TaxTMI 
TaxTMI 
1981 (4) TMI 285
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....ot. The land used is for stacking or storing materials and for parking vehicles. The period of the lease was for ten years and according to the petitioner, the period commenced on 1st January, 1963, which means that the lease was made long after the term actually commenced. According to the petitioner, the period of ten years was automatically to be extended for another ten years period. However, according to the respondents, the term was ten years which would be automatically extended for another ten years if the lease is not terminated by giving a notice terminating the lease, which notice was to be for a period of three calendar months before the first period of ten years expired. In the lease-deed, there is an arbitration clause contained in paragraph No. 19. That clause reads as follows:- "19. That in case of any dispute arising between the parties with regard to the intent and meaning of this agreement and subject-matter referred to therein the same shall be referred to the sole arbitration of the General Manager, Northern Railway, or any other officer of the Railway appointed by him, who shall conduct the proceedings in accordance with the provisions of the Indian A....
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....he first period of ten years of lease expired even according to the petitioner on 12th Dec, 1972, so more than three years had expired from the alleged termination of the lease according to the respondent. According to the petition, the cause of action arose in July, 1975 and April, 1977. when the respondent sought to recover rents contrary to the terms of the agreement and also sought to recover possession of the land. It was also stated in the petition, that instead of going to arbitration, the respondents were seeking to evict the petitioner under the Public Premises (Eviction of Unauthorised Occupants) Act, 1971. and this they were not entitled to do. According to the reply, the cause of action arose in 1967 when the demand for increase of rent was made and at least on 1st January, 1973. when the lease of the petitioner came to an end, and therefore, the petition is barred by time. 3. Various decisions of the Courts have been cited on the question of limitation. The material question is, what is the starting point of limitation for moving a petition under Section 20 of the Arbitration Act. In this case, an interesting situation arises because according to the petitioner, the....
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....rt. The way the Act is framed suggests that first you have to have a contract concerning the reference of certain types of disputes to arbitration. If you have this contract, still you cannot apply until you have a difference. The starting point of the reference under Section 20 is therefore, the date on which a difference arises to which the arbitration agreement applies. Neither party can move the Court without the existence of a difference between them. So, the material question is, when the difference arose between the parties and not when the lease expired, nor when it was entered into. In the present case, the noteworthy feature is that the agreement was made in 1969 concerning a lease which started on 1st January, 1963. We have, therefore, to examine for the purpose of the question of limitation as to when the disputes arose which are required to be referred to arbitration. As a matter of fact, paragraph No. 11 of the petition states as follows:- "11. That the petitioner requested the respondent several times to have the matters decided by arbitration as per CI. 19 of the said agreement executed between the parties. Letters dated 10-12-1975. dated 20-2-1976 and date....
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....nder a contract. There can be negotiations between the parties and all sorts of correspondence. But, it is only when they come to the conclusion that they cannot resolve the dispute between them, that it can be said that a difference arises. A difference under the arbitration agreement is a claim made by one party which is refuted by the other party. At that stage, it is open to the parties or any of them to say-now let us go to arbitration to get this difference settled. It is at this stage that it is possible to say that a difference has arisen between them. In this sense, Section 20 of the Arbitration Act differs from the normal kind of claims that arise in suits. In the case of a suit, the date on which the cause of action arises is the date from which the limitation period starts. Under Section 20. it is the date on which the right to apply accrues that determines the starting point. That starting point does not coincide with the date on which the cause of action for filing a suit arises. 10. To take a simple illustration. If there are two parties to a contract in which one claims a breach of contract by the other, then the period of limitation for filing the suit starts fr....
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....mpelled to come to the Court. 13. There is yet another aspect of the matter which raises an interesting conundrum. The limitation period for the State to claim a sum payable to it is much greater than that available to an ordinary person. For instance, in the present case, the Railway authorities could refer the matter to arbitration within 30 years later, because Art, 112 makes the limitation period for recovery of the amount due to the Central or a State Government, 30 years. It would be indeed peculiar that when the claim is not barred by time that the limitation period under Section 20 would expire much earlier, after only three years, thus making it impossible for the parties to move the Court. This example shows the difference between the applicability of the provisions of the Limitation Act as far as suits go and applications for getting an appointment of an arbitrator through the Court. To take an instance that might well arise in practice, suppose there is a contract between the State and a private contractor for the supply of certain goods in which there is an arbitration clause to the effect that a mutually acceptable arbitrator will be appointed. A difference relatin....
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....g which is concerned with the eviction of a person who, is in unauthorised occupation or it is entertaining a proceeding in respect of the recovery of arrears of rent payable in respect of the property. Shortly put. the contention is that the land which is the subject-matter of the lease is public premises and, therefore, the question of eviction from that land or the question of recovery of rent in respect of that land cannot be entertained by this Court. As it happens, this Court is not entertaining any such proceedings, but is merely considering the question whether the matter is referable to arbitration. If the Government chooses to have an arbitration clause in respect of property covered by the Public Premises (Eviction of Unauthorised Occupants) Act, 1971, I do not think that it was the intention of the Legislature to nullify that arbitration. I would not reach this conclusion, unless I am compelled to do so. It is open to the parties to have an arbitration agreement whenever there is a dispute. If there is an arbitration agreement between the parties then the provisions of the Arbitration Act have to apply. The wording of the section just reproduced states that the Court sh....
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.... out of the lease. Once there is an arbitration agreement, the parties are free to refer the matter to arbitration in accordance with the agreement. The Court is not adjudicating on any dispute relating to eviction or recovery of rent, etc, The Court is concerned rather with the enforcement of the rights of the parties under the Arbitration Act. The disputes have to be dealt with by the arbitrator appointed by the parties. I, there-fore, hold that Section 15 of the Public Premises (Eviction of Unauthorised Occupants Act, 1971, has nothing to do with this Court's jurisdiction under the Arbitration Act which is quite an independent jurisdiction. In fact, if the parties do go to arbitration, and an award is given, then there is no choice for the parties but to approach the Court under the Arbitration Act for the purpose of making the award a rule of the Court or for getting those matters arising in arbitration proceedings or relating to the same settled through the Court. By no means can it be said that the Court will then be dealing with a proceeding for the eviction of a person in unauthorised occupation or for recovery of rent or damages. The Court is merely concerned with the ....