ASIA RESORTS LTD. v. USHA BRECO LTD. — 1997 DIGILAW 350 (HP)

JUDGMENT Surinder Sarup, J. - The plaintiff-petitioner, i.e., Asia Resorts Ltd., has filed the present petition under Section 20 of the Indian Arbitration Act (hereinafter called 'the Act') on the pleadings that it has its registered office at Timber Trail Resorts Datyar (Parwanoo) Distt. Solan, H.P. It is a body corporation incorporated under the Companies Act, 1956. Shri Ramesh Kumar Garg is the Managing Director of the Company and it is through him that the present petition has been filed. 2. It has been submitted that in the year 1984, the petitioner-company initiated the process of installation of a passengers ropeway system between its existing resorts known as Timber Trail Resort Datyar, and its new resort, Timber Trail Heights at Banssar. In pursuance of the same, it entered into an agreement with the defendant-Company i.e., Usha Breco Ltd. Chitranjan Avenue, Calcutta on 10-4-1986, a copy of this agreement has been filed with the petition. In pursuance thereof, the defendant-Company undertook to supply mechanical and electrical items including structures of the passengers ropeway system required by the petitioner. The parameters of the work to be undertaken by the defendant were defined in Annexure A to that agreement. According to the same, the system to be supplied by the defendant was to have a capacity of carrying 150 passengers per hour between Datyar and Banssar. This was to be on the basis of eight hourly shift, as per the details given below : (i) Total number of trips per hour : 9 Nos. (ii) Total passenger per hour : 150 (each way). It was also stipulated in the agreement that within the eight hourly operation, the total capacity of the passengers ropeway system would be 1200 passengers per day. 3. According to the petitioner, based on the aforementioned representations, assurances and agreement, it invested huge amounts in the project, but from its very inception, it was repeatedly brought to the notice of the defendant that the working capacity of the system supplied by it and as stipulated and incorporated in the agreement, had never been achieved. As a matter of act, the petitioner, on account of the restrictions imposed by the Inspector of Ropeways, Himachal Pradesh, had accepted a shortfall of two persons. Despite the shortfall of two passengers that had been accepted by the petitioner, the defendant could not still bring the system to meet the shortfall. As a matter of act, the petitioner, on account of the restrictions imposed by the Inspector of Ropeways, Himachal Pradesh, had accepted a shortfall of two persons. Despite the shortfall of two passengers that had been accepted by the petitioner, the defendant could not still bring the system to meet the shortfall. The system installed by the defendant could not carry the number of passengers promised nor make the requisite number of nine trips per hour between the two stations. In fact, it has not been possible for the system to achieve and attain more than six and half trips per hour. Consequently, the system has not been able to carry more than 100 passengers per hour i.e., 800 passengers per day. Therefore, on account of deficiency in service, the plaintiff suffered maximum financial loss and the entire financial viability of the project has been thrown out of gear. The plaintiff continues to incur financial loss and has not been able to meet its financial commitments by way of servicing its loans etc. 4. The plaintiff got a legal demand notice dated 16-6-1993 served on the defendant but it was of no avail. The latter appears to be evading the demands raised by the plaintiff-petitioner. Consequently, as per the contents of the notice, the plaintiff was forced to rescind the contract and it has called upon the defendant to remove the system. It further informed the defendant that it would install a new ropeway system at the expenses and cost of the defendant besides claiming damages on account of harassment, mental tension and financial losses etc. Therefore, serious disputes have arisen between the parties. 5. According to the plaintiff's case, after the execution of the agreement dated 10-4-1986, number of complaints were made to the defendants and series of meetings took place between the representatives of the plaintiff and the defendant. Final meeting took place on 19-6-1988 at Parwanoo between their respective representatives in which the question of increase in the capacity was also discussed and minuted. It was agreed that passenger carrying capacity would be increased by the defendant to 135 passengers per hour, which was accepted by the petitioner-plaintiff. But nothing was done to increase the passenger carrying capacity. Since there is an existing Arbitration Clause No. 15.00 in the agreement, the matter has to be referred to the arbitration, hence the present petition. 