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  • provisions of Order XXXII of the Code. Although the Act and the Rules
  • Arbitration Act, 1940 or the Arbitration and Conciliation Act, 1996
  • Section 37(3) of the old Act and Section 21 of the present Act
  • Section 9 of The Arbitration and Con ciliation Act, 1996,
  • sub-sections (3) and (4) of Section 37 of the old Act
  • 1996 Act is applied.21. Section 43 of the 1996 Act
  • Rule 6A of Order VIII postulates; this provision
  • Section 18 of Railways Claims Tribunal Act,
  • provisions of Section 21 of the new Act.
  • Article 137 of the Limitation Act, 1963,
  • SECTION 20 ARBITRATION ACT 1940
  • LIMITATION ACT 1908
  • provisions of the new Arbitration Act.
  • SECTION 3 LIMITATION ACT 1963
  • Section 3(2) (a) of the Limitation Act.
  • Article 137 of the Limitation Act.
  • SECTION 5 LIMITATION ACT
  • Sections 43(2) and Section 21.4.
  • Section 37(3) of the old Act
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  • Section 21 of the 1996 Act.
  • Amendment Act of 1976
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  • Section 3 (2) (b)
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Cites
Cited by
Citation Codes
Equivalent Citations
citation codes
Case Number
Attorney(S)
Judges
Acts
  • provisions of Order XXXII of the Code. Although the Act and the Rules
  • Arbitration Act, 1940 or the Arbitration and Conciliation Act, 1996
  • Section 37(3) of the old Act and Section 21 of the present Act
  • Section 9 of The Arbitration and Con ciliation Act, 1996,
  • sub-sections (3) and (4) of Section 37 of the old Act
  • 1996 Act is applied.21. Section 43 of the 1996 Act
  • Rule 6A of Order VIII postulates; this provision
  • Section 18 of Railways Claims Tribunal Act,
  • provisions of Section 21 of the new Act.
  • Article 137 of the Limitation Act, 1963,
  • SECTION 20 ARBITRATION ACT 1940
  • LIMITATION ACT 1908
  • provisions of the new Arbitration Act.
  • SECTION 3 LIMITATION ACT 1963
  • Section 3(2) (a) of the Limitation Act.
  • Article 137 of the Limitation Act.
  • SECTION 5 LIMITATION ACT
  • Sections 43(2) and Section 21.4.
  • Section 37(3) of the old Act
  • Section 16 of the 1996 Act
  • Section 21 of the 1996 Act.
  • Amendment Act of 1976
  • LIMITATION ACT 1963
  • Rule 6-A areA
  • Section 3 (2) (b)
Smart Summary

Judgment Summary: Vikramajit Sen, J.

Factual and Procedural Background

The dispute arises from a contract executed on 19.10.1989 between Oil and Natural Gas Corporation Limited (the Petitioner/ONGC) and Amtek Geophysical Pvt. Ltd. (the Respondent/Amtek) for 2D seismic data acquisition in several basins. The Petitioner alleges deficient performance by the Respondent, issuance of multiple notices in 1993 for resumption of work, and invocation of a bank guarantee on 31.12.1993. The Respondent filed a petition under Section 20 of the Arbitration Act, 1940, which eventually reached the Supreme Court; by an order dated 19.4.2002 the Supreme Court directed that arbitration proceedings would proceed under the 1996 Act but allowed parties to challenge the award under either statute.

Procedurally, the Respondent requested reference to arbitration on 28.10.1996 and filed its Statement of Claim on 19.1.1998. The Petitioner filed preliminary objections, and on 30.5.1998 filed a Defence Statement which included a brief statement (paragraph 14(c)) that the Petitioner would file a detailed counter-claim separately. Arbitral proceedings were adjourned sine die for nearly four years and were revived in December 2002. The Petitioner filed a Counter Claim on 11.7.2003 together with an application for condonation of delay; the Arbitral Tribunal dismissed the application and rejected the Counter Claim on 17.8.2004 as time-barred. The Petitioner challenged the Tribunal's order by filing the present petition.

Legal Issues Presented

  1. Which arbitration statute governs the proceedings — the Arbitration Act, 1940, or the Arbitration and Conciliation Act, 1996 — and the consequences of that choice for limitation rules?
  2. Whether the Petitioner's Counter Claim (filed on 11.7.2003) was time-barred and, if so, whether the Arbitral Tribunal was right to dismiss it for delay and refuse condonation.
  3. Whether a simple averment in the Defence Statement (para. 14(c)) that the respondents would raise claims separately operates as a commencement of arbitral proceedings (or as a notice under Section 37(3) of the 1940 Act / Section 21 of the 1996 Act) so as to stop limitation from running.
  4. Whether a demand letter dated 3.9.1998 from the Petitioner constituted a notice initiating arbitration under the 1996 Act (Section 21) or otherwise prevented the Counter Claim from becoming time-barred.

Arguments of the Parties

Petitioner's Arguments (as articulated by Mr. Sundaram, Senior Counsel)

  • For limitation purposes, what matters is institution/commencement of proceedings and not merely filing of pleadings.
  • In some proceedings (e.g., a suit under the CPC) institution arises through filing pleadings; however, under arbitration the institution commences by giving a notice of dispute (relying on Section 43(2) and Section 21).
  • Any delay should relate only to condonation of delay in filing pleadings as directed and there is no bar under Section 3 of the Limitation Act to such condonation.
  • The cryptic statement in the Defence Statement (that counter-claims would be filed separately) should be treated as a step commencing the petitioner's claim — i.e., equivalent effect to a cross suit / counter-claim so as to prevent time from running against the Petitioner.
  • The delay in filing the Counter Claim was explained by the Petitioner as attributable to pursuing remedies before courts, which only concluded on 19.4.2002, and thereafter proceedings effectively recommenced in January 2003; the Counter Claim filed in July 2003 followed without undue delay.

The opinion does not contain a detailed, itemized account of the Respondent's counter-arguments beyond factual chronology of their initiating arbitration and filing claims; accordingly only the Petitioner's detailed submissions are summarized above.

