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High Court of Judicature at Madras
THE HONOURABLE MR. JUSTICE SRINIVASAN & THE HONOURABLE MR. JUSTICE S.S. SUBRAMANI
The Madras Metropolitan Water Supply & Sewerage Board and another
Versus
Ramakrishna Reddy and another
O.S.Appeal No.136 of 1992 to 141 of 1992
Decided On : 04-08-1995
ARBITRATION - LIMITATION - APPLICABILITY OF LIMITATION ACT - SECTION 37 OF ARBITRATION ACT - ARTICLE 137 OF LIMITATION ACT - CAUSE OF ACTION - REPUDIATION OF LIABILITY - FINAL BILLS PASSED - SUITS FILED BEYOND THREE YEARS - CLAIM BARRED BY LIMITATION - NO SUBSISTING CLAIM - REFERENCE TO ARBITRATOR NOT JUSTIFIED.
Fact of the Case:
Respondent entered into six contracts with the appellant. After completion of the contract and receipt of final bills without protest, respondent issued legal notices to the appellant stating disputes and wanting them referred to an Arbitrator. Appellant replied disputing liability. Respondent filed six suits under Section 20 of the Arbitration Act for referring the matter to an Arbitrator.
Finding of the Court:
The Court held that the claim was barred by limitation and referring the matter to an Arbitrator when there was no subsisting claim would cause injustice to the appellant. The Court set aside the judgment of the learned single Judge and allowed the Appeals.
Issues: 1. Whether the claim was barred by limitation? 2. Whether the matter should be referred to an Arbitrator when there was no subsisting claim?
Ratio Decidendi: 1. The Court held that Article 137 of the Limitation Act was applicable to arbitration proceedings as per the decision in A.I.R.1977 S.C.282 (Kerala State Electricity Board v. T. P. Kunhaliumma). 2. The Court held that the cause of action arose when the liability was repudiated and not when the final bills were passed. 3. The Court held that the respondent could not postpone the accrual of cause of action by writing reminders or sending reminders as per the decision in A.I.R. 1988 S.C.1007 (Inder Singh v. Delhi Development Authority). 4. The Court held that the suits were filed beyond three years from the date of repudiation of liability and hence the claim was barred by limitation.
Final Decision: The Court set aside the judgment of the learned single Judge and allowed the Appeals. C.S.144 to 149/92 were dismissed.
S.S. Subramani, J.
These six Appeals are by the defendant in C.S.Nos. 144 to 149 of 1992 filed under Section 20 of the Arbitration Act. The suits were decreed by a learned single Judge of this Court by a common judgment on 20.3.1992.
2. The respondent herein entered into six contracts with the appellant as per agreements dated 38. 1981 and 30.11.1981. After completion of the contract, and after receipt of final bills without any protect, the respondent herein issued legal notices to the appellant herein stating that there are certain disputes and that he wanted the same to be referred to an Arbitrator. A reply was sent by the appellant disputing the liability. Thereafter six suits were filed by the respondent herein under Section 20 of the Arbitration Act for referring the matter to an Arbitrator. C.S.Nos. 144 to 149 of 1992 are the various suits filed by him. O.S.A. No. 136 of 1992 is preferred against the judgment in C.S.No.144 of 1992; O.S.A.No. 137 of 1992 is preferred against the judgment in C.S.No.145 of 1992; O.S.A.No. 138 of 1992 is preferred against the judgment in C.S.No.146 of 1992; O.S.A.No.139 of 1992 is preferred against the judgment in C.S.No.148 of 1992 and O.S.A.No. 141 of 1992 is preferred against the Judgment in C.S.No.149 of 1992. Since the parties are the same, it is sufficient if we make mention of the parties as appellant and respondent.
3. In C.S.No.144 of 1992, which is the subject matter of O.S.A.No. 136 of 1992, demand for final payment was made on 22. 1985 and the reply was issued on 23. 1986. In C.S.No.145 of 1992, against which O.S.A.No. 137 of 1992 is filed, demand for final payment was made on 17. 1985 and the reply was on 10. 1985, 12. 1985 and 2. 1986. In C.S.No.146 of 1992 against which O.S.A.No. 138 of 1992 is filed, demand was made on 16. 1985 and the reply was given on 110. 1985. In C.S.No. 147 of 1992 from which O.S.A. No. 139 of 1992 aryies, demand was made on 19. 1985 and the reply was given on 110. 1985, 111. 1985, 12. 1985, 2. 1986 and 23. 1986. In C.S.No.148 of 1992 from which O.S.A.No. 140 of 1992 arises, demand was made on 3. 1986 and the reply was given on 20.3.1986, and in C.S.No.149 of 1992 from which O.S.A.No. 141 of 1992 arises, demand for final payment was made on 3. 1986 and the reply was given on 23. 1986. These dates are relevant for the purpose of computing the period on limitation, and these dates are seen from the notices issued by the respondent in these Appeals to the appellant.
4. It is not disputed in the notice itself and also in the plaints filed before the learned Judge that even in the reply, the appellant (Board) has disputed its liability to pay any amount as claimed by the respondent. It was thereafter, final bills were received without protect. The various dates on which final bills were passed are as follows:- In C.S.No. 144/92, final bill was passed on 10. 1987; in C.S.No. 145/92 on 9. 1987; in C.S.No. 146 of 1992 on 15. 1987; in C.S.No. 147 of 1992 on 16. 1987; in C.S.No. 148/92 on 9. 1987 and in C.S.No.149 of 1992 the final bill was passed on 21. 1988.
5. As stated earlier, it was after notice and reply final bill was passed, and the respondent received the payment thereunder without any protect. Long thereafter, on 19. 1990, he issued notices to the appellant calling upon it to refer the matter to an Arbitrator. The appellant sent a reply on 212. 1990 repudiating the claim. All the suits were filed on 3. 1991.
6. In the suits, the main defence was that the claim is barred by limitation, and the appellant wanted the matter to be heard regarding the same. According to the appellant, if on admitted facts, the claim is barred, there is no purpose in referring the matter to an Arbitrator.
7. The respondent contended that the question of limitation is also a matter to be decided by the Arbitrator.
8. The learned single Judge held that the question of limitation also could be referred to the Arbitrator. Learned Judge further held that th
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