6. It was agreed that passenger carrying capacity would be increased by the defendant to 135 passengers per hour, which was accepted by the petitioner-plaintiff. But nothing was done to increase the passenger carrying capacity. Since there is an existing Arbitration Clause No. 15.00 in the agreement, the matter has to be referred to the arbitration, hence the present petition. 6. In the reply filed by the defendant M/s. Usha Breco Ltd., which is in the shape of affidavit of Amit Kumar Basu, Engineer working with the defendant, it has been stated that being the General Manager (Operations) of the defendant-company, he is acquainted with the facts and in a position to depose regarding the same. 7. A number of preliminary objections have been taken in the affidavit, which inter alia, are as follows : (a) that the application under Section 20 of the Arbitration Act is barred by limitation under Article 137 of the Limitation Act, 1963 read with Section 20 of the Arbitration Act. The reasons for this are contained in sub-clauses (i) to (iii) of Clause (a) of para 3 of the reply and it is not necessary to reproduce them here. (b) There is no valid and subsisting arbitration agreement between the parties. The agreement dated 10-4-1986 was admittedly determined and concluded and all matters between the parties relating to the said agreement were admittedly settled on or around 12-4-1988. Such settlement was recorded in the minutes of the same date. The said agreement and settlement did not contain any arbitration clause. By the said settlement the contract dated 10-4-1986 as also the arbitrations agreement contained therein were wholly superseded and/or abrogated and were no longer affective or operative. Copy of the said agreement and the certificate dated 12-4-1988 of the plaintiff are annexed with the reply as Annexures 'C' and 'D', respectively. (c) The notice dated 17-4-1990 has a crucial bearing on the question as to whether the plaintiff's application and claim are barred by limitation as also whether the plaintiff was ready and willing to refer its claim to arbitration. (d) Petition under Section 20 of the Arbitration Act, 1940 is not maintainable if the petitioner was at all material times not ready and willing to refer its claim to arbitration. (d) Petition under Section 20 of the Arbitration Act, 1940 is not maintainable if the petitioner was at all material times not ready and willing to refer its claim to arbitration. The notice dated 16-6-1993 served by the plaintiff, in which it has been mentioned that "my clients shall be reluctantly compelled to institule suitable legal proceedings against you in a Court of competent jurisdiction" shows that the plaintiff was not at all material times ready and willing to refer its claim to arbitration but was contemplating institution of legal proceedings against the defendant in a Court of Law. Even in the earlier notice dated 17-4-1990 it has been mentioned that "will be constrained to take legal action against you in the Court of Law." (e) That the plaintiff is guilty of gross delay and laches in filing the petition and it should be rejected on this ground alone. (f) That the petition does not disclose any question, dispute or difference between the parties. (g) The application does not disclose even a single violation or deviation by the defendant from the basic parameters, as laid down in the agreement dated 10-4-1986 which was also accepted by the plaintiff. (h) The disputes alleged to have arisen between the parties are not covered by any arbitration agreement. (i) The alleged disputes do not and cannot in any event arise from or under the agreement dated 10-4-1986. (j) Assuming without admitting that there was a valid arbitration agreement between the parties, the plaintiff has not complied with and fulfilled the requirements of the arbitration agreement and/or the preconditions for filing the application under Section 20 of the Arbitration Act, 1940, namely, that the plaintiff has not sent any notice to the defendant containing ingredients thereof. (k) That the petition is an afterthought and is motivated. It arose on account of incident which took place on 13-10-1992 for which the defendant was in no way responsible. The said incident was widely published and reported. Several claims have been filed by the passengers travelling in the ropeway against the plaintiff. Criminal proceedings have also been instituted and is pending against the plaintiff. It is obvious that the plaintiff is trying to avoid its liability and responsibility by making false and belated allegations against the defendant. (l) That the petition has been field with ulterior motives and is an abuse of process of Court. Criminal proceedings have also been instituted and is pending against the plaintiff. It is obvious that the plaintiff is trying to avoid its liability and responsibility by making false and belated allegations against the defendant. (l) That the petition has been field with ulterior motives and is an abuse of process of Court. (m) That the petition is speculative, harassive and motivated. (n) The plaintiff by its conduct has disentitled itself from getting any relief in a Court of Law. 8. On merits, the agreement between the parties dated 10-4-1986 has been admitted, however, it has been denied that any dispute has arisen in consequence thereof between the parties. It has been denied that the agreement specified that the system would have to transport 1200 passengers per day on the basis of eight hourly shift and 9 trips per hour as alleged. 