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2023 Supreme(Bom) 33

IN THE HIGH COURT OF JUDICATURE AT BOMBAY
BHARATI DANGRE, J.
TLG India Pvt. Ltd. – Appellant
Versus
Rebel Foods Pvt. Ltd. - Respondent
Comm. Arbitration Application (L) No.28026 of 2021
Decided on : 09-01-2023

Advocates:
Advocate Appeared:
For the Appellant : Mr.Dushyant Krishnan
For the Respondent: Mr.Piyush Raheja with Mr.Akash Mehta and Mr.Aditya i/b Mansukhlal Hiralal & Company

Headnote:

Arbitration and Conciliation Act, 1996 - Section 11, 43, 43(1), 8, 29A - Limitation Act, 1963 - Section 137, 5, 20, 9, 18, 55 – Offence of Limitations - Description of application - Application of arbitrators – Time limit for arbitral award – Effect of acknowledgement in writing - Extension of prescribed period in certain cases – Continuous running of time – Effect of acknowledgement of payment by another person - Compensation for the breach of any contract, express or implied, not herein specially provided for - Power to refer parties to arbitration where there is an arbitration agreement -Whether claim staked by applicant is ex-facie time barred – Held, Court had referred to in great detail, do not make a case worst than Nortel. In the present case, applicant provided services in term of LOA and raised invoices, with no objection being raised at instance of respondent - However, since amount due and payable remained unpaid against invoices, intervention of AAAI was sought and it is immediately, respondent made over a sum of Rs. Four Crore towards partial discharge of it’s liability - Thereafter, applicant persuaded respondent to clear balance amount and respondent expressed its willingness to amicably resolve issue by it’s E-mail, but failed to honour it’s commitment and this constrained applicant to raise a demand for payment of sum along with interest rate - Application stands disposed off.

JUDGMENT :

1. The application filed under Section 11 of the Arbitration and Conciliation Act, 1996, seeks an appointment of the Sole Arbitrator for resolving the disputes that have arisen between the parties out of the contract of Media Agency. Vide Letter of Appointment (LOA) dated 13/04/2015, the applicant was appointed as an Advertising Communication Partner by the respondent. In furtherance of the of the said arrangement, invoices were raised by the applicant, in accordance with clause No.3 of the LOA, but the applicant allege that the respondent, though never raised any dispute in respect to the services provided or invoices raised, failed to make the payments in terms of the Agreement. As per the applicant, after adjusting all the payments made by the respondent, an amount of Rs.1,53,01,864/- is payable by the respondent.

In the wake of the aforesaid, applicant addressed a notice to the respondent on 09/11/2020 invoking arbitration agreement and, since, the respondent refused to accede to the request, the application has been filed under Section 11, seeking appointment of the Arbitrator in exercise of powers conferred upon this Court.

2. Heard learned counsel Mr.Dushyant Krishnan for the Applicant and the learned counsel Mr.Piyush Raheja for the respondent. Mr.Raheja, the counsel for the respondent, has opposed the relief sought in the application, by raising a point of limitation. His specific submission is, the Court may refuse to make reference under Section 11 in rare and exceptional cases, where the claims are ex-facie time barred, which make it manifest that there is no subsisting disputes. He has placed reliance upon the decision of the Hon’ble Apex Court in the case of Bharat Sanchar Nigam Ltd. & Anr. Vs. M/s.Nortel Networks India Pvt. Ltd., Civil Application No.843-844/2021 decided on 10/03/2021 and another decision in the case of CLP India Private Limited Vs. Gujarat Urja Vikas Nigam Limited & Anr., (2020) 5SCC 185. Relying upon the aforesaid decision, Mr.Raheja would make me run through the list of dates and events involved and he would submit that the applicant provided it’s services to the respondent in terms of the LOA from November 2015 to March 2015 and as per the case of the applicant, it raised various invoices. He would submit that with this arrangement between the parties, a demand notice was sent on 7/04/2020, raising a demand of Rs.1,53,01,864/- alongwith interest, which was countered at the end of the respondent on 11/05/2020. Mr.Raheja would submit that the claim raised by the applicant after gap of four years, is ex-facie time barred and, therefore, this Court shall not entertain the application, seeking appointment of the Arbitrator.

3. In the wake of the preliminary objection, being raised about the maintainability of the application, seeking exercise of power under sub-section (6) of Section 11 of the Act, I will have to analyse, whether the proposition of law emerging from the authorities cited by the counsel for the respondent, is applicable to the present case, to create an effect that the claim of the applicant is ex-facie time barred.

4. The Hon’ble Apex Court in the case of Bharat Sanchar Nigam Ltd.(BSNL) (supra), was confronted with peculiar facts, where BSNL had invited bids for planning, engineering, supply, insulation, testing and commissioning of GSM based cellular mobile network in the southern region. The respondent company-Nortel was awarded the purchase order and on completion of the works, BSNL deducted/withheld an amount of Rs.99,70,93,031/- towards liquidated damages and other levies. Nortel, vide it’s communication dated 13/05/2014 raised a claim for payment of the said amount, which was rejected by BSNL on 04/08/2014. After a period of over 5 ½ years, Nortel vide letter dated 29/04/2020 invoked the arbitration clause and requested for appointment of an independent arbitrator, by contending that the dispute of withholding the amount, would fall within the ambit of arbitrable disp

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