Judgment : This petition is filed under Section 34 of the Arbitration and conciliation Act, 1996 against the award of the second respondent/Arbitrator dated 210. 2002. .2. The O.P. is filed by the respondent before the Arbitral Tribunal. The first respondent is a corporate member of the National Stock Exchange Limited, while the petitioner is one of the clients of the first respondent from 31. 2001. The first respondent has raised the dispute before the Arbitral Tribunal on the allegation that the petitioner has committed default in providing share certificate to an amount of Rs. 1 lakh. The allegation was that as on 20.2.2001, the petitioner had a balance of Rs. 1,05,640.43 and towards clearance, it is stated, the petitioner promised to transfer his shares to the first respondent for a sum of Rs. 1 lakh and the petitioner has caused a loss to the extent of Rs. 1,32,827.74 due to the auctioning of the share position, which was effected due to the failure of the petitioner in transferring his shares. The total amount of claim was RS. 2,13,2776. As per the National Stock Exchange of India Limited Bye Laws, which contains arbitration clause, the second respondent was appointed as Arbitrator, who passed the award on 210. 2002, which is stated to have been sent to the petitioner by the National Stock Exchange of India Limited in the letter dated 11. 2002. The Arbitrator passed the award directing the petitioner to pay Rs. 1,91,688.16 together with interest at 15% p.a. from the date of claim till the date of realisation. 3. The main ground on which the award is challenged by the petitioner who was the respondent before the Arbitral Tribunal, apart from the grounds of bias and the failure to give proper opportunity, is that the Arbitrator has not conducted the proceedings as per Section 19(2) read with Section 24 of the Arbitration and Conciliation Act, 1996. It is the case of the petitioner that the petitioner had demanded to have oral hearing which was not allowed and no order was passed by the Arbitrator on the request and there is no mention about it in the award. 4. The second point raised is that the reference made by the first respondent to the Arbitrator itself is barred by limitation as per bye-law under which the proceedings were initiated. 4. The second point raised is that the reference made by the first respondent to the Arbitrator itself is barred by limitation as per bye-law under which the proceedings were initiated. It is the case of the petitioner that as per the National Stock Exchange of India Limited bye-laws, any claim, difference, or dispute has to be submitted to the arbitration within six months from the date of the claim or the difference or dispute that arose or shall be deemed to have arisen. According to the petitioner, the dispute arose on 27. 2001 the date on which the petitioner is alleged to have committed default and therefore, as per the bye-laws which contain a time-bar clause, the reference to the arbitration should have been done within six months from the date, 27. 2001 and in this case, the first respondent has made the reference to the Arbitral Tribunal on 6. 2002 and therefore, the reference of dispute is beyond the period of limitation as per bye-laws. .5. It is the contention of the learned counsel for the petitioner, Mr. K. Rajasekaran that the Arbitrator has committed a serious error in coming to the conclusion that the petitioner has made payment till 11. 2002 as per the statements furnished by the first respondent and in holding that the reference made on 6. 2002 was held to be within the period of limitation by taking the said date as starting point of dispute and according to the learned counsel, it is not correct. He would submit that there is distinction between the cause of action for a civil suit and the reason for reference of dispute before the Arbitral Tribunal. While for the purpose of recovery of the amount, the cause of action is stated to have arisen for the first respondent on 11. 2002, since the petitioner paid amount till that date, the actual dispute arose as early as 27. 2001. When the first respondent charged interest from 27. 2001, that was the starting point of the dispute. To substantiate his contention, he would rely upon the judgments in Poise Securities and Exchange Ltd., v. Mansu Investment Pvt. Ltd. and Others (2002) 2 RAJ 409 (Bombay), Dilip Construction Company v. Hindustan Steel Ltd., AIR 1973 Madhya Pradesh 261 and Rai and Sons (P) Ltd. v. Poyslta Industries Co. Ltd., AIR 1972 AP 302 . 6. To substantiate his contention, he would rely upon the judgments in Poise Securities and Exchange Ltd., v. Mansu Investment Pvt. Ltd. and Others (2002) 2 RAJ 409 (Bombay), Dilip Construction Company v. Hindustan Steel Ltd., AIR 1973 Madhya Pradesh 261 and Rai and Sons (P) Ltd. v. Poyslta Industries Co. Ltd., AIR 1972 AP 302 . 6. Regarding the first submission as to the request for oral hearing by the petitioner including cross-examination, the learned Arbitrator in the award has admitted that the petitioner has made a request to have oral hearing including cross-examination, however, the same was denied and the said finding is in single line, viz., ‘the Arbitrator denied the respondent’s request for oral hearing and filing of affidavits by witnesses.’ While Section 24(1) of the Arbitration and conciliation Act, 1996 (in short, “the Act”) contemplates for a decision by the arbitral Tribunal as to whether oral hearing should be allowed to a party for presentation of evidence or for oral argument, the proviso makes it clear that on request by a party to have oral hearing, it shall be the duty of the Arbitral Tribunal to conduct oral hearing unless the parties agreed not to have oral hearing. Section 24 is as follows: “24. Hearings and written proceedings: (1) Unless otherwise agreed by the parties, the Arbitral Tribunal shall decide whether to hold oral hearings for the presentation of evidence or for oral argument, or whether the proceedings shall be conducted on the basis of documents and other materials: Provided that the Arbitral Tribunal shall hold oral hearings, at an appropriate stage of the proceedings, on a request by a party, unless the parties have agreed that no oral hearing shall be held. .(2) The parties shall be given sufficient advance notice of any hearing and of any meeting of the Arbitral Tribunal for the purposes of inspection of documents, goods or other property. .(3) All statements, documents or other information supplied to, or applications made to the Arbitral Tribunal by one party shall be communicated to the other party, and any expert report or evidentiary document on which the Arbitral tribunal may rely in making its decision shall be communicated to the parties.” 7. .(3) All statements, documents or other information supplied to, or applications made to the Arbitral Tribunal by one party shall be communicated to the other party, and any expert report or evidentiary document on which the Arbitral tribunal may rely in making its decision shall be communicated to the parties.” 7. Section 19 of the said Act enables for determination of rules of procedure saying that the arbitral tribunal is not bound by the Code of civil Procedure, 1908 or the Indian Evidence Act, 1872, but the parties are free to agree to follow the procedures to be followed by the Arbitral Tribunal and in case where the parties have not agreed for a procedure, the Arbitrator has to conduct the proceedings following the procedure in the manner which he considers appropriate. Section 19 is as follows: “19. Determination of rules of procedure.- .(1) The Arbitral Tribunal shall not be bound by the Code of Civil Procedure, 1908 (5 of 1908) or the Indian Evidence Act, 1872 (1 of 1872). .(2) Subject to this part, the parties are free to agree on the procedure to be followed by the Arbitral Tribunal in conducting its proceedings. .(3) Failing any agreement referred to in sub-section (2), the Arbitral Tribunal may, subject to this Part, conduct the proceedings in the manner it considers appropriate. .(4) The power of the Arbitral Tribunal under sub-section (3) includes the power to determine the admissibility, relevance, materiality and weight of any evidence.” 8. A combined reading of Section 24(1) and Section 19 of the said Act makes it clear that on the factual situation of this case, the petitioner has requested for oral hearing, which has been denied by the Arbitrator without assigning any reason. By virtue of the proviso to Section 24(1) of the Act, that is, when one of the parties requests for oral hearing, it is the duty of the Arbitral Tribunal to conduct the same unless consent of the parties have been formulated by the Arbitral Tribunal agreeing not to have oral hearing. In the absence of any reason adduced by the learned Arbitrator, it has necessarily to be construed that the denial of oral hearing requested by the petitioner, by the Arbitrator is against the provisions of the Act. In such circumstances, the contention of the learned counsel for the petitioner in this regard has to be accepted. 9. In the absence of any reason adduced by the learned Arbitrator, it has necessarily to be construed that the denial of oral hearing requested by the petitioner, by the Arbitrator is against the provisions of the Act. In such circumstances, the contention of the learned counsel for the petitioner in this regard has to be accepted. 9. In respect of the next contention regarding the question of limitation, it is relevant to note the statement of case of the petitioner therein given along with the arbitration application as Annexure to Form-I, which is as follows: Annexure to Form No. 1 Statement of the case of ADV Consultant Mr. P.S. Venkatesh (Proprietor ADV Consultant) approached us for becoming a client and do business of buying and selling of shares in the Account name of ADV Consultant as soon as our Chennai Branch was started. On reference from the Branch Manger, he was allowed to commence his business with effect from 31. 2001, without any deposit, on his promising to transfer shares worth Rs. 1,00,000/-meant for sale shortly, the proceeds could be kept as his deposit. For the settlement ended 12. 2001, he had a debit balance of Rs. 26,732.83 which he paid promptly. For the next settlement ending 20.2.2001, he had a debit balance of Rs. 1,05,640.43 for which he promised to transfer his shares for Rs. 1,00,000/- as agreed upon earlier. After a week or so, we were shocked to find the transfers he made became Invalid. By this time he had further incurred a loss to the tune of Rs. 1,32,827.74 which was due to auctioning of his sale positions for which he had failed to transfer the shares to NSF as promised earlier. On knowing this, we immediately stopped doing business for him. He accepted his mistake and promised to pay our dues as early as possible. He has also acknowledged his dues to us vide his letter dated 14. 