USHA BRECO LIMITED v. ASIA RESORTS LTD. — 1998 DIGILAW 206 (HP)

JUDGMENT D. Raju, C.J.—The above appeal has been filed by the defendant against the judgment and decree passed by the learned Single Judge of this Court on 29.8.1997 in C.S. No. 2 of 1994, where under while allowing the petition filed under Section 20 of the Indian Arbitration Act, the learned Single Judge appointed Shri V.P. Bhatnagar, a retired Judge of this Court as an arbitrator in the dispute between the parties in terms of clauses 18/15, contained in the agreements dated 7/10-4-1986, entered into between the parties hereto with a further direction to the arbitrator that he 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. Liberty has also been granted to the arbitrator himself to assess his remuneration on the basis of the claims and counter-claims to be submitted before him by the parties as also to apportion his remuneration between them as per the claims and counter-claims. The arbitrator has also been directed while marking a copy of the judgment to him, to issue notice to the parties for appearance before him before fixing the schedule relating to date, time and venue therefor. The case of the plaintiff, which is a company incorporated under the Companies Act, 1956, is that in the year 1984, the company initiated the process of installation of a passengers ropeway system between what is known as Timber Trail Resort Datyar and its new resort Timber Trails Heights at Banssar In pursuance of the said project, the plaintiff entered into an agreement with the defendant company Usha Breco Ltd., Chitranjan Avenue, Calcutta, on 7.4.1986 for design, erection of the passengers ropeway system including the supervision of civil engineering jobs for the ropeway system as per the scope of work set out in Annexure D to the said agreement and clause 15 provided for arbitration of disputes arising between the parties, there under. Pursuant to the said agreement, the work undertaken was said to have been executed and the minutes of the meeting held between the parties at Calcutta of 11th and 12th April, 1988 appears to have been formally recorded on 17.4.1988 and in clause (5) of the said minutes, it was said to have been placed on record that in settlement of accounts of the project, the plaintiff will pay the defendant by 15.4.1988 an amount of Rs. 70,000/- in full and final settlement of the contract, agreements dated 7.4.1986 and 10.4.1986. The works, according to the defendant, were said to have been, therefore, executed before 15.4.1988. According to the plaintiff-company, the parameters of the works to be undertaken by the defendant were defined in an Annexure to the agreement, according to which the system to be supplied by the defendant-company was to have a capacity of carrying 150 passengers per hour between Datyar and Banssar. The understanding and agreement was stated to be on the basis of eight hourly shift with total number of trips per hour being nine in number and the total passengers per hour being 150 each way. The further stipulation was stated to be that within the eight hourly operation, the total capacity of the passengers Ropeway System would be Rs. 1,200 per day and it is only based on such representations, assurances and agreement the plaintiff-company invested huge amounts in the project, whereas, according to the plaintiff-company from its very inception, the said working capacity and target had never been achieved. The Inspector of Ropeways Himachal Pradesh also appears to have imposed certain restrictions as a consequence of which itself there was a short fall of two persons and despite such short fall which had been accepted by the plaintiff-company the defendant could not even then bring the system to meet the actual short fall. The system installed by the defendant was alleged to be not effective to carry the number of passengers promised as also to make the requisite number of nine trips per hour between the two terminals. According to the plaintiff-company, it had not been possible for the system to achieve and attain more than six and half trips per hour and, therefore, it became impossible to carry more than 100 passengers per hour which means only 800 passengers per day. According to the plaintiff-company, it had not been possible for the system to achieve and attain more than six and half trips per hour and, therefore, it became impossible to carry more than 100 passengers per hour which means only 800 passengers per day. The plaintiff-company claims that due to deficiency in service of the system, the plaintiff-company suffered maximum financial loss and that the entire financial viability of the project has been thrown out of gear and the financial loss became a recurring feature making it unable to the plaintiff company to meet its financial commitments by way of servicing its loans, etc. 2. The plaintiff-company would further assert that they got legal demand notice dated 16.6.1993 served on the defendant with no avail and finding that the defendant seems to be evading the demands raised by the plaintiff they were constrained to move the Court with the petition under Section 20. In the said notice, they were constrained to rescind the contract and call upon the defendant to remove the system, making it clear that the defendant would instal a new ropeway system at the expanses and cost of the defendant besides claiming damages on account of alleged harassment, mental tension and financial losses, etc. Asserting that serious disputes thus have arisen between the plaintiff and defendant and also claiming that after the execution of the agreement dated 10.4.1986, a number of complaints were made to the defendant and serious of meetings took place between the representatives of the plaintiff and defendant with a final meeting which took place on 19.6.1988 at Parwanoo when the question of increasing the capacity was also said to have been discussed and minuted by agreeing that the passengers capacity would be increased by the defendant to 135 passengers per hour, which was said to have been accepted by the plaintiff-company and despite all this things nothing was done to increase the passengers capacity. By relying upon the arbitration clause No. 15 in the agreement a claim for reference of the disputes to arbitration came to be made by filing the petition under Section 20 of the Arbitration Act, seeking for the appointment of an arbitrator by virtue of clause 18 of the agreement dated 7.4.1986 entered into between the parties so that the entire disputes between the parties may be referred to the arbitration of such arbitrator. 3. 3. The defendant-company filed a reply contending that the application filed under Section 20 is barred by limitation, particularly, in view of Article 137 of the Limitation Act, 1963 read with Section 20 of the Arbitration Act, 1940. It was also claimed for the defendant that the issue of a notice dated 16.6.1993 after the expiry of period of limitation cannot and does not save limitation, that the plaintiff had previously caused the issuance of a notice dated 17.4.1990 through its advocate and if really it had any claims or right which could have been, if at all, enforced by filing proceedings or initiating arbitration within three years of the said notice dated 17.4.1990 and inasmuch as the present application under Section 20 came to be filed only on 22.11.1993 (which itself during the course of arguments in the appeal was actually got verified from the original papers in the Registry in this suit that it was filed on 30.11.1993 though dated 22.11.1993) and inasmuch as more than three years elapsed from 17.4.1990, the claims of the plaintiff-company must be taken to be barred by limitation. The subsequent notice dated 16.6.1993 was said to have been also issued beyond a period of three years from the earlier notice dated 17.4.1990 and even if a suit had been filed by the plaintiff to enforce its right to damages on the date of the filing of the application under Section 20 in question, the same would have been also barred by limitation. In addition thereto, the defendant also contended that there was no valid and subsisting agreement between the parties, the agreement dated 10.4.1986 admittedly having been determined and concluded and all matters between parties relating to the said agreement having been settled on or around 12.4.1988 when minutes of the same came to be signed by both the parties. Inasmuch as, according to the defendant, the said agreement and settlement arrived at on 12.4.1988 did not contain any arbitration agreement itself, the earlier agreement dated 10.4.1986 stood superseded and/or abrogated by virtue of said settlement and therefore, earlier agreement settled cannot be no longer effective or operative. Inasmuch as, according to the defendant, the said agreement and settlement arrived at on 12.4.1988 did not contain any arbitration agreement itself, the earlier agreement dated 10.4.1986 stood superseded and/or abrogated by virtue of said settlement and therefore, earlier agreement settled cannot be no longer effective or operative. The defendant also asserted that the notice dated 17.4.1990 has a crucial bearing on the questions whether the plaintiffs application and claim are barred by limitation as also on issue as to whether the plaintiff was ready and willing to have its claim referred to arbitration. The application under Section 20 of the Arbitration Act was also said to be not maintainable for the reason that the plaintiff was at all material times not ready and willing to refer its claim to arbitration and the very statement in the notice dated 