S. RAJAN versus STATE OF KERALA AND ANOTHER

Citation: [1992] 3 S.C.R. 649 · Decided: 29-07-1992 · Supreme Court of India · Bench: P.B. SAWANT · Disposal: Dismissed

Cited by 1 judgment(s) · cites 2 · see the full citation network in Lexace

Judgment (excerpt)

S. RAJAN 
A 
v. 
STATE OF KERALA AND ANOTHER 
JULY 29, 1992 
[P.B. SAWANT AND B.P. JEEVAN REDDY, JJ.) 
B 
Arbitration Act, 1940-Section 20(1) read with Articles 137 and 113, 
-· -< 
Limitation Act, 1963-Application to appoint arbitrator-Period of limita-
tion-Three years from the date when the right to apply accrnes. 
-
Arbitration Act, 1940-Section 20( 1 }-Application to appoint ar-
bitrator-Court's power-Arbitration agreement specifies and names ar-
bitrator-Court's direction to submit panels for appointment of arbitrator 
-Legality of. 
c 
On 19.2.1966 an agreement was entered into between the appellant-
D, 
contractor and the respondent-State whereunder the appellant undertook 
to carry out certain work within a period of ten months. He did not 
complete the work within the period prescribed, whereupon the contract 
was terminated on 19.12.1968. The work was re-tendered and completed by 
another contractor. 
E 
-~ 
Respondent-State took proceedings under the provisions of the 
Revenue Recovery Act for recovering the loss suffered on account of the 
appellant's failure to carry out the contracted work. A notice of demand 
was served upon him on 30.5.1974. 
The appellant challenged the notice by way of a writ petition in the 
High Court, which was dismissed on 25.11.1978. 
In the year 1983, the ~ppellant applied to the respondent to refer the 
disputes between them to an arbitrator, which was refused in the year 1984. 
Thereafter the appellant filed an application under Section 20 of the 
Arbitration Act before the Subordinate Judge, for the appointment of an 
arbitrator to decide the disputes between him and the State of Kerala. 
The Subordinate Judge directed the parties "to submit their panels 
G 
of arbitrator to be appointed within ten days from the date of the order" l;I 
649 
650 
SUPREME COURT REPORTS 
[1992) 3 S.C.R. 
A 
for the purpose of the appointment of an Arbitrator to decide the disputes 
and differences between the parties. 
y-
Against the order of the Subordinate Judge, an appeal was filed by 
• 
the respondent-State before the High Court. 
B 
The Division Bench of the High Court allowed the appeal on the only 
ground that the very application under Section 20 was barred by Articles 
137 & Article 113 of the Limitation Act, 1963. 
The present appeal by special leave was filed by the contractor 
'r--
c against the judgment of the High Court, contending that no period of 
limitation was prescribed for making an application under Section 20 of 
the Arbitration Act either by that Act or the Limitation Act and that 
-
whenever differences or disputes arose between the parties, they could 
approach the court under section 20 of the Arbitration Act; that the 
D 
. appellant requested the Government to refer the disputes and differences 
between them to arbitration in the year 1983 which was rejected in the 
year 1984; that the application under Section 20 filed in 1985 could not be 
said to be barred by limitation, even if Article 137 or 113 was held to apply; 
that if the three years' period of limitation was applied, it would lead to 
very serious consequences and many arbitration disputes would become 
E 
barred by time. 
.,, 
Dismissing the appeal, this Court, 
'r 
HELD: 1.01. According to Article 137 of the Limitation Act, 1963 the 
period of three )Mrs' begins to run from the date when the "right to apply 
-
F 
accrues". [654F] 
1.02. According to the Sub-section(l) of Section 20 of the Arbitration 
-~-
Act, the occasion for filling the application arises when a difference arises 
between the perties to which the agreement applies. In such a case, it is 
G open to a party to apply under this section instead of proceeding under 
Chapter-II. bi other words, an application under Section 20 is an alterna-
tive to the proceedings under Chapter-II. (655 F-G] 
1.03 Reading Article 137 of the Limitation Act, 1963 and sub- section 
)--
(1) of Section 20 of the Aribitation Act together, it must be said that the 
H right to apply accrues when the difference arises or detTerences arise, as 
·. 
S. RAJAN v. STATE OF KERALA 
651 
the case may be, between the parties. It is thus a question of fact to be A 
-...ii( 
d~termined in each case having regard to the facts of that case. [6568) 
-
' ' 
·--< 
1.04. The dispute had arisen in 1974 with the service of the demand 
notice. Only in the year 1983, did the appellant choose to request the 
Government to refer the dispute to the arbitrator in terms of the agree-
men

Excerpt shown. Read the full judgment & AI analysis in Lexace.