O.P.No.595 of 2019

IN THE HIGH COURT OF JUDICATURE AT MADRAS

Reserved on : 13.07.2023

Pronounced on : 21.07.2023

CORAM

THE HON'BLE MR. JUSTICE ABDUL QUDDHOSE

O.P.No.595 of 2019

and

A.No.5367 of 2019

M/s.Saravana Global Holdings Ltd.,

(Formerly known as Saravana Foundations Ltd.,)

No.15, New Giri Road, T.Nagar,

Chennai - 600 017.

... Petitioner

Vs.

N.Jayamurugan

... Respondent

PRAYER: Petition has been filed under Section 34 of the Arbitration and

Conciliation Act, 1996 to set aside the award dated 20.02.2019.

For Petitioner

: Mr.K.V.Babu

for Mr.Sashidhar Sivakumar

For Respondent

: Mr.AR.L.Sundaresan

Senior Counsel

Assisted by Mr.AR.Karthik Lakshmanan

for Mr.L.Palanimuthu

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O.P.No.595 of 2019

ORDER

The issues that arise for consideration in this petition filed under

Section 34 of the Arbitration and Conciliation Act, 1996, challenging the

arbitral award dated 20.02.2019 are as follows:

a) Whether the arbitrator was correct in treating the letter dated

05.03.2015 sent by the petitioner to the respondent as a promise to pay a

time barred debt which saves limitation attracting Section 25 (3) of the

Indian Contract Act;

b) Whether the alleged promise to pay the time barred debt through

the petitioner's letter dated 05.03.2015 is a fresh contract giving rise to a

fresh cause of action and whether the terms and conditions of the earlier

contract including the arbitration agreement can be made applicable when

admittedly the earlier MOU dated 18.05.2006 had become unenforceable on

account of it becoming time barred;

c) Whether the alleged promise to pay through the petitioner's letter

dated 05.03.2015 has satisfied the requirements of Section 25 (3) of the

Indian Contract Act enabling the respondent to make a claim for a time

barred debt;

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O.P.No.595 of 2019

d) Whether the arbitrator was right in awarding compensation to the

respondent at the rate of Rs.1,00,000/- per acre, when the alleged promise to

pay through the petitioner's letter dated 05.03.2015 does not cover a

promise to pay compensation;

e) The difference between an acknowledgment of debt given within

the period of limitation coming within the purview of Section 18 of the

Limitation Act, 1963 and a promise to pay a time barred debt as per Section

25 (3) of the Indian Contract Act which enables the claimant to seek

payment despite the debt being a time barred debt.

2. Brief facts leading to the filing of this petition under Section 34

of the Arbitration and Conciliation Act, 1996:

The respondent in this petition is the claimant and the petitioner is the

respondent in the arbitration who has also made a counter claim against the

respondent. The respondent had invested money with the petitioner for the

purchase of 200 acres of land at Moosivakkam Village, Kancheepuram

under a Memorandum of Understanding (MOU) dated 18.05.2006.

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O.P.No.595 of 2019

3. As per the MOU dated 18.05.2006, the petitioner agreed to identify

and acquire 200 acres of land for and on behalf of the respondent. The terms

and conditions entered into between the parties are found in the MOU dated

18.05.2006. One of the conditions is that the time fixed for completing the

process of acquisition was 90 days from the date of MOU. There arose a

dispute between the petitioner and the respondent under the MOU dated

18.05.2006. Admittedly, there is an arbitration clause in the MOU dated

18.05.2006. However, as per the general law of limitation under the

Limitation Act, 1963, the debt if at all payable to the respondent by the

petitioner has become a time barred debt. The respondent claims a sum of

Rs.5,33,76,000/- which is the alleged balance unutilized amount retained by

the petitioner out of the total payment made by the respondent which the

petitioner has refused to return to the respondent, despite the petitione