Judgment :- J. KANALURAJ, J. 1. The respondent Sree Rajendra Mills Limited filed O.P. No. 27 of 1989 on the file of Sub Judge, Salem under Section 20 of the Arbitration Act, 1940 seeking an order of reference to arbitration in respect of the disputes referred to in the petition. It is stated in the said petition that the first appellant herein was part of the respondent Mills and that with a view to make the two companies economically viable as two separate companies, certain agreements were entered into between the two companies. Prior to the agreements, the appellant company was a wholly owned subsidiary company of the respondent company. The first agreement between the parties was entered into on 8.10.1982 between the Managing Director of the respondent company and the Joint Managing Director of the same company. The agreement provides for division of the two units belonging to the respondent company and division of supporting share holders. The assets and liabilities of the company were identified and described in the schedules A and B of the said agreement. There were references to the use of the trade mark and emblem as well as the division of the labour force. One important clause in the agreement which has some relevance to the present appeal is the clause which permits the appellants company to draw its power requirements from the respondent company upto 50% of the available power until the appellant company gets separate electricity supply. The second agreement was entered into on 24.11.1982 and referred to certain items which were not mentioned in the first agreement. The third agreement was on 23.2.1982 and here again there is reference to the assets and liabilities having been fully divided to the mutual satisfaction of the respective companies. The last agreement out of which the present arbitration petition arose is dated 28.3.1983. We will advert to the important clauses of this agreement when occasion arises except to say that clause 18 provided for a reference to the arbitration common to both parties by mutual consent whenever dispute arose with regard to the implementation and interpretation of the terms of the last agreement as well as the thrree earlier occasions. 2. We will advert to the important clauses of this agreement when occasion arises except to say that clause 18 provided for a reference to the arbitration common to both parties by mutual consent whenever dispute arose with regard to the implementation and interpretation of the terms of the last agreement as well as the thrree earlier occasions. 2. In the petition under Section 20 of the Arbitration Act, (hereinafter referred to as the “Act”) it is stated that the appellant, subsidiary company had certain obligations and to make certain payments as per the agreements. On account of the defaults committed by them, the respondent main company had to make the payments. Therefore, it is pointed out that the appellant company was bound to reimburse such payments. The respondent company had sent a notice to the appellant company on 24.8.1988 calling up on the appellant company to appoint a common arbitrator agreeable to both parties. The notice was received by the appellant company on 26.8.1988. and by the second respondent on 29.8.1988. A final reply was received on 22.12.1988 repudiating the claims made by the respondent company and claiming certain amounts as payable by the respondent company. 3. For the purpose of understanding the disputes between the parties, it is necessary to refer to the claims made by the respondent company. They are as follows: “For obtaining the new High Tension Electric Supply and Service Connection to Sri. Akilandeswari Mills P. Ltd., a sum of Rs. 6,47,508/- has been spent by the petitioner out of his amount, the respondents have reimbursed only Rs. 2,6,210/- There is a balance of Rs. 4,21,298/- to be paid by the respondents with interest “Towards the reimbursement to Vysya Bank (who had given a Bank Guarantee) of the D.P.G. payments made because of the respondents default in payments, the petitioner have paid a sum of Rs. 11,70,601/- which must be reimbursed by the respondents, and towards reimbursement to Central-Bank for a similar payment of Rs. 48,296/- c. The respondents have to pay as per the agreement the Electricity charges amounting to Rs. 6,08,173.81 with interest; d. A consideration of Rs. 7,33,322/- is to be paid by the respondents according to the agreement in four instalments specified in the agreement; e. Besides, the following amounts are also to be paid by the respondents to the petitioner; i. Interest on the above arrears; ii. 6,08,173.81 with interest; d. A consideration of Rs. 7,33,322/- is to be paid by the respondents according to the agreement in four instalments specified in the agreement; e. Besides, the following amounts are also to be paid by the respondents to the petitioner; i. Interest on the above arrears; ii. Payments made by Sree Rajendra Mills towards, Urban Land Tax, Municipal Taxes and other taxes, rents for workers colony, electricity bills, telephone Deposits etc., about Rs. 32,000/- and with interest thereon. f. The reliefs to be given to the parties in the circumstances.” The total of the above claims amounted to Rs 30,13,691/- with further interest. 4. In the counter statement filed by the appellants, it was contended that the petition did not disclose any dispute arising between the parties with regard to the implementation or interpretation of the agreement. It was contended by the appellants that if the respondent company had made payments, it was only a voluntary payment and they have no right to make the same as a subject matter of arbitration. Secondly it was contended that even assuming that the claims arose out of the agreements, they are barred by limitation, having been made more than three years from the date of the agreement. 5. By judgment dated 1.10.1992, the learned Sub Judge held that the disputes did arise out of the agreements and therefore were covered by the arbitration clause. On the question of limitation the lower Court observed that it is a question which could be decided by the arbitrator. 6. Before us, Mr. R. Subramanian, learned counsel for the appellants stressed the very same point and sought to convince us that the claims were not covered by the said agreements. 