9. It has also been denied that the plaintiff invested huge amounts in the project or that such investment was based on any representation or assurance or agreement as alleged. It has also been denied that the working capacity of the system supplied by the defendant and/or as stipulated and incorporated in the agreement, had never been achieved or that there was any shortfall in the system supplied by the defendant or that the system installed by the defendant could not carry the number of passengers promised. It has been stated that the demand notice was not called for and was motivated. Copies of the letters dated 17-5-1990 and 16-7-1993 written by the Counsel of the defendant to the Counsel of the plaintiff, are annexed as Annexures E and F, respectively, with the reply. It has been denied that the defendant ever evaded any demand or notice or that the plaintiff rescinded the contract as per notice dated 16-6-1993 or that there was any question of the plaintiff calling upon the defendant to remove the system as alleged. The contracts dated 7th and 10th April, 1986 were duly performed and were superseded by the agreement dated 12-4-1988. 10. According to the defendant, there were no complaints lodged by the plaintiff after execution of the agreement dated 10-4-1986 with the defendant or that a series of meetings took place between the representatives of the parties in connection with such complaints. The meeting dated 19-6-1988 was held after the contract dated 10-4-1986 had been performed, terminated and abrogated. 10. According to the defendant, there were no complaints lodged by the plaintiff after execution of the agreement dated 10-4-1986 with the defendant or that a series of meetings took place between the representatives of the parties in connection with such complaints. The meeting dated 19-6-1988 was held after the contract dated 10-4-1986 had been performed, terminated and abrogated. It was also denied that in the meeting held on 19-6-1988, the question of increase in capacity was discussed. The minutes of the meeting have been annexed with the reply as Annexure 'G'. It has been denied that there is an existing arbitration clause between the parties or that any matter has to be referred to Arbitrator as alleged. 11. To the above reply, the plaintiff has filed replication in which it has been stated that the reply has not been signed or filed and/or verified by a competent person, therefore, it deserve to be ignored. The specific paras have not been verified on the basis of personal knowledge or on the basis of record. According to the plaintiff, the arbitrator, who alone is competent to decide the same, the matter needs to be referred to him. On merits, the pleadings, as contained in the original petition, have been reiterated. The parties have also filed various applications and other documents. 12. On the pleadings of the parties, the following issues have been framed : "(1) Whether the application in question is within limitation ? OPP (2) In case Issue No. 1 is decided in the affirmative, whether there is a dispute existing in between the parties ? OPP (3) Whether the written statement has been filed by a competent and authorised person ? OPD (4) Relief." 13. I have heard Mr. R. L. Sood, learned Counsel for the plaintiff-petitioner and Mr. Arun Jaitley, Senior Advocate, Mr. Joideep Gupta, Mr. Suman Khaitan and Mr. K. D. Sood, Advocates on behalf of the defendant and have gone through the record. My finding, issuewise, is as under : Issue No. 1 : 14. This Issue is the most hotly contested issue in this case and has much bearing on its ultimate fate. The pleadings have already been reproduced in detail above. Mr. Arun Jaitley has on the basis of objection regarding limitation taken in the reply of the defendant, referred this Court to Article 137 of the Limitation Act. The precise argument of Mr. The pleadings have already been reproduced in detail above. Mr. Arun Jaitley has on the basis of objection regarding limitation taken in the reply of the defendant, referred this Court to Article 137 of the Limitation Act. The precise argument of Mr. Jaitely is that after the expiry of three years from the date of notice of Mr. K. K. Aggarwal, Advocate, Chandigarh dated 17-4-1990, the present petition under Section 20 of the Act, is time-barred in view of the aforesaid legal provision. 