PRASAR BHARTI Vs. MAA COMMUNCATION

JUDGEMENT

(1.) These applications under Section 11(6)(c) of the Arbitration Act, 1996, though entertainable by the Chief Justice or his designate, were vide order dated 4th September, 2009 referred to this Bench, to consider the aspect of limitation within which an application under Section 11(6) can be filed. The counsels for the respondents had relied upon the judgment of a Single Judge of this Court in Sh. Rajesh Kumar Garg v. MCD, 2008 149 DLT 343 to contend that the limitation of three years commences from the date on which, had there been no arbitration clause, the cause of action would have accrued. It was felt that the matter was required to be considered by a larger bench.

(2.) The counsels for the respondents during the hearing also relied on Steel Authority of India Ltd. v. J.C. Budharaja, 1999 AIR(SC) 3275; therein, relying on Panchu Gopal Bose v. Board of Trustees for Port of Calcutta,1993 4 SC 338, it was held that the period of limitation for commencement of an arbitration runs from the date on which the cause of arbitration accrued, that is to say from the date when the claimant first acquired either a right of action or a right to require an arbitration to take place upon the dispute concerned. It was further held that the period of limitation for commencing an arbitration runs from the date on which, had there been no arbitration clause, the cause of action would have accrued. In fact, the said passage from Panchu Gopal Bose (supra) reproduced in Steel Authority of India Ltd. (supra) forms the backbone of the contention of the counsels for the respondents. Reliance in this regard is also placed on Shah Construction Co. Ltd. v. Municipal Corporation of Delhi, 1985 AIR(Del) 358.

(3.) The judgments in Steel Authority of India Ltd., Panchu Gopal Bose and in Shah Construction Company Ltd. (supra) are under Section 20 of the Arbitration Act, 1940. In fact, the Division Bench of this Court in Shah Construction Co. Ltd. noticed that the 1940 Act provided for three kinds of arbitration i.e. (i) arbitration without intervention of Court (i.e. Section 3 to Section 19), (ii) arbitration with intervention of a court where there is no suit pending (Section 20) and (iii) arbitration in suits (Chapter IV). It was further held that a party may proceed under Section 20 instead of proceeding under Chapter-II (Section 8); Section 20 confers power on court to order the agreement to be filed and further to make an order of reference to the arbitrator appointed by the parties or where the parties cannot agree upon an appointment, to an arbitrator appointed by the court. It was further distinguished that Section 8 does not contain any provision empowering the court to make an order of reference as one found in Section 20(4); the party has thus an option to proceed either under the provision of Chapter II (Section 8) or of Chapter III (Section 20) in proceeding with the reference; there is nothing in Section 20 to compel the other party not to take recourse to Section 8 of the Act; it is his choice whether to apply under Section 8 of under Section 20 of the Act. Yet further it was held that there is no period of limitation if the parties proceed under Section 8 of the Act.