VOLTAS LTD. versus ROLTA INDIA LTD.

Citation: [2014] 2 S.C.R. 797 · Decided: 14-02-2014 · Supreme Court of India · Bench: ANIL R. DAVE · Disposal: Case Partly allowed

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Judgment (excerpt)

[2014] 2 S.C.R. 797 
VOLTAS LTD. 
V. 
ROLTA INDIA LTD. 
(Civil Appeal No. 2073 of 2014) 
FEBRUARY 14, 2014 
[ANIL R. DAVE AND DIPAK MISRA, JJ.) 
ARBITRATION AND CONCILIATION ACT, 1996: ss.21, 
43 - Counter claim - Limitation period - Held: Limitation period 
A 
8 
for filing counter claim should be computed as on the date of C 
service of notice of such claim on the claimant and not on 
the date of final counter claim - Exception to the said rule is 
if a party. against whom a claim is made in arbitration can 
satisfy that he had previously made a claim against the 
claimant and sought arbitration by serving a notice to the 
D 
claimant - However, limitation cannot be saved solely on the 
ground that a party had previously in a notice vaguely stated 
that it would be claiming liquidated damages. 
JUDGMENT/ORDER: Binding effect of - Held: A 
, judgment is not to be read as a statute but to understand the 
coffect ratio stated in the case it is necessary to appreciate 
the repetitive use of the words. 
E 
The appellant and the respondent entered into a civil 
construction contract for construction of buildings. 
F 
Dispute arose between them and on 03.12.2004, the 
respondent terminated the contract. By letter dated 
29.03.2006, the appellant invoked the arbitration clause. 
On 17.04.2006, the respondent denied any amount being 
payable by them and called upon the appellant to pay 
G 
Rs.68.63 crores. The appellant filed an application for 
appointment of arbitrator and a sole arbitrator was 
appointed by the High Court. Before the arbitrator, the 
appellant filed its statement of claim on 13.04.2011 
797 
H 
798 
SUPREME COURT REPORTS 
[2014] 2 S.C.R. 
A claiming Rs. 23.31 crores. The respondent filed statement 
of defence and counter claim of Rs.333.73 crores on 
24.08.2011. The Arbitrator passed interim order that the 
limitation for making a counter claim is required to be 
asserted with reference to the date on which the cause 
B of action arose and the date on which counter claim was 
filed. The respondent filed an application under Section 
34 of Arbitration Act for setting aside decision of 
Arbitrator. The Single Judge of the High court rejected the 
section 34 application holding that when the notice was 
c given by the appellant on 29.03.2006, the said notice was 
only in respect of the disputes having arisen between the 
parties due to refusal of claims made by the respondent. 
On the date of issuance of such notice, the respondent 
had not even asserted its claim and after issuance of 
0 notice dated 29.03.2006, the respondent by its letter dated 
17.04.2006 had asserted its claim for the first time and, 
therefore, counter claim was beyond the period of 
limitation. On appeal, the Division Bench of the High 
Court set aside the order of the Single Judge. Hence the 
E instant appeal. 
Partly allowing the appeal, the Court 
HELD: 1.1. By letter dated 01.03.2005, the appellant, 
while referring to the letter dated 03.12.2004 issued by the 
F respondent terminating the contract on the ground of 
alleged delay and default in completion of the project, 
without prejudice had made a request for payment of final 
bill in full and settle the claim made therein at the earliest. 
It was also suggested therein that if the respondent 
G needed any additional information or material in support 
of the claim put forth, the appellant would furnish the 
same. On 18.03.2005, the respondent communicated to 
the appellant that it would compute its losses, damages, 
costs, charges, expenses, etc. after the building work was 
over and claim the same from the appellant. The appellant 
H 
VOLTAS LTD. v. ROLTA INDIA LTD. 
799 
by letter dated 7.4.2005 intimated the respondent that it A 
was not liable to pay any alleged losses, damages, costs, 
charges and expenses, allegedly suffered by the 
respondent. On 27 .04.2005 by another communication an 
assertion was made about the losses suffered by the 
respondent. The respondent asseverated that it was not 
B 
liable to pay to the appellant any compensation and 
damages or other amounts as claimed in the letter dated 
01.0~.2005. In fact, the respondent was compelled to 
terminate the contract as per the recommendation of the 
architects and the respondent had suffered huge losses c 
and damages and had incurred heavy costs, charges and 
expenses for which the appellant was solely responsible. 
It was also mentioned in the letter that the respondent 
reserved its right to take appro

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