15. In order to appreciate the argument of Mr. Jaitley, which on the face of it, appears to be unexceptionable, the provisions of Article 137 of the Limitation Act may be noticed. This is the residuary Article and relates to contingencies for which no specific limitation is provided under the Act. According to him, the limitation regarding any other application for which no period of limitation is provided elsewhere in this division is three years from the date when the right to apply accrues. The notice purported to have been issued by Mr. K. K. Aggarwal, Advocate on 17-4-1990 through registered post to the defendant is a part of record and is not in dispute. As a result of the same detailing the technical problems which had arisen in the functioning of the ropeway as per the details in the petition referred to above, it was categorically mentioned that the defendant was called upon to do the needful within 30 days of the date of the said notice, otherwise the plaintiff would be constrained to initiate legal action in the Court of Law is mentioned. This is Annexure B with the reply of the defendant. Annexure E is the reply sent by the defendant through M/s. Khaitan and Co., Advocates and Notaries, Calcutta dated 17-5-1990 to the notice Annexure B. In other words, the said notice is not disputed. 16. On the other hand, Mr. R. L. Sood, learned Counsel for the plaintiff-petitioner has referred me the two letters dated 13-6-1991 and 24-3-1991 and 24-3-1993 at the instance of the plaintiff and has submitted that another letter dated 6-4-1993 is an acknowledgement by the defendant under Section 18 of the Limitation Act, which would make the present petition under Section 20 of the Act, within the period of limitation. The letter dated 13-6-1991 is part of the documents filed by the plaintiff-petitioner and relied upon by him. The letter dated 13-6-1991 is part of the documents filed by the plaintiff-petitioner and relied upon by him. The same is from M/s. Usha Breco Ltd., addressed to M/s. Tata Consulting Engineers, Bombay, in which it is mentioned that they confirm that they have done a Jig Back Systems ropeway at Parwanoo for M/s. Asia Resorts Ltd., and furnished the particulars of installation and capacity has been mentioned as 150 passengers per hour. The letter dated 24-3-1993 is from M/s. Asia Resorts, i.e., the plaintiff-petitioner by registered post, addressed to the Executive Engineer, M/s. Usha Martin Industries Ltd., Calcutta. This is the parent company of the defendant, as is the admitted case of both the parties. The operative part of this letter is that "we have received a notice from National Consumer Disputes Redressal Commission from Delhi and M/s. Usha Breco Ltd., Calcutta are also a party to it." It has been mentioned therein that it was necessary to take a common stand on this issue, despite the misunderstanding between the two companies which can be removed through negotiations. Though it is not so mentioned in the said document, the notice received from the National Consumer Disputes Redressal Commission was in respect of the claims made by certain parties against the plaintiff-petitioner. Lastly, there is a letter dated 6-4-1993 from M/s. Usha Breco Ltd., sent through Mr. A. K. Basu, General Manager (Operations) addressed to the plaintiff petitioner. In it, it has been categorically mentioned that with reference to the letter of the plaintiff-petitioner addressed to the Executive Director of M/s. Usha Martin Industries Ltd. dated 24-3-1993, attention of the plaintiff-petitioner has been invited to the fact that discussion held with Shri B. S. Jaswal on 19/20-3-1993 at Calcutta has not been correctly recorded in its letter and a detailed letter will follow. As regards the receipt of formal notice from National Consumer Disputes Redressal Commission, it is stated that the defendant has also received a formal notice and the suggestions made by the plaintiff-petitioner is noted and the defendant will revert back to the plaintiff. Admittedly, there was no exchange of communication or letters thereafter between the parties. 17. In support of his objection regarding limitation, Mr. Arun Jaitely has cited a number of authorities. They are, The Vulcan Insurance Co. Ltd. v. Maharaj Singh and another ((1976) 1 SCC 943.). Admittedly, there was no exchange of communication or letters thereafter between the parties. 17. In support of his objection regarding limitation, Mr. Arun Jaitely has cited a number of authorities. They are, The Vulcan Insurance Co. Ltd. v. Maharaj Singh and another ((1976) 1 SCC 943.). There is an observation in para 23 of the report that the period of three years prescribed in Article 137 of the Act of 1963 may be applicable to an application under Section 20 of the Act. Therefore, no help can be derived from this authority. 