BLUE DART EXPRESS LTD Vs. SANGAM PROPERTY

JUDGEMENT

(1.) BY this petition under article 227, the petitioner has assailed an order of the learned Civil judge dated 18th September, 2004 whereby an application of the petitioner under Section 8, 9 and 11 of the Arbitration and conciliation Act for appointment of Arbitrator was dismissed.

(2.) THE relevant facts to appreciate the order of the Trial Court are as under : there was a lease agreement between the parties in respect of premises. After expiry of lease agreement, the premises was handed over and the petitioner had to recover certain amount against the security deposit. A legal notice was sent by the petitioner on 26th May, 1997 demanding a sum of rs. 1,03,200/ -. When the respondent failed to pay the balance of the security amount, thereafter a suit was filed for recovery of Rs. 1,03,200/- in 1998 itself. During pendency of the suit, an application under Section 34 of arbitration Act, 1940 was filed by the respondent for staying the proceedings on the ground of existence of an Arbitration Agreement between the parties. However, the petitioner continued with the suit. The suit was dismissed in default. On an application of petitioner, it was restored on 1st March, 2002. Thereafter the petitioner sent a notice to the respondent stating that the petitioner was appointing Sh. Narinder Singh, Advocate as an Arbitrator in terms of the Arbitration Agreement. The respondent rejected the proposal. The petitioner filed an application before the Court where suit was pending for appointment of an Arbitrator which was dismissed by the impugned order on the ground that the Arbitration Act, 1940 had already been superseded by Arbitration and Conciliation Act, 1996 when the parties entered into agreement. Since old act was not applicable and no application could be moved under the old Act of 1940. The other ground for rejecting the application was that the claim of the petitioner could not be referred to the Arbitrator since the petitioner had failed to raise the dispute within period of limitation.

(3.) IT is settled law that only a live dispute can be referred to the Arbitrator and a stale and time barred dispute cannot be referred to the arbitrator. Indisputably, the dispute arose in May, 1997 when the premises was vacated and the security amount was not paid. A notice was served by the petitioner in May, 1997 on the respondent. The Arbitration Clause was within the knowledge of the petitioner. The respondent also drew attention of the petitioner to the Arbitration Clause by making application under Section 34 of arbitration Act, 1940. The petitioner did not choose to refer the matter to the arbitrator and continued with the suit. The petitioner served notice on the respondent for the first time invoking Arbitration Clause in March, 2002, i. e. , almost after 5 years of the arising out of the dispute. The dispute, as far as the Arbitrator was concerned, had become stale dispute. The pendency of the suit before the Court would not extend the period of limitation for raising the dispute before the Arbitrator. The benefit of Section 14 (1) of Limitation Act is not available for extension of limitation period before the Arbitrator. Moreover, it is not the case of the petitioner that a benefit of Section 14 (1)be given to it.