NDLI: M/s B and T Ag Vs. Ministry of Defence

Content Provider	Supreme Court of India
e-ISSN	30484839
Language	English
Access Restriction	NDLI
Subject Keyword	Arbitration and Conciliation Act 1996
Content Type	Text
Resource Type	Law Judgement
Jurisdiction	India
Act(s) Referred	Limitation Act, 1963 (36 of 1963) Arbitration and Conciliation Act, 1996 (26 of 1996)
Case(s) Referred	Referred Case 0 Referred Case 1 Referred Case 2 Referred Case 3 Referred Case 4 Referred Case 5 Referred Case 6 Referred Case 7 Referred Case 8 Referred Case 9
Case Type	Arbitration Petition
Court	Supreme Court of India
Disposal Nature	Petition Dismissed
Headnote	Arbitration and Conciliation Act, 1996 – s.11– Limitationperiod – Cause of action – When accrues – “Breaking Point”–Negotiations, if postpone the cause of action – Held: No – Causeof action becomes important for calculating the limitation periodfor bringing an action – Period of limitation for commencing anarbitration runs from the date on which the “cause of arbitration”accrued i.e., from the date when the claimant first acquired either aright of action or a right to require arbitration – An application u/s.11 is governed by Article 137 of the Schedule to the 1963 Act andmust be made within 3 years from the date when the right to applyfirst accrues – There is no right to apply until there is a clear andunequivocal denial of that right by the respondent – Claim forarbitration must be raised as soon as the cause for arbitration arises– Whether any particular facts constitute a cause of action has tobe determined with reference to the facts of each case and thesubstance rather than the form of the action – If an infringement ofa right happens at a particular time, the whole cause of action willbe said to have arisen then and there – In such a case, it is not opento a party to sit tight and not file an application for settlement ofdispute of his right and allow it to be extinguished by lapse of time– Mere negotiations will not postpone the cause of action for thepurpose of limitation – What is important for the Court is to find outwhat was the “Breaking Point”, a question of fact, at which anyreasonable party would have abandoned efforts at arriving at asettlement and contemplated referral of the dispute for arbitration–Entire history of the negotiation between the parties must be pleadedand placed on record for the Court to find out the “Breaking Point”– Bilateral discussions for an indefinite period of time would notsave the situation so far as the accrual of cause of action and the right to apply for appointment of arbitrator is concerned – LimitationAct, 1963 – Article 137.Arbitration and Conciliation Act, 1996 – s.11(6), 43 – Contractentered between parties in 2012 – Dispute in relation to the allegedwrongful imposition of Liquidated Damages and wrongfulencashment of the bank guarantee by the respondent-Ministry ofDefence in2016 – Petitioner issued notice invoking arbitration onlyin 2021 – According to the petitioner the parties were trying toamicably resolve the disputes by way of ‘bilateral discussions’ asper the Contract – Present petition filed by the petitioner u/s.11(6),claiming to be within the period of limitation, for appointment ofarbitrator – Time-barred claims/claims barred by limitation, if canbe said to be live claims which can be referred to arbitration –Held: Disputes between the parties had cropped up way back inthe year 2014 itself – When the bank guarantee came to be encashedin 2016 and the requisite amount stood transferred to theGovernment account, that was the end of the matter – This “BreakingPoint” is the date at which the cause of action arose for the purposeof limitation – Petitioner not justified in saying that it continued tonegotiate till 2019 – Statutory time period of three years prescribedfor the enforcement of a claim cannot be defeated on the groundthat the parties were negotiating – Present case is one of a hopelesslybarred claim, as the petitioner slept over its right for more than fiveyears – Petition rejected – Limitation Act, 1963 – Article 137.Words and Phrases– “cause of action”; “right to apply” –Meaning of – Discussed.
Judge	Hon'ble Mr. Justice J.B. Pardiwala
Neutral Citation	2023 INSC 549
Petitioner	M/s B And T Ag
Respondent	Ministry Of Defence
SCR	[2023] 7 S.C.R. 599
Judgement Date	2023-04-18
Case Number	13

Sl.	Authority	Responsibilities	Communication Details
1	Ministry of Education (GoI), Department of Higher Education	Sanctioning Authority	https://www.education.gov.in/ict-initiatives
2	Indian Institute of Technology Kharagpur	Host Institute of the Project: The host institute of the project is responsible for providing infrastructure support and hosting the project	https://www.iitkgp.ac.in
3	National Digital Library of India Office, Indian Institute of Technology Kharagpur	The administrative and infrastructural headquarters of the project	Dr. B. Sutradhar bsutra@ndl.gov.in
4	Project PI / Joint PI	Principal Investigator and Joint Principal Investigators of the project	Dr. B. Sutradhar bsutra@ndl.gov.in Prof. Saswat Chakrabarti will be added soon
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