18. The next ruling cited by Mr. Jaitley is Major (Retd.) Inder Singh Rekhi v. Delhi Development Authority ((1988) 2 SCC 338 = 1988(2) Arb. LR 270.). This authority is more on the point as it has been categorically held therein that Article 137 of the Limitation Act, 1963 would apply to any petition or application filed in a Civil Court. The case was under Section 20 of the Act. In para 4 of this report, it has been laid down that in order to be entitled to order of reference under Section 20 ibid, it is necessary that there should be an arbitration agreement and secondly, difference, must arise to which this agreement applied. On the facts of that case, it was held that the application under Section 20 of the Act was filed in Court within the period of three years as prescribed under Article 137 (ibid). As regards the date, when the cause of action arose, reliance has been placed by Mr. Arun Jaitley on Panchu Gopal Bose v. Board of Trustees for Port of Calcutta ((1993) 4 SCC 338 = 1993(2) Arb. LR 97.). According to this authority, for the purpose of Indian Limitation Act, 1908, an arbitration shall be deemed to be commenced when one party to the arbitration agreement serves on the other party thereto, a notice requiring the appointment of an arbitrator, or where the arbitration agreement provides that the reference shall be to a person named or designated in the agreement requiring that the difference be submitted to the person so named or designated. The limitation shall be deemed to have been accrued to the party in respect of any such matter of the time when it should have accrued but for the contract. The limitation shall be deemed to have been accrued to the party in respect of any such matter of the time when it should have accrued but for the contract. Cause of action shall be deemed to have commenced when one party serves the notice on the other party requiring the appointment of an arbitrator. The question is when the cause of arbitration arises in the absence of issuance of a notice or omits to issue for long time or contract to the contrary. This authority has been relied on in the notice of Mr. A. K. Aggarwal, referred to above, which was issued in the year 1990, i.e., much before the period of three years prescribed by Article 137 of the Limitation Act. 19. Mr. Arun Jaitley has then cited before this Court, the case of State of Orissa and another etc. v. Shri Damodar Das (1996(1) SCALE 68 = 1996(1) Arb. LR 221.). It has been laid down therein that the application under Section 20 is governed by Article 137 of the Schedule to the Limitation Act and must be made within three years from the date when the right to apply first accrues. There is no right to apply until there is a clear and unequivocal denial of that right by the respondent. It must, therefore, be clear that the claim for arbitration must be raised as soon as the cause for arbitration arises as in the case of cause of action arisen in a civil action. 20. The last authority relied upon by Mr. Jaitley is S. Rajan v. State of Kerala and another (AIR 1992 SC 1918 = 1992(2) Arb. LR 281.). This is also to the same effect, i.e., the application under Section 20 is governed by Article 137 of the Limitation Act. I have given thoughtful consideration to the respective contentions of the learned Counsel for both the parties. 21. As per the settled law on the subject vide cases of The Vulcan Insurance Co. Ltd. v. Maharaj Singh and another, (supra) and Panchu Gopal Bose v. Board of Trustees for Port of Calcutta, (supra) and two other cases relied on by Mr. Arun Jaitely, an application under Section 20 of the Act is governed as regards the period of limitation under Article 137 of the Limitation Act, 1963. Ltd. v. Maharaj Singh and another, (supra) and Panchu Gopal Bose v. Board of Trustees for Port of Calcutta, (supra) and two other cases relied on by Mr. Arun Jaitely, an application under Section 20 of the Act is governed as regards the period of limitation under Article 137 of the Limitation Act, 1963. Now, applying the law to the facts of the present case, it will be seen that whereas the case of the defendant is that limitation would start running from the date of service of notice sent on behalf of the plaintiff-petitioner by Shri K. K. Aggarwal, Advocate Chandigarh, dated 17-4-1990 referred to above, the case of the petitioner, as submitted by its learned Counsel Mr. R. L. Sood, is that in view of the letter dated 6-4-1993 read with letters dated 13-6-1991 and 24-3-1993 of the plaintiff-petitioner, the limitation would commence from 6-4-1993 in view of Section 18 of the Limitation Act, is such the present petition under Section 20 of the Act is within time. 22. On the facts and circumstances of the case, the Court is of the considered view that the letter dated 6-4-1993 has the effect of an acknowledgement on behalf of the defendant in terms of Section 18 of the Limitation Act. The language of Section 18 is reproduced here below, for facility of reference : "18. Effect of acknowledgement in writing (1) Where, before the expiration of the prescribed period for a suit or application in respect of any property or right, an acknowledgement of liability in respect of such property or right has been made in writing signed by the party against whom such property or right is claimed, or by any person through whom he derives his title or liability, a fresh period of limitation shall be computed from the time