16.61993 that the plaintiff shall be reluctantly compelled to institute suitable legal proceedings against the defendant in a Court of competent jurisdiction itself demonstrates that the plaintiff was not at all ready and willing refer its claim to arbitration but was contemplating institution of legal proceedings in a court of law. A similar statement, which was contained m the earlier notice dated 17.4.1990 also, according to the defendant, discloses that the plaintiff was never ready and willing to have their claims referred to arbitration and they were keen of deciding their claims in legal proceedings before a Court of law and, therefore, by their own conduct the plaintiff must be held to have abandoned and cancelled the arbitration agreement. Delay and laches in filing the application under Section 20 of the Act also was urged as a ground for rejection of the relief. The application also was not said to disclose any question, disputes or differences between the parties and the allegations relating to the alleged existence of dispute are also stated to be vague and without any particulars or details. No single violation or deviation by the defendant from the basic parameters, as laid down in the agreement dated 10.4.1986, was said to have been disclosed and the so-called disputes alleged to have arisen between the parties are stated to be not covered by any arbitration agreement, particularly, the agreement dated 10.4.1986. No single violation or deviation by the defendant from the basic parameters, as laid down in the agreement dated 10.4.1986, was said to have been disclosed and the so-called disputes alleged to have arisen between the parties are stated to be not covered by any arbitration agreement, particularly, the agreement dated 10.4.1986. A claim that no notice complying with the pre-conditions for filing an application under Section 20 cf the Arbitration Act, 1940 was ever issued prior to {he institution of the proceedings was also taken. Ulterior motives have been attributed to the plaintiff for filing this application in their attempt to avoid certain prior claims and criminal proceedings which have been instituted on account of an incident which has been said to have taken place on 13.10.1992 with which the defendant had no concern or connection and the claim of the plaintiff-company is stated to be speculative and motivated and, therefore, it had no merits. In other respects, even on the merits of the claim pertaining to the contractual liabilities and obligations of the defendants-company, the assertions made by the plaintiff with reference to frequency of operation and number of persons to be transported were also denied. 4. The plaintiff-company has also filed a replication contending that the reply has not been filed in the proper form and, therefore, deserves to be ignored and that so far as the merits of the contentions raised in the reply are concerned, it is for the arbitrator to decide the same after the matter is referred to him and in other respects the claims and statement of Tacts made in the original petition came to be reiterated by the plaintiff. 5. On the above claims and counter-claims, the learned Single Judge formulated three points Cap consideration and adjudication, which are as follows : "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. 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." The learned Single Judge after adverting to the submissions of the learned Counsel appearing on either side, in the light of the materials placed before him and the case law referred, to held that the application filed under Section 20 of the Arbitration Act has been filed within the period of limitation and, thereby decided the first point formulated in favour of the plaintiff. As for the second point formulated about the existence or otherwise of the dispute between the parties, the learned Single Judge was of the view that there existed between the parties disputes as regards the work executed under the contracts between the parties and held the same in favour of the plaintiff. The procedural objection raised with reference to the form in which the reply has been filed has been over-ruled by holding that the same is in order. It is on that view of the matter that the learned Single Judge ultimately allowed the application and granted the relief, as indicated earlier in this order. 6. It is seen from the judgment of the learned Single Judge that as against the plea of the defendant that on the expiry of three years from the date of notice dated 17.4.1990, issued by the Counsel for the plaintiff the petition under Section 20 of the Arbitration Act became time-barred in view of Article 137 of the Schedule to the Limitation Act, the Counsel for the plaintiff contended that in the context of the letters dated 13.6.1991 and 24.3.1993 sent by the plaintiff, and the reply sent by the defendant dated 6.4.1993 constituted an acknowledgment by the defendant under Section 18 of the Limitation Act and, therefore, the petition filed under Section 20 was well within the period of Limitation. In substance, the contention for the plaintiff appeared to be that the limitation would commence from 6.4.1993 in view of Section 18 of the Limitation Act and, therefore, the petition under Section 20 was well within time. In substance, the contention for the plaintiff appeared to be that the limitation would commence from 6.4.1993 in view of Section 18 of the Limitation Act and, therefore, the petition under Section 20 was well within time. This plea on behalf of the plaintiff had the acceptance of the learned Single Judge to hold that the letter dated 6.4.1993 had the effect of an acknowledgment on behalf of the defendant within the meaning of Section 18 of the Limitation Act, since till 1993, correspondence was being exchanged between parties as regards the disputes raised by the plaintiff. The learned Judge was also of the view that in case there is an arbitration agreement between parties and the Court refers the matter to Arbitration, the point of limitation could also appropriately be decided by the arbitrator. On the merits of the other contentions raised, the learned Single Judge was of the view that disputes did exist between the parties in respect of the subject under consideration which deserved to be referred to the arbitrator for his adjudication. 7. Shri M.L. Verma, learned Senior Counsel, for the appellant contended that the learned Single Judge was in serious error in holding that the petition filed under Section 20 of the Arbitration Act, 1940, is well within the period of limitation prescribed therefor and that too for the reason that the letter dated 6.4.1993 sent by the defendant constituted an acknowledgment within the meaning of Section 18 of the Limitation Act, 1963. The learned Counsel further contended that the correspondence exchanged between the parties would also go to show that there was no disputes pending between parties and that at any rate after the joint meeting and the consensus arrived at which came to be recorded in the form of minutes on 12.4.1988, no disputes relating to the execution of the work undertaken by the defendant could be said to be pending for being arbitrated. Argued the learned Senior Counsel further that even assuming for purposes of argument, without admitting, all that in favour of the plaintiff, the learned Single Judge was not right in himself appointing an arbitrator, without having the arbitrator appointed in terms of the agreement itself and even in the absence of any exercise in this regard or without recording any finding that the appointment of an arbitrator, as per the arbitration clause in the agreement has become either impossible or would be an exercise in futility. In support of the said stand taken for the appellant, apart from relying upon the relevant case law cited, the learned Senior Counsel took elaborate pains to invite our attention to the documents and correspondence between the parties, including those relied upon by the learned Single Judge to sustain the plea of acknowledgment projected by the plaintiff to save the period of limitation and forcefully submitted that the contents of the letters disclose a case of outright strong and sustained denial, rather than admitting or acknowledging any liability or the rights of the plaintiffs as such and urged that the petition under Section 20 of the Arbitration Act filed by the plaintiff deserves to be dismissed and the appeal allowed. 8. Mr. R.L. Sood, learned Counsel for the plaintiff-respondent with his usual vehemence and perseverance equally contended that the reasons assigned by the learned Single Judge for holding that there existed disputes between parties which required to be referred to the arbitrator for his adjudication on merits and that the petition under Section 20 of the Arbitration Act was well within the period of limitation and that the letter dated 6.4.1993 taken together with the other correspondence between parties constituted acknowledgment within the meaning of Section 18 of the Limitation Act are well merited and unassailable and, therefore, do not suffer any infirmity either in law or on facts to warrant interference in this appeal. The learned Counsel for the respondent apart from distinguishing some of the decisions relied upon for the appellant and himself replying upon some of the observations contained therein also invited our attention to some case law in support of his stand. The learned Counsel for the respondent apart from distinguishing some of the decisions relied upon for the appellant and himself replying upon some of the observations contained therein also invited our attention to some case law in support of his stand. But, at the same time the learned Counsel for the respondent fairly stated in unmistakable terms more than once, that he cannot support the appointment of the arbitrator of the choice of this Court as made by the learned Single Judge and the actual appointment of the arbitrator could be only of the nature, made and method agreed to by parties in the arbitration clause in the contract itself and at any rate on this account alone the defendant cannot claim to succeed in the appeal to have the appeal allowed in their favour. 