Bangalore District Court
N.K.Developers Pvt vs Concord.India Ltd on 29 August, 2022
IN THE COURT OF LXXXIX ADDL.CITY CIVIL & SESSIONS
JUDGE, BENGALURU. (CCH-90)
Present: Sri.S.J.Krishna, B.Sc., LL.B.,
LXXXIX Addl.City Civil &
Sessions Judge, Bengaluru.
Dated: 29th August 2022
Com.A.S.No.88/2019
PLAINTIFF : N.K.Developers Pvt., Ltd.,
A Company registered under the
Companies Act, 1956,
Having its Registered Office at
9/2, Madra Bank Road,
Behind India Garage,
St.Marks Road,
Bengaluru-560 001.
Represented by its Authorised
Signatory,
Mr.Kunla Kashyap.
(By M/s.Holla & Holla Advocates)
Vs.
DEFENDANTS : 1. Concord.India Ltd.,
A Company Registered under the
Companies Act, 1956
Having its office at
1st Floor, Embassy Point,
150, Infantry Road,
Bengaluru-560 001.
(By M/s.INDUS LAW, Advocates)
2. Hon.Mr.Justice Anand Byrareddy
(Retd),
Ld.Presiding Arbitrator,
#776, Double Road,
Indiranagar II Stage,
Bengaluru-560 038.
/2/
Com.A.S.88/2019
3. Hon.Mr.Justice Subhro Kamal
Mukherjee (Retd),
Ld.Co-Arbitrator,
69B, Ustad Amir Khan Sarani,
(Old 699 D), Block-P,
New Alipore, Kolkata-700 053.
4. Hon.Mr.Justice R Gururajan (Retd)
Ld.Co-Arbitrator,
No.504, Chtrapur Apartments
5th Floor, 15th Cross,
Malleshwaram,
Bengaluru-560 055.
Date of Institution of suit : 07.06.2019
Nature of suit : U/sec.34 of the Arbitration &
(suit on pronote, suit for Conciliation Act, 1996.
declaration and
possession suit for
injunction, etc.,)
Date of commencement : -
of recording of evidence
Date of judgment : 29.08.2022
Total duration : Year/s Month/s Day/s
03 02 22
(S.J.KRISHNA)
LXXXIX ADDL.CITY CIVIL &
SESSIONS JUDGE, BENGALURU.
(CCH-90)
JUDGMENT
The Plaintiff has filed this suit under section 34 of Arbitration & Conciliation Act, 1996 praying the Court to set /3/ Com.A.S.88/2019 aside the Arbitral Award passed by a majority decision dated:19.03.2019 in the Arbitration Case A.C.No:2134 between the Plaintiff and Defendant No:1 and grant such other reliefs.
02. For the sake of convenience the parties to the suit are referred to as Claimant and Respondent respectively as before the learned Arbitral Tribunal in A.C.No:2134.
03. The Hon'ble Supreme Court of India in S.L.P.(Civil) 4056/2018 filed by the Respondent No.1 herein, has passed an order dated: 05.03.2018 relegated the parties to the Indian Council of Arbitration for appointment of arbitrator and to take a decision in the matter within one month from the date of receipt of copy of the order. Accordingly, the Arbitral Tribunal was constituted as per the Rules of Indian Council of arbitration and three arbitrators were appointed to adjudicate the dispute.
04. For the sake of convenience the parties to the suit are referred to as 'Claimant' and 'Respondent' as before the Learned Arbitral Tribunal in A.C.No:2134.
The case of the plaintiff in brief is as under:
05. The Claimant is a Company incorporated under the Companies Act, 1956 and has Registered Office at Bengaluru /4/ Com.A.S.88/2019 and engaged in business of developing and dealing in real estate.
06. The Respondent is a Company incorporated under the Companies Act, 1956 and has Registered Office at New Delhi and a branch office at Bengaluru and engaged in business of manufacturing tractors, accessories and other engineering products.
