J. K. Mehra,j. ( 1 ) THIS is a petition under Section 20 of the Arbitration Act,1940. The petition was filed on 23. 2. 1989. According to the allegations in the plaintand in the petition, the petitioner had entered into a licence agreement with therespondents on 3. 12. 1975, being Exhibit P-5 whereby the petitioner granted alicence to the respondents about the process for manufacture of ultrasonic probesfor non-destructive testing (Vig), Angle Beam Probes, Surface Wave Probes andnormal Beam Probes etc. The petitioner under the said agreement was to supplythe technical know how on the said process, which is claimed to be an invention ofthe petitioner. The agreement was to run for a term of seven years to be computedfrom the date of the start of manufacture by the respondents and the respondentswere to pay to the petitioner a royalty @ 5% of the net ex-factory sale price of thematerial manufactured by it and marketed by it fora period of seven years. Theroyalty was to be paid every half year, i. e. , on 1st April and 1st October each year. In the event of default in payment of such royalty, the respondents agreed to payinterest on the amount of royalty @ 15% p. a. It is an admitted case that no royaltywas paid by the respondents to the petitioner on the plea that they did not go intomanufacture of any products making use of the petitioner s invention covered bythe said licence agreement. Having failed to obtain any payment and also aresponse to their demand for payment, the present petition was filed for filing ofan agreement arid invoking the arbitration clause No. 11 of the said agreement andreference of the disputes between the parties to the Arbitrator. ( 2 ) NOTICES were issued and the respondents on appearing before the Courttook up several preliminary objections, but at the time of hearing, only two wereargued. One that the claim in the present case is hopelessly time barred. It is settledlaw that the question as to whether the particular claim is barred by limitation, isa matter for the Arbitrator to consider and decide. A reference in this behalf maybe made to the decision of the Hon ble Supreme Court in the case of Wazir Chandv. Union of India, reported as AIR 1969 SC 474 . This has been consistently followedin AIR 1976 SC 287 and AIR 1988 SC 1072. A reference in this behalf maybe made to the decision of the Hon ble Supreme Court in the case of Wazir Chandv. Union of India, reported as AIR 1969 SC 474 . This has been consistently followedin AIR 1976 SC 287 and AIR 1988 SC 1072. The next question that comes up fordecision in this case is whether the petition under Section 20 has been filed withintime. The respondents have pressed that the agreement which was entered into in1975 had come to an end in 1982 after a period of seven years and since noproduction could be undertaken by them on the basis of the invention covered bythe said agreement, there could be no question of any payment of royalty or adispute arising in this matter. The law on the question is well settled by the Hon blesupreme Court in the case of Inder Singh Rekhi v. Delhi Development Authority,reported as AIR 1988 SC 1007 . Our High Court in the case of Pooran Chand Nangia v. Aviatiort Employees cooperative House Building Society, reported as 38 (1989)DLT 188 has also followed the law laid down in the aforesaid Supreme Court sjudgment. The question was further considered by a Division Bench of this Courtin the case of Union of India v. Vijay Construction Company, reported as AIR 1981delhi 193 wherein the Division Bench of this Court considered the question oflimitation in filing the petition under Section 20 and held that the cause of actionaccrues to a party to the contract containing the arbitration clause on the date whenthe contract was rescinded by other party thereto and the limitation of three yearshas to be counted from that date and not from the date of notice when that partyserves a notice on the other party requiring the appointment of the Arbitrator. Inthe present case, there is no plea of agreement having been rescinded. The plea ofthe respondents is that nothing whatsoever had fallen due for payment as production could not be started. Such assertion could strengthen the argument that thepetition is not maintainable being pre-mature. The respondents cannot avail of theratio of the judgement cited by it in the case of S. Rajan v. State of Kerala. It is notdisputed that the licence agreement was to continue even after the expiry of theterm of the agreement according to proviso to the agreement. Such assertion could strengthen the argument that thepetition is not maintainable being pre-mature. The respondents cannot avail of theratio of the judgement cited by it in the case of S. Rajan v. State of Kerala. It is notdisputed that the licence agreement was to continue even after the expiry of theterm of the agreement according to proviso to the agreement. The objection of therespondents is not that there is no accrual of cause of action in favour of thepetitioner for a reference, but that the agreement came to an end in 1982 and threeyears period is to be reckoned from 1982. Nothing was addressed regarding theeffect of proviso. For that reason also, the objection on the question of limitation infiling Section 20 petition would not be construed from 1982. In fact, from thecorrespondence. Exhibits P-10 and P-11, it appears that the respondents hadadvertised their products in a magazine, namely Purchases Volume - VI published in December, 1983 wherein the respondents had claimed that they are manufacturing ultrasonic flaw detectors ranging from 0. 5 to M. H. Z. It is stated bycounsel for the petitioner that they acquired the knowledge of comencement ofmanufacture of these probes from the said advertisement in December, 1983 andthe respondents, as per the terms of the agreement, were to continue paying royaltyin terms of the agreement for a period of seven years, at least from the date therespondents had advertised that they were manufacturing such products. If theperiod of seven years is computed from 1983, the liability to pay royalty wouldhave come to an end in 1990 only and not in 1982. Since the petition has been filedin 1989,1 am satisfied that the same is within time and in view of the allegations andcounter-allegations, there also exists a dispute regarding the payment of royalty asthe petitioners have asserted that the production started in 1983 and consequentlyroyalty became payable which has been denied by the respondents. The onlydisputes that can be referred in the present case are : (1) Whether the respondents are liable to pay a sum of Rs. 1,05,000. 00 byway of royalty and interest under the agreement dated 3. 12. 1975, and (2) Whether the claim of the petitioner is barred by limitation? ( 3 ) IN the light of the above discussion, I am satisfied that the petitioner hasmade out a case for the petition being allowed. 1,05,000. 00 byway of royalty and interest under the agreement dated 3. 12. 1975, and (2) Whether the claim of the petitioner is barred by limitation? ( 3 ) IN the light of the above discussion, I am satisfied that the petitioner hasmade out a case for the petition being allowed. Accordingly, I direct filing of theagreement and order the disputes to be referred to the sole arbitration of thechairman, petitioner corporation in terms of clause-11. The said Arbitrator willalso decide whether the claim of the petitioner is within limitation. The referenceshould be made within two months from this date and the Arbitrator should makeand publish his award within four months of the date he enters upon reference. Thesuit is disposed of in the above terms with no order as to costs.