Table of Precedents Cited

Precedent Rule or Principle Cited For Application by the Court
SLP No. 5211/2002 (Supreme Court Order dated 19.4.2002) Directed that arbitration proceedings proceed under the new Arbitration Act (1996) but allowed parties to challenge any award under either Act; left the applicability of old or new Act to courts when raised later. Court treated the question of which Act applies as open and considered both statutes' provisions (old Act and 1996 Act) when analysing limitation and commencement; relied on the Supreme Court's modification to proceed under the new Act but to permit challenges under either Act.
Sundaram Finance Ltd. v. Nepc India Ltd., (1999) 2 SCC 479 Section 9 of the 1996 Act: an application under Section 9 is maintainable before commencement of arbitral proceedings but requires manifest intention to commence arbitration within a reasonable time; proximity between interim relief application and intended arbitration is required. Court extrapolated that any party with a claim must invoke the arbitration clause and initiate proceedings promptly; used the decision to emphasise the requirement of manifest intention and expedition in invoking arbitration.
Firm Ashok Traders & Another v. Gurumukh Das Saluja & Others, (2004) 3 SCC 155 Clarified and qualified Sundaram Finance principles regarding Section 9 and the need for manifest intention to commence arbitration. Court relied on paragraph 17 of Firm Ashok to underline that a party must show proximate intention to commence arbitration when seeking interim relief before arbitration and that delay undermines such proximity.
Ramesh Chand Ardawatiya v. Anil Panjwani, (2003) 7 SCC 350 Rule 6-A / Order VIII, Rule 6-A — a counter-claim must find its place in the written statement; counter-claim runs with the right to file a written statement; court discretion to allow belated pleading must be exercised reasonably considering conduct and prejudice. Court applied the ratio to hold that a counter-claim that is not filed with the written statement and that is time-barred cannot be allowed belatedly as of right; supported the conclusion that the Petitioner's cryptic statement did not operate as a proper counter-claim institution.
A.A. Haja Muniuddin v. Indian Railways, AIR 1993 SC 361 Tribunal/tribunal-like bodies not strictly bound by Code procedure; may follow principles of natural justice and, where appropriate, procedure analogous to CPC Order XXXIII/XXXII to effect justice. Court accepted that arbitrators may draw upon broad procedural principles and analogues in CPC, but emphasised that core principles (e.g., timely articulation of claims) remain applicable; used to justify applying CPC analogies to counter-claims in arbitration.
Union of India v. Momin Construction Company, AIR 1995 SC 1927 Article 137 of the Limitation Act (1963) applies to petitions/applications under Section 20 of the Arbitration Act; a petition under Section 20 must be filed within three years from accrual of cause of action. Court cited this authority to support the proposition that limitation runs from the date the cause of action arose and that belated Section 20 petitions are time-barred; applied this to determine the Petitioner's claims were stale.
State of Orissa v. Damodar Das, (1996) 2 SCC 216 Section 3 of the Limitation Act requires courts to consider limitation even if not pleaded; purpose is to prevent stale claims. Court relied on this principle (as reiterated by later Supreme Court authorities) to hold that limitation must be considered regardless of pleadings and that the petitioner's claims could not circumvent limitation rules.
Panchu Gopal Bose v. Board of Trustees for Port of Calcutta, (1993) 4 SCC 338 Period of limitation for commencing arbitration runs from the date the cause of arbitration accrued, i.e., when claimant first acquired a right of action or right to require arbitration. Court cited the rule to conclude that limitation for the Petitioner's claims ran from the date the cause of action accrued (not from later events) and that these claims had become time-barred.
Steel Authority of India Ltd. v. J.C. Budharaja, 1999 (3) Arb. LR 335 (S.C.) Reiterated that limitation for arbitration runs from date cause of action accrued; reference to Russell on Arbitration for the same principle; clarified that arbitration clause does not postpone accrual of cause of action for limitation purposes. Court relied on Budharaja (and its discussion) to state that time runs from the normal date the cause would have accrued had there been no arbitration clause and applied that principle to the Petitioner's case.
Asia Resorts Ltd. v. Usha Breco Ltd., AIR 2002 SC 55 : (2001) 8 SCC 710 Confirms (a) petition under Section 20 must be filed within three years from date cause of action arises; (b) Section 5 of the Limitation Act can be applied to such petitions. Court relied on Asia Resorts to emphasise the strictness of the three-year rule for Section 20 petitions and noted that Section 5's discretionary relief may apply but was not available on these facts to revive Petitioner's stale claims.
S. Rajan v. State of Kerala, AIR 1992 SC 1918 Period of limitation for filing application under Section 20 governed by Article 137 of the Limitation Act; right to seek reference arises on service of demand notice or similar event. Court cited S. Rajan in tracing accrual dates and reinforcing that rights under Section 20 arise when differences first crystallize (e.g., upon service of demand) and limitation runs from that date.
Major (Retd.) Inder Singh Rekhi v. Delhi Development Authority, (1988) 3 SCR 351 Three-year period for Section 20 must be computed from accrual of cause of action; a right to seek reference arises when the underlying dispute arises. Court applied the principle that the cause of action date governs limitation computation and used this to reject Petitioner's contention that later steps tolled limitation.
Town Municipal Council, Athani v. Presiding Officer, Labour Court, Hubli, (1970) 1 SCR 51 : AIR 1969 SC 1325 Earlier authority on scope of Article 137; subsequently clarified by later cases (Kerala State Electricity Board) that Article 137 applies widely to petitions to civil courts. Court referred to the subsequent overruling/clarification trajectory to show that Article 137 applies to Section 20 petitions and limitation principles must be strictly applied.
Kerala State Electricity Board v. T.P.K.K. Amsom, (1977) 1 SCR 996 : AIR 1977 SC 282 Article 137 of the Limitation Act applies to any petition or application filed under any Act to a Civil Court; not confined to CPC applications. Court cited this to support the applicability of Article 137 (and Limitation Act rules) to arbitration-related petitions and Section 20 filings.
M/s. Oriental Building & Furnishing Co. Ltd. v. Union of India, AIR 1981 Delhi 293 Decision was described as per incuriam in the present opinion; relates to when a dispute arises and limitation's commencement. Court held that Vijay Construction Co. decision (and subsequent Supreme Court authority) should prevail over Oriental Building if there is inconsistency; used it to reject any argument that Section 20 filing injects elasticity that revives time-barred claims.
Union of India & another v. M/s. Vijay Construction Co., AIR 1981 Delhi 193 Dispute arises on rescission or event giving clear intimation of breach; awaiting reply to a request for arbitration does not save limitation already running from rescission/initial event. Court relied on this decision to support that the right to apply for arbitration depends on the date the dispute arose and that mere waiting for a reply does not stop limitation; used it to reject Petitioner's contention that later procedural steps saved their claim.
Shankar Construction Co. Pvt. Ltd. v. Union of India, AIR 1984 Calcutta 317 Discussed divergence of view between High Courts on applicability of Section 20 and when it operates; considered whether differences must first have arisen. Court noted divergence historically but treated Vijay Construction / Supreme Court authorities as prevailing; used the discussion to contextualize the limitation rules applied.
Russell on Arbitration (Anthony Walton, 19th Edn.) Textual authority: period of limitation for commencing arbitration runs from date the 'cause of arbitration' accrued — when claimant had a right of action or to require arbitration. Cited in support of established principle that limitation for arbitration accrues when the cause of action would have accrued had there been no arbitration clause; used to underpin the court's limitation analysis.

