Case: Mohta Alloys Steel Works Vs. Mohta Finance & Leasing Co. & Others

1. The appellant filed an application under S.33 of the Arbitration Act, 1940 challenging the existence and validity of the arbitration clause forming part of the lease agreement entered into between the first respondent and the appellant Company.2. The application was filed before the High Court of Delhi and the matter was dealt with by the learned Single Judge. The learned Judge raised several issues to be considered in the matter. So far as the present matter is concerned, it is not necessary for us to examine other aspects of the matter except to concentrate on the question of limitation and that issue reads as follows:"Whether the claim of the petitioner and the petition under S.33 of the Arbitration Act is barred by limitation?"3. On this aspect of the matter the learned Single Judge held that Art.137 of the Limitation Act would be attracted and that the period would commence when the right to apply under S.33 would accrue and recorded a finding that the application was filed in the month of March 1993 which is a period beyond the period of 3 years from the several dates referred to by the learned Judge. Firstly, he referred to certain claims made towards rent and certain legal notices exchanged between the parties. 4. It is unnecessary to refer to all these details if we take into consideration the claim put forth by Shri Gopal Subramanium, learned Senior Advocate appearing on behalf of the appellant that the cause of action would accrue under S.33 of the Arbitration Act when the clause for arbitration is disclosed to the appellant and the same is invoked. In the letter dated 8-1-1990 sent by the respondent to the Registrar, the Tribunal of Arbitration indeed invoked the clause relating to settlement of the disputes by arbitration under the Rules of Arbitration of the PHD Chamber of Commerce and Industry. It would be idle to contend that this notice did not disclose the intention to invoke the arbitration clause as provided in the lease deed. Therefore, reckoning the period as the date of receipt of the said notice, we have no hesitation to hold that the learned Single Judge is perfectly right in his order to state that the application filed by the appellant is barred by limitation.5. The learned Single Judge, however, proceeded further to examine certain other contentions raised by the parties which was wholly unnecessary for the purpose of the case having held that the application is barred by time. Those questions could be thrashed out only upon adducing proper evidence in the matter and such an opportunity was not available to the learned Single Judge to have examined the matter and reach a conclusion. Hence the conclusions reached by the learned Single Judge on other aspects of the matter cannot be sustained and the same shall stand vacated. It is, therefore, open to the PHD Chamber of Commerce and Industry --

Decision reasoning: 1[ds]5. The learned Single Judge, however, proceeded further to examine certain other contentions raised by the parties which was wholly unnecessary for the purpose of the case having held that the application is barred by time. Those questions could be thrashed out only upon adducing proper evidence in the matter and such an opportunity was not available to the learned Single Judge to have examined the matter and reach a conclusion. Hence the conclusions reached by the learned Single Judge on other aspects of the matter cannot be sustained and the same shall stand vacated. It is, therefore, open to the PHD Chamber of Commerce and Industry