Limitation for repayment begins only upon creditor acquiring knowledge of pre-condition fulfillment withheld by debtor.

The appellant, a proprietary concern engaged in grape exports from Latur, Maharashtra, availed a term loan of approx. Rs. 1 crore from Bank of Maharashtra to establish a cold storage unit, which it could not repay as scheduled.

The respondent, Small Farmers Agri Business Consortium ("SFAC"), a society under the Ministry of Agriculture, GoI, executed an agreement dated 25.08.2006 to provide Venture Capital Assistance ("VCA") of Rs. 23.71 lakhs to the appellant, supplementary to the bank's term loan.

Under the agreement, the VCA would automatically convert into a loan upon the lending bank recovering its term loan (or the end date of the term loan, whichever was earlier), secured by a charge on project assets; disputes were to be resolved through arbitration before the Indian Council of Arbitration ("ICA"), New Delhi.

On 17.09.2015, SFAC initiated arbitration, but the claim was rejected as premature since the appellant had not yet repaid the bank term loan (award dated 13.06.2016; challenge finally decided on 13.12.2021).

The appellant repaid the Bank of Maharashtra term loan on 04.04.2018, but admittedly never informed SFAC of the repayment, despite Clause 10 obligating it to do so.

SFAC issued a notice dated 27.04.2024 (via email) expressly stating its instructions to initiate arbitration before the ICA, and filed arbitral proceedings on 30.04.2024.

SFAC learned of the 2018 repayment only when the appellant filed its statement of defence on 12.02.2025.

The Sole Arbitrator's award dated 06.05.2025 went against the appellant; its Section 34 challenge was dismissed by the District Judge (Commercial Court-02, Saket) on 07.04.2026, leading to this appeal under Section 37.

1. Whether the respondent's arbitral claim was barred by limitation under Article 137 of the Limitation Act, 1963, i.e., whether the cause of action accrued on 04.04.2018 (date of repayment of the bank term loan) or only upon the respondent acquiring knowledge of such repayment, given the appellant's breach of its contractual obligation to inform.

2. Whether the arbitral award was liable to be set aside for the respondent's failure to comply with the mandatory requirement of service of notice under Section 21 of the Arbitration and Conciliation Act, 1996.

3. Whether the District Judge's dismissal of the Section 34 challenge warranted interference within the circumscribed appellate jurisdiction under Section 37 of the Arbitration and Conciliation Act, 1996.

Article 137 of the Limitation Act, 1963, prescribing a three-year limitation for invoking arbitration from the date the cause of action arises.

Equitable doctrine that a party cannot take benefit of its own wrong, applied in context of Clause 10 obligating disclosure.

Section 21 of the Arbitration and Conciliation Act, 1996 regarding the mandatory notice for commencement of arbitral proceedings.

Standards for judicial interference under Section 34 and Section 37 of the Arbitration and Conciliation Act, 1996 as established in UHL Power Company Ltd. v. State of H.P. and Ircon International Ltd. v. Afcons Infrastructure Ltd.

COVID-19 limitation extension in Suo Motu Civil W.P. No. 03/2020.

The Court reasoned that under Clause 10 of the agreement, the onus lay squarely on the appellant to inform SFAC of the repayment of the bank loan, and the appellant's plea that SFAC ought to have enquired from the debtor was rejected as untenable, evincing a lack of intention to repay.

SFAC had no means of discovering the repayment date except through the appellant—the lending bank being neither a party to the agreement nor under any obligation to inform SFAC—such that the appellant, having "turned dishonest" by concealing the repayment, could not be permitted to take advantage of its own wrong by pleading limitation.

The Court emphasized that the appellant sought a "double benefit": first defeating the 2015 claim as premature, then pleading limitation after suppressing the very fact that would have triggered SFAC's cause of action; the factum of repayment in 2018 thus could only result in the claim filed in 2024.

Accounting for the pendency of the earlier round of litigation (the premature claim dismissed on 13.06.2016 and its challenge finally decided on 13.12.2021), the proceedings initiated on 30.04.2024 were within the three-year period in that sense as well.

On the Section 21 objection, the Court upheld the finding that the email notice dated 27.04.2024 contained a specific reference to initiating arbitration before the ICA, materially distinguishing it from defective notices that contain no reference to arbitration.

Given the narrow and circumscribed scope of interference under Sections 34 and 37, and finding no perversity on the face of the award, the Court declined to intervene.

The appeal, being devoid of merits, was dismissed, affirming the District Judge's order dated 07.04.2026.