Court's Reasoning and Analysis

The Court proceeded through a chronological and legal analysis, grounded in the facts and in established authorities:

  1. Chronology and core factual points: the Respondent sought reference to arbitration on 28.10.1996 and filed its Statement of Claim on 19.1.1998; the Petitioner filed a Defence Statement on 30.5.1998 which included a brief, non-specific assertion that detailed counter-claims would be filed separately (para. 14(c)). For nearly four years arbitration was adjourned; proceedings resumed in December 2002; the Petitioner filed a Counter Claim on 11.7.2003 and an application for condonation which the Tribunal dismissed and the Tribunal rejected the Counter Claim on 17.8.2004 as time-barred.
  2. Legal framework on limitation: the Court analysed both the old Arbitration Act, 1940 and the Arbitration and Conciliation Act, 1996 because the Supreme Court's earlier order left applicability open. Under the old Act, Section 37(3) deemed arbitration to commence when one party served notice requiring appointment of arbitrator; under the 1996 Act, Section 21 states proceedings commence when a request to refer a dispute to arbitration is received by the respondent. Section 43 of the 1996 Act and Section 37 of the old Act make Limitation Act rules applicable to arbitrations.
  3. Precedent synthesis on accrual and limitation: the Court surveyed binding Supreme Court authorities (e.g., Panchu Gopal Bose, Budharaja, Asia Resorts, S. Rajan, Momin Construction) to conclude that limitation for arbitration or for initiating reference runs from the date the cause of action/differences first arose and that Section 20 petitions must be filed within three years of accrual. The Court emphasised that Section 3 of the Limitation Act requires courts to consider limitation even if not pleaded.
  4. Application to Petitioner's material acts: the Court tested whether the Defence Statement's cryptic paragraph 14(c) could be treated as a notice under Section 37(3) (old Act) or Section 21 (1996 Act). The Court found it could not: it was not addressed to the Respondent (Amtek) or to a person capable of appointing an arbitrator; it lacked material particulars about the claim; it was addressed to the Arbitral Tribunal adjudicating the Respondent's claims and did not constitute a clear request to refer a distinct dispute to arbitration.
  5. The Court examined the Petitioner's letter dated 3.9.1998 demanding payment (stating claims of Rs. 24.49 crores and interest) and concluded that, although it detailed claims, it was a peremptory demand for payment rather than a notice requesting reference to arbitration under Section 21. The Court noted that if the Petitioner intended arbitration, it ought to have taken concrete steps (e.g., under Section 11/Section 20 or by referring matters timely to the already constituted Tribunal) within the limitation period.
  6. On the argument that a simple averment in the Defence Statement stopped limitation: the Court relied on civil procedure analogies (Rule 6-A / Ramesh Chand Ardawatiya) and held that counter-claims must be filed with the written statement and that a mere statement of intention does not constitute institution. The Court emphasised common-sense and sound procedural principles: a claim must be articulated at the earliest opportunity, typically in the written statement or by commencing separate proceedings.
  7. Final application: the Court held that time, as to the claims raised by the Petitioner, began to run in October 1996 when the Respondent sought reference to arbitration and any claims by the Petitioner ought to have been raised with its written statement or by other proceedings within three years of that date. The Counter Claim filed in July 2003 was therefore time-barred under either Act and the Tribunal's dismissal of the condonation application and rejection of the Counter Claim was justifiable.

Holding and Implications

DISMISSED

Holding (direct effect): The petition is dismissed. The Arbitral Tribunal's impugned order rejecting the Petitioner's Counter Claim as time-barred and dismissing the condonation application is upheld. The Court found that neither the Defence Statement's cryptic averment nor the Petitioner's letter dated 3.9.1998 sufficed to constitute a valid notice/request to commence arbitration under the relevant statutory provisions, and the Petitioner's Counter Claim had become time-barred.

Broader implications: The opinion applies and reiterates established principles from Supreme Court authorities regarding accrual of cause of action for arbitration and the strict operation of limitation — i.e., limitation runs from date of accrual and mere procedural or cryptic statements do not revive or stop limitation. The Court did not purport to lay down a novel precedent; it applied existing authorities and procedural principles to the facts and concluded the Petitioner's claims could not be adjudicated due to limitation.

    Oil & Natural Gas Corporation Ltd. Petitioner v. Amtek Geophysical Pvt. Ltd.

    Vikramajit Sen, J.:— The parties have been litigating with each other with ferocity for several years. Observations were made by this Court to the effect that the Oil and Natural Gas Corporation Limited (hereinafter referred to as the Petitioner) had adopted dilatory tactics in the Claims raised by Amtek Geophysical Pvt. Ltd. (hereinafter referred to as the Respondent) which are the subject matter of arbitration proceedings. One of the contentions that had arisen was whether the Arbitration Act, 1940 or the Arbitration and Conciliation Act, 1996 would govern the arbitral proceedings. In SLP No. 5211/2002 the Hon'ble Supreme Court had passed the following Order while disposing of the Petition on 19.4.2002:

    By consent of parties, the order of the High Court is modified as follows:

    The arbitration proceedings will go on under the provisions of the new Arbitration Act. However, any party aggrieved by the Award to be passed by the Arbitrator will be at liberty to challenge the same either under the old or the new Act and, if any objection is raised by any of the opposing parties as to the applicability of the old or the new Act, the same shall be decided by the court concerned independently without being influenced by the impugned order in this special leave petition. With this modification, the SLP is disposed of.

    2. The contentions that have been raised before me have been articu lated by Mr. Sundaram, learned Senior Counsel for the Petitioner as fol lows:

    1. For the purpose of limitation what is relevant is the institution of proceedings and not filing of pleadings.

    2. In some cases like a suit under CPC, institution of proceedings arises through the filing of pleadings.

    3. However, under the Arbitration Act, the institution of proceedings for the purpose of limitation is through giving of notice of dispute. See Sections 43(2) and Section 21.

