Section 11(6) of AA – Exclusion of time taken for settlement from limitation
Section 11(6) of AA – Exclusion of time taken for amicable settlement from limitation
Agreement dated 26.12.2018 was entered into between the parties. Lock in period was for 3 years for the respondent. The petitioner made payment of revenue share from 1.3.2019 to Feb 2020. By the email dated 18.2.2020, three months advance notice for termination of the agreement from 18.5.2019 was given.
Several discussions between the parties resulted in settlement. As a result the termination notice was withdrawn on 23.6.2020. Thereafter, there was no response from the respondent.
The first arbitration notice was given on 8.11.2020. It was rejected by the respondent on 17.11.2020.
In the meanwhile, there were efforts for amicable settlement between the parties. However, since there was no settlement, the respondent gave second arbitration notice dated 31.1.2024. The respondent rejected the same by the letter dated 7.2.2024.
In Section 11(6) AA petition of the petitioner, the respondent has taken objection of limitation and on that ground of limitation, maintainability of petition itself.
According to the respondent, the first arbitration notice dated 8.11.2020 was abandoned, the last pay was received by the petitioner in February, 2020 and therefore, second arbitration notice of January 2024 is barred by limitation.
HELD that the implications of notice of withdrawal of termination on 26.6.2020 is that the contract continued to subsist between the parties. After the first arbitration notice of 8.11.2020, the parties got into negotiations till March 2021. Since the negotiations for settlement were going on, the period of limitation start only when they last got concluded in March, 2021 and the cause of action arose only thereafter. Thus, the notice dated 31.1.2024 is well within limitation.
The period during which the parties were bona fide in negotiations for amicable settlement may be excluded for computing period of limitation for Section 11(6) AA reference. However, the entire negotiations between the parties must be specifically pleaded and placed on record. The Court must carefully consider the entire history to find breaking point to be treated as the day for cause of action and limitation.
Judgment dated 13.5.2024 of the Delhi High Court in ARB.P.630/2024 of M/s. Blooming Orchid Vs. FP Life Education Foundation.