when the acknowledgement was so signed. (2) Where the writing containing the acknowledgement is undated, oral evidence may be given of the time when it was signed; but subject to the provisions of the Indian Evidence Act, 1872 (1 of 1872), oral evidence of its contents shall not be received. (2) Where the writing containing the acknowledgement is undated, oral evidence may be given of the time when it was signed; but subject to the provisions of the Indian Evidence Act, 1872 (1 of 1872), oral evidence of its contents shall not be received. Explanation-For the purposes of this section, (a) an acknowledgement may be sufficient though it omits to specify the exact nature of the property or right, or avers that the time for payment, delivery, performance of enjoyment has not yet come or is accompanied by refusal to pay, deliver, perform or permit to enjoy, or is coupled with a claim to set off, or is addressed to a person other than a person entitled to the property or right. (b) the word "signed" means signed either personally or by an agent duly authorised in this behalf, and (c) an application for the execution of a decree or order shall not be deemed to be an application in respect of any property or right." 23. The last portion of the letter dated 6-4-1993 states that the defendant has also received a formal notice from the National Consumer Disputes Redressal Commission regarding claims filed by the parties, who were involved in the incident which took place in 1992 in the running of the Cable ropeway from Timber Trail to Timber Heights and that the defendant will revert back to the plaintiff. Thereafter, admittedly, there was no communication inter se between the parties on the subject. The letter dated 6-4-1993, when read along with the letter of the defendant Company addressed to M/s. Tata Consulting Engineers, indicates that as regards the work of Jig Back System, the capacity was acknowledged to be 150 passengers per hour. This capacity according to the plaintiff, was not achieved, whereas the defendant, in substance, is disputing that allegation. According to the plaintiff, the defendant was conscious of the fact that it had to ensure a capacity of 150 passengers per hour in the Jig Back ropeway system of the plaintiff. This capacity according to the plaintiff, was not achieved, whereas the defendant, in substance, is disputing that allegation. According to the plaintiff, the defendant was conscious of the fact that it had to ensure a capacity of 150 passengers per hour in the Jig Back ropeway system of the plaintiff. Both these letters have to be read alongwith letter dated 23-4-1993 at the instance of the plaintiff, addressed to M/s. Usha Martin Industries, which is a part of the Group of Companies to which the defendant belongs, in which they have requested the defendant belongs, in which they have requested the defendant to take a common stand as regards the claim filed before the Consumer Disputes Redressal Commission. When all the three documents are read together, it clearly indicates that till 1993, correspondence was being exchanged between the parties as regards the dispute raised by the plaintiff-petitioner. 24. The matter can be looked at from another angle. The plaintiff is relying on Annexure A, which is a part of the reply filed by the defendant. The same is a notice sent by registered A.D. post from the office of Mr. R. L. Sood, Advocate, learned Counsel for the petitioner dated 16-6-1993 addressed to the defendant. In that, the technical problems being faced by the plaintiff-petitioner and the capacity of 150 passengers, as agreed to between the parties was not being achieved, were highlighted and it was stipulated that the plaintiff-petitioner has no alternative but to resident the contract dated 10-4-1986 and to install a new ropeway system with the said carrying capacity. In the last para of this notice it has been mentioned that since the defendant has been unable to rectify the system qua its capacity the plaintiff-petitioner apart from rescinding the contract, considers itself at liberty to replace the system at the risk and costs of the defendant. The defendant was called upon to pay Rs. 90 lacs and interest thereon @ 23.75% with quarterly rests till the date of payment alongwith Rs. 1,500/- as costs of that notice within one month otherwise the same shall be recovered by entrusting suitable legal proceedings against the defendant in a court of competent jurisdiction entirely at the risk and costs of the defendant. To this, the defendant sent a brief reply through M/s. Khaitan & Co., Advocates and Notaries Calcutta dated 16-7-1993 addressed to Mr. 1,500/- as costs of that notice within one month otherwise the same shall be recovered by entrusting suitable legal proceedings against the defendant in a court of competent jurisdiction entirely at the risk and costs of the defendant. To this, the defendant sent a brief reply through M/s. Khaitan & Co., Advocates and Notaries Calcutta dated 16-7-1993 addressed to Mr. Rakeshwar Lal Sood, learned counsel for the plaintiff-petitioner. The reply is reproduced herebelow for facility of reference : "Our clients abovenamed have handed over to us your letter No. RLS D/93 dated June 16, 1993 received by them on June 24, 1993 with instructions to act and reply thereto. We are collecting detailed instructions from our clients and the documents referred to in your letter under reply as also details of incident which took place on 13th October, 1992 and various technical reports submitted by our clients. In the meantime, our clients deny such and every allegations contained in your letter under reply which are contrary to and/or inconsistent with the record and the facts." 