    4. Any delay would only be for condoning the delay in filing pleadings as directed and there is no bar under Section 3 of the Act that such delay should not be considered.

    This is in the context of the decision dated 17.8.2004 of the learned Arbitral Tribunal dismissing the Counter Claim filed by the Petitioner for the reason that it could not be entertained on the date on which it was filed. The application seeking condonation of delay was dismissed.

    3. The annals of the litigation, in brief, is that the Petitioner had, in 1986, invited Tenders for Acquisition of 2D Seismic Data in India. After detailed discussions and negotiations Works were awarded on 17.10.1988 to the Respondent for Cambay Basin (Gujarat) and Assam/Nagaland region; and for the Cauvery Basin and Krishna Gadavary Basin on two other parties. The Contract was executed between the Petitioner and the Respondent on 19.10.1989 It is the case of the Petitioner that even after the expiry of the stipulated period of nine months for mobilisation of equipment and crew, it gave as many as ten extensions to the Respondent. The Petitioner further asserts that almost no work was carried out by the Respondent in the Cambay area. On 28.12.1993 several notices were issued by the Petitioner to the Respondent for resumption of work. Eventually on 31.12.1993 the Petitioner invoked a Bank Guarantee furnished by the Respondent. This led to the filing of a petition under Section 20 of the Arbitration Act, 1940 by the Respondent being the springboard for the litigation which had reached the Hon'ble Supreme Court which was disposed of by its Order dated 19.4.2002 On 23.4.1997 the Petitioner appointed Justice Rajinder Sachar, Retired Chief Justice of the Delhi High Court as its Arbitrator. By a communication dated 9.11.1996 the Respondent appointed Late Shri R. V. Reddy as their Arbitrator. In December 1997 Justice K. Amareswari (Retired) was appointed as the Presiding Arbitrator by these two Arbitrators. On 22.11.2002 Shri R.V Reddy died and consequently Dr. Avtar Singh was appointed in his place in December, 2002. It has been stated in the Petition that between December, 2002 and July, 2003 the Petitioner made considerable efforts to locate the records pertaining to the Counter Claim.

    4. Mr. Sundaram has submitted that the request for submission of disputes to arbitration was made by the Respondent on October 28, 1996, despite the execution of the Deed of Settlement dated 8.6.1995, which the Petitioner has affirmed in its oral as well as written arguments. The Respondent proffered its Statement of Claim before the Arbitral Tribunal on 19.1.1998 Thereafter the Petitioner filed its Preliminary Objection dated 26.3.1998 It appears that the Arbitral Tribunal had deferred the consideration and decision on these Objections. On 30.5.1998 the Petitioner filed its Defence Statement containing the following:

    14. GENERAL:—

    (a) Unless otherwise specifically admitted the respondents deny all the claims raised by the claimants in the statement of facts and all the allegations made by the claimants against the respondents regarding the breaches of contract.

    (b) In view of the limited time, the respondents are not in position to submit in this counter statement a copy of all the letters relevant to the claims. They crave the permission of the Learned Arbitrators for submission of these documents in due course.

    (c) The respondents are also raising their claims against the claimant separately. The detailed statement of counter-claims will be filed separately.

    15. PRAYER:

    In reply to the prayer clause the respondents most respectfully submit that the Hon'ble arbitrators may be pleased to:—

    (a) to adjudicate and decide the portion of the claim No. 3.1 only of the claimants pertaining to stand-by charges for 88 days as were agreed to be referred for arbitration.

    (b) dismiss and reject all the claims as have been raised by the claimant more particularly claims detailed in paras 3.2 to 3.9

    (c) to reject the prayers 4.1 to 4.8 made by the claimants in the last page of the statement of facts/claims.

    (d) to declare that this Hon'ble Arbitral Tribunal has no jurisdiction to adjudicate on the remaining claims (all claims excepting claim No. 3.1) of the claimants raised by them in their statement of facts/claims.

    (e) to award costs to the respondents for having to defend an unwanted arbitration proceedings.

    (f) to grant such other relief or reliefs as the Hon'ble Arbitral Tribunal considers the respondents as entitled to in the facts and circumstances of the case.

    PLACE:For and on behalf of

    DATED:30.05.1998Oil & Natural Gas Corpn. Ltd.

    RESPONDENT THROUGH ADVOCATE

    5. Owing to the initiation and pendency of litigation arbitral proceed ings are stated to have been adjourned sine die for almost four years and were revived in December, 2002.

    6. My attention has been drawn to the Petitioner's letter dated 3.9.1998 addressed to the Respondent with reference to the subject contract stating therein that - “ONGC has suffered heavy losses and accordingly.... has the following claims on you which you are liable to pay and reimburse to our organisation. The details of the claim as are due and payable by you on account of your various illegal acts and non performance of your contractual obligation are enclosed as separate Annexure.

    ...... You are hereby by way of this notice called upon to pay and remit to ONGC the above mentioned sum of Rs. 24.49 crores along with interest accrued thereon at current market rate of interest @ 22% per annum from the date of the accrual of the claim to the date of payment, within 15 days from receipt thereof, failing which we shall be constrained to take appropriate legal action in the matter as may be advised, which shall be filed at your risk, cost and expenses”. The question to be answered is whether this communication is indicative of the Petitioner's intent to set the arbitral proceedings into motion, if the cryptic sentence in the Defence Statement is not so; or does the letter disclose a demand for payment of money simpliciter de hors and distinct from the arbitration clause.

    7. Very often one gets so embroiled in esoteric legal arguments that we fail to perceive what is patently obvious. If A has a claim or grievance against B plain commonsense expects A to articulate it at the very earliest occasion. The case of the Petitioner is that almost from the inception of the contract the Respondent failed to perform its obligations according to the tenor of the agreement, yet it did not take any legal action for several years. Despite an alleged ‘Settlement’ in 1995, on a demand for arbitration being raised by the Respondent in October, 1996, the Petitioner did not consider it imperative to raise and thereafter litigate upon its own claims. Assuming that the communication dated 3.9.1998 was not a simple demand for damages and was a sequel to the intent of the Petitioner to raise its own claim in arbitration, the question to be answered is why were steps not taken before the Arbitral Tribunal immediately. In the Petitioner's Written Synopsis filed in Court on 4.10.2004 there is a mention for the first time of a letter dated 13.08.1997 copy of which is not forthcoming.

