TaxTMI 
TaxTMI 
1992 (7) TMI 295
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....h Court allowing the appeal preferred by the State of Kerala and setting aside the order of the learned Subordinate Judge, Thiruvanathapuram. On an application made under Section 20 of the Arbitration Act by the appellant, the learned Subordinate Judge had directed the appointment of an Arbitrator to decide the dispute and differences between the parties. He directed both the parties "to submit their panels of arbitator to be appointed within ten days from the date of the order" for the purpose. A Division Bench set aside the said order on the ground that the very application under Section 20 was barred by limitation. An agreement was entered into between the appellant and the State of Kerala on 19.2.1966 whereunder the appellant underto....
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....iable to be rejected. The learned Subordinate Judge concluded that here is a case where certain claims were put forward by the plaintiff which were denied by the defendants. (In the State of Kerala, an application under Section 20 is registered as a suit). Since there is a clause in the agreement providing for arbitration, the disputes and differences arising between the parties ought to be referred. He rejected the various objections raised by the State. The operative paragraph of the judgment reads: "In the result the disputes and differences mentioned in para 10 of the plaint are hereby ordered to be referred to an arbitrator for arbitration. Both parties are directed to submit their panels of Arbitrator to be appointed withi....
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....licability of Limitation Act to an application under Section 20 of the Arbitration Act is concerned, it is no longer res integra. In Inder Singh Rekhi v. Delhi Development Authority, A.I.R. 1988 S.C. 1007 it has been held by this court that Article 137 of the Limitation Act, 1963 applied to an application under Section 20 of the Arbitration Act. It was so held following the decision in Kerala State Electricity Board v. Amsom, [1977] 1 S.C.R. 996 which overruled the earlier decision of this court in Town Municipal Council, Athani v. Presiding Officer, Labour Court, [1970] 1 S.C.R. 51. it is true that under the Limitation Act 1908, it was held that Article 181 of that Act does not govern and application under Section 20 of the Arbitration Act....
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....es interested or claiming to be interested as plaintiff or plaintiffs and the remainder as defendant or defendants, if the application has been presented by all the parties, or, if otherwise, between the applicant as plaintiff and the other parties as defendants. (3) On such application being made, the Court shall direct notice thereof to be given to all parties to the agreement other than the applicants, requiring them to show cause within the time specified in the notice why the agreement should not be filed. (4) Where no sufficient cause is show, the Court shall order the agreement to be filed, and shall make an order of reference to the arbitrator appointed by the parties, whether in the agreement or otherwise, or, where the parti....
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....ises or differences arise, as the case may be between the parties. It is thus a question of fact to be determined in each case having regard to the facts of that case. The question in the present case is when should the difference between the parties be said to have arisen. According to the High Court the date on which notice of demand under the Revenue Recovery Act was served upon the appellant namely 30.5.1974 is the date on which difference must be held to have arisen between the parties, if not earlier. Sri Poti, however, says that it is not so and that it must be held to have arisen only when the appellant applied to the Government to refer the disputes between them to the arbitrator in terms of the agreement and the Government refused....
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....nt by filing a writ petition in the Kerala High Court is the demonstrable proof of the dispute. Accordingly, we agree with the High Court that 30.5.1974 is the date on which the right to apply accrued in terms of article 137 read with Section 20(1) and that therefore the application filed in the year 1985 was clearly 657 barred by limitation. We also think it appropriate to point out that the learned Subordinate Judge was not justified in directing the parties to submit their respective panels of arbitrator so as to enable him to appoint an arbitrator or arbitrators, as the case may be, out of such panels. Clause (3) of the agreement (extracted in the Counter Affidavit filed by the State of Kerala in this court, the correctness whereof i....