Authority: High Court of Judicature at Bombay

Order Date: 22 October 2026

Case Overview

  • Parties: M/s. S. D. Bhatt (Applicant) vs. Hindustan Construction Company Ltd (Respondent).
  • Under Work Order No. 14015024 dated 25 July 2011, the applicant was engaged as a subcontractor for civil and architectural works on the National Hydro Power Corporation’s hydro‑electric project at Kargil, J&K. Clause 32 of the Work Order contains an arbitration agreement.
  • The final bill was issued on 20 April 2013, signed by the applicant, and a No Claim Certificate was executed on the same date. The applicant also sent a letter on its own letterhead accepting measurements, materials, requisitions and quality of work, undertaking not to raise any objection thereafter.
  • All payments due under the final bill were released by the respondent on 23‑24 April 2013.
  • Despite the settlement, the applicant raised disputes on 15 October 2013; the respondent rejected these objections on 21 October 2013.
  • The applicant pursued criminal complaints (Vikhroli police, Mumbai and Chief Judicial Magistrate, Kargil) and corresponded repeatedly (10 Sept 2013, 15 Oct 2013, 29 Oct 2013, 25 July 2014, 21 July 2017, 21 July 2019) without obtaining payment.
  • On 4 Nov 2019 the applicant invoked Clause 32 and requested appointment of an independent arbitrator; the respondent rejected the request on 5 Dec 2019.
  • The applicant filed Arbitration Petition No. 21 of 2021 before the High Court of Jammu & Kashmir under Section 11(6) of the Arbitration and Conciliation Act, 1996. That petition was dismissed on 13 Feb 2026 for lack of territorial jurisdiction, with liberty to approach the competent court.
  • The present Commercial Arbitration Application No. 359 of 2026 was filed in the Bombay High Court seeking appointment of a sole arbitrator.
  • The respondent contended the claims were ex facie barred by limitation, arguing that the limitation period began on 21 Oct 2013 (the date the respondent rejected the applicant’s objections) and expired three years later.
  • The applicant relied on Section 14 of the Limitation Act, 1963, asserting that the period spent pursuing Section 11 proceedings should be excluded.
  • The court noted that the settlement documents of 20 April 2013 constitute a full and final settlement; subsequent correspondence does not constitute acknowledgment of liability by the respondent and does not reset the limitation clock.
  • The court referenced Supreme Court judgments (Arif Azim Co. Ltd. v. Aptech Ltd., (2024) 5 SCC 313; Elfit Arabia & Another v. Concept Hotel Barons Ltd., 2024 SCC OnLine SC 1739; State of West Bengal & Others v. B.B.M. Enterprises, 2026 SCC OnLine SC 980) affirming that criminal proceedings under Section 138 of the Negotiable Instruments Act are separate causes of action and do not extend the limitation period for contractual claims.
  • The notices invoking arbitration dated 4 July 2022 and 27 Oct 2022 were issued eleven years after the cause of action arose in 2011, far exceeding the three‑year limitation under Section 46(1) of the Arbitration and Conciliation Act, 1996 and Article 55 of the Limitation Act, 1963.
  • The court concluded that the applicant’s claim was hopelessly time‑barred when arbitration was invoked on 4 Nov 2019, more than six and a half years after the settlement.
  • The applicant’s reliance on Section 14 of the Limitation Act was rejected because the liberty granted by the Jammu & Kashmir High Court did not revive a claim already barred by limitation.

Final Outcome

  • Commercial Arbitration Application No. 359 of 2026 is dismissed.
  • No order as to costs.

Topics: Arbitration, Limitation, Construction Contracts