A. K. Sikri ( 1 ) THE appellant herein had filed a petition under section 20 of the Arbitration Act, 1940 (for short "the act ) for appointment of arbitrator and reference of disputes to him as per the arbitration agreement entered into between the parties. This petition was dismissed by the learned Addl. District Judge, Delhi vide judgment dated 21st May, 1985. The present appeal is directed against the aforesaid judgment. ( 2 ) THE facts which were stated by the appellant in the petition filed by it in brief are that the appellant transfers technical know-how and expertise developed by different Government laboratories. The respondent herein approached the appellant for transfer of technical know-how developed by the National Physical laboratory, New Delhi for manufacture of hard ferrites covered by Indian Patent No. 93725. Acceding to the request of the respondent, an agreement dated 8th august, 1967 was entered into between the parties for this purpose which agreement was operative from november, 1965. The agreement was on non-exclusive basis. As per this agreement, in consideration of royalty at the rate of 2 1/2 per cent on the net ex-factory sale price of material manufactured by him in accordance with the said invention , the technical know-how was to be provided by the appellant. The licence was to remain in force for the period of 14 years as provided in clause 1 of the agreement. It was further agreed that in case of default of payment of royalty interest was payable at the rate of 6 per cent from the date of default in making the payment and the respondent was required to file half yearly returns indicating the sale of produces so manufactured. These half yearly returns were to be filed by the appellant by 1st of April and 1st of October every year. These half yearly returns were to be filed by the appellant by 1st of April and 1st of October every year. ( 3 ) IN case of disputes and difference, clause 12 of the agreement provided for arbitration which is in the following terms: "12:if any dispute or difference arises between the parties hereto or their representatives or assigns with respect to their rights or liabilities or in regard to any other matter under presents, save as to any matters the decision whereof is hereinbefore expressly provided for, the same shall be referred TO to the sole arbitration of the chairman, National Research Development corporation of India, and if he is unable or unwilling to act, to the sole arbitration or some other person appointed by him and willing to act as such arbitrator. The reference to the arbitration shall be deemed to be as a submission within the meaning of the arbitration Act, 1940 or any statutory modifications or re-enactment thereof and the rules made thereunder for the time being in force shall apply to such reference and this deed shall be deemed to be a submission to such arbitration. It is the condition of this Clause that all hearings of the arbitration will take place at Delhi. "it is the case of the appellant that royalty returns were filed by the respondent in the beginning and till march, 1967 after entering into the agreement indicating the production to be "nil . Thereafter, no such returns were filed on the ground that the royalty was payable only after off-setting the losses suffered by the profits made by the respondent. This plea of the respondent was, however, controverted by the appellant and the respondent was asked to file royalty returns due to the appellant. Instead of doing so, the respondent reiterated his stand by letter dated 20th february, 1971. According to the appellant, various letters were written thereafter being dated 19th december, 1975, 20th January, 13th February, 30th march, 1976, 25th September, 1978, 19th February, 1979, llth January and 24th/25th January, 1980. However, at this stage, the respondent wrote a letter dated 26th september, 1980 stating that M/s power Agents , the business which was being carried out by him as sole proprietor, had been purchased by his father sh. However, at this stage, the respondent wrote a letter dated 26th september, 1980 stating that M/s power Agents , the business which was being carried out by him as sole proprietor, had been purchased by his father sh. P. N. Kathpalia and since his father died thereafter the respondent had nothing to do with the said firm, and therefore, he was not liable to make any payment towards the royalty. ( 4 ) THE appellant again started sending various communications and letters dated 28th January, 15th february, 1982 and 15th June, 1983. Vide letter dated 16th February, 1982 the respondent again reiterated the stand which he had take by letter dated 28th December, 1971. At this stage, the appellant approached the court and filed a petition under Section 20 of the Act which was marked as Suit No. 174 of 1984. ( 5 ) AS mentioned above, this petition has been dismissed as time barred. The learned Addl. District judge while holding the petition to be time barred, has observed as under: "8. In the instant case the admitted facts are that the parties entered into an agreement on 8/8/67 w. e. f. November, 1965 and that the respondent had royalty returns mentioning the production to be "nil" till the period ending March, 1967 the respondent did not file any return and thereafter till December, 1971 when the legal notice was issued by the petitioner and with this the differences and dispute arose between the parties as the respondent had all the time, been telling the petitioner that he had been suffering the losses and many other manufacturers were using the same technique in manufacturing hard ferrites. In reply dated 28/12/1971 to the legal notice given by the petitioner requiring the respondent to submit royalty return upto 30th September 1971, the respondent stated that they were no more using their process and were not liable to pay anything at all. Thus through this reply they repudiated the agreement and right to apply for arbitration accrued from this date. The correspondence between the parties continued upto November 2, 1972 and for 8 years there was no correspondence and it re-strated from september, 1980. However the petitioner filed certain letters allegedly sent