High Court Of Delhi
BHAGWAT DAYAL GALGOTIA - Appellant
Versus
PRITAM DAYAL GALGOTIA - Respondent
Suit 278A of 1975
Decided On : 05/14/1979
{'KEYWORD': 'Arbitration Act, 1940', 'SUBJECT': 'Limitation for filing a petition under Section 20 of the Arbitration Act, 1940', 'ACT SECTION LIST': ['Arbitration Act, 1940, Section 20', 'Limitation Act, 1963, Article 137']}
Fact of the Case:
The petitioner and respondent entered into a partnership agreement on 1st April, 1960, which was dissolved on 31st March, 1972. The respondent took over the technical section and the business at Indian Institute of Technology, Hauz Khas, New Delhi, and agreed to reimburse the petitioner for his share of goodwill in the business at Hauz Khas. The petitioner filed a petition under Section 20 of the Arbitration Act on 29th April, 1975, seeking the filing of the arbitration agreement and the appointment of an arbitrator.
Finding of the Court:
The court held that the petition under Section 20 of the Arbitration Act was barred by limitation as it was filed more than three years from the date when the right to claim share in goodwill arose, which was on the date of dissolution of the partnership, i.e., 31st March, 1972.
Issues: 1. Whether there is a period of limitation prescribed for a petition under Section 20 of the Arbitration Act? 2. Whether the present petition is within time?
Ratio Decidendi: 1. Article 137 of the Limitation Act, 1963 applies to any petition or application filed under any Act to the civil court, including petitions under Section 20 of the Arbitration Act. 2. The right to claim share in goodwill arose on the date of dissolution of the partnership, i.e., 31st March, 1972. 3. The petition under Section 20 of the Arbitration Act was filed on 29th April, 1975, which is more than three years from the date when the right to claim share in goodwill arose. Therefore, the petition is barred by limitation.
Final Decision: The petition under Section 20 of the Arbitration Act was dismissed as barred by limitation.
( 1 ) THE petitioner filed this petition on 29th April, 1975 under S. 20 of the Arbitratsion Act which was registered as Suit No. 278-A of 1975 for the filing of arbitration agreement and for appointment of an arbitrator. On 1st April, 1960 the petitioner and the respondent entered into a partnership agreement to carry on business under the name and style of M/s. E D. Gal gotia and Sons. This firm has tow sections (i) Technical Section and (ii) General Section. Technical Section business was carried on the mezzanine floor and the General Section business was carried on the entire ground floor of 17-B Connaught Place, New Delhi. The partnership business continued up to 31st March, 1972 when the firm was dissolved. As a result of dissolution the respondent took over the Technical Section. Apart from the premises at 17-B Connaught Place, New Delhi, the partnership firm had a branch of Hauz Khas New Delhi and on dissolution the respondent also took over the business of the Branch at Hauz Khas, New Delhi. The petitioner alleges that the respondent, agreed to reimburse the petitioner to the extent of his share of goodwill in the business at Hauz Khas, New Delhi, that after dissolution the petitioner demanded his share of goodwill but the respondent denied his liability to pay. Under cl. 9 of the Deed of partnership dated 1st April, 1960 it was agreed between the petitioner and the respondent that all disputes amongst the parties in. respect of interpretation of the deed or any other matter whatsoever in connection with the partnership deed would be referred to arbitration. On 28th March, 1975 the petitioner through his counsel sent a notice to the respondent alleging that under cl. 1 of the partnership deed the firm was to carry on business at 17-B, Connaught Place, New Delhi with liberty to open any branch at any other place, that a branch was opened at Indian Institute of Technology, Hauz Khas, New Delhi, that as a result of dissolution the respondent took over the technical section, as well as entire business at Indian Institute of Technology, Hauz Khas, New Delhi, that the respondent had agreed to reimburse his share of goodwill of the business at Indian Institute of Technology, that the value of the goodwill of the said branch was Rs. 2,00,000 and under cl. 9 of the partnership deed, the respondent was required to refer the dispute to share goodwill to an arbitrator. It appears that the respondent did not reply to this notice dated 28th March, 1975 and therefore the petitioner filed the present petition.
( 2 ) THE respondent in his written statement resisted the petitioner s claim on various grounds. Issues were also framed on 29th Nov. , 1976. It is not necessary to deal with any of them as at the time of hearing it was discovered that petition under S. 20 of the Arbitration Act was barred by time although no specific plea was raised in the written statement. Opportunity was given for arguments on the question of limitation, parties argued the matter at great length,
( 3 ) THE questions for decision are (i) whether there is any period of limitation prescribed for a petition under S. 20 of the Arbitration Act and also (ii) whether the present petition is within time.
( 4 ) IN short the facts of the present case as stated above are that the parties entered into partnership on 1st April, 1960, it was dissolved on 31st March, 1972, the Technical Section at Connaught Place, New Delhi and business at Indian Institute of Technology were taken over by the respondent, the respondent agreed to reimburse the petitioner to the extent of his share in goodwill of the branch at Indian Institute of Technology, Hauz Khas, New Delhi. Thus it appears that the right to claim share in goodwill arose on 31st March, 1972. The petitioner, however, alleges further that the respondent agreed to reimburse his share in goodwill but the respondent denies the same.
( 5 ) THERE is no specific Article in the Limitation Act, 1963 prescribing a peri
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