07. The Respondent was allotted land Bg.No:Industrial Plot No:6 situated in Survey No:1, Kadugodi Village, Bidrahalli Hobli, Hosakote Tq., measuring 78-21A by MIDC now known as KIADB and has also executed a registered Lease-cum-Sale deed dated:21.02.1979 in favor of the Respondent.
08. The Respondent herein had filed O.S.No:159/1990 against KAIDB for the relief of Permanent Injunction to protect its peaceful possession. The KAIDB did not execute the absolute sale deed in favor of the Respondent, which it was entitled to as per the terms of Lease cum Sale deed dated:21.02.1979. The suit filed by the Respondent was decreed. The KIADB filed a Regular Appeal against said decree before the Hon'ble Civil Judge, which was later dismissed. The KAIDB filed RSA No:501/1997 before the Hon'ble High Court of /5/ Com.A.S.88/2019 Karnataka and the said appeal was also dismissed vide order dated:08.12.1997.
09. The Claimant and the Respondent entered in to a Memorandum of Understanding on 16.08.1999. The Claimant had agreed that it would ensure the execution of the sale deed in favor Respondent within a period of 270 days. It was agreed that the Respondent was to make available the schedule property and also execute a Power of Attorney in favor of the Claimant so as to enable the Claimant to develop and put up constructions on the schedule property in the manner stipulated in the MOU. The parties have agreed to share 50% each of net profits, after expenditure arising from the sale of the apartments/office buildings/industrial house colonies or any other kind of construction proposed to be put up on the schedule property.
10. The Claimant has paid a sum of ₹.25,00,000/- vide two demand drafts Bg.Nos. 091652 and 091653 drawn on UBI to the Respondent. The Claimant was required to pay an additional amount of ₹.25,00,000/- to the Respondent within 180 days from the date of execution of MOU or on execution and registration of sale deed by KIADB in favor of respondent, whichever is earlier. The payment of second installment of ₹.25,00,000/-and performance of other obligations was /6/ Com.A.S.88/2019 contingent upon the KIADB not seeking to challenge the Judgment of the Hon'ble High Court of Karnataka passed in RSA No:501/1997. In the event that KIADB challenges the same before the Hon'ble Supreme Court of India, the terms of the MOU would remain in abeyance till the outcome of any such challenge.
11. The KIADB had filed SLP(Civil)17126/1998 before the Hon'ble Supreme Court of India as such the execution of sale deed by KIADB was not contemplated. The said petition was dismissed by the Hon'ble Supreme Court of India vide order dated:03.12.1999. The Respondent called upon the KIADB to execute the sale deed vide letter dated:21.12.1999.
12. The KIADB filed a fresh suit O.S.No:421/2000 before the Principal Civil Judge (Sr.Dvn), Bengaluru Rural seeking recovery of possession of the schedule property from the Respondent. Wherein, the Respondent herein made a counter claim for specific performance of the Lease cum sale deed in its favor.
13. The respondent herein started claiming that the MOU between the Respondent and the Claimant was been allegedly canceled on account of the non-performance of the obligations stipulated as per the MOU by the claimant and clandestinely /7/ Com.A.S.88/2019 started negotiating with other parties for entering in to development agreement with them in respect of schedule property.
14. The Claimant filed an application under Section 9 of Arbitration and Conciliation Act, 1996 against the Respondent herein before the City Civil Judge, Bengaluru in A.A.No.3/2004 on 21.01.2004 for the relief of injunction to restrain the respondent from entering in to any transaction with third parties in respect of schedule property. The Respondent did not appear in the said proceeding. The application was allowed vide order dated:04.01.2007 with a direction to the Claimant to commence arbitration proceeding within 3 months from the date of Order.
