LexM/S. JUPITOR CHIT FUND (P) LTD. versus SRI SHIV NARAIN MEHTA (DEAD) BY LRS. AND ORS.
Open in Lexace · Ask the AI about this caseJudgment (excerpt)
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M/S. JUPITOR CHIT FUND (P) LTD.
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v.
SRI SHIV NARAIN MEHTA (DEAD) BY LRS. AND ORS.
FEBRUARY 10, 2()C{)
(S. SAGHlR AHMAD AND S.N. PHUKAN, JJ.)
B
Arbitration Ac~ 1940 :
Sections 37(3) and ~Scope and interpretation of.
Indian limitation Act, 1908 :
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Section 14-Applicability to proceedings under Arbitration Act.
Suit for recovery of amount-Limitation period-Computation of-Dis-
pute between chit fu11d company a11d subscribei-Matter referred to ar-
bitrator-Award passed by arbitrator-Award set aside on the ground there D
cannot be a unilateral reference by chit fund company without notice to
subscriber--171ereafter recovery suit filed by chit fund compan~Suit held
barred by time-Appeal before Supreme Cou~eld period from the date on
which arbitration commenced to the date when award was set aside cannot
be excluded while computing the limitation period for suit for recovery of E
money-Sub-section(5) and sub-section (3) of section 37 of the Arbitration
Act are to be read together to find out the period which is liable to be excluded
in computing the time prescribed by the Indian limitation Act, 1908.
Pandit Daya Shankar v. Shea Ram, (1956) Allahabad Law Journal 40,
approved.
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CIVIL APPELLATE JURISDICTION : tivil Appeal No. 1288 of
1982.
From the Judgment and Order dated 15.11.79 of the Allahabad High
Court in C.R. No. 1284 of 1977.
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Jitendra Sharma, Ms. Minakshi Vij, P.N. Jha and Parmanand Gaur
for the Appellant.
Arvind Kumar, Ms. Laxmi Arvind and R.A. Mishra, for the Respon-
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768
SUPREME COURT REPORTS
[2000] 1 S.C.R.
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The following Order of the Court was delivered :
S. SAGHIR AHMAD, J. Appellant is a Chit Fund Private Limited
Company. Respondent No. 1 subscribed to the appellant's chit fund
scheme for the value of Rs. lOGO which was to be repaid in instalments.
Respondent Nos. 2 and 3 were the sureties for Respondent No. 1. On a
B dispute having arisen between the parties for non-payment of instalments,
the matter was referred by the appellant to the named arbitrator who
passed an award. In proceedings for making the award a rule of the Court,
it was held that the award was liable to be set aside on the ground that the
reference to the arbitration was not proper as there cold not be a unilateral
C reference without notice to the respondents.
On the award being s1~t aside, the appellant filed a civil suit which
was held to be barred by time.
Learned counsel for the appellant has placed reliance upon the
D provisions of Section 37 of the Arbitration Act, 1940 and has contended
that the entire period taken by it is pursuing the matter before the ar-
bitrator ought to be excluded under Section 14 of the Limitation Act which
has been made applicable to the proceedings under the Arbitration Act.
Relevant provisions of Section 37 arc quoted below :
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"37. Limitations. - (1) All the provisions of the Indian Limitation
Act, 1908 (9 of 1908), shall apply to arbitrations as they apply to
proceedings in Court.
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(3) For the purposes of this section and of the Indian Limitation
Act, 1908 (9 of 1908), an arbitration shall be deemed to be
commenced when one party to the arbitration agreement serves
on the other parties thereto a notice requiring the appointment of
an arbitrator, or where the arbitration agreement provides that the
reference shall be to a person named or designated in the agree-
ment requiring that the difference be submitted to the persons so
named or designated.
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(5) Where the Court orders that an award be set aside or
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JVPITOR CHIT FL'ND (P) LTD. v. SHIV NARAIN MEIITA (DEAD) BY LRS. 769
orders, after the commencement of an arbitration, that the arbitra-
A
tion agreement shall cease to have effect with respect to the
difference referred, the period between commencement of the
arbitration and the date of the order of the Court shall be excluded
in computing the time prescribed by the Indian Limitation Act,
1908 (9 of 1908), for the commencement of the proceedings (in-
cluding arbitration) with respect to the difference referred."
In view of the provisions of Sub-section (5) extracted above, it is
contended that for purposes of commencement of the proceedings in a civil
suit for the recovery of the amount due from the respondents, the appellant
was entitled to exclusion of the entire period from the date on which the
arbitration commenced to the date when the aExcerpt shown. Read the full judgment & AI analysis in Lexace.