9. We have carefully considered the submissions of the learned Counsel appearing on either side. We consider it appropriate to advert to some of the case law on the subject brought to our notice and strongly relied upon by them in support of their respective stand. 10. In AIR 1961 S.C. 1236, Shapoor Freedom Mazda v. Durga Prasad Chamaria and others, the apex Court while construing Section 19 of the Limitation Act, 1908, declared the essentials of an acknowledgment in law. It is observed therein as hereunder: "(5) Section 19(1) says, inter alia, that where before the expiration of the period prescribed for a suit in respect of any right, an acknowledgment of liability in respect of such right has been made in writing signed by the party against whom such right is claimed, a fresh period of limitation shall be computed from the time when the acknowledgment was so signed. It would be noticed that some of the relevant essential requirements of a valid acknowledgment are that it must be made before the relevant period of limitation has expired, it must be in regard to the liability in respect of the right in question and it must be made in writing and must be signed by the party against whom such right is claimed. Section 19(2) provides that where the writing containing the acknowledgment is undated, oral evidence may be given about the time when it was signed but it prescribes that subject to the provisions of the Indian Evidence Act, 1872, oral evidence of its contents shall not be received; in other words, though oral evidence may be given about the date oral evidence about the contents of the document is excluded. Explanation 1 is also relevant. It provides, inter alia, that for the purpose of Section 19 an acknowledgment may be sufficient though it omits to specify the exact nature of the right or avers that the time for payment has not yet come, or is accompanied by a refusal to pay, or is coupled with a claim to a set off, or is addressed to a person other than the person entitled to the right. (6) It is thus clear that acknowledgment as prescribed by Section 19 merely renews debt; it does not create a new right of action. It is a mere acknowledgment of the liability in respect of the right in question; it need not be accompanied by a promise to pay either expressly or even by implication. The statement on which a plea of acknowledgment is based must relate to a present subsisting liability though the exact nature or the specific character of the said liability may not be indicated in words. Words used in the acknowledgment must, however, indicate the existence of jural relationship between the parties such as that of debtor and creditor, and it must appear that the statement is made with the intention to admit such jural relationship. Such intention can be inferred by implication from the nature of the admission, and need not be expressed in words. If the statement is fairly clear then the intention to admit jural relationship may be implied from it. The admission in question need not be express but must be made in circumstances and in words from which the Court can reasonably infer that the person making the admission intended to refer to a subsisting liability as at the date of the statement. In construing words used in the statements made in writing on which a plea of acknowledgment rests oral evidence has been expressly excluded but surrounding circumstances can always be considered. In construing words used in the statements made in writing on which a plea of acknowledgment rests oral evidence has been expressly excluded but surrounding circumstances can always be considered. Stated generally courts lean in favour of a liberal construction of such statements though it does not mean that where no admission is made one should be inferred, or where a statement was made clearly without intending to admit the existence of jural relationship such intention could be fastened on the maker of the statement by an involved or far-fetched process of reasoning. Broadly stated that is the effect of the relevant provisions contained in Section 19, and there is really no substantial difference between the parties as to the true legal position in this matter." 11. In AIR 1967 SC 935, Tilak Ram and others v. Nathu and others, the apex Court while following and applying the principles in AIR 1961 SC 1236 (supra), held that the statement on which a plea of acknowledgment is based must relate to a subsisting liability and that the words used in the acknowledgment must indicate the jural relationship between the parties and it must appear that such a statement is made with the intention of admitting that jural relationship subsisting at the time when it was made, and that such an intention can be also inferred by implication from the nature of the admission and need not be in express words. The decision in AIR 1966 SC 837, Municipal Corporation of the City of Jabalpur v. State of Madhya Pradesh and another, was relied upon to contend that a party to a proceedings must be made to confine to the pleadings, save in exceptional cases, and the plaintiff in this case cannot introduce new facts or new plea altogether. In AIR 1987 SC 2179, Vinod Kumar Arora v. Smt. Surjit Kaur, it was observed that the pleadings of the parties form the foundation of their case and it is not open to them to give up the case set out in the pleadings and propound a new and different case. 12. In AIR 1987 SC 2179, Vinod Kumar Arora v. Smt. Surjit Kaur, it was observed that the pleadings of the parties form the foundation of their case and it is not open to them to give up the case set out in the pleadings and propound a new and different case. 12. In (1988) 2 SCC 338, (Major Retd.) Inder Singh Rekhi v. Delhi Development Authority, the apex Court held that in view of the decision reported in AIR 1977 SC 282, Kerala State Electricity Board v. T.RK.K. Amsom and Besom, Kerala, the legal position is well settled that Article 137 of the Schedule to the Limitation Act, 1963, would apply to any petition or application filed in a Civil Court under Section 20 of the Arbitration Act. It was further held therein that in order to be entitled to for a reference under Section 20 of the Act, there must be not only an entitlement to money but there must be a difference or dispute must arise and in that sense a dispute can be said to arise where there is a claim and a denial and repudiation of the claim, the existence of such dispute being essential for appointment of an arbitrator under Section 8 or for a reference under Section 20. It was further elucidated therein that mere failure and inaction does not lead to the inference of the existence of a dispute. The further principles laid down therein was, that a party cannot postpone the accrual of cause of action by writing reminders or sending reminders. In AIR 1992 SC 1918, S. Rajan v. State of Kerala and another, the-apex Court, while dealing with the period of limitation applicable for filing a petition or application under Section 20 of the Arbitration Act, observed as follows : "8. So far as the applicability of Limitation Act to an application under Section 20 of the Arbitration Act is concerned, it is no longer res integral. In Iner Singh Rekhi v. Delhi Development Authority AIR 1989 SC 1007, it has been held by this court that Article 137 of the Limitation Act, 1963 applied to an application under Section 20 of the Arbitration Act. In Iner Singh Rekhi v. Delhi Development Authority AIR 1989 SC 1007, it has been held by this court that Article 137 of the Limitation Act, 1963 applied to an application under Section 20 of the Arbitration Act. It was so held following the decision in Kerala State Electricity Board v. Amsom, 1977 1 SCR 996 : AIR 1977 SC 282, which overruled the earlier decision of this Court in Town Municipal Council, Athani v. Presiding Officer, Labour Court, (1970) 1 SCR 51 : AIR 1969 SC 1335. It is true that under the Limitation Act, 1908, it was held that Article 181 of that Act does not govern an application under Section 20 of the Arbitration Act but as has been pointed out in Kerala State Electricity Board the new Act makes a difference to the position. By virtue of the definitions of the words applicant and application contained in Sections 2 (a) and 2 (b) of the Limitation Act, 1963, the new Act, it was held, governs all petitions and the applications under the special laws so long as they are filed in a Civil Court. It was this principle which was followed in Inder Singh and it was held that Art. 137 governs the application under Section 20. In this view of the matter, we cannot agree with Sri Poti that no period of limitation is prescribed for making an application under Section 20." As to when the said period of limitation commence and the conditions to be fulfilled to apply under Section 20 and the considerations to be kept in view by the Court before appointing an arbitrator at the instance of a party, their Lordships of the apex Court further held as hereunders: "10. According to sub-section (1) where an arbitration agreement has been entered into before the institution of any suit with respect to subject-matter of such agreement, and where difference has arisen to which the agreement applies, either or both the parties can apply to the Court that the agreement be filed in Court. According to the sub-section, the occasion for filing the application arises when a difference arise between the parties to which the agreement applies. In such a case, it is open to a party to apply under this section of proceeding under Chapter II. According to the sub-section, the occasion for filing the application arises when a difference arise between the parties to which the agreement applies. In such a case, it is open to a party to apply under this section of proceeding under Chapter II. In other words, an application under Section 20 is an alternative to the proceedings under Chapter II. Sub-section (2) is procedural. So is sub-section (3). Sub-section (4) provides that after hearing the parties and on being satisfied that the agreement should be filed, the Court shall order an agreement to be filed and shall make an order of reference to the arbitrator appointed by the parties, whether in the agreement or otherwise or where the parties cannot agree upon an arbitrator, an arbitrator appointed by the Court.” 