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2016 Supreme(Pat) 130

IN THE HIGH COURT OF JUDICATURE AT PATNA
VIKASH JAIN, J.
Braj Kishore Pandey - Petitioner
Versus
M/s Hem Developers Pvt. Ltd. & Ors. - Respondents
Request Case No. 10 of 2014
Decided On : 05-05-2016

Advocates:
Advocate Appeared:
For the Petitioner: Mr. Manish Chandra Gandhi, Mr. Subodh Kumar Sinha
For the Respondents: Mr. Siddhartha Prasad

Headnote:Arbitration & Conciliation Act, 1996–Section 43(1) read with Limitation Act, 1963–Section 117–Appointment of arbitrator–Period of limitation–Provisions of Limitation Act are applicable to arbitration matters as they apply to civil proceedings before the court–accordingly, the time limit as laid down under Article 137 of the Schedule to the Limitation Act prescribing the limitation period of three years from the time when the right to apply acrues, is applicable–In the present case, the limitation for the purpose of appointment of an arbitrator under the Act started running from September, 1997 itself when the cause of action first arose to the petitioner–Present application filed in August, 2014 is, therefore hopelessly barred by limitation–request case accordingly dismissed. (Paras 10 & 13)

       (1993) 4 SCC 338; (1997) 9 SCC 97; (2005) 8 SCC 618; 2013 (1) PLJR 633; (1992) 3 SCC 608; (1997) 9 SCC 97; (2006) 4 SCC 658–Referred.

JUDGMENT :

Heard learned counsel for the petitioner and learned counsel for the respondent no.3.

2. The present request application has been filed under Section 11(6) of the Arbitration and Conciliation Act, 1996 (for short, “the Act”) for appointment of sole independent Arbitrator in view of Clause 64 of the General Conditions of Contract (for short, “the GCC”) for adjudication of contractual disputes in connection with collaboration agreement dated 26.03.1995 entered into between the parties.

3. According to the petitioner, a collaboration agreement dated 26.03.1995 was entered into between the petitioner, the owner of a plot of land measuring 5103.75 Sq. ft. equivalent to 3.75 Katha bearing Holding No. 36(B) on the Fraser Road, Patna, and the respondent no. 1, the Developer-Company, through its Director, the respondent no. 3. Under the agreement, the developer was required to construct a residential complex on the aforesaid land in which 47% of the total built up area would fall to the share of the land owner and the remaining 53% to the developer. The construction of the complex was required to be completed within a period of two years with provision for a further six months” grace period. Failure to abide by the time limit for construction would entail consequences including a penalty on the developer.

4. Learned counsel for the petitioner submits that the developer (respondent no. 1) failed to adhere to the time schedule for construction, thereby violating the terms of the agreement. Accordingly, an advocate’s notice dated 23.06.2009 was communicated to the respondents by registered post enumerating as many as 17 defects and failures on the part of the developer and calling for rectification, which notice, however, was not responded to. About three years thereafter, a second registered notice was sent on 31.05.2010, which was once again ignored. The petitioner then approached this Court in Request Case No. 1 of 2015 which, however, was rejected by order dated 28.03.2014 on the ground that neither of the two notices given by the petitioner had carried a demand for referring the disputes for arbitration.

5. The petitioner then sent an Advocate’s notice dated 15.05.2014 by registered post, this time invoking the arbitration clause in terms of the Collaboration Agreement. It is, however, stated that such notice returned unserved with the endorsement that the addressee’s office was locked all the time. It is submitted that in the facts and circumstances of the case, an arbitrable dispute exists between the parties in the backdrop of an agreement, Clause XV whereof contemplates the reference of disputes to arbitration.

6. Learned counsel for the respondent-developer raises a preliminary objection to the maintainability of the present request petition on the ground that the same is barred by limitation. He invites attention to the provisions of Section 43(1) of the Arbitration & Conciliation Act, (for short, “the Arbitration Act”) which provides that the Limitation Act, 1963 shall apply to arbitrations as it applies to proceedings in Courts. He, therefore, submits that Article 137 of the Schedule to the Limitation Act, 1963 which provides a limitation period of three years from the time when the right to apply accrues, becomes applicable.

7. It is submitted by the respondents that the agreement dated 26.03.1995 contemplated a period of two years and six months (including the grace period) for completion of the construction by the respondents and if the respondents failed to fulfill their obligations within such stipulated time, a cause of action arose to the petitioner at that stage itself for the purpose of limitation. It is further submitted, if only for argument’s sake, that had the petitioner in his initial notice dated 23.06.2009 made a demand for arbitration, even then his right to apply under Section 11(6) of the Arbitration Act for appointment of an arbitrator would be barred on 23.06.2012 upon the expiry of three years thereo



















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