M/s. Serve and Volley Outdoor Advertising Pvt Ltd. vs Bruhat Bengaluru Mahanagara Palike and another. Miscellaneous First Appeal 4502/2020 (AA) decided on 8 January 2021.
Judgment Link: http://judgmenthck.kar.nic.in/judgmentsdsp/bitstream/123456789/357722/1/MFA4502-20-08-01-2021.pdf
Relevant Paragraphs: 15….Hence, the question in the instant case is, whether Section 474 of the KMC Act, which is a special law prescribes a different period of limitation than as prescribed under the schedule to the Limitation Act, in terms of Section 3 of the Limitation Act?
Karnataka Municipal Corporations. Act. 474. Limitation for recovery of dues. – No distraint shall be made, no suit shall be instituted and no prosecution shall be commenced in respect of any sum due to the corporation under this Act after the expiration of a period of six years from the date on which distraint might first have been made, a suit might first have been instituted or prosecution might first have been commenced, as the case may be, in respect of such sum.”
Thus, the limitation period for filing a suit to recover dues to the corporation (BBMP) is six years from when a suit might first have been instituted. The expression used in Section 474 of KMC Act is “suit”. Learned senior counsel for the appellant submitted that the said Section would not apply to an arbitration proceeding. However, we do not think, the said submission is right inasmuch as the Hon’ble Supreme Court in the case of Geo Miller & Co. Pvt. Ltd. (supra) has referred to Panchu Gopal Bose vs. Board of Trustees for Port of Calcutta [(1993) 4 SCC 338] (Panchu Gopal Bose) and extracted paragraph No.11 in the latter case as under: “11. Therefore, the period of limitation for the commencement of arbitration runs from the date on which, had there been no arbitration clause, the cause of action would have accrued. Just as in the case of civil actions the claim is not to be brought after the expiration of a specified number of years from the date on which the cause of action accrued, so in the case of arbitrations, the claim is not to be put forward after the expiration of the specified number of years from the date when the claim accrued.”
On a reading of the same, it is clear that the period of limitation, whether for a suit or an arbitration is the same under Section 474 of the KMC Act even though the word “arbitration” is not found in the said provision. The reason being, the judgment in Panchu Gopal Bose clearly states that the period of limitation for the commencement of arbitration runs from the date on which, had there been no arbitration clause, the cause of action would have accrued. Therefore, the period of limitation as prescribed for a suit in Section 474 of the KMC Act, i.e., to commence a civil action, would also be the same for commencement of an arbitration. Hence, the expression “suit” in Section 474 of the KMC Act would take within its scope and ambit the expression “arbitration” also. This is because arbitration is an alternative dispute resolution mechanism to a suit. In the circumstances, the period of limitation for making claims by respondent No.1/BBMP by way of a suit or arbitration is six years from the date when the cause of action arose.
Case laws in N.Balakrishnan v. M. Krishnamurthy, [(1998) 7 SCC 123], State of Orissa vs. Mamata Mohanti, [(2011) 3 SCC 436], Hukumdev Narain Yadav vs. Lalit Narian Mishra, [(1974) 2 SCC 133], Consolidated Engineering Enterprises vs. Prl. Secretary, Irrigation Department, [(2008) 7 SCC 169], State of Goa vs. Western Builders [(2006) 6 SCC 239]
Compiled by S. Basavaraj, Advocate, Daksha Legal.
Daksha Legal 