2001, requesting us to waive 50% of his dues and that the balance would be paid by him in parts from July 2001 onwards. Till 11. 2002 he had paid an amount of Rs. 27,500/-. Thereafter, his response and cooperation has become totally unsatisfactory, though he is not disputing his dues. However since the claim is pending, we now prefer to refer this case for Arbitration. For Extermpore Securities & Investments Pvt. Ltd. Sd/-xxxxx Authorised Signatory. 10. Till 11. 2002 he had paid an amount of Rs. 27,500/-. Thereafter, his response and cooperation has become totally unsatisfactory, though he is not disputing his dues. However since the claim is pending, we now prefer to refer this case for Arbitration. For Extermpore Securities & Investments Pvt. Ltd. Sd/-xxxxx Authorised Signatory. 10. A reference to the said statement which has been submitted by the first respondent along with the arbitration petition in Form No. 1 makes it clear that it is the first respondent’s case that as per the statement ending on 20.2.2001, the petitioner had a debit balance of Rs. 1,05,640.43 and he promised to transfer of his shares for Rs. 1 lakh as per earlier agreement. However, after a week or two from the date of said statement ending on 20.2.2001, the first respondent was shocked to find that the transfers made by the applicant became invalid. That is the starting point of dispute between the parties. It is also specific case of the first respondent that on knowing such conduct of the petitioner, the first respondent stopped doing business for the petitioner. It is true that the statement makes it clear that even thereafter the petitioner has been making payments till 11. 2002. It is also not in dispute that the alleged transfers made by the petitioner to the first respondent’s Demat account has been invalid. The learned Arbitrator has found that even though the transfers which were done in April, 2001, were invalid, the petitioner acknowledged his debt by letter dated 14. 2001 and paid the instalments on 5. 2001, 24. 2001 and 27. 2001 and 11. 2002 to the extent of Rs. 27,500/- and thereafter, the amount was not paid and therefore, taking the date of last payment, viz., 11. 2002, it was concluded that the reference to the Arbitral Tribunal was within six months from 11. 2002 and hence, not hit by limitation, since the first respondent filed the reference for arbitration on 24. 2002. As per the Bye-laws of the National Stock Exchange of India Limited, relating to the period for reference of claim or difference or disputes for arbitration is as follows: “The paragraph of bye laws which speaks about limitation is reproduced in verbatim. 2002. As per the Bye-laws of the National Stock Exchange of India Limited, relating to the period for reference of claim or difference or disputes for arbitration is as follows: “The paragraph of bye laws which speaks about limitation is reproduced in verbatim. Limitation period for reference of claims, differences or disputes for arbitration (3) All claims, differences or disputes referred to in Bye laws (1) (1A) and (1B) above shall be submitted to arbitration within six months from the date on which the claim, difference or dispute arose or shall be deemed to have arisen. The time taken in conciliation proceedings, if any, initiated and conducted as per the provisions of the Act and the time taken by the Relevant Authority to administratively resolve the claim, differences or disputes shall be excluded for the purpose of determining the period of six months.” Therefore, the reference to arbitration has to be made within six months from the date of claim or difference or dispute that arose or shall be deemed to have arisen. 11. In this case, certainly it is not in dispute that the dispute between the parties has arisen on 22. 2001 when the petitioner has stopped doing transaction with the first respondent and an acknowledgement of debt was made on 14. 2001. The statement of accounts made by the first respondent shows that the claim has been made for the period from 20.2.2001 to 23. 2001. The question is, if any instalment has been made after the said acknowledgement of debt, whether the payment of the said instalments could be taken as a cause for referring the dispute to the arbitration. The crux of the dispute appears to be that the transfers effected by the petitioner in favour of the first respondent which were during the month of February, 2001 have become invalid. Therefore, the question whether the payment of any instalment thereafter and subsequent stoppage of instalments could be deemed to be the starting point of dispute for reference to the Arbitral Tribunal has to be considered. 12. It is nowhere stated in the award that the alleged invalid transfer of shares stated to have been effected by the petitioner in February, 2001 has been totally rectified by the parties by the acknowledgement dated 14. 2001. 12. It is nowhere stated in the award that the alleged invalid transfer of shares stated to have been effected by the petitioner in February, 2001 has been totally rectified by the parties by the acknowledgement dated 14. 