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Judgment
R.D. Dhanuka, J.—By this petition u/s 43 of the Arbitration and Conciliation Act, 1996 (for short ''Arbitration Act 1996''), the Petitioner seeks extension of time for filing claim before Arbitrator. Some of the relevant facts are as under :-
(a) The Petitioner is a trading-cum-clearing member of the Respondent No. 2 i.e. National Commodity and Derivatives Exchange Limited and is governed by the bye-laws which are statutory in nature (for short "the exchange").
(b) There is no dispute that the claim is arising for the period between 25th February, 2005 to 15th June, 2006. It is the case of the Petitioner that since Respondents did not pay the said amount, by notice dated 9th April 2007, the Petitioner demanded the outstanding money. Since the Respondents failed to pay the same, on 1st April, 2008, the Petitioner lodged his claim before the Exchange.
(c) By letter dated 15th April, 2008, the Exchange informed the Petitioner that since the complaint was received much beyond the extended timelines, the Petitioner was free to take suitable appropriate legal advice to regularise the matter.
(d) The Petitioner thereafter filed the Arbitration Petition (12/2009) on the Appellate Side of this Court. By an Order dated 18th June 2010, S.C. Dharmadhikari J. returned the Petition to the Petitioner for presentation to the Original Side. The Petitioner accordingly filed this petition.
The Learned Counsel appearing for the Petitioner submits that the Petitioner was negotiating for settlement of the claim with the first Respondent and therefore could not file the proceedings within time prescribed under the bye-laws of the Respondent No. 2.
The Learned Counsel submits that there is no dispute that the claim was ultimately filed within a period of three years from the date of cause of action and therefore in the interest of justice, time to file the claim be extended u/s 43(3) of the Arbitration Act, 1996.
The Learned Counsel appearing for the 1st Respondent on the other hand submits that by the bye-laws framed by the Respondent No. 2 Exchange are statutory and the arbitration under such bye-laws is statutory arbitration. The Learned Counsel placed reliance upon the bye-law 11.4 which reads as under :-
11.4 LIMITATION PERIOD FOR REFERENCE OF CLAIMS, DIFFERENCES OR DISPUTES FOR ARBITRATION
All claims, differences or disputes referred to in clause (1) 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.
He also placed reliance on the Notification issued by the Respondent No. 2 Exchange on 18th October, 2007 which provides that the Members and Constituents are requested to inform the Exchange about any complaint against any member or any Constituent as the case may be, at the earliest when such dispute arises, keeping in view the prescribed limitation period for reference of dispute to legal process of arbitration as prescribed under bye-law 11 framed by the Exchange.
The Learned Counsel next submitted that in the alternative, the decision given by the Exchange on 15th April, 2008 refusing to entertain claim on the ground of limitation is an award. The Petitioner has not challenged the said Award and is thus not entitled to seek extension of time u/s 43 of the Arbitration Act, 1996.
In so far as the second contention raised by the 1st Respondent is concerned that communication of the rejection of claim by the Exchange is an award, I am not inclined to accept this submission made by the Learned Counsel. In my view the said communication was only an administrative decision taken by the Exchange and the same cannot be construed as an arbitral Award made by the arbitrator within the meaning of arbitral award u/s 2(1)(c) of the Arbitration Act, 1996.
Admittedly the claim pertains to the period between 25th February, 2005 and 15th June, 2006 and the same has not been filed within six months from the date of difference or disputes having arisen between the parties. Section 2 (4) of the Arbitration Act, 1996 provides as under :-
2(4) This Part except sub- section (1) of section 40, sections 41 and 43 shall apply to every arbitration under any other enactment for the time being in force, as if the arbitration were pursuant to an arbitration agreement and as if that other enactment were an arbitration agreement, except in so far as the provisions of this Part, are inconsistent with that other enactment or with any rules made thereunder.
It is not in dispute that the arbitration under bye-laws of the exchange is statutory arbitration. On perusal of the bye-laws and on considering Section 2(4) of the Arbitration Act, 1996, it is clear that the bye-laws framed by the exchange and the remedy of arbitration provided under the said bye-laws is statutory in nature. In view of Section 2(4), Section 43 does not apply to the statutory arbitration. In my view the Learned Counsel appearing for the Respondent No. 1 is, therefore, right in his submission that the application filed by the Petitioner for seeking extension of time is not maintainable.
Resultantly, the Petition is dismissed. It is made clear that Petitioner is at liberty to adopt such other proceedings as are permissible in law. There shall be no order as to costs.