Arbitration and Conciliation Act, 1996 – s.11(6) – Petition under – Claims of Petitioners, if barred by limitation – Court exercising jurisdiction u/s 11(6) may reject ex-facie non-arbitrable or dead claims – Duty of the court to protect the parties from being compelled to arbitrate when the claim is demonstrably barred by limitation:
Held: Whether a claim is barred by limitation lies ordinarily within the domain of the arbitral tribunal – However, a Court exercising jurisdiction u/s 11(6) of the Act may reject ex-facie non-arbitrable or dead claims, to protect other party being drawn into protracted arbitration process that is bound to eventually fail – Court must ‘cut the deadwood’ by refraining from appointing an arbitrator when claims are ex-facie time-barred and dead, or there is no subsisting dispute – This examination does not involve a full review of contested facts but only a primary review, where contested facts speak for themselves – Such limited scrutiny is necessary as it is the duty of the court to protect the parties from being compelled to arbitrate when the claim is demonstrably barred by limitation – If courts don’t intervene within this limited compass and mechanically refer every dispute to arbitration, it may undermine the effectiveness of the arbitration process itself – On facts, the notices invoking arbitration were issued 11 years after the cause of action arose, which is well beyond the limitation period of 3 years and thus the claim which is sought to be raised is hopelessly barred by limitation. [Paras 5, 6, 8]
Arbitration and Conciliation Act, 1996 – s.11(6) – On dishonour of cheques given to petitioner, it instituted petition u/s.11(6) for appointment of arbitrator – In the interregnum, proceedings u/s.138 NI Act instituted against respondents – If a “continuing cause of action” – Negotiable Instruments Act, 1881 – s.138: Held: Initiation of arbitration and criminal proceedings under s.138 of NI Act are separate and independent proceedings that arise from two separate causes of action – Institution of proceedings u/s 138 does not imply “continuing cause of action” for purpose of initiating arbitration, as erroneously contended by petitioner. [Para 9]
As published in the Supreme Court Reports, Supreme Court of India. Headnotes prepared by: Bibhuti Bhushan Bose (With assistance from: Nivedita Rawat, LCRA) Section 21, Arbitration and Conciliation Act, 1996. Section 46(1), Arbitration and Conciliation Act 1996; Article 55 of the Schedule, Limitation Act, 1963. Sri Krishn. Text from the Indian Supreme Court Judgments open data set (Dattam Labs), CC BY 4.0.
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