LexPANCHU GOPAL BOSE versus BOARD OF TRUSTEES FOR PORT OF CALCUTTA
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PANCHU GOPAL BOSE
v.
BOARD OF TRUSTEES FOR PORT OF CALCUTT A
[K. RAMASWAMY ANDS. MOHAN,JJ.]
APRIL 23, 1993
Arbitration Act, 1940:
Ss.5, 12, 33 and 37:
Limitation Act. 190811963:
Delay of JO years in seeking reference to arbitration-Held, limitation
applies to arbitration-Claim barred by delay-Courts below justified in rescind-
ing arbitration agreement.
On May 27, 1978, the petitioner entered into an arbitration agreement
under which he had to execute a certain work within 9 months. He averred
that he had sent his bills on July 12, 1979, but payment was not made. On
November 28, 1989, for the first time he sent a notice to the respondent for
reference to arbitration. The respondent approached the High Court under
Ss. 5, 12 and 33 of the Arbitration Act, 1940. A learned Single Judge held that
the claim was hopelessly barred by limitation, and cancelled the arbitration
agreement. A Division Bench dismissed the Appeal.
On appeal, this Court addressed itself to 2questions: Whether the High
Court could permit a party to rescind an arbitration agreement; and whether
delay can be a ground for rescinding such agreement.
Dismissing the appeal, this Court,
HELD: 1. The Court has the power and jurisdiction under Ss. 5 and 12
to grant leave to the applicant in exceptional circumstances to revoke the
contract of arbitration. The Court should exercise the power sparingly,
cautiously and with circumspection in permitting a party to rescind an
arbitration agreement he had entered into voluntarily. (365-B)
2. By virtue of s. 37 of the Arbitration Act, the provisions of the
Limitation Act would apply to arbitrations, notwithstanding any term in the
contract to the contrary. (366·8)
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B
c
D
E
F
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3. The period oflimitation for the commencement of an arbitration runs
from the date on which, had there been no arbitration clause, the cause of H
361
362
SUPREME COURT REPORTS
(1993] 3 S.C.R.
A
action would have accrued, just as in the case of actions the claim is not to be
brought after the expiration of a specified number of years from the date on
which the cause of action accrued, so in the case of arbitrations, the claim is
not to be put forward after the expiration of the specified number of years
from the date when the claim accrued. (368-D-E)
B
Ram Dutt Ramkissendassv.Sassoon (E.D.) & Co. (1929) (56) IA 128 (PC);
Naamlooze V~nnootschap Handels-En-Transport Maatschappij 'Vulcatf v'.Vs.J.
Ludwig Mowinckels Rederi [1938) 2 AU ER 152; Pegler v. Railway Eucutive
[1948) AC 332 at 338 and; West Riding of Yorkshirtr Country Council v.
Huddersfield. Corporation [1957) 1 All ER 66'{and Russell on Arbitration;-t
C
Justice Bachawat, law of Arbitration, applied.
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4. Delay defeats justice: Defaulting party should hear the hardship and
should not transmit the hardship to the other party, after the claim in the
cause of arbitration was allowed to be barred. (369-F )
Mustiu and Boyd's Commercial Arbitration (1982 edn.), referred to.
5. The claim in the case on hand is undoubtedly hope-lessly barred by
limitation as the petitioner by his conduct slept over his right for more than
10 years. The High Court justifiably exercised the discretionary power and
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jurisdiction under Ss. 5 and 12 (2) (b) in permitting the respondent to rescind
the agreement. (370-E)
F
CIVIL APPELLATE JURISDICTION: Special Leave Petition (C) Nos.
4304-06 of 1993.
From the Judgment and Order dated 18.12.1992 of the Calcutta High Court
in Appeal from Original Order Nos. 105. 104. and 106 of 1991.
Panchugopal Bose-in-person for the Petitioner.
G
D.P. Gupta, Solicitor General, A.K Sil and G. Joshi for the Respondent.
The Judgment of Court was delivered by
K. RAMASWAMY. J.: These three Special Leave Petitions arise out of
Arbitration Agreement said to be executed by the petitioner on May 27, 1978
H
which provided that the petitioner had to execute the work within 9 months. It is
P.G. BOSS v. BOARD OFTRUSlEES [RAMASWAMY, J.)
363
his claim that while executing the work be sent the bills on July 12, 1979 but
A
payment was not made. For the first time he sent noticeoii Nov. 28,l989 to the
respondent for reference to the arbitration. On receipt thereof, the respondent filed
an arbitration suits in the Calcutta High Court under ss. 5, 12 and 33 of the
·Arbitration Act. 1940 for short 'the Ac(. The le"'11ed Single Judge held. that the
claim was hopelessly barred by limitition. There was no proof thaExcerpt shown. Read the full judgment & AI analysis in Lexace.