to the respondent from December, 1975 till 1979 but no U. P. C. or AD receipts were produced to show the despatch of these letters. The correspondence between the parties continued upto November 2, 1972 and for 8 years there was no correspondence and it re-strated from september, 1980. However the petitioner filed certain letters allegedly sent to the respondent from December, 1975 till 1979 but no U. P. C. or AD receipts were produced to show the despatch of these letters. Further when the respondent made it known to the petitioner that he was not using their process and therefore was not obliged to file their returns, time had started running for arbitration. It is surprising that after 1972, the first letter sent by the petitioner to the respondent with regard to their disputes was in December, 1975 and second in Jan. ,1976 and third in Feb. , 1976 and so on till Jan. , 1980. all the letters have been denied. On some of these letters regd. AD is mentioned while on the others the word "issued" is mentioned. On the previous letters which was sent till 1971 the indication mentioned thereon were that these were sent through regd. AD. 9: It seems that the petitioner went into soporific slumber after 1972 and again woke up in 1975. It is accepted that the letters from 1975-1980 were not sent to the respondents, after 1972 the respondent all of a sudden woke up and started correspondences after 8 yers i. e. in September, 1980. If the respondent can admit the receipt of the letters sent to him in September, 1980 and thereafter there was no reason for him not to admit the receipt of the letters sent in december, 1975. 10: The arguments of the Ld. counsel that the limitation is to be computed from each default of not filing the returns does not find favour with me as it is not a case of recovery. The question to be decided as to on what date the right to apply for arbitration accrued to the petitioner and this is to be determined from the correspondence exchanged between the parties. As I have held that the right to apply accrued in Dec. The question to be decided as to on what date the right to apply for arbitration accrued to the petitioner and this is to be determined from the correspondence exchanged between the parties. As I have held that the right to apply accrued in Dec. , 1971 when the respondents in reply to the legal notice categorically stated that they were not obliged to file the returns as they were not using their process though prior to that also he had been informing the respondent that they were not using their process as it has incurred a great loss to them and therefore, were not obliged to file the returns. Thus the petition is hopelessly time barred. Moreover the arbitration agreement automatically stood abandoned when the petitioner after receiving the reply to its legal notice did not take any action either by way of filing the petition u/s 20 of the arbitration Act or by asking the respondent to file the returns. He remained silent for practically 8 long years from December, 1972 till 1980 when he re-opened the dead issue. His silence for 8 years has resulted in abandonment of the agreement. After receiving the reply to the legal notice, the petitioner did not deem it proper or necessary to proceed further in the matter till 1980. However, even if it is accepted that he started corresponding in 1975 even then the petitioner s silence for 3 years after receiving the reply to the notice by which the agreement was impliedly rescinded also has the effect of abandonment. "( 6 ) THE learned counsel appearing for the appellant submitted that the learned Addl. District Judge committed an error in dismissing the petition inasmuch as limitation for filing the petition under Section 20 of the Act was three years and each default would give fresh cause of action. According to the learned counsel, when the period of agreement was 14 years and half yearly returns were to be filed, three years were to be counted from each such default when the returns were not filed. The agreement which started in the year 1965, therefore, had to remain valid for a period of 14 years from 1st November, 1965 to 31st October, 1979. In support of this submission, he REFERRED TO to the Judgment of this court in the case of Globe Motors ltd. Vs. Mehta Teja Sinah and Co. The agreement which started in the year 1965, therefore, had to remain valid for a period of 14 years from 1st November, 1965 to 31st October, 1979. In support of this submission, he REFERRED TO to the Judgment of this court in the case of Globe Motors ltd. Vs. Mehta Teja Sinah and Co. reported in 24 (1983) DLT 214. ( 7 ) THE aforesaid submission is without any merit in view of the facts noticed in this case. When the respondent had disputed his liability to pay any royalty, cause of action had arisen at that time, and therefore, three years were to be counted therefrom and thus approach of the learned Addl. District Judge cannot be faulted with. Although initially the respondent denied the liability on the ground that royalty would be payable after off-setting the losses, by his letter dated 26th September, 1980, he denied the liability altogether on the ground that he had sold his buisness to his father (who had also died) and he had nothing to do with the business. In such a situation there is no question of separate cause of action on non-filing of returns on each stipulated date for this purpose as envisaged in the agreement. Even if the contention of the appellant is accepted, still the petition filed by it would be time barred. As Noticed above, the agreement itself expired on 31st October, 1979. Thus even the last return was to be filed by that time and that gave a fresh cause of action so far as that particular return is concerned, three years expired on 31st October, 1982. The petition under Section 20 was filed only on llth December, 1984. Therefore, even by the appellant s own calculation this petition under section was highly time barred. ( 8 ) I, therefore, do not find any infirmity in the order passed by the learned Addl. District Judge. The appeal is accordingly dismissed. ( 9 ) SINCE nobody appeared on behalf of the respondent, there shall be no order as to costs.