Sanjib Banerjee, J.@mdashThe award appears clearly to be erroneous and in derogation of the Limitation Act, 1963; and, as such, opposed to public policy and susceptible to annulment under section 34(2)(b)(ii) of the Arbitration and Conciliation Act, 1996. Despite the respondent''s insistence on an affidavit being filed, such request has been declined since affidavits may be unnecessary in proceedings for setting aside arbitral awards where, applying the dictum in
"On hearing both the parties and examining all the documents placed by them it is observed that there was delay in execution of the work, with respect to the stipulated date of completion on June 21, 1992 as agreed upon. The Claimant served notice upon the Respondent regarding imposition of Liquidated Damages as per contract in January, 1993 when delay was continuing. In reply, in February, 1993 the Respondent admitted the delay and requested to waive the Liquidated Damage. The work was completed on 28th January, 1993. Subject to the Settlement of Liquidated Damage the Claimant paid the bill raised by the Respondent for work executed by them in March, 1993. In March, 1994 the Claimant preferred the claim for Liquidated Damage within a reasonable period and, thereafter, requested and reminded the Respondent time to time to make the payment. The Respondent kept on silence for more than three years showing no interest to make any payment or dispute the claim or refer the matter to the Arbitrator till August, 1997. In September, 1997 the Respondent denied and disputed the claim of the Claimant from where the dispute had arisen as well as right to apply accrued for reference to arbitration proceedings as per Clause 7 of the Contract Agreement. Arbitration was sought for by the Claimant in March, 1998 within valid period from the date when right to apply accrued. On March, 1999 the Learned Arbitrator (of previous arbitration) entered into the reference. A Court case for setting aside the award followed thereafter vide A.P.O. No. 484 of 2006/A.P. No. 54 of 2006 in the High Court at Calcutta. The instant arbitration took place according to the order of the Hon''ble High Court."
2. Even though the third and the fourth dates referred to in the paragraph, January 28, 1993 and March, 1993, appear to be irrelevant for the purpose of reckoning limitation, the award-holder may be given the benefit of the doubt and the later of such dates may be taken for the purpose of ascertaining whether the right to pursue the claim was alive at the time that the arbitration proceedings commenced. The reference in the paragraph to March, 1993 corresponds to a document appearing at page 151 of the papers dated March 31, 1993. The document was the covering letter issued by the award-holder while making the final payment, with the following caveat:
"In the event of any excess payment on final settlement of our liquidated damage claimed, you will be liable to refund the same."
3. Thus, it is evident that prior to or by March, 1993 the award-holder had pointed out to the petitioner herein that the award-holder was entitled to liquidated damages in terms of the contract and at the time of the award-holder making the final payment under cover of the letter dated March 31, 1993, the award-holder reserved its right to seek refund on account of the liquidated damages claimed.
4. It is not in dispute that the arbitration agreement was invoked and the arbitral proceedings commenced, within the meaning of section 21 of the 1996 Act, in March, 1998. Indeed, on the basis of the following observation at paragraph 3 of the order passed by the arbitrator on the petitioner''s application under section 16 of the 1996 Act, such order may be set aside. "The respondent kept in silence for more than three years..."
5. Nothing that the arbitrator has referred to in the order dated July 19, 2011 or that the award-holder can demonstrate detracts from the fact that between March 31, 1993 and March, 1998, the award-holder did not take effective steps to pursue the claim. It is elementary that a repetition of a demand, of the kind evident from the documents appearing at pages 178 to 186 of the papers, would not arrest the clock of limitation. It is also trite that anything said or done by the party against whom a claim is made would not amount to an acknowledgement within the meaning of section 18 of the Limitation Act, 1963 for a fresh period of limitation to begin there from unless the acknowledgement of the jural relationship is within the period of limitation. As would be evident from the relevant paragraph of the arbitrator''s order of July 19, 2011, the earliest letter or acknowledgement of the petitioner is said to be of September, 1997. Since nothing that the petitioner did in September, 1997 could have revived a claim that could not be pursued after March 31, 1996, Section 3 of the Limitation Act read with section 43 of the 1996 Act precluded the arbitrator from proceeding with the reference any further.
6. It is of some significance that a previous award had been set aside both on the ground of lack of reasons in the award and the objection regarding limitation. In appeal, the order of the arbitration Judge was modified by permitting a further reference to be instituted for the point of limitation to be adjudicated thereat.
7. Since the respondent''s claim, on the face of it, could not have been pursued in view of limitation, the award is liable to be set aside.
8. A.P. No. 389 of 2014 is allowed by setting aside the impugned award of December 4, 2013 and the order dated July 19, 2011 and holding that the respondent could not have pursued the claim by invoking the arbitration agreement only in March, 1998. The petitioner will be entitled by way of costs to the entire amount borne by the petitioner on account of the arbitrator''s remuneration. If such amount is not paid by the respondent to the petitioner within a fortnight from date, the petitioner will be entitled to interest thereon at the rate of 8 per cent per annum till payment. Urgent certified website copies of this order, if applied for, be supplied to the parties subject to compliance with all requisite formalities.