15. During the pendency of O.S.No:421/2000 between KIADB and the Respondent they have settled the dispute out of Court and the suit was disposed off vide order dated:26.06.2007. The KIADB and the Respondent had entered in to a fresh lease-cum Sale deed dated:07.06.2007.
16. The Claimant issued a notice dated:26.03.2007 to the Respondent seeking to initiate Arbitration proceedings and had appointed one Sri.D.Manmohan, advocate as the Arbitrator. The notices sent to the respondent returned unserved.
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17. The Claimant approached the Hon'ble High Court of Karnataka by filing CMP No. 98/2008 under section 11 of A & C Act, on 12.2008 seeking appointment of an Arbitrator. The Respondent appeared in CMP 98/2008 and contended that MOU stood terminated under a notice dated:22.07.2000. The Claimant was never served with the alleged termination notice dated:22.07.2000.
18. The Hon'ble High Court of Karnataka disposed off CMP 98/2008 by appointing a Former Judge of of Hon'ble High Court of Karnataka as the Sole Arbitrator and the Arbitration proceedings to be conducted before the Arbitration & Conciliation Centre, Bengaluru. The Respondent filed SLP(Civil) 4056/2018 before the Hon'ble Supreme Court of India challenging the Order of the Hon'ble High Court of Karnataka. The Hon'ble Supreme Court was pleased to allow the SLP vide order dated:05.03.2018 on the ground that the MOU provided for the Arbitration to be conducted under the Rules of the Indian Council of Arbitration, New Delhi and the same could not have been varied by the Hon'ble High court.
19. The Claimant has made the following prayers before the Tribunal:
1. Direct specific performance of the MOU dated:16.08.1999 by directing the Respondent to execute a power of attorney in favor of the claimant by /9/ Com.A.S.88/2019 receiving the balance sum of ₹.25,00,000/-consequently directing the respondent to deliver the vacant physical possession of the schedule property to the claimant;
2. Declare that the alleged letter of termination dated:22.07.2000 issued by the respondent to the claimant, allegedly terminating the MOU dated;16.08.1999 is not binding on the Claimant;
3. Direct the respondent to pay to the claimant a sum of ₹.332 crores as compensation/damages along with interest thereon at 18% p.a. calculated from this day till the date of its payment in addition to the grant of relief of specific performance as sought for at prayer (i) above;
4. As alternative to prayers(i) to (iii0 direct the respondent to refund to the claimant the amount of ₹.25 lakhs received by it as advance along with interest at 18% p.a. from 22.07.2000 till the date of payment and also damages of ₹.332 crores along with interest at 18% p.a. from this day till the date of payment.
5. Award cost of this petition to the claimant and grant such other and further reliefs as are just.
20. The Respondent appeared before the tribunal and filed I.A.No:1/2018 under Section 16 of Arbitration & Conciliation Act, 1996 praying the Tribunal to dismiss the claim petition as barred by Limitation and grant such other reliefs as the Hon'ble Tribunal deems fit and proper under the facts and circumstances of the case.
21. The claimant has filed objections to I.A.No.1 and prayed the Tribunal to dismiss the application.
The Respondent has filed rejoinder to the objections filed by the Claimant to I.A.No.1.
/10/ Com.A.S.88/2019
22. After hearing the Claimant and Respondent the learned Tribunal by majority decision 2-1 has passed the following Award vide order dated:09.03.2019 as under:
AWARD In the light of the above reasons the Claim petition is dismissed as being barred by time.
a) The Claimant shall pay and bear the Respondent's share of the Arbitrator's fees, Administrative expenses and other charges including Goods and Service Tax @ 18% incurred in respect of this Arbitration, which is computed at ₹.68,73,500/- (Rupees Sixty-eight lakh seventy three thousand five hundred only) by the Registry of the Indian Council of Arbitration, New Delhi;
b) The Claimant shall pay legal costs of the respondent, which is normally awarded at ₹.2,00,000/- (Rupees Two lakh only)
c) The Respondent shall pay the stamp duty of ₹.47,870/- (Rupees Forty Seven Thousand eight hundred and seventy only) to the State Government of Karnataka on the Award. The Claimant shall reimburse the respondent of the said sum. The Stamp duty payable in this Award is as per Article 11(b) (ii) of the Schedule to the Karnataka Stamp Act, 1957.
d) The Original of this Award shall be dispatched to the ICA for further step.
