Arbitration and Conciliation Act, 1996: s. 34 – Setting aside of arbitral award – Dispute regarding partnership accounts between the parties referred to arbitration – As a counter claim, the surviving partner of the appellant firm alleged that the respondent had falsified accounts and siphoned huge sums of money – Arbitrator concluded that the respondent was guilty of fraud – Application by the respondent for setting aside of award – Rejected by Single Judge of the High Court – Division Bench of the High Court held arbitrator’s method of proceeding backwards and looking at accounts of 21 years was unsustainable and set aside the award on the ground of public policy – On appeal, held: Appellant had knowledge of the alleged fraud, but made no attempt to positively enforce his claim for more than 3 years from the date of such knowledge – Further, no specific averments on allegation of fraud – Thus, no error by Division Bench of High Court in setting aside the award.
Limitation Act, 1963 – s. 17 – Effect of fraud or mistake – Start of period of limitation – Held: s. 17 is an exception to the rule that the period of limitation commences from the date of cause of action – However, where the condition contemplated under the provision exists (such as fraud), then subject to proof based on specific averments, date when limitation begins to be seen is date of knowledge of the plaintiff.
Vallabh Glass Works Ltd. v. Union of India [1984] 3 SCR 180; Commissioner of Sales Tax, UP v. Auriaya Chambers of Commerce, Allahabad [1986] 2 SCR 430; R. Radha Bai & Ors. v. P. Ashok Kumar & Ors. [2018]
12 SCR 143 – relied on.
As published in the Supreme Court Reports, Supreme Court of India. Text from the Indian Supreme Court Judgments open data set (Dattam Labs), CC BY 4.0.
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