    8. At this stage it would be relevant to briefly discuss the decision of the Hon'ble Supreme Court in Sundaram Finance Ltd. v. Nepc India Ltd., (1999) 2 SCC 479 and the clarification made thereto by the Hon'ble Supreme Court in Firm Ashok Traders and Another v. Gurumukh Das Saluja and Others, (2004) 3 SCC 155. While it is true that the Apex Court was dealing with the Section 9 of The Arbitration and Con ciliation Act, 1996, it would not be unfair to extrapolate upon the decision by holding that any party having a claim against another, must invoke the Arbitration Clause and initiate proceedings with expedition. Paragraph 17 of Firm Ashok's case (supra) reads thus;

    17. There are two other factors which are weighing heavily with us and which we proceed to record. As per the law laid down by this Court in Sundaram Finance Ltd. an application under Section 9 seeking interim relief is maintainable even before commencement of arbitral proceedings. What does that mean? In Sundaram Finance Ltd. itself the Court has said:

    It is true that when an application under Section 9 is filed before the commencement of the arbitral proceedings, there has to be manifest intention on the part of the applicant to take recourse to the arbitral proceedings. Section 9 permits application being filed in the court before the commencement of the arbitral proceedings but the provision does not give any indication of how much before. The word “before” means, inter alia, “ahead of; in presence or sight of; under the consideration or cognizance of”. The two events sought to be interconnected by use of the term “before” must have proximity of relationship by reference to occurrence; the later event proximately following the preceding event as a foreseeable or “within-sight” certainly. The party invoking Section 9 may not have actually commenced the arbitral proceedings but must be able to satisfy the court that the arbitral proceedings are actually contemplated or manifestly intended (as Sundaram Finance Ltd. puts it) and are positively going to commence within a reasonable time. What is a reasonable time will depend on the facts and circumstances of each case and the nature of interim relief sought for would itself give an indication thereof. The distance of time must not be such as would destroy the proximity of relationship of the two events between which it exists and elapses. The purpose of enacting Section 9, read in the light of the Model Law and UNCITRAL Rules is to provide “interim measures of protection”. The order passed by the court should fall within the meaning of the expression “an interim measure of protection” as distinguished from an all-time or permanent protection”.

    9. On 11.7.2003 a Counter Claim was filed by the Petitioner along with an application for condonation of delay, which application has been disposed of by the impugned Orders of the Arbitral Tribunal. Issues were framed on 28.2.2003 and 24.4.2003 Evidence has been recorded in the form of Affidavits.

    10. It is contended on behalf of the Petitioner that on 17.8.2004 the Tribunal rejected the Counter Claim on the grounds that it had been proffered after the lapse of five years from 30.5.1998 The contention is that there can be only one date for commencement of arbitration proceedings between the parties and that even a simple and single averment in the Defence Statement that a Counter Claim would be filed should be taken as a step for commencement of arbitration proceedings. It is also mentioned in the Written Submissions that the delay in filing the Counter Claim was for the reason that Petitioner “ was pursuing appropriate remedy before a competent Court of law, which was only decided on 19.4.2002 by the Hon'ble Apex Court and thereafter the proceedings effectively recommenced only in January 2003 whereafter the counter-claims which were filed on 11th July 2003 without any undue or unexplained delay”. Emphasis has also been laid on the fact that on 22.11.2003 the Arbitral Tribunal had stated that the issue of Counter Claim will be decided along with the main Claim. In my view, this, however, does not preclude the Tribunal from chartering a different course after hearing the parties concerned. I find no substance in the Petitioner's submission that the Tribunal failed to appreciate that the Counter Claim has the same effect as a Cross Suit so as to enable the Tribunal to pronounce a final judgment in the same proceedings. No decisions have been placed before me to the effect that even a time barred Counter Claim must be adjudicated upon and decided merely because another Claim is pending consideration. In Ramesh Chand Ardawatiya v. Anil Panjwani, (2003) 7 SCC 350 it has been opined thus:—

    26. A perusal of the abovesaid provisions shows that it is the Amendment Act of 1976 which has conferred a statutory right on a defendant to file a counter-claim. The relevant words of Rule 6-A are—

    A defendant in a suit may, in addition to his right of pleading a setoff under Rule 6, ..... before the defendant has delivered his defence or before the time limited for delivering his defence has expired... These words go to show that a pleading by way of counter-claim runs with the right of filing a written statement and that such right to set up a counter claim is in addition to the right of pleading a setoff conferred by Rule 6. A set-off has to be pleaded in the written statement. The counter-claim must necessarily find its place in the written statement. Once the right of the defendant to file written statement has been lost or the time limited for delivery of the defence has expired then neither can the written statement be filed as of right nor a counter-claim can be allowed to be raised, for the counter-claim under Rule 6-A must find its place in the written statement. The court has a discretion to permit a written statement being filed belatedly and, therefore, has a discretion also to permit a written statement containing a plea in the nature of set-off or counter-claim being filed belatedly but needless to say such discretion shall be exercised in a reasonable manner keeping in view all the facts and circumstances of the case including the conduct of the defendant, and the fact whether a belated leave of the court would cause prejudice to the plaintiff or take away a vested right which has accrued to the plaintiff by lapse of time.

    11. The question that immediately arises is whether the Counter Claim had become time barred so far as the pending arbitral proceedings are concerned. section 41 of the 1940 act makes it clear that, subject to the provisions of the Act and Rules framed thereunder the provisions of the CPC shall apply to the Court. A slight departure has been made in the present Act in that Section 19 substantially introduces the corresponding Article 19 of the UNCITRAL Model Law granting freedom to the Arbitrators to conduct proceedings in the manner they consider appropriate. So far as the CPC is concerned it collates general principles of law, all of which are imbued with plain and sound commonsense. In A.A Haja Muniuddin v. Indian Railways, AIR 1993 SC 361 the Apex Court had before it Section 18 of Railways Claims Tribunal Act, which provides in its first sub-section that the Tribunal shall not be bound by the procedure laid down by the Code, but shall be guided by the principles of natural justice and shall have power to regulate its own procedure. The Court observed that - “Nowhere in the Act is there any provision which runs counter to or is inconsistent with the provisions of Order XXXII of the Code. Although the Act and the Rules do not specifically provide for the application of Order XXXIII of the Code, there is nothing in the Act or the Rules which precludes the Tribunal from following that procedure if the ends of justice so require”. Even where courts of law are concerned the salutary approach is that they should not become subservient to the letter of procedural law. If the Arbitrator draws upon principles of this genre of law to effect justice between the parties he cannot be faulted. This is even more so where the parties are represented by Advocates. If A initiates a claim against B, the latter may similarly initiate its claim against the former but if it is not by means of a separate action, the claim must be articulated and lodged at the very earliest and surely not later than when B files its response/defence/written-statement to the Claim. This is also what Rule 6A of Order VIII postulates; this provision also clarifies that the counter-claim shall have the same effect as a cross suit and shall be treated as a plaint. Under the 1940 act, section 37 made it indubitably clear that all the provisions of the Limitation Act, 1908 were applicable to arbitrations as they were to proceedings in Court. Since the question of which of the two arbitration statutes apply has been left somewhat open by the Hon'ble Supreme Court, both the provisions will have to be carefully considered. I shall advert to sub-sections (3) and (4) of Section 37 of the old Act a little later. It is clear that on a reading of Section 43 the same position obtains under the 1996 Act. However, there is no gainsaying that the counter-claim cannot be filed in respect of a claim that has become time-barred. So far as the claims before the Arbitral Tribunal are concerned, time started to run on 28.10.1996 when the Respondent sought reference to arbitration. So far as this cause of action is concerned the Petitioner ought to have raised or lodged its claims with its written statement, or latest within three years of 28.10.1996 but by means of other proceedings. The Arbitral Tribunal under both statutes could no doubt have followed its own procedure. The Petitioner has been represented by distinguished Advocates all through out. To contend that it could raise its claims even after the Issues had been framed and the recording of evidence had commenced for a considerable time, would render nugatory every tenet of the general principles of law or natural justice, leave aside the CPC.

