1 IN THE HIGH COURT OF JUDICATURE AT BOMBAY CIVIL APPELLATE JURISDICTION ARBITRATION PETITION NO. 11 OF 2009 Roopchand Mohanlal Jain ........Petitioner versus Anurag Trading Co. through its Prop. Mrs. Shaila Hasrish & anr. ......Respondent. Mr. P.J. Thorat & P.F. Patni adv.for the petitioner Mr. Yogendera M. Kanchan i/b. Ajay K. Rao adv, for the respondent no.1. CORAM: B. R. GAVAI, J. DATED : 15th January, 2010. P.C.: Rule. Rule made returnable forthwith. Taken up for final hearing by consent of parties. 1. The Petitioner has approached this court under section 43 of the Arbitration and Conciliation Act for a direction to respondent no.2 to entertain the dispute and claim filed by the present petitioner against the respondent no.1 though filed beyond limitation. Though duly served with notice for final disposal at the stage of admission, neither the respondent no.1 has appeared in person or through a counsel. As such the petition is taken up for final hearing. 2. Mr. Patni the learned counsel appearing on behalf of the 2 petitioner submits that the claim for arbitration before the respondent no.2 was not filed within the prescribed period of six months from the date on which cause of action arose since the proceedings under sec. 138 of the Negotiable Instrument Act were pending before the competent court at Aurangabad wherein the respondent no.1 has already been convicted. He submitted that after the appeal was filed by respondent no.1 challenging his conviction and after the conviction is suspended, it was found that the petitioner would suffer from undue hardship, if he was required to wait till the final disposal of the appeal before the learned Sessions Judge. Therefore the petitioner has filed an arbitration claim before respondent no.2. 3. It is submitted that in view of the judgment of the Apex Court in the case of Sterling Genera;l Insurance Co. ltd. Vs. Planters Airways Pvt. Ltd. Reported in AIR 1975 S.C. 415, the word “ undue hardship” has to be given a liberal meaning. He therefore submits that in the present case, the delay which is occurred in invoking arbitral proceedings is liable to be condoned and the claim is required to be determined on merits. 4. Perusal of the pleadings which has gone uncontroverted, would reveal that a cheque was issued by the respondent no.1 in favour of the appellant dated 23rd August 2006. The said cheque was returned unpaid with an endorsement that the account of the respondent no.2 was closed. It is on account of dishonour of the cheque, a notice as required under the provisions of Negotiable Instrument Act dated 8-9-2006 as isued which was duly served on 3 the respondent on 11-9-2006. The respondent no.1 has been convicted in the said proceedings. The appeal challenging the conviction has been subsequently admitted and the sentence has been suspended. It appears that immediately thereafter on 1-4-2008 the petitioner has registered his claim with respondent no.2 against the respondent no.1. Perusal of the judgment of the Apex Court in the case of “Sterling General Insurance Company” would reveal that the Apex Court while interpreting the provisions of sec. 37(4) of the 1940 Act which is para materia with sec. 43 of the present Act, has held that the words “undue hardship” are required to be given a liberal consideration. It has been held that while considering the application under sec. 37(4), the bonafides and reasonableness of the conduct of the parties is required to be taken into consideration. 4. In the present case it can be seen that the petitioner immediately after the cheque was dishonoured, and the respondent no.1 failed to make the payment in response to the notice issued to it, has initiated proceedings under section 138. In the said proceedings, an order of conviction was also recorded. The petitioner appears to be under bonafide impression that in view of this conviction being suspended by the learned Sessions Judge, he would suffer “undue hardship” since the matter would take a long time for final decision. In this factual background, I find that the petitioner is entitled for the benefit of section 43 of the said Act. The conduct of the petitioner in not approaching the respondent no.2 within the period of six months, as required under the 4 relevant byelaws, appears to be bonafide, since the criminal proceedings were pending before the competent criminal court and only after the conviction of the petitioner and the suspension of the sentence, it appears that he has found it appropriate to move an arbitral proceeding. It can further be seen that the cheque issued by the respondent no.2 in favour of the petitioner is dishonoured. In my considered view even an equitable consideration the petition stands on the better footing as against respondent no.1. In that view of the matter, I am inclined to allow the petition. Rule is made absolute in terms of prayer clause (b). (B.R. Gavai, J.)