnety Five Lakh) crores and Rs. 1.91 Crores (One Crore Ninety one Lakh) which was spent by the Claimants on renovation of Bogmallo Resort with 18% interest from the date of receipt to the date of payment.

Finding of the Court:

The learned Arbitrator on hearing the parties by the impugned order dated 6/07/2013 allowed the application holding that none of the claims raised by the petitioners in their statement of claim can be entertained or granted by the Tribunal. Thus while upholding the objection under Section 16(2) of the Act, claims were dismissed for "lack of jurisdiction of the Tribunal and/or lack of arbitrability".

Issues: Whether a revision application under Section 115 of the Civil Procedure Code would be maintainable against the judgment and order passed under Section 37 of the Act by the learned District Judge? Whether an issue of limitation can be examined in an application filed under Section 16 of the Act by the learned Arbitrator. In other words, whether the power of the learned Arbitrator to rule on his own jurisdiction would include the examination of the issue of limitation? If the answer on point no.(ii) is in the affirmative whether the finding recorded by the learned Arbitrator that the claim is barred by limitation on the ground that the SHA self terminated on 7/09/2000, as confirmed by the learned District Judge, is illegal and perverse, so as to warrant interference? Whether the impugned order rejecting the entire claim (as framed and filed), needs interference being perverse?

Ratio Decidendi: The issue as to whether an action is brought within the period of limitation may in a given case require examination of various questions both of law and fact. For instance, on the basis of the relief claimed it has to be ascertained as to under which of the Articles under the Limitation Act the action would fall. In that view of the matter, it would be a question of law. On the other hand, under Article 54 of the Limitation Act, with which we are presently concerned, the issue would be as to whether any time period is fixed for specific performance of the contract and if not what would be the date on which the plaintiff can be said to have first noticed that the performance is refused. This aspect would be part of the exercise which may be dependent on the examination of facts. If the facts on the basis of which the starting point of limitation is to be reckoned, are either undisputed or are clearly discernible from the record, the question of limitation may not depend upon any “disputed question of fact” notwithstanding that it would continue to be a mixed question of law and fact.

Final Decision: The revision application is dismissed with no order as to costs.