11. Reading Article 137 and sub-section (1) of Section 20 together, it must be said that the right to apply accrues when the difference arises or differences arise, as the case may be, between the parties. It is thus a question of fact to be determined in each case having regard to the facts of that case. The question in the present case is when should the difference between the parties be said to have arisen. According to the High Court, the date on which notice of demand under the Revenue Recovery Act was served upon the appellant namely 30.5.1974 is the date on which difference must be held to have arisen between the parties, if not earlier. Sri Poti, however, says that it is not so and that it must be held to have arisen only when the appellant applied to the Government to refer the disputes between them to the arbitrator in terms of the agreement and the Government refused to do so. We find it difficult to agree with the learned Counsel. The agreement was entered into in 1966. It was terminated on 19.12.1968. The work was re-tendered and it was completed through another contractor. The State then worked out the loss suffered by it on account of the appellants failure to carry out the work in accordance with the agreement and called upon the appellant to pay the same through the demand notice dated 30.5.1974. It is relevant to notice that this demand notice was questioned by the appellant by way of writ petition in the High Court of Kerala which was dismissed on 25.11.1978. It is relevant to notice that this demand notice was questioned by the appellant by way of writ petition in the High Court of Kerala which was dismissed on 25.11.1978. Thus, the dispute had arisen in 1974 with the service of the demand notice. Only in the year 1983 did the appellant choose to request the Government to refer the dispute to the arbitrator in terms of the agreement which was rejected in the following year. Neither the arbitration clause nor a copy of the agreement is placed before us. Therefore, we cannot say whether the arbitration clause contemplates that a reference to arbitration can be made only by the Government and not by the appellant. Assuming that such was the requirement of the arbitration clause, even so it must be held that the very request in 1983 was very much belated and cannot, in any event, be treated as the date on which the right to apply accrued. The differences had already arisen between the parties following the service of the demand notice. The challenge to the said demand notice made by the appellant by filing a writ petition in the Kerala High Court is the demonstrable proof of the dispute. Accordingly, we agree with the High Court that 30.5.1974 is the date on which the right to apply accrued in terms of Article 137 read with Section 20(1) and that therefore, the application filed in the year 1985 was clearly barred by limitation." 13. On the further question as to the manner of selection and choice by the Court of the arbitrator to be appointed, the apex Court also declared the position, thus : "12. We also think it appropriate to point out that the learned Subordinate Judge was not justified in directing the parties to submit their respective panels of arbitrator so as to enable him to appoint an arbitrator or arbitrators, as the case may be, out of such panels. Clause (3) of the agreement (extracted in the counter-affidavit filed by the State of Kerala in this Court, the correctness whereof is not questioned by the learned Counsel for the appellant) says that Jthe arbitrator for fulfilling the duties set forth in the arbitration clause of the Standard Preliminary Specification shall be the Superintending Engineer, Buildings and Roads Circle, Trivandrun V. Thus, this is a case where the agreement itself specifies and names the arbitrator. It is the Superintending Engineer, Buildings and Roads Circle, Trivandrum. In such a situation, it was obligatory upon the learned Subordinate Judge, in case he was satisfied that the dispute ought to be referred to the arbitrator, to refer the dispute to the arbitrator specified in the agreement, it was not open to him to ignore the said clause of the agreement and to appoint another person an arbitrator. Only if the arbitrator specified and named in the agreement refuses or fails to act the Court does get the jurisdiction to appoint another person or persons as the arbitrator. This is the clear purport of subsection (4). It says that the reference shall be to the arbitrator appointed by the parties. Such agreed appointment may be contained in the agreement itself or may be expressed separately. To repeat, only in cases where the agreement does not specify the arbitrator and the parties cannot also agree upon an arbitrator, does the Court get the jurisdiction to appoint an arbitrator. It must, accordingly, be said that in the present case, there was no occasion or warrant for the learned Subordinate Judge to call upon the parties to submit panels of arbitrators. He was bound to refer the dispute only to the arbitrator named and specified in the agreement. This aspect, however, has become academic now in view of the fact that the very application under Section 20 has been held by us to be barred by limitation. Even so we thought it necessary to emphasise this aspect in view of the numerous instances noticed by us where courts ignore the arbitrator specified in the agreement and appoint a different person as the arbitrator." 14. In AIR 1988 SC 1172, Union of India and another v. M/s LK. Ahuja and Co., their Lordships of the apex court had an occasion to deal with the distinction between the period of limitation for filing an application under Section 20 of the Arbitration Act, 1940, and the one for adjudging whether the claim on the merits of the cause itself is barred and held as follows : "6. Ahuja and Co., their Lordships of the apex court had an occasion to deal with the distinction between the period of limitation for filing an application under Section 20 of the Arbitration Act, 1940, and the one for adjudging whether the claim on the merits of the cause itself is barred and held as follows : "6. It appears that those questions were discussed in the decision of the Calcutta High Court in Jiwnani Engineering Works R Ltd. v. Union of India, AIR 1978 Cal 228, where one of us Sabyasachi Mukharji, J. was a party and which held after discussing with all these authorities the question whether the claim sought to be raised was barred by limitation or not, was not relevant for an order under Section 20 of the Act. Therefore, there are two aspects. One is whether the claim made in the arbitration is barred by limitation under the relevant provisions of the Limitation Act and secondly, whether the claim made for application under Section 20 is barred. In order to be a valid claim for reference under Section 20 of the Arbitration Act, 1940, it is necessary that there should be an arbitration agreement and secondly differences must arise to which the agreement in question applied and, thirdly, that must be within time as stipulated in Section 20 of the Act. 8. In view of the well-settled principles, we are of the view that it will be entirely wrong to mixup 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 Section 20 of the Arbitration Act, to be barred by limitation. 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 Section 20 of the Arbitration Act, to be barred by limitation. In order to be entitled to ask for a reference under Section 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. In this case, the claim for reference was made within three years commencing from April 16, 1976 and the application was filed on December 18, 1976. We are, therefore, of the view that the High Court was right in this case. See in this connection the observations of this Court in Major (Retd.) Inder Singh Rekhi v. D.D.A., (1988) 2 JT 6 : AIR 1988 SC 1007." 