The Hon’ble Supreme Court in the case titled as “Vishram Vanu and Ors Versus Union of India”, Civil Appeal No:2964 of 2022, was considering an appeal where the dispute arose in the year 1985/1986 but the appellant invoked the arbitration clause 32 years later by sending a legal notice.
The facts of the case were:
That the appellant was given work order in the year 1982 and the work was executed till year 1986. According to the appellant, he executed work in excess to scheduled quantity of work to be done. Therefore, he was entitled to the additional amount for the excess quantity of work done. It was the case on behalf of the appellant that a lot of correspondence was made by the appellant, however, the amount due and payable with respect to the excess quantity of work done was still not paid. The appellant through letter dated 31.05.2018 requested the respondent to release the amount due or refer the dispute to the arbitrator under clauses 63 & 64 of General Conditions of Contract (GCC) under the 1996 Act, however, no action was taken on the said letter. Thereafter, the appellant sent a legal notice through his advocate on 31.07.2019 invoking the arbitration clause and seeking appointment of an arbitrator by the office of the General Manager. However, Respondent’s failure to appoint an arbitrator compelled him to approach the Hon’ble Calcutta High Court under Section 11(6), which dismissed his petition on the ground that “the arbitration petition in 2019 is hopelessly barred by limitation.“
Feeling aggrieved and dissatisfied with the impugned order passed by the Hon’ble High Court, an appeal was preferred. It was submitted on behalf of the appellant that in the present case, right to apply under Section 11(6) of the 1996 Act can be said to have accrued when the legal notice invoking arbitration clause and the request to appoint the arbitrator by the General Manager was made and the period of limitation would commence after 30 days of serving the legal notice invoking the arbitration clause and making a request to appoint arbitrator.
Considering the facts of the present case, the Hon’ble Supreme Court has held that:
“Merely because for the claim/alleged dues of 1985/1986, the legal notice calling upon the respondent to pay the amount due and payable or to refer the dispute to the arbitrator is made after a period of approximately thirty-two years, the appellant cannot be permitted to say that the cause of action to file the application under Section 11(6) of the 1996 Act had accrued in the year 2018/2019. In the instant case, the legal notice has been served for the purpose of invoking arbitration clause and request to appoint the arbitrator was made after a period of approximately thirty-two years from the date of completion of work. Therefore, the appellant, who served the legal notice invoking the arbitration clause and requesting for appointment of an arbitrator after a period of approximately thirty-two years, cannot contend that still his application under Section 11(6) of the 1996 Act be considered as the limitation would start from the date of serving the legal notice and after completion of 30 days from the date of service of the legal notice and invoking arbitration clause.
…….Therefore, the High Court has not committed any error in dismissing the application under Section 11(6) of the 1996 Act on the ground that it is hopelessly barred by limitation and is a stale claim.”