25. There is nothing to indicate from the records, nor it has been pointed out by the learned Counsel for the parties at the time of arguments, that any detailed reply was sent thereafter on behalf of the defendant to the plaintiff-petitioner in answer to the notice dated 16-6-1993 Annexure A to the reply of the defendant. It may also be mentioned here that the brief reply as reproduced above, dated 16-7-1983, is incorporated in Annexure F thereto. 26. It is thus manifest that right upto 1993, the parties were in correspondence as regards the dispute raised by the plaintiff-petitioner, although denied by the defendant as argued by Mr. Arun Jaitley, learned Counsel for the defendant. This would be an additional factor making the present petition under Section 20 of the Act, within limitation. 27. Lastly, the fact that an objection regarding limitation has been taken by the defendant, subject to the decision under the other issues in this case, it must be stated that in case there is an arbitration agreement between the parties and in case this Court ultimately refers the dispute to the arbitration as per the prayer in the present petition, it would be appropriate point to be decided by the arbitrator insofar as the limitation is concerned. Be that as it may, for the reasons given hereinabove, the application is held to be within limitation. This Issue is accordingly decided in favour of the plaintiff-petitioner. Issue No. 2 : 28. On merits, this is the main Issue between the parties and has been hotly contested, both in the pleadings as also at the time of arguments. It is not disputed that as per the original agreement, which is a part of the record of this case, which was entered into between the parties on 7-4-1986, Clause 18.00 thereof speaks of arbitration. The same is reproduced herebelow for facility of reference : "If at any time any question, dispute or difference whatsoever shall arise between ARL and UBL in relation to or in connection with this Agreement, both parties agree to resolve such differences by mutual consultation failing which either party may give to the other notice in writing of the existence of such question, dispute or difference and the same shall be referred for the final determination of a single arbitration, if agreed upon or to two Arbitrators one to be appointed by ARL and another by UBL; or in case of disagreement between the said two arbitrators to be final arbitration of an Umpire to be appointed by the said two Arbitrators and that the award of the sole Arbitrator or the said Umpire as the case may be shall be final and binding on both the parties and the said arbitration proceedings shall be governed by the provisions of the Indian Arbitration Act, 1940 and the rules thereunder, to be read together with all statutory amendments or modifications of the said Act." Mr. Arun Jaitely has not disputed this fact and indeed he cannot in view of the specific arbitration clause in the original agreement of 1986 between the parties, which has been reproduced hereabove. 29. He, however, has invited my attention to the minutes of the meeting held between the parties at the office of the defendant in Calcutta on 11/12-4-1988. The same is also a part of the record and there is no dispute as regards those minutes and the meeting that took place on these two dates. In particular, he has referred to para 5 of the said minutes according to which in settlement of accounts of the project, ARL will pay UBL by 15-4-1988 an amount of Rs. The same is also a part of the record and there is no dispute as regards those minutes and the meeting that took place on these two dates. In particular, he has referred to para 5 of the said minutes according to which in settlement of accounts of the project, ARL will pay UBL by 15-4-1988 an amount of Rs. 70,000/- in full and final settlement of the contract agreement dated 7-4-1986 and 10-4-1986. Relying on this, Mr. Jaitely has argued, which is also the case of the defendant in the reply that these minutes have the effect of a subsequent agreement which further had the effect of wholly superseding and/or abrogating the previous contracts between the parties dated 7-4-1986 and 10-4-1986. Moreover, there was no arbitration clause in this agreement of 11/12-4-1988 in the shape of minutes of the meeting held on those dates between the parties at Calcutta, therefore, according to Mr. Jaitely, no arbitration clause subsists between the parties as a result thereof. 