15. In AIR 1955 Ker 307, Sankara Pillai Kujukrishna Pillai v. Ananda Pillai Bharathi Amma, a Division Bench of the Kerala High Court while construing Section 19 of the Limitation Act, 1908 observed that the acknowledgment need not directly refer to the liability sought to be enforced in the suit and that an acknowledgment made during the additional period of limitation conferred by Section 19 will be sufficient for the purpose of the section. In AIR 1961 Pat 68, Uma Shankar Prasad Narain Singh v. Mst. Saraswati Devi & others, dealing with the question of an acknowledgment for the purpose of Section 19 of the Limitation Act, 1§08, a Division Bench of that Court has held, while adopting the ratio of the decision of a Full Bench of Allahabad High Court reported in AIR 1947 All. Saraswati Devi & others, dealing with the question of an acknowledgment for the purpose of Section 19 of the Limitation Act, 1§08, a Division Bench of that Court has held, while adopting the ratio of the decision of a Full Bench of Allahabad High Court reported in AIR 1947 All. 74, Munshi Lal v. Hira Lal, that a document which was said to constitute an acknowledgment has to be construed in the context in which it is given and that where its language is not clear in itself, the context may be examined to see what is it to which the words refer and that is not to say that any equivocation in an acknowledgment can be cured by ascertaining what the probable intention of the acknowledger was, which is really a quite different thing. If after examining, in the light of the context what it was that the persons giving the acknowledgment was actually referring to, the conclusion follows, that it is an unequivocal acknowledgment of a right and that acknowledgment is sufficient to satisfy Section 19 of the Limitation Act. In AIR 1971 SC 1482, M/s. Lakshmiratan Cotton Mills. Co. Ltd. v. The Aluminimum Corporation of India Ltd., it was observed that the statement on which the plea of acknowledgment is founded need not amount to promise and need not indicate the exact nature or the specific character of the liability, but it must, however, relate to a present subsisting liability and indicate the existence of jurat relationship between the parties such as, that of a debtor and a creditor and the intention to admit such jural relationship and such an intention need not be in express terms and can be inferred by implication also from the nature of the admission and the surrounding circumstances. Their Lordships also further observed that generally speaking a liberal construction of a statement should be given though that does not mean that where a statement is made without intending to admit the existence of jural relationship such intention should be fastened on the person making the statement by an involved and far-fetched reasoning. 16. We have carefully considered the submissions of the learned Counsel appearing on either side, who made elaborate exposition of their respective stand, apparently carried away by the stakes involved. 16. We have carefully considered the submissions of the learned Counsel appearing on either side, who made elaborate exposition of their respective stand, apparently carried away by the stakes involved. Though initially, it was hotly contested for the appellant that the plea of acknowledgment and saving of limitation was not raised by the plaintiff in their pleading, on being pointed out that the position was explained and projected in the replication filed in the petition before the learned Single Judge the contest shifted to the question as to whether the letters and communications relied upon for the plaintiff really constitute an acknowledgment so as to save the period of limitation fixed for filing a petition or application under Section 20 of the Arbitration Act, in the case on hand. 17. The infirmities alleged by the appellant in the learned Singe Judge straightaway resorting to appointment of an Arbitrator, without even making an attempt to see or give an opportunity to the parties to see whether it was not possible or it has become so impossible, to have an arbitrator appointed in terms of the arbitration clause contained in the agreement itself may be taken up for consideration first. The learned Senior Counsel for the appellant contended that even if everything is to be assumed in favour of the plaintiff, for the purposes of argument without admitting such position, the learned Single Judge must have first given a chance and allowed the parties to work out the possibilities and also issued directions to have the arbitrator appointed within a particular period in terms of the agreement and if despite all these such appointment of an arbitrator in terms of the agreement itself became impossible only, the learned Single Judge could have resorted to the appointment of an arbitrator as has been done and the procedure adopted by the learned Single Judge is not inconformity with the governing position of law. Shri R.L.Sood, learned Counsel for the plaintiff had no effective reply to this ground of challenge as to the manner of the appointment made by the learned Single Judge and has fairly agreed that the appointment, straight away made and directed, by the learned Single Judge cannot be supported by him and he has no objection for the appointment of the arbitrator being made even in terms of the arbitration clause contained in the agreement between the parties. That apart, the stand taken for the appellant in this regard gains ground and support from the decision of the apex court reported in AIR 1992 SC 1918 (supra), and has to be necessarily sustained. 18. Coming to the other contentions raised before us, the next important question which requires our decision is as to the period of limitation applicable and the relevant article of the Limitation Act which governs the period of limitation for filing a petition or application under Section 20 of the Arbitration Act, 1940. This issue is also no longer res integra and their Lordships of the apex Court have stated and restated the governing position of law on more than one occasion as could be seen from the judgments adverted to in the earlier part of this judgment. Consequently, it is by now well settled that for purposes of limitation in respect of a petition or application under Section 20 of the Arbitration Act is concerned, Article 137, the residuary article alone applies and governs such period and that for purposes of computing the period of limitation, the right to apply must be held to accrue in a given case when the differences arise between the parties or disputes are raised by them. In AIR 1992 SC 1918 (supra) the apex Court also held while rejecting specifically a plea raised therein that the differences must be held to have arisen only when a demand to refer the disputes between the parties to the arbitrator in terms of the agreement was made and refused, that the same related to the point of time when differences and disputes arose between parties under the contract or agreement. Disputes were considered also to arise whenever any demands in respect of the subject-matter of the contract or agreement was made by one party and the same was denied or repudiated by the other party. It was further pointed out that the question as to when the differences or disputes arose to entitle any one of the parties to have recourse to an application or petition under Section 20 of the Act before the Court is a question of fact to be determined in each case, having regard to the facts of that case. It was further pointed out that the question as to when the differences or disputes arose to entitle any one of the parties to have recourse to an application or petition under Section 20 of the Act before the Court is a question of fact to be determined in each case, having regard to the facts of that case. This question as to when the disputes arose in this case, whether there was any acknowledgment within the meaning of Section 18 of the Limitation Act and if so to what extent the so-called acknowledgment have the consequence of saving or extending the period of limitation will be taken up for consideration in the light of the facts relied upon in support thereof by the parties hereto, at the last and before undertaking such adjudication it is necessary to advert to the subtle issue as to the nature of limitation to be considered or the purpose for which limitation has to be computed. 19. The law of limitation has been ordained to apply to adjudications before the arbitrator, as much as it applied to adjudications before ordinary courts and arbitrators also are obliged to decide disputes referred to them for adjudication applying the law of limitation, in force. As pointed out by their Lordships of the apex Court in the decision reported in AIR 1988 SC 1172 (supra), whether the claim sought to be vindicated on merits was barred by limitation or not was not very much relevant for passing an order under Section 20 of the Arbitration Act and it is one thing to state that the claim made in the arbitration is barred by limitation and totally another thing to claim as to whether the claim made for an application under Section 20 of the Arbitration Act is barred. Since Article 137 of the Schedule to the Limitation Act, 1963 has been held to govern and apply to an application or petition filed under Section 20 of the Arbitration Act, 1940, the Court dealing with an objection that the application or petition so filed under Section 20 of the Arbitration Act is barred has to compute and calculate the period of three years from the date when the right to apply under Section 20 accrues and not from the date when the cause of action for the suit claim or arbitration claim itself arose, inasmuch as the question as to whether the claim to be adjudicated by the arbitrator was itself barred by limitation, is always a matter to be decided by the arbitrator in the course of arbitration proceedings, unless even at the stage of the petition under Section 20, on the admitted facts