- (1.) THIS is an appeal under section 39 of the Arbitration Act, 1940 (which will hereinafter be referred to as the Act), from the order dated November 16, 1974, by the District Judge, Pali, on an application filed by the appellant under section 20 of the Act.
(2.) THE facts giving rise to the application may be stated within a narrow compass. A partnership was entered into between the appellant Dhan Raj and the respondents Pratap and Raja on November 13, 1966 and a partnership deed was also duly executed. Clause (17) of the partnership deed, which refers to arbitration, reads as follows: - "17. If during the continuance of the partnership or at any time afterwards any dispute or difference of opinion arises between the parties or any of their legal representatives regarding the partnership accounts and transactions thereof, or the construction, meaning or effect of this deed or any thing herein contained on the rights and liabilities of the partners or their legal representatives, every such dispute, difference or question shall be referred to arbitration and the provisions of the Indian Arbitration Act, shall apply at the time of reference. " The appellant's case is that a dispute arose between the parties regarding the settlement of accounts, but the respondents got a deed of dissolution dated July 12, 1969, signed by the appellant on December 13, 1969, by exercising undue influence and fraud upon the appellant. He has further pleaded that he asked the respondents several times to send the accounts of partnership and also wrote a letter to them on July 8, 1970 asking them to furnish the balance-sheet, stock list etc. but they did not do so and were pressurising the appellant He, therefore prayed that the agreement be filed in court and the court may further make an order of reference to the Arbitrator as envisaged by section 20 of the Act The application was opposed by the respondents, inter alia, on the ground that the partnership agreement was superseded by a deed of dissolution dated July 12, 1979, executed by the parties and, therefore, the arbitration clause did not survive. The learned District Judge held that in face of the dissolution deed the arbitration clause contained in the partnership agreement did not survive. In this view of the matter, he dismissed the application as not maintainable. Aggrieved by the decision of the learned District Judge, the appellant Dhan Raj has filed this appeal. A preliminary objection has been raised by Mr. Hukmi Chand on behalf of the respondents that the application filed by the appellant under section 20 of the Act is barred by limitation inasmuch as it has been filed after more than three years from the date the right to apply accrued to the appellant. In this connection, he has submitted that such an application would be governed by Article 137 of the Limitation Act, 1963. In support of his contention, he has placed reliance on The Kerala State Electricity Board Vs. T. P Kunhaliumma (1 ). We have, therefore, thought it fit to hear the learned counsel for the parties first, on the question of limitation. It appears that earlier the view of the Supreme Court was that Article 181 of the Limitation Act. 1908, was not applicable to applications under Special Act. It was held that Article 181 would apply only to those applications which are made under the Code of Civil Procedure (See Mohd. Usman Vs. Union of India (2 ). This view was reiterated by the Supreme Court in Athani Municipality Vs. Labour Court, Hubli (3) wherein under Article 137 of the Act of 1963, which is analogous to Article 181 of the old Act, was considered, However, in The Kerala State Electricity Board Vs. T. P. Kunhaliumma (supra) the earlier decision of the Supreme Court in Athani Municipality Vs. Labour Court (supra) was overruled, and their Lordships observed as follows: - "the changed definition of the words "applicant" and "application" contained in section 2 (a) and 2 (b) of the 1963 Limitation Act indicates the object of the Limitation Act to include petitions, original or otherwise, under special laws. The interpretation which was given to Article 181 of the 1908 Limitation Act on the principle of ejusdom genaris is not applicable with regard to Article 137 of the 1963 Limitation Act. Article 137 stands in isolation from all other Articles in Part I of the third division. This Court in Nityanands Joshi's case (AIR 1970 SC 209) (Supra) has rightly thrown doubt on the two Judge Bench decision of this Court in Athani Municipal council case (AIR 1969 SC 1335) (supra) where this Court construed Article 137 to be referable to applications under the Civil Procedure Code. Article 137 includes petitions within the word "applications". These petitions and applications can be under any Special Act as in the present case. The conclusion we reach is that Article 137 of the 1963 Limitation Act will apply to any petition or application filed under any Act to a civil court. . With respect we differ from the view taken by the two Judge Bench of this Court in Athani Municipal Council case (AIR 1969 SC 1335) (supra) and hold that Art. 137 of Limitation Act is not confined to applications contemplated by or under the Code of Civil Procedure. The petition in the present case was to the District Judge as a court. The petition was one contemplated by the Telegraph Act for judicial decision. The petition is an application falling within the scope of Article 137 of the Limitation Act. "
(3.) THE above extracted passage, leaves no room for argument that an application under the Arbitration Act would be governed by Article 137. THE inevitable corollary that flows from the aforesaid decision is that an application under section 20 of the Act would be governed by Article 137 of the Limitation Act, 1963, which reads as under: - "137. Any other application for which no period of limitation is provided elsewhere in this Division. Three years when the right to apply accrues. " Mr. Hasti Mal, learned counsel for the appellant, also conceded that the application under sec. 20 of the Act in the present case will be governed by Art. 137 of the Limitation Act, 1963. However, he urged that since the Kerala State Electricity Board's case (supra) laid down the law different from the view taken by the Supreme Court in earlier cases referred to above, and the earlier view held the field at the time when the application under Art. 20 of the Act was filed by the applellant, the case may be remanded to the trial court to give an opportunity to the appellant to take a proper plea on the question of limitation and the trial court may be directed to decide the case afresh. This prayer, made by Mr. Hasti Mal, is stoutly opposed by Mr. Hukami Chand Jain. We have, therefore, to see whether any useful purpose would be served by remanding the case. The starting point of limitation for the purpose of such an application is "when the right to apply accrues". The right to apply under section 20 of the Act, in our opinion, would accrue when the difference between the parties arises. In other words as soon as there arose a difference or dispute between the parties regarding the partnership accounts and transections the right to apply under section 20 of the Act will be deemed to have arisen. We have, therefore, to see whether there is any specific pleading in the application as to when the dispute or difference between the partners arose so as to enable one of the parties to get an arbitration made. In para 8 of the application it is mentioned that the respondents got a deed of dissolution written on July 12, 1969 and obtained the signatures of the applicant thereon by fraud and undue influence on December, 13, 1969. Then again in para No 14 of the application it is mentioned that the applicant asked the respondents several times to render the accounts of partnership but the latter did not comply. It is further averred that the applicant wrote a letter on July 8, 1970 to the respondents for furnishing the accounts of partnership and to supply to him the balance-sheet, stock list etc but the respondents turned a deaf ear. At this stage, it would not be out of place to refer to the dissolution deed dated July 12, 1969. which recites, besides other things, that on account of differences having arisen between the partners as to the conduct of business it had been agreed to dissolve the firm with effect from June 11. 1969. In para 5 of the dissolution deed it is further mentioned that in full and final settlement of the partnership capital account stands at Rs. 1, 08, 260. 41 in debit on June 11, 1969 and that the partners Pratapji and Rajaji have agreed to pay and Dhan Raj has agreed to accept a sum of Rs. 27,065. 10 p. in yearly instalment of Rs. 4000/-, only. It was also mentioned that Dhan Raj (appellant) would ceases to have interest in the partnership firm from June 11, 1969. ;