Karnataka High Court
M/S Sierra Constructions Pvt Ltd vs Shri Anis Ahmed on 20 June, 2025
IN THE HIGH COURT OF KARNATAKA AT BENGALURU
DATED THIS THE 20TH DAY OF JUNE, 2025
PRESENT
THE HON'BLE MRS. JUSTICE ANU SIVARAMAN
AND
THE HON'BLE DR. JUSTICE K.MANMADHA RAO
MISCELLANEOUS FIRST APPEAL NO.4959 OF 2020 (AA)
BETWEEN:
1 . M/s. SIERRA CONSTRUCTIONS
PRIVATE LIMITED
A COMPANY REGISTERED UNDER THE
PROVISIONS OF THE COMPANIES ACT, 1956
AND HAVING ITS REGISTERED OFFICE AT
No.187, 1ST CROSS, 1ST MAIN
LOWER PALACE ORCHARDS
BENGALURU-560 003
REP. BY ITS MANAGING DIRECTOR
MR. A.C DHANSHANKAR
2 . SMT. BHARATHI
W/O MR. A.C. DHANSHANKAR
AGED ABOUT 46 YEARS
R/AT No.187, 1ST CROSS, 1ST MAIN
LOWER PALACE ORCHARDS
BENGALURU-560 003
...APPELLANTS
(BY SRI. VIKHAR AHMED B., ADVOCATE)
AND:
1 . SHRI. ANIS AHMED
1ST FLOOR, OLD No.150
PYCROFTS ROAD
OPPOSITE REGISTRY OFFICE
ROYAPETTTAH
CHENNAI-600 014
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2 . M/s. HDB FINANCIAL
SERVICES LIMITED
No.1, 2ND FLOOR, 14TH CROSS
SAMPIGE ROAD
MALLESHWARAM
BENGALURU-560 003
...RESPONDENTS
(By SRI. V. SURESH, ADVOCATE FOR R2;
NOTICE TO R1 IS DISPENSED WITH VIDE ORDER DATED
18.12.2024)
THIS MFA IS FILED U/S.37(1)(c) OF THE ARBITRATION
AND CONCILIATION ACT, 1996, AGAINST THE ORDER DATED
19.08.2020 PASSED ON A.S.No.111/2016 ON THE FILE OF XXIX
ADDIT IONAL CITY CIVIL AND SESSIONS JUDGE, BENGALURU
CITY, (CCH-30), DISMISSING THE SUIT FILED U/S.34 OF THE
ARBITRATION AND CONCILIATION ACT AND ETC.
THIS APPEAL HAVING BEEN HEARD AND RESERVED FOR
JUDGMENT ON 09.06.2025 AND COMING ON FOR
PRONOUNCEMENT OF JUDGMENT THIS DAY, ANU SIVARAMAN
J., PRONOUNCED THE FOLLOWING:
CORAM: HON'BLE MRS. JUSTICE ANU SIVARAMAN
and
HON'BLE DR. JUSTICE K.MANMADHA RAO
CAV JUDGMENT
(PER: HON'BLE MRS. JUSTICE ANU SIVARAMAN) This appeal is preferred under Section 37(1)(c) of the Arbitration and Conciliation Act, 1996 ('Arbitration Act' for short) against the order dated 19.08.2020 of the XXIX Additional City Civil Judge, Bengaluru in I.A.No.3 in A.S.No.111 of 2016.
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2. We have heard Shri. Vikhar Ahmed B, learned counsel appearing for the appellants and Shri. V. Suresh, learned counsel appearing for respondent No.2.
3. Appellant No.1 is a Private Limited Company and appellant No.2 is one of its Directors. They were arrayed as opposite parties in an arbitration proceeding initiated by respondent No.2 herein. The appellant No.1 submits that the appellant, who was carrying out a construction project in Srirangapatna Taluk, had placed a purchase order for the purpose of purchasing a Concrete Pump and had availed a loan of Rs.39,48,000/- from respondent No.2. The loan was to be repaid in 35 equal monthly installments of Rs.1,35,250/- each. The Concrete Pump was delivered on 13.07.2012. However, the machine was damaged in floods and the appellant requested the Bengaluru office of the manufacturer to repair the pump and return as evidenced by Annexure E-Delivery Challan and Annexure F-Tax Invoice.
4. The appellant also raised a claim with the insurer, the New India Assurance Company Limited for Rs.50,00,000/- on the ground that the pump was a total
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4 loss. Since the pump was hypothecated with respondent No.2, the fact of the claim was also informed to him. However, it is stated that a notice from respondent No.2 was received by email on 29.09.2014 requiring the appellant to pay a sum of Rs.15,82,952.78/- towards alleged losses. The appellant had clearly informed that the loan availed was for Putzmeister Concrete Pump BSA 1409D which had been damaged beyond repairs and that the insurance company had made good the claim. As such the appellant had nothing to do with Concrete Pump BSA 1405D for which the amount was claimed by respondent No.2. However, it is submitted that behind the back of the appellant, the arbitration proceedings were conducted by respondent No.1, who resides in Chennai and an execution petition was filed on the basis of an ex-parte arbitral award.