30. On the other hand, Mr. R. L. Sood, learned Counsel for the petitioner has submitted that the agreement dated 7/10-4-1984 was still in force and continues to be in force between the parties and the meeting held on 11/12-4-1988 vide minutes thereof, cannot by any stretch of imagination have the effect of abrogating the same. 31. On the face of it, the argument of Mr. Jaitely is ingenious and at first flush, the Court would be in clined to accept the same, but when considered in depth, it falls to the ground. As rightly submitted by Mr. R. L. Sood, the meeting, incorporated in the minutes thereof dated 11/12-4-1988, is only a record of the proceedings thereof. It cannot by any yardstick have the effect of abrogating or rescinding the contract between the parties, which was entered into vide agreement dated 7/10-4-1986. That agreement admittedly contained an arbitration clause. 32. Now proceeding on the premises that there was an arbitration clause in the agreement between the parties, referred to above, we come to the next part of this issue, i.e., whether there is a dispute existing between the parties. In this connection, suffice it to say that a bare reading of the pleadings of the parties indicates that there is dispute on merits. 33. In this connection, suffice it to say that a bare reading of the pleadings of the parties indicates that there is dispute on merits. 33. Crux of the case of the plaintiff-petitioner is that as per the agreement, the capacity to be installed by the defendant, as agreed to between the parties was to be 150 passengers per hour each way, but that capacity was never achieved and the maximum that was achieved was 100 passenger per hour. These fell far short of the stipulated capacity. On the other hand, the case of the defendant is that the defendant denied that the working capacity of the system supplied by the defendant and/or as stipulated and incorporated in the agreement had never been achieved or that there was any shortfall in the system or that the system installed by the defendant could not carry the number of passengers promised. 34. Apart from pleadings, the correspondence exchanged between the parties, the relevant part of which has already been referred to above while dealing with Issue No. 1, clearly indicates that there is a dispute as regards the execution of the ropeway system by the defendant as per the agreement between the parties, which is not to the satisfaction of the plaintiff-petitioner. This being the factual position, there is no escape from the conclusion that a dispute thus exists between the parties as regards the same. This issue is also accordingly decided in favour of the plaintiff-petitioner. Issue No. 3 : 35. This Issue was not pressed at the time of arguments by Mr. R. L. Sood, Advocate. Even otherwise, a perusal of the reply indicates that the same has been filed by Shri Amit Kumar Basu, who is the General Manager (Operations) of the defendant company and has stated in para 1 thereof that he has been duly authorised and is competent to make and affirm the reply for and on behalf of the defendant. There is nothing on record to indicate that this is not correct. This issue is accordingly decided in favour of the defendant and against the petitioner by holding that the written statement has been filed by a competent and authorised person. Relief : 36. In view of the findings under Issue Nos. 1 to 3 above, more particularly, contentions Issue Nos. 1 and 2, the petition under Section 20 of the Act is allowed and Mr. Relief : 36. In view of the findings under Issue Nos. 1 to 3 above, more particularly, contentions Issue Nos. 1 and 2, the petition under Section 20 of the Act is allowed and Mr. V. P. Bhatnagar, a retired Judge of this Court is hereby appointed as an arbitrator in the dispute between the parties, in terms of Clause No. 18/15 in the agreements dated 7/ 10-4-1986, respectively, entered into between them. The Arbitrator shall decide the dispute and make his award within the prescribed statutory period to be reckoned from the date he enters upon the reference into the dispute, which is being referred to him. He shall assess his remuneration on the basis of the claims and counter-claims, if any, to be submitted before him by the parties. He shall apportion his remuneration between them as the claims and counter-claims. A copy of this judgment be sent to the arbitrator so appointed, alongwith the relevant record of the case. On receipt of the same, the arbitrator shall issue notice to the parties for appearance before him stating the time, dated and venue therein. 37. In the circumstances, there will be no order as to costs. C.M.P. Nos. 49, 65 and 258 of 1996 In view of the above detailed judgment, these applications no longer survives and have become infructuous. They are disposed of accordingly. Petition allowed.