IN THE HIGH COURT OF PUNJAB AND HARYANA AT CHANDIGARH Arb. Case No. 77 of 2008 Date of decision: 25.5.2011 Harish Chandra (India) Ltd. …..Petitioner vs. Haryana Power Generation Corporation Ltd and others ....Respondents CORAM: - HON’BLE MR. JUSTICE HEMANT GUPTA Present: - Mr. R. Kartikey, Advocate for the petitioner. Mr. Parveen Gupta, Advocate for respondents. HEMANT GUPTA, J Petitioner was allotted the work of construction of Western Yamuna Canal, Hydro Electric Project, Stage-II vide the memo dated 22.8.2000. The due date of completion was 30 months i.e. 8.3.2003. During the course of the execution of the construction work, the petitioner has raised three set of claims i.e. claim No. 1 to 24 (Annexure P-6), Claim No. 25 to 46 (Annexure P-13) and Claim No. 47 to 59 (Annexure P-14). The petitioner completed the construction work on 31.12.2005. Earlier, the petitioner approached this Court for appointment of an Arbitrator vide the Arbitration case No. 17 of 2004, in respect of the adjudication of the disputes of claim No. 1 to 24 for which demand notice was served on 17.4.2003 (Annexure P-6). This Court declined to appoint an Arbitrator vide the order dated 11.11.2005, but the Hon’ble Supreme Arb. Case No. 77 of 2008 Court vide the order dated 19.3.2007 (Annexure R1/2) permitted the petitioner to deposit an amount of Rs. 85,28,340/- as a cash security before an Arbitrator is appointed. It is thereafter the petitioner deposited the security amount and the Arbitrator has been appointed. Before the Arbitrator, the petitioner sought to include Claim No. 25 to 46 raised in the communication dated 14.8.2004 (Annexure P-13) and Claim No. 47 to 59 raised in the communication dated 11.11.2004 (Annexure P-14). Such claims were not entertained by the Arbitrator. The present is the petition for appointment of an Arbitrator under Section 11(6) of the Arbitration and Conciliation Act, 1996 (for short the ‘Act’) filed on 19.4.2008. The question which arises for consideration is whether the present petition for appointment of an Arbitrator in respect of Claim Nos 25 to 46 and 47 to 59 is beyond the period of limitation. This Court in The Hisar Model Town Azad Co- operative Labour and Construction Society Limited Vs. The State of Haryana and others (Arb.Case No.37 of 2009 decided on 18.5.2011 have examined the question as to whether an application under Section 11(6) of the Act is required to be filed within the period of limitation from the date, the cause of action arises or that there is no period of limitation from the date of notice, to seek appointment of Arbitrator is served. It was held to the following effect: - 2 Arb. Case No. 77 of 2008 “In my opinion, provisions of Section 21 are in relation to arbitration without the intervention of the Court or to determine the applicability of the 1940 or the Act as required to be examined in certain cases within meaning of Section 85(2) of the Act. But, if intervention of the Court is necessitated, such petition has to be filed within the period of limitation. It has been held that the period of limitation is for all applications filed before the civil court. Since there is no specific period of limitation prescribed for such like application under Section 11 of the Act in Schedule to the Limitation Act, 1963, therefore, the residuary Article 137 would be applicable. As per Article 137, the period of limitation is three years from the date right to apply accrues. The right to apply accrues when the cause of action accrues. To constitute a cause of action, firstly there has to be existence of right and secondly its infringement or threat of infringement. The case of action denotes and determines the starting point of limitation. Such cause of action in relation to arbitration proceedings is said to be cause of arbitration as held in Panchu Gopal Bose's case (supra). The question as to when right to sue accrues depends on the facts of each case and as and when the right is asserted or denied or when the right to claim ascertained amount arises. The cause of action to seek appointment of an arbitrator does not accrue with the issue of the notice. To seek appointment of an Arbitrator, the notice is required to be served in terms of sub clause 4 of Section 11 of the Act. It is step in aid to seek appointment of an arbitrator. The right to apply for cause of arbitration will accrue prior thereto and in pursuance of such right, a notice is required to be served. Therefore, the starting period of limitation in terms of Article 137 of the Limitation Act would be prior to the serving of 3 Arb. Case No. 77 of 2008 notice. It is from the said date, the aggrieved party has to seek intervention of the Court within three years. Since, the right to apply to the Court in terms of sub-section 6 arises only after expiry of 30 days of serving of a notice, therefore such 30 days are required to be excluded while determining the period of limitation in terms of Section 15(2) of the Limitation Act, 1963. Such interpretation is by harmonious construction of Section 21, Section 43 and Section 11 of the Act.” In the present case, the petitioner has sought adjudication of dispute of Claim No. 25 to 46 vide communication dated 14.8.2004 (Annexure P-13) and Claim No. 47 to 59 vide communication dated 11.11.2004 (Annexure P-14). Since, the Arbitrator was not appointed within 30 days, the cause of action to invoke the jurisdiction of this Court under Section 11(6) arose on refusing to appoint the Arbitrator. Since, the present petition has been filed after the expiry of 3 years, the present petition is barred by limitation. Dismissed. (HEMANT GUPTA) JUDGE 25.5.2011 preeti 4