2001. When the claim of the petitioner stated to have been made for the purpose of reducing the interest to the extent of 50% was not admitted by the first respondent furtherance to which instalments were made by the petitioner on 5. 2001, 25. 2001, 27. 2001 and 11. 2002, it is not possible to conclude that 11. 2002 was the date when the dispute arose for the purpose of referring the same to the Arbitral Tribunal. This is relevant because, the four days on which the amounts were stated to have been paid by the petitioner are not regular periods and hence, the last payment made by the petitioner on 11. 2001 may be stated to be the date on which the cause of action arose for the first respondent to recover the amount in the manner known to law. But, for a reference to Arbitral Tribunal under the Arbitration and Conciliation Act, the dispute having arisen sometime in February, 2001 and continued till April or July, 2001 is the starting point for limitation. This point has not been discussed by the Arbitrator in the award. 13. A reference of Form No.1 which is in the form of request by the first respondent to refer the dispute to the Arbitral Tribunal dated 24. 2002 makes it clear that in fact the first respondent is claiming interest at the rate of 15% p.a. for 274 days from 27. 2001 to 24. 2002 which itself shows that the dispute arose from 27. 2001 for the purpose of reference of dispute to the Arbitral Tribunal and not 11. 2002. 14. In Poise Securities and Exchange Ltd., v. Mansu Investment Pvt. Ltd., and Others (supra), it was held that reference of dispute to Arbitral Tribunal after three moths from the accrual of cause of action which period is mentioned in Regulation 5 of Regulations of Stock Exchange should be treated as barred by limitation. 15. In Rai and Sons (P) Ltd., v. Poysha Industries Co. 15. In Rai and Sons (P) Ltd., v. Poysha Industries Co. Ltd., (supra), a Division Bench of Andhra Pradesh High Court while dealing with Section 34 of the Arbitration Act, 1940 regarding the power of Court to stay the legal proceedings, held that when there was no controversy and when the other party admitted the liability but simply failed to pay, there was no dispute to invoke Section 34 of the Arbitration Act, 1940 for the grant of stay. The Division Bench after referring to an English judgment of ROWLATT, J., in London and North Western Railways v. Jones (1915) 2 KB35 at p.38 held as follows: “Co. v. Donellan, 1898 2 QB 7 and Nidland Railway Co. v. Loseb, 1899 AC 133 (observed as, follows: “that if there is a difference of any kind arising under the Section before action, that matter must be decided by arbitration and the Courts have no jurisdiction to determine that difference. It does not, however, follow that the Court cannot be resorted to without previous recourse to arbitration to enforce a claim which is not dispute but which the trader merely persists in not paying. This must at any rate is clear from the decision in the House of Lords in London and North Western and Great Western Joint Rly. Cos. V. Billington, (1899) AC 79 where the company did obtain judgment in the courts although there had been no arbitration.” 16. It was also held by the Division Bench of Madhya Pradesh High Court consisting of A.P. SEN, J. and J.S. VERMA, J. (as he then were) (sic) in Dilip Construction Company v. Hindustan Steel Ltd. (supra), that mere failure to pay is not a difference and that itself would not constitute a dispute, unless the party who chooses not to pay raises a point of controversy. By referring to various judgments on this point, the Division Bench, holding that unless there is repudiation of claim, there is no dispute to enable the parties to refer the same to the Arbitral Tribunal, held as follows: “12. The weight of authority is clearly in favour of the view that unless there is repudiation of a claim, there can be no dispute in respect thereof. The weight of authority is clearly in favour of the view that unless there is repudiation of a claim, there can be no dispute in respect thereof. In Chandmull Goneshmull v. Nippon Munkwa Kabushiki Kaisha, AIR 1921 Cal 342 : (1921) 33 Cal LJ 545, the buyer wanted a variety of information from the sellers to enable him to judge whether the goods supplied were or were not according to the contract. Amongst other things, he demanded production of shipment samples. The sellers declined to comply with the request. But there was at no stage an assertion by the buyer that the goods had not been supplied according to the contract and consequently there was not and could not be a repudiation by the sellers of any such assertion. It was held by MOOKERJEE and FLETCHER, JJ. that there was no “dispute” which could be and had been validly referred to arbitration. While repelling the contention similar to the one made before us, MOOKERJEE, J. Stated: “It has been argued before us, that this is an unduly narrow construction of the arbitration clause and that the terms ‘difference’ and ‘defect’ need not be restricted to ‘difference’ or ‘defect’ in quantity or quality only. We are disposed to accede to this contention, but, even then, the appellant is not entitled to succeed, unless he proves that there was a dispute as to difference or a dispute as to