    12. The Division Bench had observed in Union of India and another v. M/s. Vijay Construction Co., AIR 1981 Delhi 193 as follows:

    The right to apply for arbitration is dependant on a dispute having arisen and the dispute is whether the rescission of the contract was justified or not. The learned Judge assumes that it is only if the General Manager rejects the request of arbitration that a dispute arises. We cannot agree. The dispute between the contractor and the railway arose on the rescission of the contract. Making a request for referring the matter to arbitration is a demand to refer the dispute to the forum which the parties had agreed upon. Awaiting reply from the Railways cannot save limitation which had already started running from the date of the rescission of the contract. The rescission of the contract is a clear and straight intimation to the contractor that his work has not been found satisfactory and the consequences will follow. It is no doubt true that if in pursuance of a notice given, the arbitrator had been appointed by the Railways, no necessity to file an application under Section 20 would have arisen. But the grievance of the contractor had arisen from the date of rescission of the contract. In order to get the relief from the injury done to him by the rescission of contract, the appointment of an arbitrator was one of the steps, he had to take. The right to apply and take effective steps had thus arisen from the date.

    13. From the above extract it will be palpably clear that the decision in M/s. Oriental Building & Furnishing Co. Ltd., New Delhi v. Union of India, AIR 1981 Delhi 293 is clearly per incuriam. It needs to be clarified that even if there may be a distinction between the arising of the cause of action of a dispute, and that of a petition under Section 20, the latter does not inject any elasticity to the adjudication of the former, and would not resurrect a time-barred claim. It is an absurdity to contend that if a dispute has arisen, say in January 1995, and a legal notice has been issued in January 1997, it would be possible to initiate recovery proceedings beyond January 1998. Even a categoric admission/acknowledgment of liability has to be made during the currency of the limitation period for such acknowledgment to extend limitation for another three years. Once a petition for the appointment of an arbitrator under Section 20 is brought before it, the Court may still refer the dispute to adjudication since it is the domain of the Arbitrator to rule on the question of whether the claim stands time-barred or not. This is so also in relation to a claim being excluded by the terms of the contract or barred for the reason that accord and satisfaction had occurred between the parties, inter alia, on the receipt of full and final payment.

    14. A Single Judge of the Calcutta High Court in the case of Shankar Construction Co. Pvt. Ltd. v. Union of India, AIR 1984 Calcutta 317 had considered the precedents available till that date and had found a divergence in the opinion of the Calcutta High Court on the one hand, and the Delhi High Court and Allahabad High Court on the other. The Learned Judge, therefore, expressed her opinion, (in conformity with the decision of the Calcutta High Court), to the effect that unless differences had arisen between the parties, Section 20 of the Arbitration Act would not be applicable. However, the views expressed by the learned Division Bench in Vijay Construction Co. case (supra) must prevail.

    15. This very question had arisen before the Hon'ble Supreme Court in some other cases also. In S. Rajan v. State of Kerala and another, AIR 1992 SC 1918, the Apex Court had observed that the period of limitation for the filing of an application under Section 20 of the Arbitration Act is governed by Article 137 of the Limitation Act. In that case the Contractor had entered into an agreement with the State for carrying out certain works. The Contractor could not, however, execute the work as per the terms of the agreement and the Contract was retendered. The State computed the loss suffered by it on account of retendering and served a demand notice on the Contractor. The demand notice was unsuccessfully challenged by the Contractor by way of a writ petition. Subsequently, the Contractor applied to the State to refer the dispute to an arbitrator. This application was rejected by the State. The Contractor's application under Section 20 filed 9 years after the initial service of the demand notice was held to be barred by limitation. The Hon'ble Supreme Court opined that the differences between the Contractor and the State, or in other words the right to apply under Section 20, arose on the date of service of demand notice on the Contractor and not on the date his application to the State to refer the disputes to arbitration was rejected. In Major (Retd.) Inder Singh Rekhi v. Delhi Development Authority, (1988) 3 SCR 351, the Apex Court again observed that the three year period must be computed from the accrual of the cause of action. The Hon'ble Supreme Court was of the view that “in order to be entitled to ask for a reference under Section 20 of the Act there must not only be an entitlement to money but there must be a difference or dispute. It is true that on completion of the work a right to get payment would normally arise but where the final bills as in this case have not been prepared as appears from the record and when the assertion of the claim was made on 28th February, 1983 and there was non-payment, the cause of action arose from that date, that is to say, 28th of February, 1983”. What is essential, therefore, is to trace backwards to the earliest date on which differences had arisen. Law would not give suc cor to a litigant who sleeps over his rights and agitates them only after limitation has run out.

