L AMARNATH Vs. UNION OF INDIA UOI

JUDGEMENT

(1.) THIS is an appeal from an order of the Civil Judge Bareilly dismissing the appellant's application under Section 20 of the Arbitration Act.

(2.) THERE was a contract between the appellant and respondent No. 1 about the supply of fuel by the former to the latter for one year ending on 20-2-1952; it contained an arbitration clause for reference of a dispute arising under it to the arbitration of respondent No. 2. Some dispute arose between the parties about the quality of the fuel supplied and on 28-6-1951 respondent No. 1 informed the appellant that it had rescinded the contract. The appellant protested against the decision, but his protests were ignored and on 12-7-1951 respondent No. 1 informed him by telegram that the decision to rescind the contract was final. On 3-11-1951 the appellant asked respondent No. 1 to refers the dispute between them to the arbitration of respondent No. 2 according to the arbitration clause of the contract but the respondent refused to do so and communicated its refusal to him on 23-11-1951. After remaining quiet for some time he filed, the application under Section 20 of the Arbitration Act, in the court below on 3-8-1954. The trial court held that the cause of action for filing the application accrued to the appellant on 12-7-1951, that the period of limitation for the application, as provided in Article 181 of the Limitation Act, was three years from the date and that since the application was made more than three years from that date it was barred by time.

(3.) THIS at once takes us to the next question, which is when did the right to make the application accrue to the appellant? According to the learned Civil Judge it accrued on 12-7-1951 when respondent No. 1 informed the appellant of its decision to rescind the contract, while according to him it accrued on 23-11-1951 when respondent No. 1 informed him of its refusal to submit the dispute to arbitration. We are satisfied that neither of them is right and that it accrued still earlier. It is laid down in Section 20 of the Arbitration Act that