defect. Now, a dispute implies an assertion of a right by one party and a repudiation thereof by another. In the case before us, the parties never reached that stage.” In Dawoodbhai Abdulkader v. Abdulkader Ismailji, AIR 1931 Bom 164, the plaintiff was the sub-partner of the defendant in a certain business. The deed of sub-partnership incorporated all the articles, covenants, conditions and obligations contained in the principal partnership agreement between the defendant and his partner which were not inconsistent with the terms of the agreement. There was a clause in the deed of principal partnership which provided, inter alia, that any dispute or difference arising between partners with regard to the construction of any of the articles contained in the agreement or to any divisions of goods or things, related to the said Partnership or the affairs thereof, shall be referred to arbitration in the manner therein mentioned. The plaintiff called upon the defendant to make up the accounts and to pay him the amount found due at the foot thereof. The defendant did not pay and the plaintiff filed a suit praying that the defendant may be ordered to render a true and complete account of the profits ended by the partnership business and of the amount due to the plaintiff, and to pay the same to him. The defendant thereupon took out a summons for an order to stay further proceedings to enable the parties to refer to arbitration. It was held by WADIA, J. that as there was no dispute between the parties but mere failure to pay, the suit was maintainable and could not be stayed. The principles deducible from these authorities are- .(i) the existence of a difference or dispute is an essential condition for the arbitrator’s jurisdiction to act under an arbitration clause in an agreement; .(ii) The jurisdiction of an arbitrator depends not upon the existence of a claim or the accrual of a cause of action, but upon the existence of a dispute. A dispute implies an assertion of a right by one party and repudiation thereof by another; (iii) A failure to pay is not a difference and the mere fact that a party could not or would not pay does not in itself amount to a dispute unless the party who chooses not to pay raises a point of controversy regarding, for instance, the basis of payment or the time or manner of payment.” 17. By applying the said yardstick to the facts and circumstances of the case, it is clear that the repudiation by the petitioner can be presumed in July, 2001 or before when the transfers effected by the petitioner were found to be not valid and in fact, that was the point of dispute as far as the first respondent is concerned. That is also revealed from the fact that the first respondent has chosen to claims interest from the said date viz., 27. 2001 till 24. 2002 being the date of reference to the Arbitral Tribunal and therefore, the mere payment of subsequent instalments as alleged by the first respondent and found by the learned Arbitrator as 11. 2002 cannot be taken as a point of dispute for the purpose of reference to the Arbitral Tribunal. 18. 2001 till 24. 2002 being the date of reference to the Arbitral Tribunal and therefore, the mere payment of subsequent instalments as alleged by the first respondent and found by the learned Arbitrator as 11. 2002 cannot be taken as a point of dispute for the purpose of reference to the Arbitral Tribunal. 18. The dispute started at the time when the first respondent found that the transfers of shares effected by the petitioner were not valid, and the subsequent payment of instalments or non-payment of instalments cannot be termed to be the actual period of dispute. As correctly pointed out by the learned counsel for the petitioner, the last date of instalment paid by the petitioner may be the cause of action for the first respondent to proceed in a Civil Court against the petitioner for recovery of money by treating it as an acknowledgement of debt for the purpose of limitation under Section 18 of the Limitation Act, 1963 and that can never be treated as the period of limitation as per the bye-laws which prescribes six months time from the date of actual dispute which arose. 19. It is well settled that for reference to the Arbitral Tribunal, the sine quo non is the existence of dispute between the parties. For the purpose of instituting a suit, in arriving at the period of limitation, it is the actual cause of action for which the acknowledgement of debt or payment of last instalments that could be taken as a ground for the purpose of instituting a suit. Two being parallel and distinct, in its character cannot be mixed together. The reference to the award made by the learned Arbitrator apart from denying the claim of oral hearing/evidence by the petitioner which is opposed to the provisions of Section 24(1) read with Section 19 of the Arbitration and Conciliation Act is also not sustainable on the existence of a dispute for the purpose of reference to the Arbitral Tribunal for the reasons stated supra. 20. On the facts of the case, I am of the considered view that the learned Arbitrator has failed to take note of the above said relevant issues in their proper perspective. In such view of the matter, the award of the arbitrator dated 210. 2002, stands set aside. Consequently, the O.P. stands allowed. No Costs.