    16. If any doubt still remained, it has now been finally set to rest by the Hon'ble Supreme Court in Steel Authority of India Limited v. J.C Budharaja, Government and Mining Contractor, 1999 (3) Arb. LR 335 (S.C) in which the Hon'ble Court has discussed the controversy threadbare. It first reiterated its earlier view expressed in State of Orissa v. Damodar Das, (1996) 2 SCC 216 to the effect that Section 3 of the Limitation Act, 1963 enjoins the Court to consider the question of limitation, regardless of whether it is pleaded or not. It then reproduced the following extract from that judgment:

    Russell on Arbitration by Anthony Walton (19th Edn.) at pp. 4-5 states that the period of limitation for commencing an arbitration runs from the date on which the ‘cause of arbitration’ accrued, that is to say, from the date when the claimant first acquired either a right of action or a right to require that an arbitration take place upon the dispute concerned. The period of limitation for the commencement of an arbitration runs from the date on which, had there been no arbitration clause”, the cause of action would have accrued:

    Just as in the case of actions the claim is not to be brought after the expiration of a specified number of years from the date on which the cause of action accrued, so in the case of arbitrations, the claim is not to be put forward after the expiration of the specified number of years from the date when the claim accrued.

    Even if the arbitration clause contains a provision that no cause of action shall accrue in respect of any matter agreed to be referred to until an award is made, time still runs from the normal date when the cause of action would have accrued if there had been no arbitration clause.

    The Hon'ble Supreme Court also referred to its earlier decision in Panchu Gopal Bose v. Board of Trustees for Port of Calcutta, (1993) 4 SCC 338 in which it had spoken thus:

    The period of limitation for commencing an arbitration runs from the date on which the cause of arbitration accrued, that is to say, from the date when the claimant first acquired either a right of action or a right to require that an arbitration takes place upon the dispute concerned.

    Therefore, the period of limitation for the commencement of an arbitration runs from the date on which had there been no arbitration clause, the cause of action would have accrued. Just as in the case of actions the claim is not to be brought after the expiration of a specified number of years from the date on which the cause of action accrued, so in the case of arbitrations, the claim is not to be put forward after the expiration of the specified number of years from the date when the claim accrued.

    The facts in Budharaja's case (supra) were that the Contractor had raised claims in terms of his letter dated 29.8.1979 Thereafter the parties had entered into a Supplementary Agreement on 20.12.1980 Keeping in perspective that the Contractor had not sought any reference within three years from the date when the cause of action had arisen i.e 29.8.1979, and had done so only in 1985 when the dispute arose with regard to the second agreement, the Apex Court declined to permit a Reference of the claims of 1979. More recently, in Asia Resorts Ltd. v. Usha Breco Ltd., AIR 2002 SC 55 : (2001) 8 SCC 710 : JT 2001 (9) SC 301, a similar question had arisen and the Hon'ble Supreme Court took note of its decisions in the foregoing cases. The dispute between the parties was in respect of the contract for the construction of a ropeway which was completed and handed over on 27.4.1988 The appellant issued a notice on 17.4.1990 threatening legal action. On 16.6.1993 the appellant issued a notice proposing the filing of a petition under Section 20 and this was eventually filed on 30.11.1993 The Hon'ble Supreme Court affirmed the view of the Division Bench that the petition had become barred by time.

    17. Reference should be made to the decision of the Hon'ble Supreme Court in Union Of India v. Momin Construction Company, AIR 1995 SC 1927 where it has been opined thus:—

    3. The appellant and the respondents entered into a contract which contained an arbitration clause, namely, that all disputes or matters in difference between them arising out of or connected with the contract during the progress of the construction work therein set out or after its completion would be decided by arbitration. The final bill in respect of the construction work was prepared and the respondents, gave a ‘No Claim Certificate’ on 11th August, 1965, whereupon the final bill was passed. On 26th February, 1971, the respondents filed a petition under Section 20 of the Arbitration Act to take on the file of the City Civil Court, Ahmedabad the arbitration agreement aforementioned. The appellant contested the petition and urged that it was barred by limitation. The issue was answered against the appellant and the petition was allowed.

    4. The appellant preferred an appeal to the Gujarat High Court. The High Court relied upon various judgments and concluded, basing itself principally upon the decision of this Court in Town Municipal Council, Athani v. Presiding Officer, Labour Court, Hubli, (1970) 1 SCR 51 : (AIR 1969 SC 1325), that Article 137 of the Limitation Act, 1963, did not apply to an application under Section 20 of the Arbitration Act. The High Court dismissed the appeal.

    5. Two judgments of this Court subsequent to the decision in the case of the Town Municipal Council (AIR 1969 SC 1325), aforesaid must be noted.

    6. In Kerala State Electricity Board, Trivandrum v. T.P.K.K Amsom and Besom, Kerala, (1977) 1 SCR 996 : (AIR 1977 SC 282), this Court held that Article 137 of the Limitation Act, 1963, would apply to any petition or application filed under any Act to a Civil Court. The view taken by the two judge bench in the Town Municipal case (AIR 1969 SC 1325), aforementioned was expressly different from and it was held that Article 137 was not confined to applications contemplated by or under the Code of Civil Procedure. In Major (Retd.) Inder Singh Rekhi v. Delhi Development Authority, (1988) 3 SCR 351: AIR 1988 SC 1007), the decision in the case of Kerala State Electricity Board, AIR 1977 SC 282, just cited was applied in respect of an application under Section 20 of the Arbitration Act. It was held that Article 137 applied thereto.

    7. The claim in the first appeal aforementioned arose to the respondents therein before 11th August, 1965, when they issued the No Claim Certificate and the final bill was passed. The right to apply under Section 20, of the Arbitration Act, therefore, arose to the respondents before 11th August, 1965. The application under Section 20 was made by them much after the expiry of three years therefrom. The application under Section 20 was, therefore, plainly barred by time.

    18. Asia Resort's case (supra) is of importance because of the two prin ciples that it lays down - (a) that a Petition under Section 20 must be filed within three years from the date on which the cause of action arises and (b) that Section 5 of the Limitation Act can be applied to such Petitions. This is what the Court observed on the first Issue which is topical for our purposes.

    11. It is true that from the above arbitration clause it is clear that parties should have made an effort to settle the differences by mutual consultations and only on failure of such attempt steps could have been taken by the parties for making a reference to the arbitrator, but the notices issued between the parties hardly give any indication that these mutual consultations for resolution of differences continued upto 1993. A perusal of the notice sent by the appellant on 17-4-1990 to the respondent and the reply received from the latter would show that the cause of action had arisen for filing of a petition under S. 20 of the Act as early as on 17-5-1990. The material portion of the notice sent by the appellant has been extracted in the impugned judgment. Suffice it to say that in the notice dated 17-4-1990, it is made out in unmistakable terms that the appellant was of the view that the respondent had committed a serious breach of the agreement and, therefore, the respondent was called upon to do the needful within 30 days from the date of that notice, failing which the appellant would take legal action against the respondent in Court of law.

    ......

