The main legal point established in the judgment is the reasonable and possible application of the law of limitation to the facts of the case, as determined by the arbitrator, and the court's finding that no fault could be found with it under Section 34 of the Arbitration and Conciliation Act, 1996.

S.C. GUPTE, J.

1. Heard learned Counsel for the parties.

2. This petition challenges an award passed by a sole arbitrator in a reference arising out of a loan agreement.

3. The Petitioner had taken a loan from the Respondent. There is no dispute about the loan. The loan was repayable in equated monthly installments. The Petitioner had committed a default in payment of installment due on 5 November 2018. There is no dispute that the default did occur. The case of the Petitioner, who was the Respondent before the arbitral tribunal, was that upon happening of this default, the Respondent (original claimant) was contractually bound to recall the entire loan together with interest and overdue charges. It is submitted that on the date of the first default, the Respondent's cause of action arose and within three years of such accrual, the Respondent had to invoke the arbitration agreement, so as to be within limitation. It is submitted that since that was not done, the reference was bared by limitation and the arbitrator was accordingly bound to reject the claim, since there was neither acknowledgment of liability nor part payment within three years prior to invocation of the arbitration agreement.

4. In the impugned award, the arbitrator has held that the tenure of the loan was 5 years, so that the Petitioner was liable to repay the entire loan in sixty equal monthly installments (EMIs) or the whole sum along with interest and other charges as applicable at the end of the tenure, i.e. on or before 22 November 2012. The arbitrator held that the Respondent having initiated the arbitration on 29 January 2013, the invocation was within time.

5. The arbitrator's view in this behalf is clearly a possible view on a reasonable application of the law of limitation to the dispute raised by the Respondent. If one has regard to the contract of loan in the present case, which was for a tenure of 5 years, it provides for the right of the creditor to recall the entire loan and demand immediate payment of all amounts outstanding or payable, including interest and overdue charges, upon the occurrence of any event of default. Non-payment of any installment is indeed one of the events of default mentioned in this behalf. Clause 6.3 of the terms and conditions of the loan agreement, however, makes it clear that whereas the lender had the option to recall the entire loan and demand immediate payment of all amounts outstanding or payable under the loan agreement on the happening of an event of default, there was no obligation on him to do so. In the face of this clause, the arbitrator's conclusion that the cause of action in the present case arose at the end of the tenure of the loan, i.e. on or before 22 November 2012, appears to be a reasonable and possible view of the contract between the parties. Based on such reasonable and possible view, no fault can be found with the application of the law by the arbitrator to the facts of the case whilst determining the issue of limitation.

6. Learned Counsel for the Petitioner relies on various judgments of our court as well as a decision of the Supreme Court in Sundaram Finance Limited Vs. Noorjahan Beevi, (2016) 13 SCC 1 in support of his case that the cause of action ought to be treated as having accrued to the claimant-lender upon first non payment of installment. In Sundaram Finance Limited, the respondent-hirer was financed by the appellant-financier for purchase of a vehicle under an agreement of hire purchase. The respondent, who was required to clear the entire loan by thirty six monthly EMIs, committed a default in payment of installments with effect from 20 May 1984. This led to the appellant-financier seizing the vehicle on 9 February 1985. The financier, vide notice dated 12 February 1985, called upon the respondent-hirer to settle the entire hire purchase dues within 10 days of receipt of the notice. The respondent-hirer failed to make any payment. The vehicle was thereafter sold by financier o