7. We have carefully perused the agreements as well as the disputed claims. We are clearly of the opinion that each of the disputed claims did arise out of the said agreements. For instance, the first dispute relates to the payment of Rs. 6,47,508/- for obtaining new High tension electric supply. The said payment was made by the respondent company and the appellant company was bound to reimburse the same. In fact, they had reimbursed to the extent of Rs. 2,26,210/-. We have already pointed out the question of electricity supply was a matter of agreement between the parties right from the first agreement. The said payment was made by the respondent company and the appellant company was bound to reimburse the same. In fact, they had reimbursed to the extent of Rs. 2,26,210/-. We have already pointed out the question of electricity supply was a matter of agreement between the parties right from the first agreement. Till the appellant subsidiary company was able to get new electricity supply, they were permitted to draw 50% of the power from the respondent company. Therefore, the payment made by the respondent company cannot be said to be voluntary, but arising out of the agreements. We do not certainly purport to decide the issue one way or the other, but we do hold that dispute does arise out of the said agreements. 8. The second claim relates to the default committed by the subsidiary company (appellant) towards reimbursement to Vysya Bank who had given a bank guarantee. The respondent company had made payments to the tune of Rs. 11,70,601/- and they claim reimbursements from the appellant company. It was vehemently argued by the learned counsel for the appellant that this claim certainly was not maintainable because clause 16 of the last agreement dated 28.3.1983 clearly says that the assets and liabilities had been divided and allotted between the parties. The amounts payable by the appellant subsidiary company had been specified, the balance amounts payable were directed to be paid in instalments. Therefore, it is argued that there cannot be any further question remaining in respect of the payments to be made by the appellant subsidiary company. Even clause 14 of the agreement says that the parties had agreed and ratified the division and allotment of assets and liabilities. It is true that the parties had agreed upon the division of the assets and liabilities. But the question raised by the respondent in the petition under Section 20 is that the appellant subsidiary company, having defaulted on account of which a grave situation had arisen with reference to the bank guarantee furnished by Vysya Bank, the respondent company had to make certain payments. Therefore, the question of reimbursement of the said money is certainly a matter which arises between the parties out of the said agreements. Therefore, the question of reimbursement of the said money is certainly a matter which arises between the parties out of the said agreements. So far as the claims under Clauses(c) and d of the petition, to which we have already made a reference there is little difficulty in holding that clauses 7 and 16 of the arbitration agreement do make the claims arbitrate. Similarly, the payments under Clause C(ii) cannot also be disputed. Therefore, we agree with the learned trial Judge that all the claims made by the respondent do arise out of the agreements and therefore, the arbitration Clause 18 does apply to the claims. 9. The only other question is to find out whether the petition is barred by limitation. In this connection, we must advert to the stand taken by the appellant in its counter statement which runs as follows: — “Assuming without admitting that the petition under the Act is maintainable the petition is barred by limitation haying been made more than three years from the date of the agreement. Hence the petition has to be dismissed in limine.” Therefore, the stand taken by the appellant is that the petition under Section 20 of the Arbitration Act had been filed beyond three years of the said agreements. There is little difficulty in rejecting this argument having regard to the number of decisions which have been cited before us. Learned counsel for the appellants also argues that the disputed claims themselves are barred by limitation. Though such a plea was not taken, we are prepared to consider the aspects of the case. A Division Bench of this Court in The Madras Metro Water Supply and Sewerage Board v. O. Ramakrishna Reddy (1995 2 L.W. 694) had occasion to deal with this question. The Division Bench referred to three judgments of the Supreme Court and came to the conclusion that Article” 137 of the Limitation Act is the appropriate Article for making a reference under Section 20 of the Arbitration Act After considering all the three judgments of the Supreme Court, the Division Bench observed: “.. The cause of action has arisen only when the liability is repudiated. The respondent cannot after receipt of the final payment, issue notices long after three years. The cause of action has arisen only when the liability is repudiated. The respondent cannot after receipt of the final payment, issue notices long after three years. So on the admitted facts, if Article” 137 of the limitation Act applies, the claim will be barred by limitation and to refer the matter to an Arbitrator when there is no subsisting claim will amount to causing great injustice to the appellant” 10. We are of the opinion that while there can be no dispute regarding the ratio that the cause of action arises only when the liability is repudiated, we are unable to subscribe to the sentence “and to refer the matter to an Arbitrator when there is no subsisting claim will amount to causing great injustice to the appellant”. We do not think a careful perusal of the judgment of the Supreme Court would lead to the said conclusion. Here again, if on admitted facts a claim is barred by limitation, certainly it will be open to the Court to reject the petition under Section 20 of the Arbitration Act But where the bar of limitation is a disputed question, then the proper thing would be to leave it to the arbitrator to decide the issue. 