the claim itself is found or considered to be barred by limitation. Consequently, it is necessary for us in this case to find out only whether the right of the plaintiff to make an application under Section 20 of the Arbitration Act, 1940 to get the arbitrator appointed and have a reference made to him to get an adjudication of the outstanding disputes under the agreement, stood barred by virtue of the period provided under Article 137 of the Schedule to the Limitation Act, 1963 and not as to whether the claim or dispute sought to be got referred to itself was barred under any other provision of law and there was no subsisting arbitrable claim at all, while dealing with the question of limitation. This distinction pointed out by their Lordships of the apex Court requires to be kept into consideration in analysing the materials relied upon in support of the plea of acknowledgment, pressed into service to get over the objection based upon period of limitation mainly and more strongly urged for the appellant, in this case. 20. We are, it may be once again confirmed, now to consider the only question of limitation for the purpose of filing an application or petition under Section 20 of the Arbitration Act and whether the petition filed by the plaintiff/respondent in this case on 30.11.1993 is well within the period of limitation prescribed under Article 137 of the Schedule to the Limitation Act, 1963. The learned Senior Counsel for the appellant while submitting that it is for the plaintiff in this case to demonstrate as to how the petition filed by them is within the period of limitation and that so far as the case on hand is concerned, the period of limitation must be held to have commenced either from 17.4.1990, the notice issued by the advocate on behalf of the plaintiff filed as Annexure B, or at least from 17.5.1990, the reply notice issued by the Advocates of the appellant to the advocate of the plaintiff and the time which started sticking from then onwards cannot be said to have been stopped or kept in abeyance. While dealing with the plea of acknowledgment saving the period of limitation and enabling the plaintiff to claim an extended period, the learned Senior Counsel for the appellant strenuously contended that there is nothing on facts which could either prove any such acknowledgment nor permits of any inference of an acknowledgment being drawn against the appellant, to save the petition filed under Section 20 from the vice of bar of limitation. Shri R.L.Sood, the learned Counsel for the plaintiff/respondent, with equal force contended that an acknowledgment of a debt and an acknowledgment of a right are distinct and different things, and that in view of the letters dated 6.4.1993 rfead with those dated 13.6.1991 and 24.3.1993, the period of limitation would really commence from 6.4.1993, in view of Section 18 of the Limitation Act and thus viewed the petition filed on 30.11.1993 is well within time. 21. We have carefully considered the submissions of the learned Counsel appearing on either side and the respective stand taken in the light of the factual basis relied upon by them to vindicate their respective stand point. For the appellant strong reliance has been placed on the notice dated 17.4.1990 issued by the plaintiff through its advocate Shri Krishan Kumar Aggarwal and the reply dated 17.5.90 sent by the advocates of the appellant M/s. Khaitan & Co. A perusal of the notice dated 17.4.1990 disclose that in paragraphs 1 to 4 averments have been made about the background of the circumstances in which the parties have entered into agreements dated 7.4.1988 and 10.4.1986 and the salient terms thereof. A perusal of the notice dated 17.4.1990 disclose that in paragraphs 1 to 4 averments have been made about the background of the circumstances in which the parties have entered into agreements dated 7.4.1988 and 10.4.1986 and the salient terms thereof. Paragraphs 5 to 9 show that disputes between parties surfaced even at that point of time and they have been enumerated also with a demand to rectify and comply with the demands within 30 days on threat of legal action. It is useful and necessary to set out paragraphs 5 to 9 as also some portions of the reply dated 17.5.1990 since the entire case of the plaintiff in respect of the objection relating to bar of limitation turns mainly on these communications. Paragraphs 5 to 9 of the notice dated 17.4.1990 read as follows : "(5) That you submitted the same plan and design as prepared by you to ARL as well as to The Inspector of Ropeways, Himachal Pradesh Government at Sunder Nagar HP. But strange enough on practical performance, the passenger ropeway does not give more than six or six and a half trips per hour. It is brought to your notice that according to the design calculations and also in the two agreements it was settled and agreed that the ropeway would carry 150 passengers per hour each way at nine trips per hour. But this fact has not been complied by your promises which you have given in writing to my clients and because of this my client has suffered and still suffering financial losses caused by your promises given to my client which were quite hollow from beginning. You have supplied the equipment which are capable to work on 60% capacity for which you have charged 100% money. (6) That it is brought to your notice that because of the delay in the delivery of the equipment on which my client has spent about 70 lacs of Rupees and on the basis of the liquidated damages at the rate of five per cent comes to Rs. 3.50 lacs but you exerted undue pressure and compelled my client to forgo Rs. 2.00 lacs and the matter was settled under duress, pressure and under extortion to Rs. 1.50 lacs. In fact the entire project costing Rs. 3.50 lacs but you exerted undue pressure and compelled my client to forgo Rs. 2.00 lacs and the matter was settled under duress, pressure and under extortion to Rs. 1.50 lacs. In fact the entire project costing Rs. 206.00 lacs which should have been completed in the month of March 1987 as per agreements, but it was not ready by April 1988. Even after we calculate the loss which my client have suffered at market rate of interest 18% which works out to Rs. 37.00 lacs for one year at the construction stage. Me client has suffered this loss even before the start of the project because of your negligence and utter failure for not complying with the terms and conditions envisaged in both the agreements. (7) That the project of Passenger Ropeway System was handed over to my clients on 14.4.1988 and my clients were to purchase the required spares at cost price which were lying at site after one year i.e. after 14.4.1989. But your Deputy Manager Services with an ulterior motive or may be for personal bona fide had altered the price list by making several changes and some of the instances my client have given in their letter No. ARL/89/18-852 dated 22.4.1989 and refused to accept the spares, because the price quoted by you was very high as compared to the market price. Thus, keeping in view the price quoted by Mr. Dey and the above market price was concerned, charging 170% to 650% over and above the market price wairing from part to part. (8) That because of the conduct and the initial dishonest intention on the part of your officials, you have cheated my client for several lacs of rupees and has committed an offence of cheating punishable under Section 420, IPC of Indian Penal Code and other relevant provisions. Had my client known the reality or you have told the reality to my client then my client would have not entered in the agreements to whom you have shown green pastures. As you had an dishonest intention from the very beginning to cheat my client. This act of yours has positively given an impression that your concern is having the roots of dishonesty and cheating. As you had an dishonest intention from the very beginning to cheat my client. This act of yours has positively given an impression that your concern is having the roots of dishonesty and cheating. Further you have also committed an offence of extortion by putting my client in fear of not completing the project entire when he had spent several lacs of rupees on that project and thus you have rendered yourself liable for the same offence as punishable under the relevant provisions of Indian Penal Code. This method you have adopted to accumulate great wealth by the means of extortion which does not behave of the so-called nice company. (9) That now the tourist season in this area is going to start and still you have not increased the capacity of the ropeway as agreed and stipulated in the agreement, so I hereby call upon you to do the needful within 30 (Thirty) days from the date of this notice or otherwise my clients will be constrained to take legal action against you in the Court of Law. All the damages and expenditure incurred on litigation will be at your risks and costs." Paragraphs 2 to 8 of the reply read as hereunder : "(2) Before dealing any further with the allegations contained in your letter under reply, our client states that the letter under reply has caused to be written under incorrect and false instructions inter alia, for the reasons stated hereinafter : (a) After signing of the agreements, your client desired that design has to follow H.P. Aerial Ropeway Act, 1968. This was not stipulated in the agreement. As a result, your client called for a change in the basic type of ropeway system. Our client had to adopt Twin Track Ropeway as against Bicable Ropeway which uses only one Track Rope. This resulted in the delay in completion of the project and considerable