Arbitration reference and limitation: final bill acceptance does not by itself erase an arbitrable dispute.

For a reference under Section 20 of the Arbitration Act, 1940, the court examines whether an arbitration agreement exists, whether disputes have arisen within its scope, and whether the application is timely; the underlying claim's limitation is ordinarily for the arbitrator unless the time bar is clear on admitted facts. Acceptance of final bills and a no-claim declaration may weaken the claim, but they do not by themselves extinguish an arbitrable dispute. On the stated principles, the application was within time and the dispute remained referable to arbitration.

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Issues: Whether an application under Section 20 of the Arbitration Act, 1940 for filing an arbitration agreement and appointment of an arbitrator was barred by limitation, and whether the existence of a claim dispute could be treated as non-existent merely because the final bills had been accepted.

Analysis: The limitation question governing an application under Section 20 had to be distinguished from the separate question whether the substantive claim to be decided by arbitration was time-barred. For an application under Section 20, the relevant inquiry was whether an arbitration agreement existed, differences had arisen within its scope, and the application itself was made within the prescribed time. The Court reaffirmed that the arbitrator ordinarily decides whether the claim is barred by lapse of time, unless the admitted facts show that the claim is already barred at the stage of the Section 20 application. It further held that acceptance of final bills and a no-claim declaration may weaken the claim, but do not by themselves extinguish the existence of a dispute capable of reference to arbitration.

Conclusion: The application under Section 20 was within time and the dispute was referable to arbitration. The appeal therefore failed.

Ratio Decidendi: For a reference under Section 20 of the Arbitration Act, 1940, the court is concerned with the existence of an arbitration agreement, the existence of an arbitrable dispute, and the timeliness of the application itself, while the question whether the underlying monetary claim is barred by limitation is ordinarily for the arbitrator to decide unless the bar is apparent on admitted facts.

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