S.C. Gupte, J. - (1.) This arbitration Petition, filed under Section 34 of the Arbitration and Conciliation Act, 1996 ("Act"), challenges an order passed by a sole arbitrator on an application under Section 16 of the Act raising a preliminary issue of limitation. The learned Arbitrator held against the Petitioner (Respondent to the reference) on the issue of limitation. As explained by the Supreme Court in the case of Indian Farmers Fertilizer Cooperative Limited vs. Bhadra Products, 2018 2 SCC 534, the Arbitrator's order disposing of the issue of limitation finally is an interim award within the meaning of Section 2(1)(c) of the Act. The order has, accordingly, been challenged under Section 34 of the Act.
(2.) A few facts of the case reflecting on the relevant dates for the purpose of the issue before us may be noted as follows : The dispute between the parties arises on a purchase order placed by the Petitioner on the Respondent on 24 June 2013. The order was for supply of IT equipment. The delivery schedule in the purchase order required delivery of the equipment by 20 July 2013. It is the grievance of the Respondent (original Claimant in the reference) that though the Respondent was ready to supply the equipment, the Petitioner failed and omitted to accept delivery and as a result, the Respondent suffered damages. A demand notice in that behalf was addressed on 23 March 2016, followed by a winding up notice issued to the Petitioner on 30 March 2016. After receipt of a reply from the Petitioner, on 18 May 2016, a winding up petition was filed by the Respondent before this court. The petition was opposed by the Petitioner inter alia on the ground that there was no admitted or indisputable debt which could sustain a winding up petition. The Petitioner raised several disputes in respect of the debt. When the petition was at the stage of admission, the parties agreed to refer the underlying disputes to the arbitration of a sole arbitrator. Accordingly, by consent, the matter was referred to the learned arbitrator. All rights and contentions of the parties were kept open save and except the question of constitution of the arbitral tribunal. Before the arbitral tribunal, the Petitioner herein applied for an interim award on the issue of limitation. It was the Petitioner's case that as on the date of the reference, i.e. on 12 February 2018, which would be the relevant date of invocation within the meaning of Section 21 of the Act, the Respondent's claim was barred by the law of limitation, since more than three years had by then elapsed from the date of the accrual of the cause of action. On the other hand, it was the Respondent's case that the Respondent was entitled to exclusion of time during which it prosecuted the company winding up petition. It was submitted that the winding up petition filed by the Respondent was a civil proceeding within the meaning of Section 14(1) of the Limitation Act, 1963; the same was prosecuted by the Respondent herein with due diligence in the court of first instance; and the said proceeding related to the same matter in issue as in the arbitration reference and was prosecuted in good faith in a court which, from defect of jurisdiction or other cause of a like nature, was unable to entertain it. It was also the Respondent's case that the delivery date of 20 July 2013 was extended to 27 January 2016 and the reference was, accordingly, anyway within time. The extension was disputed by the Petitioner. The learned Arbitrator in her impugned interim award, relying on the Supreme Court judgments cited before her, accepted the Respondent's case that the period spent by the Respondent in pursuing its winding up petition before this court ought to be excluded under Section 14(1) of the Limitation Act, 1963.
(3.) Ms.Sethna, learned Counsel for the Petitioner, makes the following submissions : (a) The company winding up petition is not a civil proceeding for recovery of money and hence time spent in prosecuting it cannot be excluded for computation of the period of limitation for the arbitration reference under Section 14(1) of the Limitation Act; (b) The winding up petition could not, at any rate, be treated as having been prosecuted in good faith for recovery of the debt claimed as due by the Petitioner herein; and (c) The winding up petition was not rejected by the court on the ground of defect of jurisdiction or other cause of a like nature and hence, the requirement of Section 14(1) could not be said to have been satisfied. ;