cost over run to our client due to use of extra 3.5 km of track ropes with extra rope supports fittings, anchorage, tensioning system and deployment of staff for extra time and inflation, etc. A new type of carriage and hanger was also designed to suit twin track system, as was instructed by your client. (b) Our client completed the project oh the assurance that your client will pay the extra costs involved. A new type of carriage and hanger was also designed to suit twin track system, as was instructed by your client. (b) Our client completed the project oh the assurance that your client will pay the extra costs involved. This also resulted in some delay but the same occurred only due to the insistance of your client to switch over the system as mentioned above. (c) Besides incurring considerable extra expenditure due to revision of basic system from a Bicable to a Twin Track System, our client suffered losses due to non-fulfilment of commitments and/or obligations on the part of your client as par agreed Minutes of Meetings held from time to time and signed by the parties. (d) At the time of expiry of the service contract the spares, tools and tackless, tensioning items and various other miscellaneous materials of our client lying at the premises of your client at Parwanoo were checked jointly by representatives of our client and your client and list of all the above items which were handed over to your client, was made out. (3) The allegations contained in paragraph 5 of your letter under reply are denied by our client. The ropeway was designed to carry up to 18 persons per cabin per trip and it is up to your client to obtain the permission of the Authorities to carry up to 18 persons. There is no deficiency whatsoever on this count. Further, due to incapability of your clients staff and inexperience, your client has failed to obtain the optium performance and is trying to put the blame on our client with ulterior motive. (4) With reference to paragraph 6, it is denied that there has been any delay on the part of our client or that the delay was the making of our client as intended to be alleged and our client denies and disputes any liability on this account. Our clients also denies and disputes the calculation of the alleged loss as alleged or at all. The matter of liquidated damages was settled amicably without any duress or undue pressure as alleged and keeping in view the extra cost incurred by our client. (5) The allegations made out in paragraph 7 of your letter under reply are false, mischievous and speculative to the knowledge of your client. The same are also defamatory and are denied. The matter of liquidated damages was settled amicably without any duress or undue pressure as alleged and keeping in view the extra cost incurred by our client. (5) The allegations made out in paragraph 7 of your letter under reply are false, mischievous and speculative to the knowledge of your client. The same are also defamatory and are denied. Our clients demand an explanation from your client for making such reckless, insinuations. Spaces lying at the site and belonging to our client, are neither being allowed to be removed nor price as settled with your client are paid. (6) The allegations contained in paragraph 8 of your letter are defamatory and the same are denied. It does not behove of your as an Advocate to indulge on behalf of your client in such reckless allegations which have no footing. The entire game of your client is to somehow manage to withhold payment of a sum of Rs. 5,99,961 / - and the interest thereon by adopting unfair means. Our client reserves its right to take out separate proceedings on the ground of defamation, etc. (7) With reference to paragraph 9 of your letter, please be informed that not only there is no deficiency in the carrying capacity of the ropeway, our client had to incur enormous extra expenditure with the consent and concurrence of your client to conform the local Governmental regulations, and/or otherwise and also the stock of spares and miscellaneous, items are duly handed over to your clients and therefore, unless the said sum of Rs. 5,99,961/ - together with interest @ 18% per annum till date is paid to our client forthwith, our client would take out suitable proceedings/actions as may be advised. (8) It is needless to add that in case our client is compelled to take up legal proceedings against yours, your client will be held responsible for all the consequences thereof. Hence, you are also hereby requested to advise your client to withdraw your letter under reply and pay the dues of our client forthwith," 22. (8) It is needless to add that in case our client is compelled to take up legal proceedings against yours, your client will be held responsible for all the consequences thereof. Hence, you are also hereby requested to advise your client to withdraw your letter under reply and pay the dues of our client forthwith," 22. A careful analysis and consideration of the paragraphs in the notice and the reply, referred to above, would show, without even making any serious effort therefor too, that after pointing out the nature of the claims to which the plaintiff has become entitled to on account of the alleged defective and unworkman like execution of the contract by the appellant, demand for rectification and compliance has also been made within the stipulated time on threat of legal action against the appellant in the Court of law making it clear that the damages and expenditure incurred on such litigation will be at the risk and costs of the appellant. Similarly, the reply dated 17.5.1990 would show that every one of the damans raised by the plaintiff has also been specifically and meticulously denied, and de hors the merits or otherwise of such denial, the fact remains that in the assertion made in paragraph 7 of the reply a counter-claim too has also been made with similar threat of instituting legal proceedings. Though the learned Senior Counsel for the appellant even tried to place reliance upon the minutes of the meeting drawn between parties on 17.4.1988 to contend that there are no merits in the claims or disputes raised by the plaintiff subsequently, we refrain from adverting to them in detail as also the reply made at the time of arguments by the learned Counsel for the respondent-plaintiff in this regard, since those are all matters which are not the concern of this court in this proceeding and if at all the arbitrator is to be appointed, it is for the arbitrator to adjudicate on such issues. Consequently, in view of the assertion of their demands and claims by the plaintiff-respondent in their notice through their advocate and the refusal and denial, as also the projection of a counter-claim made by the appellant through their advocate in their reply, disputes between parties must be held to have arisen at that point of time itself and both the plaintiff-respondent and the appellant-defendant have become entitled, if they so desired, to vindicate their rights to move the court under Section 20 for a reference of their disputes to an arbitrator to be appointed and the cause of action, therefore, for the purpose of Article 137, in our view, arose from those respective dates with reference to their respective claims projected and asserted by the parties. 23. Now the question remaining for consideration is as to the plea of acknowledgment projected for the plaintiff-respondent to save the bar of limitation and the claim for an extended period by shifting the cause of action to a subsequent date. How far the defendant succeeded in its attempts in this regard has to be considered and would depend upon the letter dated 24.3.1993 addressed by the Managing Director of the plaintiff to the Executive Director, M/s Usha Martin Industries Ltd. 2A, Shakespeare Sarani, Culcutta 700 071, a copy of the letter dated 13.6.1991 addressed by the appellant to M/s. Tata Consulting Engineers,34 Sant Tukuram Road, Carnac, Bombay 400 009 and the copy of the letter dated 6.4.1993 issued by the appellant to the plaintiff with reference to the letter dated 24.3.1993, noticed above. Since much was said to base the entire claim projected for the respondent on the basis of acknowledgment said to have been made under these letters, we deem it necessary to extract them as part of our order. 