RASHTRIYA !SPAT NIGAM LTD. versus M/S. PRATHYUSHA RESOURCES & INFRA PRIVATE LIMITED AND ANR.

Citation: [2016] 2 S.C.R. 80 · Decided: 12-02-2016 · Supreme Court of India · Bench: PINAKI CHANDRA GHOSE, R.K. AGRAWAL · Disposal: Appeal(s) allowed

Judgment (excerpt)

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[2016] 2 S.C.R. 80 
RASHTRIYA !SPAT NIGAM LTD. 
v. 
MIS. PRATHYUSHA RESOURCES & INFRA PRIVATE 
LIMITED AND ANR. 
(Civil Appeal No. 3699 of2006) 
FEBRUARY 12, 2016 
[PINAKI CHANDRA GHOSE AND R.K. AGRAWAL, JJ.] 
Limitation - Notice of Arbitration. - Whether beyond- limitation 
C - Held: The cause of action arises when the real dispute arises i.e. 
when one party asserts and the other party denies any right - Jn 
the facts of the present case, the date when the. cause of action 
arose, was not beyond limitation period - Hence the notice of 
arbitration was not barred by limitation ·-Appeal is dismissed. 
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CIVIL APPELLATE JURISDICTION: Civil Appeal No. 3699 
of 2006 
From the Judgment and Order dated 16.12.2005 of the Division 
Bench of the High Court of Judicature for Andhra Pradesh at Hyderabad 
in C.M.A. No. 254 of2005. 
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Chander Uday Singh, Sr. Adv., Pratap Venugopal, Ms. Surekha 
Raman, Anuj Sarma, Ms. Niharika, (For M/s. K. J. John & Co.), Advs. 
with him for the Appellant. 
Mohan Parasaran, Sr. Adv., K. Raghavacharyulu, Sridhar Potaraju, 
Kai lash Pandey, Gaichang Pou Gangmei, Ranjit Singh,Arjun Singh, A. 
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Mukunda Rao Angara, Ms. Arunima Pal, Advs. with him for the 
Respondent. 
The Order of the Court was delivered by 
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I . The present appeal is filed by the appellant challenging the 
judgment and order dated 16.12.2005 passed by the Division Bench of 
the High Court of Judicature for Andhra Pradesh at Hyderabad, whereby 
the order dated·6.7.2004, passed by the learned District Judge, 
Vishakhapatnam, was set aside and the arbitration award was confirmed. 
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2. The appellant- Rashtriya lspatNigam Ltd., which is popularly 
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RASHTRIYA !SPAT NIGAM LTD. v. MIS. PRATHYUSI-iA 
81 
RESOURCES & INFRA PVT. LTD. 
known as Yisakhapatnam Steel Plant, is a Government of India 
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Undertaking, inter alia, engaged in manufacture and sale of steel products 
and pig iron in the domestic and export markets. Respondent No. I is a 
transporter, stevedoring, clearing & forwarding agent at Visakhapatnam. 
The appellant floated a tender vide Notification dated 31.03 .1992 for 
transportation of pig iron etc. from its Visakhapatnam Steel Plant to the 
Visakhapatnam Port area. Respondent No. I being the successful bidder, 
was awarded the work order on 28.07.1992. An Agreement was entered 
into between the appellant and respondent No. I on 24.02. I 993 which 
was to expire on 31.03.1993. But owing to circumstances, the work was 
extended several times and the contract was finally completed on 
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23 .10.1997. Issues arose as to the rate of escalation based on the base 
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year I 992 or 1994. Respondent No. I submitted final bill having three 
annexures out of which first two were admitted, however, the appellant 
·rejected the third one which was as to deciding the base year for 
cakulating escalation. 
3. The Arbitration Tribunal (consisting of a retired Judge of the 
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High Court) decided the five issues framed in favour of the respondent/ 
claimant whereby the base year was adjudged as 1992, the bar ofl imitation 
was negated and the calculations made by the Claimant were upheld. 
The appellant challenged the said award under Section 34 of the Arbitration 
Act, 1996 before the Ld. District Court which set aside the award as the 
relief was barred by limitation. Upon appeal under Section 37 oftheAct . E 
by the respondent/claimant, the High Court set aside the order of the 
District Judge and upheld the award of the Arbitrator. 
4. The appellant/ Employer herein have challenged the said Order 
of the High Court. The bone ofcontention in this appeal is the question 
ofreliefbeing barred by the law oflimitation. The appellant submit~ that 
the High Court has arrived at a wrong conclusion by invoking Article 
137 of the Limitation Act, 1963, and since the contract was in the nature 
of work contract, Article 18 would apply. This Article would thereby 
provide that the right to sue accrued when the contract was completed 
. i.e. 23. l 0.1997 and hence notice for arbitration was beyond the period 
oflimitation. The respondent/claimant also argued that the dispute as to 
determination of base year for calculating escalation arose vide letter 
dated 15.7.1996 and hence the notice for arbitration was issued beyond 
the period of limitation. Either ways the cause of action in favour of the 
resp.ondent/claimant accrued, if any, is an imperfect right. 
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SUPREME COURT REPORTS 
[2016] 2 

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