Balakrishnan, J. - (1.) Leave granted.
(2.) The appellant constructed a hotel resort by name "Timber Trail Heights" at Bansaar in Himachal Pradesh. This place is at a high altitude of 5000 feet from sea level and in order to ensure a quick access for the visiting tourists to this resort, the appellant wanted to have a passenger ropeway system and for that purpose, the appellant entered into a contract with the respondent, by name, Usha Breco Limited. The respondent completed the work relating to ropeway system and handed over the same to the appellant on 27-4-1988. Initially, the ropeway system was being operated and maintained by the employees of the respondent, but later on the appellant absorbed those workers as its own employees. According to the appellant, right from the beginning, the ropeway system was not functioning well and it did not meet the specification required by the appellant. The appellant had been making a request to the respondent to rectify the defects but the latter failed to rectify the same. The appellant also alleged that the respondent did not co-operate with the appellant for getting clearance from the Himachal Pradesh Ropeway Inspector. The Inspector did not approve the ropeway system for the installed capacity. The appellant alleged that the works undertaken by the respondent were defined in the annexure to the agreement and as per the agreement, the ropeway system must have a capacity for carrying on 15- passengers per hour and it was further stipulated that within 8 hours of operation per day, the total capacity of passengers must be 1200 per day and according to the appellant, based on such representation, assurance and agreement, the appellant invested huge amount for the ropeway system. The appellant latter realized that only 800 passengers would be able to reach the destination through the ropeway system per day and this, according to the appellant caused heavy financial loss. The appellant issued a notice to the respondent but the latter did not accede to their request. Ultimately, on 16-6-1993, the appellant issued a notice to the respondent intimating that it would be constrained to file a petition under S. 20 of the Arbitration Act, 1940 (for short "the Act"). Clause 15 of the agreement provided for arbitration and the appellant filed a petition under S. 20 of the Act on 30-11-1993.
(3.) The respondent filed a reply contending that the petition filed by the appellant was barred by limitation. The respondent contended that the appellant had issued notice on 17-4-1990 through its advocate intimating the respondent that they would take legal action against them. It was contended by the respondent that the petition filed under S. 20 of the Act on 30-11-1993 was more than 3 years after the issuance of notice. The respondent alleged that the subsequent notice on 16-6-1993 was issued beyond the period of 3 years from the earlier notice. The respondent also contended that there was no subsisting agreement between the parties and all matters relating to the contract were concluded and the minutes also were recorded on 12-4-1988.;