HARI SHANKAR SINGHANIA AND ORS. versus GAUR HARI SINGHANIA AND ORS.

Citation: [2006] 3 S.C.R. 726 · Decided: 04-04-2006 · Supreme Court of India · Bench: H.K. SEMA · Disposal: Appeal(s) allowed

Cited by 5 judgment(s) · cites 1 · see the full citation network in Lexace

Judgment (excerpt)

A 
B 
c 
HARi SHANKAR SINGHANIA AND ORS. 
v. 
GAUR HAR! SINGHANIA AND ORS. 
APRIL 4, 2006 
[H.K. SEMA AND DR. AR. LAKSHMANAN, JJ.] 
Arbitration: 
Arbitration Act, 1940: 
Section 20- Application under-- Limitation for-Three brothers formed 
a partnership firm-There was disagreement between them as to the division 
of the assets involvLd in the partnership firm-Distribution of the immoveable 
properties could not be effected by 31.5.1987 as contemplated by the Deed of 
D Dissolution--Nominees were appointed by each group to work out an 
arrangement--Numerous letters written by the parties to find a w01 10 seltle 
the dispute pertaining to the division of assets-Lust communication in this 
regard was on 29. 91989--Plailll under S. 20 filed by one group on 8. 5.1992. 
High Court dismissed the arbitrution suit on the ground of limitution being 50 
days beyond the period of three yeurs computed from I IJ. 3.19,W -Correctness 
E of-Held: Article 137 of the limitation Act applies to an application under S. 
20 of the Arbitration Act--App/ication is required to be filed within a period 
of three years when the right to apply uccrues--Right to apply accrues when 
difference or dispute arises between the parties to the arbitration agreement-
Right to apply accrued only on the date of the last correspondence i.e. 
F 29.9.1989--Hence, suit filed on 8.5.1992 is within limitation. 
limitation Act, 1963: Article 137. 
Arbitration suit--Family arrangements or settlements-Dispute over 
distribution of immoveable properties-Duty of court- -Held' Family settlement 
should be treated differently from any other formal commercial settlement-
G Technicalities as limitation elc. should not be put ut risk of the implementation 
of a settlement drawn by a family-Hence, technical considerations should 
H 
give way to peace and harmony in enforcement of family arrangements or 
settlements. 
726 
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HARi SHANKAR SINGHANIA v. GAUR HARi SINGHANIA 
727 
There was a disagreement between the appellants and the respondents A 
as to the division of the assets involved in the partnership firm formed by 
three brothers. Therefore, the distribution of the immoveable properties could 
not be effected by 31.5.1987 as con.templated by the Deed of Dissolution. 
Ultimately, in February 1988 the three groups each of appointed nominees 
to work out an arrangement for satisfactory distribution of the properties of B 
the said dissolved firm. The nominees held several meetings but no agreement 
of distribution could be arrived at. There were numerous letters written by 
both parties to find a way to settle the dispute pertaining to the division of 
assets. The last letter that was exchanged in this regard was a letter dated 
29.9.1989. 
The appellants filed a plaint under Section 20 of the Arbitration Act, 
1940 before the High Court on 8.5.1992. The High Court dismissed the 
Arbitration Suit on the ground of limitation being 50 days beyond the period 
of three years computed from 18.3.1989. Hence the appeal. 
On behalf of the appellants, it was contended that the date of the last 
communication between the parties to reach a settlement was 29.9.1989; that 
the right to apply under Section 20 of the Arbitration Act accrued to the 
appellants on 29.9.1989; and, therefore, limitation period would start running 
from 29.9.1989 and hence arbitration suit filed on 8.5.1992 was within 
limitation as laid down in Article 137 of the Schedule to the Limitation Act. 
1963. 
The following questions arose before the court:-
I. When the right to file the application under Section 20 of the 
Arbitration Act, 1940 has accrued and when it becomes time barred? 
2. Whether in the context of Section 20 of the Arbitration Act, 1940 a 
difference or dispute can be said to have arisen between the parties without 
there being any denial or repudiation of a claim by a party? 
Allowing the appeal, the Court 
HELD: I.I. It is now well-settled that Article 137 of the Limitation Act, 
1963 applies to an application under Section 20 of the Arbitration Act, 1940. 
Accordingly, an application under Section 20 of the Act for filing the 
arbitration agreement in Court and for reference of disputes to arbitration 
in accordance therewith is required to be filed within a period of three years 
c 
D 
E 
F 
G 
H 
728 
SUPREME COURT REPORTS [2006] 3 S.C.R. 
A when the right to apply accrues. The right to apply accrues when difference 
or dispute arises between the parties to the arbitration agre

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