    16. Under Section 20 of the Act, the cause of action for filing an application may arise whenever “a difference has arisen to which the agreement applies”. Regard must be had to the relevant arbitration clause in the agreement. If any specific terms are used in the arbitration clause, that would govern the parties as to when a petition for reference of arbitration shall be filed in Court.

    17. In the instant case, the arbitration clause states that all parties would resolve such differences by mutual consultation failing which either party must give to the other notice in writing of the existence of such question, dispute or difference and the same shall be referred for the final determination. The appellant issued notice to the respondent and a definite reply was received by the appellant. It is clear that cause of action for filing had arisen, the moment the appellant received the reply notice denying the claims made by the appellant. Therefore, the Division Bench has rightly held that the application was barred by time.

    19. It has already been noticed that the parties had entered into a Deed of Settlement and the question whether the Respondent's Claims could thereafter be open to adjudication will indubitably be answered by the Arbitral Tribunal. Presumably, the cause of action is pegged by the Respondent on this Deed. Prima facie, if the Petitioner is also of the opinion that it can raise demands despite the Settlement its cause of action also arises from the same date. This may be impermissible in view of the Petitioner's averment in its application dated 9.7.2004 under Section 16 of the 1996 Act where it has stated that “as a result of the above, the claims/disputes as set-out prior to the deed of settlement stood settled and closed beyond the jurisdiction of either the Hon'ble Tribunal or any other Tribunal”. An ingenious but interesting argument has been proffered by Mr. Sundaram that whatever action is contemplated in law to be taken has in fact been carried out purely upon the statement made by the Petitioner in its Defence Statement dated 30.5.1998 that a counter-claim would be filed. The contention of Mr. Sundaram is that time ceased to run against the Petitioner as a consequence of this simple statement. In civil law in order to ensure that a claim/dispute is not liable to be dismissed as having become time-barred a plaint must be presented to the proper officer as contemplated in Section 3(2) (a) of the Limitation Act. The next sub-section, that is, Section 3 (2) (b) stipulates that a counter claim shall be treated as a separate suit and shall be deemed to have been instituted on the date on which it is made in Court. Since every person is aware of where and how the plaint has to be presented no difficulty or imponderable is encountered. In the case of arbitration however, more often than not the Arbitrator is unknown and the venue is indeterminate and therefore the claimant can do no more than notify the adversary of the resolve to commence arbitration; this action is therefor not comparable with raising a claim or demanding payment followed by a civil action. In the old statutory regime if the adversary had to take steps in this direction and failed to do so the Courts could be approached under Section 20 so that an order of reference to the Arbitrator(s) could be made. Whilst Section 37(3) of the old Act enunciates that arbitration shall be deemed to have commenced when one party to the arbitration agreement serves on the other party a notice requiring the appointment of an arbitrator, in those not so infrequent instances where the other party recalcitrantly refuses to initiate the process, recourse has to be had to Section 20. Provided the hiatus between the issuance of the notice and the moving of the Court under Section 20 was not inordinate or beyond the period of limitation, the parties would be referred to arbitration. The judgments of the Apex Court have already been discussed above. Accordingly, the present case is viewed from the perspective of the old Act there is no escape from the conclusion that the claims cannot be adjudicated.

    20. Assuming that the cause of action arose in October, 1996, if the Counter Claim had been filed within three years it would have warranted its consideration. The cryptic pleading in paragraph 14(c) of the Defence Statement dated 13.5.1998 to the effect that “ the respondents are also raising their claims against the claimant separately”, if taken as a notice under Section 37(3) would nevertheless mandate that the provisions of section 20 should have been invoked immediately thereafter and before October, 1999. If this had happened, then even if the matter had remained pending in the Court for ten years, the claims would not have become stale and time barred. The case of the Petitioner is, however, hopeless since the cryptic statement reproduced above cannot be viewed as a notice requiring the appointment of an arbitrator. It was not addressed to the person possessing power to appoint the arbitrator but was made to the Arbitral Tribunal which was adjudicating the claims of the Respondent. The Arbitral Tribunal committed no error in following the principles pertaining to Counter Claims contained in the Civil Procedure Code on the analogy of the ratio in Haja Muniuddian's case (supra). What remains to be seen is whether any appreciable difference occurs if the 1996 Act is applied.

    21. Section 43 of the 1996 Act states that the Limitation Act, 1963 shall apply to arbitrations as it applies to proceedings in the Court. Thereafter, reverting back to Section 21 the Act stipulates that arbitral proceedings in respect of a particular dispute commences on the date on which a request for that dispute to be referred to arbitration is received by the Respondent. The opinion has already been expressed that the Defence Statement cannot be construed as a request that the dispute should be referred to arbitration. It was not addressed to the Respondent, that is, Amtex, but to the Arbitral Tribunal which was dealing with another dispute albeit between the same parties. It did not contain any material particulars about the claim or dispute. The letter of the Petitioner dated 3.9.1998 cannot also be viewed as a notice under Section 21 of the 1996 Act. It is true that the Claims of the Petitioner have been detailed in this letter but rather than requesting or notifying that these Claims were to be referred to arbitration a peremptory demand for the payment of those Claims has been conveyed. The fact that the Petitioner had not intended to refer these Claims to arbitration is borne out from the fact that it took no steps to refer its particular disputes to arbitration either through the avenue of Section 11 of the Act or arguably by bringing these Claims before the Arbitral Tribunal adjudicating the Claims of the Respondent within three years. Had it done so the legal conundrum of whether the already constituted Arbitral Tribunal was competent to decide the disputes raised by the Petitioner would have had to be decided. But this has not happened. Instead, the Claims raised in the Petitioner letter dated 3.9.1998 are now sought to be introduced in July 2003 when they had already become time barred. I find no reason to hold that the Petitioner needed to do nothing more than make a demand for payment of its Claims contained in its letter dated 3.9.1998 for five long years, assuming that the letter dated 3.9.1998 conformed to the requirements of a notice as envisaged by Section 21 of the 1996 Act. The Hon'ble Supreme Court had pronounced in the series of decisions mentioned above that a claim must not be time barred for a reference to be made under section 20 of the old act. The language of Section 37(3) of the old Act and Section 21 of the present Act is appreciably the same in content and intent. Time would have ceased to run for the Petitioner upon its taking requisite steps to commence arbitration without delay presuming that the letter dated 3.9.1998 conformed with the provisions of Section 21 of the new Act. Viewed from any angle, therefore, the impugned Order cannot be faulted.

    22. Petition is dismissed.

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