The regulation on limitation units closing dates for initiating authorized instances and intends to make sure well timed decision of disputes and forestall previous claims.
“We have now upheld the choice of the Excessive Court docket to the extent of the Limitation Act being relevant to arbitration proceedings beneath the MSMED Act…,”a bench comprising justices P S Narasimha and Joymalya Bagchi mentioned.
It, nonetheless, held that the Limitation Act, 1963 won't apply to conciliation proceedings between events beneath the Micro, Small and Medium Enterprises Improvement (MSMED) Act, 2006.
The bench additional held “there is no such thing as a authorized bar within the Limitation Act, the MSMED Act…, or the authorized precedents laid down by this court docket that proscribes conciliation with respect to time-barred money owed.”
Justice Narasimha penning the 51-page verdict for the bench mentioned, “The Limitation Act doesn't apply to conciliation proceedings beneath Part 18(2) of the MSMED Act. A time-barred declare may be referred to conciliation because the expiry of the limitation interval doesn't extinguish the fitting to get well the quantity, together with via a settlement settlement that may be arrived at via the conciliatory course of.” The decision got here on pleas together with the one filed by M/s Sonali Energy Equipments Pvt Ltd.
The bench partly allowed the appeals and put aside a 2023 determination of the Bombay Excessive Court docket to the extent it held that the Limitation Act applies to each conciliation and arbitration proceedings beneath the MSMED Act.
