Arbitration – Section 11 – Limitation – Delay of six years in making application for appointment – Whether Section 21 notice or claim for repayment is time barred
The petitioner had lent Rs.75 lakhs to the respondent under MOU dated 25.5.2011 for construction on the land allotted by Bidhannagar Municipality to the respondent. The confirmation of accounts as on 31.5.2017 shown balance of Rs.56 lakhs payable to the petitioner.
However, the petitioner invoked the arbitration agreement by way of section 21 notice on 9th August, 2023.
The respondent in reply dated 26.8.2023 nominated its Arbitrator. However, the respondent raised objection to section 11 petition on the ground of limitation.
The notice refers to several verbal requests of respondent for return of money but the respondent continued to give specific undertakings to refund payment. The notice clearly states that the petitioner had waited for more than 12 years for the respondent to construct building on the land but the respondent failed to obtain permission for the construction and hence violated the terms of MOU.
MOU contains arbitration clause. The parties were in constant communication with each other for settlement of claims. The party who has received the money continuing to give undertakings in furtherance of the agreement but failed to do so, cannot be the beneficiary of such an unnatural construction. Article 55 of Schedule of the Limitation Act contemplates continuing breach of a contract. The respondent, withholding the money without compliance of MOU and failing to return the money to the petitioner for several years on one or other pretext, cannot now argue the point of limitation particularly after having nominated Arbitrator.
Tree House Education and Accessories Ltd Vs. Holy Trust School – Judgment dated 21.2.2024 in AP No.24 of 2024