24. The contents of the letter dated 24.3.1993 are as follows: "ASIA RESORTS LIMITED PARWANOO - 173220 (HP). TIMBER TRAIL Phone : (01794) 2340, 2341 Cable : TIMBERESORT Telex : 03905-216 TTRH In Fax : (91) (01794) 4119 Ref. No. ARL/93/2(6)/89 Dated 24th March, 1993. REGISTERED AD The Executive Director, M/s. Usha Martin Industries Ltd., 2A, Shakespeare Sarani, CULCUTTA - 700 071 Dear Sir, First of all, we must thank you for the time given to for the meeting, to the undersigned during his recent visit to Calcutta though your schedule was very busy. No. ARL/93/2(6)/89 Dated 24th March, 1993. REGISTERED AD The Executive Director, M/s. Usha Martin Industries Ltd., 2A, Shakespeare Sarani, CULCUTTA - 700 071 Dear Sir, First of all, we must thank you for the time given to for the meeting, to the undersigned during his recent visit to Calcutta though your schedule was very busy. We are grateful to you for your positive attitute and you have narrowed down the gap of misunderstanding between both the companies. We are looking forward for the implementation of your decision to increase the capacity of our passenger ropeway system and we assure you that we will release the payments in your favour as agreed, immediately. We have received a notice from National Consumer Disputes Redressal Commission from Delhi and M/s. Usha Breco Ltd., to take a common stand on this issue. We are looking forward to your suggestion and we will not mind if you want to fix up any meeting in Delhi at any time with your lawyers. Please pay us a visit with your family if possible in future or any time if you are visiting this area on your business tour. Thanking you, With regards, (R.K. GARG) MANAGING DIRFCTOR N.B: A copy of the notice of the National Consumer Disputes Redressal Commission enclosed here for your ready reference." The contents of the copy of the communication dated 13.6.1991 are as follows : "USHA BRECO LIMITED Registered Office: 8, CHITTRANJAN AVENUE, CALCUTTA- 700 072 Phone : 275030 (3 Lines) Cable : USHBRECO Telex : 021-5040, 021-5268 Collaborating British Ropeway Engg. Co. Ltd. U.K. UBL.CKK: 1182 June 13, 1991 Tata Consulting Engineers 34 Sant Tukuram Road, Carnac Bombay 400 009 Attn: Mr. L.L. Bhatia Dear Sirs, Sub : Ropeway We refer your telex TCE/G91/Ropeway/30/1708 dated 5.6.91. We confirm we have done a Jig Back System ropeway at Parwanoo for M/s. Asia Resorts Ltd. The particulars of installation are furnished below: (a) Name of client M/s. AISA RESORTS LTD. (b) Location Timber Trail, Parwanoo, HP (c) Type of Ropeway Twin Track Rope, Twin rope, Jigback passenger repeway. (d) Capacity 150 passengers per hour. (e) Length of repeway : 1600 M (approx) (f) Lift of ropeway : 500 M (approx) (g) Free Span : 1472 M (approx) (h) Capacity of cabin : 18/20 persons In case you desire, you may please visit our installation. Thanking you, Yours faithfully, FOR USHA BRECO LTD. (d) Capacity 150 passengers per hour. (e) Length of repeway : 1600 M (approx) (f) Lift of ropeway : 500 M (approx) (g) Free Span : 1472 M (approx) (h) Capacity of cabin : 18/20 persons In case you desire, you may please visit our installation. Thanking you, Yours faithfully, FOR USHA BRECO LTD. Sd/- (CK KARMAKAR) DIVISIONAL KANAGER (!RD)" The contents of the letter dated 6.4.1993 are as follows : "USHA BRECO LIMITED 8 CHITTRANJAN AVENUE, CALCUTTA - 700 072 Through Courier Service UBL/AKB/78 6th April 1993 Asia Resorts Limited Parwanoo 173 220 HIMACHAL PRADESH. Kind Attn :Mr. R.K. Garg, Managing Director Dear Sirs, This has reference to your letter No. ARL/92/2(6)/89 dated 24th March 1993 addressed to Shri B.S. Jaiswal, Executive Director of M/s. Usha Martin Industries Limited. Please note your discussion held with Shri B.S. Jaiswal on 19th and 20th March, 1993 at Calcutta has not been correctly recorded in your letter. A detailed letter follows. We have also received a formal notice from National Consumer Disputes Redressal Commission on 31 st March, 1993. We have noted your suggestion and will revert back to you. Thanking you, Yours faithfully, for USHA BRECO LIMITED. Sd/- (A.K. BASU) GENERAL MANAGER (OPERATIONS)." 25. We are not on the veracity or the correctness or credibility of the assertions made in those letters. So far as the letter dated 24.3.1993 is concerned, it purports to record the discussion the Managing Director of the plaintiff was said to have had with the Managing Director of the M/s. Usha Martin Industries Ltd., though on behalf of the appellant it is contended that the said discussion or that the said letter had nothing to do with the appellant-Company, since what transpired between the plaintiffs Managing Director and the Executive Director of the other company, which is a separate entity and not even the subsidiary company of the appellant company cannot be used to fix any responsibility or liability on the appellant. At the same time the learned Counsel for the respondent vehemently contended that the reply dated 6.4.1993 given by the appellant-Company made the respondent-plaintiff to wait, particularly, because there is no specific denial of the claim of the plaintiff. At the same time the learned Counsel for the respondent vehemently contended that the reply dated 6.4.1993 given by the appellant-Company made the respondent-plaintiff to wait, particularly, because there is no specific denial of the claim of the plaintiff. Argued the learned Counsel for the respondent-plaintiff further that since the appellant did not deny that a discussion as such has taken place as found stated in the letter dated 24.3.1993 and in the reply it has also been stated that a detailed letter follows and no such letter actually came from the appellant, thereafter, it must be considered that the right to go to arbitration has been held or kept in abeyance on account of the letter dated 6.4.1993 sent by the appellant and consequently the bar of limitation cannot be pleaded against the plaintiff-respondent. In appreciating the respective stand taken before us on behalf of either side, we have to express our view that the communication dated 6.4.1993 sent by the appellant cannot either be construed or taken to amount to any admission or acceptance of the claim as it is attempted to be made before us. On the other hand, denial of the correctness of the contents of the letter dated 24.3.1993 would mean there has been no further acceptance or acknowledgment or conceding of the claim of the plaintiff subsequent to the notice and the reply exchanged between parties in the year 1990. That apart, in the absence of any proof or material to show that the discussion said to have been had with the Executive Director of M/s. Usha Martin Industries Ltd, has any binding force or effect on the appellant by producing any information or material or inviting to our notice any provision of law that those companies are either one and the same or subsidiary companies and the Executive Director of M/s. Usha Martin Industries Ltd. had any power or authority to represent, negotiate or deal with the matters pertaining to the appellant, we cannot consider the communication dated 24.3.1993 to be of any help to the plaintiff-respondent to get over the hurdle of limitation which, as held by us, has commenced and started running with the exchange of notices in the year 1990 itself. Similarly, the copy of the letter dated 13.6.1991 addressed by the appellant to Tata Consulting Engineers furnishing certain of information to the said concern at Bombay about the details of Jig Back System Repeway at Parwanoo for the plaintiff, cannot help the plaintiff in any manner to base any claim of acknowledgment for the purpose of saving the period of limitation for filing a petition or application under Section 20 of the Arbitration Act. The learned Counsel for the respondent has also invited our attention to another notice dated 16.6.1993 issued by the learned Counsel for the plaintiff-respondent raising some demands against the appellant. In our view, a perusal of the same would go to show that the disputes earlier raised are reiterated and a further demand has also been made seeking for compliance by the appellant, which in our view, does not in any manner, help the plaintiff-respondent to avoid the period of limitation which has already commenced against them in the year 1990 itself when earlier notices were exchanged. This issue of a notice on 16.6.1993 after the claim to move under Section 20 of the Arbitration Act became already time-barred has no significance or consequence in law to afford a fresh cause or period of limitation to move under Section 20 of the Arbitration Act. As observed by the apex Court in Inder Singh Rekhis case (supra), a party cannot postpone the accrual of cause of action by writing or sending reminders and making repeated demands of the dispute. 26. The learned single Judge, in our view was in error in his conclusion in paragraphs 26 & 27 that right up to 1993, the parties were in correspondence, despite the fact noticed and observation made by the learned Judge himself that disputes have been raised by the plaintiff-respondent, which were denied by the defendant-appellant apparently meaning thereby those so made in 1990, and that it would help the plaintiff-respondent to save the limitation by either postponing the commencement of period of limitation till 1993 or giving a fresh period of limitation from 1993 to save the petition filed in this case from the hurdle of bar of limitation. We cannot also accept the further view expressed by the learned Single Judge to overrule the objection based on the bar of limitation by stating merely that it would be an appropriate point to be decided by the arbitrator So far as the limitation is concerned, in the teeth of the decision of the apex Court, noticed earlier, specifically pointing out the difference between the limitation for making the demand or asserting claim made on merits of the cause and the limitation for filing a petition under Section 20 of the Arbitration Act, what could be relegated or reserved for the adjudication of the arbitrator to be appointed is only the question of limitation, visa-vis, the claim and demand made on merits and not the plea of limitation relating to the very filing of the petition under Section 20 of the Arbitration Act which has to be decided only by the Court, before directing a reference and making an appointment of an arbitrator for adjudicating the disputes to be referred to him. 27. For all the reasons stated above, we have no hesitation to hold that the petition filed by the plaintiff-respondent under Section 20 of the Arbitration Act is barred by limitation and on that ground alone, the learned Single Judge ought to have dismissed the petition. We, therefore allow the appeal while setting aside the order of the learned Single Judge and direct that the petition under Section 20 of the Arbitration Act filed in C.S. No. 2 of 1994 shall stand dismissed. No costs. Appeal allowed.