11. In this case, we have already pointed out that the claim for arbitration was repudiated by a final notice dated 22.12.1988. Before that an interim reply was sent on 16.9.1988, informing that a detailed reply would be sent for the notice issued by the appellant company. Taking note of either of the dates, the arbitration petition under Section 20 of the Act filed in February 1989 is well within three years. In this view of the matter, the objection taken by the appellants in their counter statements has to fall and is accordingly rejected. 12. We will now take up the question whether the disputed claims are themselves barred by limitation. On this issue, we would like to refer to the judgments of the Supreme Court The first is Inder Singh v. Delhi Development Authority (A.I.R. 1988 S.C. 1007). The facts in the said case are: The Delhi Development Authority accepted a tender for construction of certain houses. The work was required to be completed by the 14th July, 1977. The work was finally completed on 2.4.1980. Between February 1983 and December 1985, the contractor sent several letters seeking settlement of the bills. The facts in the said case are: The Delhi Development Authority accepted a tender for construction of certain houses. The work was required to be completed by the 14th July, 1977. The work was finally completed on 2.4.1980. Between February 1983 and December 1985, the contractor sent several letters seeking settlement of the bills. The first of these letters, was written on 28.2.1983. In January 1986, a petition under Section 20 of the Arbitration Act was filed. The same was dismissed by the trial Judge and confirmed by a Division Bench of the Delhi High Court. With reference to the above facts, the Supreme Court observed. “The application under S. 20 of the Act was filed in Court in January, 1986, that is to say, within the period of three years. Therefore the application was within time. The High Court was in error in dismissing the application on the ground of limitation. The judgment and order of the High Court are, therefore, set aside.” The second judgment is Union of India v. L.K. Ahuja & Co. (A.I.R. 1988 S.C. 1172). In that case also there were four agreements. The contract is said to have been completed on 30th May, 1971. Four final Bills were received and settled. Therefore, the contractor again wrote a letter seeking payment of Rs. 1,91,137/- and sought for a reference to arbitration. On 4.6.1976, a reply was sent that there was no dispute pending between the parties. On 13.12.1976, a petition under Section 20 of the Arbitration Act was filed. The application was dismissed as barred by limitation. The High Court allowed the appeal holding that the petition under Section 20 of the Act was maintainable. With reference to the above facts, the Supreme Court observed, bringing to light the dichotomy between the two arbitrators of the limitation, as follows: “In view of the well-settled principles we are of the view that it will be entirely wrong to mix-up the two aspects, namely, whether there was any valid claim for reference under Section 20 of the Act, and, secondly, whether the claim to be adjudicated by the arbitrator, was barred by lapse of time. The second is a matter which the arbitrator would decide unless, however, if on admitted facts a claim is found at the time of making an Order under S. 20 of the Arbitration Act, to be barred by limitation, In order to be entitled to ask for a reference under S. 20 of the Act, there must be an entitlement to money and a difference or dispute in respect of the same. It is true that on completion of the work, right to get payment would normally arise and it is also true that on settlement of the final bill, the right to. get further payment gets weakened but the claim subsists and whether it does subsist, is a matter which is arbitrable” 13. Thus, it will be seen that the Supreme Court has categorically laid down the law that the right to get further payment even after the final bill is a weak claim, but all the same whether it subsists or not is a matter which is arbitrable (Emphasis supplied). In our opinion, the judgment of the Division Bench, to which we have earlier made a reference, is not in conformity with the above sentence in the Supreme Court Judgment. Panchu Gopal Bose v. Board of Trustees for Port of Calcutta (1993 4 S.C.C. 338) is only an authority for the proposition that the period of limitation for commencement of arbitration runs from the date on which the cause of arbitration arose. In that case, a claim was made on 12.7.1979 and the same was not accepted. For 10 years, the contractor did not take up any follow up action and thereafter sent a notice on 28.11.1989 seeking reference to an arbitration. It was held that the claim was hopelessly barred by limitation and we do not think that any explanation is necessary, because even the judgment of the Supreme Court, cited earlier lay down the proposition of law. 14. Mr. R. Subramanian, finally referred to a recent judgment of the Supreme Court in State of Orissa v. Damodar Das (1996 2 S.C.C. 216). The above judgment does not lay down any proposition of law, but only says that for the purpose of Section 37(1) of the Arbitration Act, “action” and “cause of arbitration” should be construed as arbitration and cause of arbitration. The above judgment does not lay down any proposition of law, but only says that for the purpose of Section 37(1) of the Arbitration Act, “action” and “cause of arbitration” should be construed as arbitration and cause of arbitration. The judgment further lays down that “an application under Section 20 is governed by Article 137 to the schedule to the Limitation Act, 1963, and must be made within 3 years from the date when the right to apply first accrues, but there is no right to apply until there is a clear and unequivocal denial of that right by the respondent”. We have already referred to the facts that in the instant case, the repudiation was made on 22.12.1988 and the petition under Section 20 of the Arbitration Act was filed within 3 years from the said date. That apart, we have also pointed out that the claims made by the respondent company are not barred by limitation on a prima facie appreciation of the facts of the case. It requires further consideration and it is the arbitrator who is the proper person to do so. In this view of the matter, the judgment of the lower Court is confirmed and the appeal is dismissed. However, there will be no order as to costs.