5. On receipt of summons from the City Civil Court in Execution Petition No.2245/2015, the appellant came to know about the proceedings and filed it's Vakalathnama on 04.03.2016. The copy application filed by the learned counsel for the petitioner for the certified copy of the award
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5 was rejected on the ground that the original award was not filed and a copy of the arbitral award was made available to the petitioner. It is submitted that a copy was obtained and Section 34 petition was filed before the City Civil Court along with applications for stay of operation of an ex-parte arbitral award as also for condonation of delay.
6. Respondent No.2 filed I.A.No.3 seeking the dismissal of Section 34 application on the ground that it was belated. Though it was specifically contended by the petitioner that no notice was issued before the arbitral award was passed and no copy of the award was served on the petitioner. The City Civil Court accepted the contentions of the respondents and rejected the application.
7. The learned counsel appearing for the appellants submits that the question of limitation is a mixed question of fact and law and the finding that the application was belated would have been arrived at only after taking evidence in the matter. It is submitted that the arbitration proceedings as well as the notices issued were in respect of a different concrete pump that is Concrete Pump BSA 1405D while the
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6 concrete pump for which the appellant had availed loan was Concrete Pump BSA 1409D.
8. It is further contended that the acceptance of the contentions that notice had been issued in the arbitration proceedings and that a copy of the award had been served on the appellant were completely unsupported.
9. The learned counsel appearing for the respondents on the other hand contends that the provisions of the Arbitration Act are very clear. It is submitted that the petitioner under Section 34 of the Arbitration Act which was filed long after the period provided under Section 34(3) of the Arbitration Act was essentially belated and that the City Civil Court was perfectly justified in having rejected the same. It is further contended that the receipt of notice in the arbitration proceedings by the appellant as well as the notice of the arbitral award by the firm had been specifically pleaded and proved before the City Civil Court by the respondents herein by producing evidence including the acknowledgments which are also placed on record in this appeal.
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10. Having considered the contentions advanced, we notice that the City Civil Court has specifically considered the contentions of both the parties and has found that the notice had been duly sent to the appellant in the arbitration proceedings. The order sheet of the Arbitral Tribunal was examined by the City Civil Court. It was found that notice was sent on 14.08.2013. But, acknowledgement was not returned. Further, notices were sent and it appears that the order sheet revealed that notice had been served on the appellant by service to its authorized signatory, one Shivakumar. The acknowledgments were also on record which is taken note of by the City Civil Court. Thereafter, the Court records that the arbitration award was sent to the petitioners on 06.11.2013 and the postal acknowledgement card shows that the award copy was duly served on the appellant on 09.11.2013. In case, the appellant had any contentions on the merits of the matter, the proper course was open to participate in the arbitration proceedings and to raise the contention in those proceedings. Even if it is considered that the appellant was prevented from
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8 participating in the arbitration proceedings for any tenable reason, the Arbitration Act provides that the application under Section 34 has to be preferred within three months from the date of receiving the arbitral award. As a matter of fact, Section 34(3) provides that an application under Section 34 cannot be made after three months from the date when the party making the application has received the arbitral award. The proviso to Section 34(3) gives the Court the power to condone the delay for a limited period of 30 days that too on sufficient cause being shown.
11. In the instant case, the appellant contends that he was placed ex-parte and was unaware of the arbitration proceedings and the award till he received notice in the execution proceedings. The petition (A.S.No.111/2016) under Section 34 of the Arbitration Act was filed on 01.08.2016. Thereafter, I.A.No.2 seeking stay the operation of the ex-parte arbitral award dated 31.10.2013 was filed on 04.09.2018. In the meanwhile, the claimant had filed an Interlocutory Application seeking dismissal of the A.S. on the ground that it is belated under Section 34(3) of the
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9 Arbitration Act. The limitation provided in Section 34(3) of the Arbitration Act is three months from the date of receipt of the arbitral award. The proviso to Section 34(3) of the Arbitration Act states that if the Court is satisfied that the applicant was prevented by sufficient cause from making the application within three months, it may entertain the application within a further period of thirty days, but not thereafter.
12. The Hon'ble Apex Court in several decisions including P. Radha Bai and Others v. P. Ashok Kumar and Another reported in (2019) 13 SCC 445, had clearly held that once the time limit or extended time limit for challenging the arbitral award expires, an application under Section 34 of the Arbitration Act would not be maintainable. The language of the proviso to Section 34(3) of the Arbitration Act which provides for condonation of delay by 30 days, "but not thereafter" was specifically referred to and it was found that there is no power in the Court to condone the delay beyond 30 days from the date of lapse of three months from the date on which the award is served on the
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10 party concerned. The same view has been taken by the Apex Court in Mahindra and Mahindra Financial Services Limited v. MaheshBhai Tinabhai Rathod and Others reported in (2022) 4 SCC 162.
13. In view of the fact that the award was dated 30.10.2013 and was served on the appellant on 09.11.2013, we are of the opinion that the finding of the City Civil Judge that the application under Section 34 of the Arbitration Act was hopelessly belated, cannot be found fault with.
14. We find that no grounds are made out to interfere with the findings of the City Civil Court. This appeal therefore fails and the same is accordingly dismissed.
Sd/-
(ANU SIVARAMAN) JUDGE Sd/-
(DR. K.MANMADHA RAO) JUDGE cp*