Signed Copies of this Award are furnished to the parties.
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23. The Claimant being aggrieved by the Award passed by the learned Arbitral Tribunal has filed the present suit for the following among other grounds:
The Claimant has furnished facts of the case by reiterating the averments made in the claim statement and statement of objections filed to I.A.No.1 before the learned Arbitral Tribunal.
24. The Order of the Arbitral Tribunal is wholly erroneous and is not sustainable in law or on facts.
25. The Arbitral Tribunal failed to take in to account that the Issue of Limitation is a mixed question of law and fact and can only be decided after a full-fledged trial and cannot be adjudicated at the threshold.
26. As per Section 16 of the Arbitration & Conciliation Act, the Arbitral Tribunal has been empowered to rule on its jurisdiction to entertain a claim raised. However, the question of jurisdiction to decide a claim is relatable to the issue as to whether there is a valid contract/agreement, whether such a contract/agreement has a valid arbitration clause and as to whether the dispute arises under the said contract/agreement or is relatable thereto. A question as to whether the Claim is barred by limitation would not amount to a ruling on its own /12/ Com.A.S.88/2019 jurisdiction in terms of Section 16 of the said Act. Hence, the application filed by the first respondent was not maintainable and was liable to be rejected in limine.
27. The Arbitral Tribunal has failed to follow the binding precedents of the Hon'ble Supreme Court.
28. The Arbitral Tribunal has erred in entertaining the application under Section 16 even though said application was not maintainable, being one touching upon limitation.
29. The Arbitral Tribunal erred in deciding the question of Limitation which is one of a mixed question of fact and law as a preliminary issue without even allowing the applicant herein to adduce evidence.
30. The Tribunal erred in not following the agreed procedure as per the ICA rules and in not permitting evidence to be adduced.
31. Even as per the averment made in A.A. No:3/2004, the applicant in the paragraph referring to the cause of action had also clearly stated that the cause of action had arisen on various other dates on which the first respondent negotiated /13/ Com.A.S.88/2019 and attempted to enter in to the agreement in respect of the schedule property with third parties.
32. The first respondent subsequent to the initiation of A.A.No:3/2004 before the City Civil Court was constantly in touch with the applicant requesting the applicant to withdraw the case and to settle the dispute amicably thereby further extending the period of limitation. Though the first respondent was in constant touch, it deliberately failed to appear in the said case and hence was placed ex-parte.
33. In this regard, the applicant with the permission of this Hon'ble Court would like to furnish copies of letters issued by the first respondent to the applicant dated:18.08.2004 and 14.07.2004 clearly admitting to the MOU dated:16/08/1999 and requesting the applicant to settle the A.A.No:3/2004 outside Court. The letters also indicate that the terms and conditions of the MOU dated:16.08.1999 would be applicable after the sale deed is executed by KIADB in the applicant's favor and that the balance amount of ₹.25 Lakhs can also be produced at that time.
34. It is pertinent to mention that the dispute being almost two decades old, the applicant is still in the process of unearthing correspondences that it had issued and received /14/ Com.A.S.88/2019 during the last two decades. The same is also the reason why the above referred correspondences could not be produced before the Arbitral Tribunal.
35. The applicant despite due diligence could not produce the said correspondence before the Tribunal as it was misplaced due to the long lapse of time since it was received. The applicant recently chanced upon the said letters during the preparation of the instant application and would like this Hon'ble Court to take it on record.
36. The non production of the same before the arbitral tribunal was for a bonafide reason. A perusal of the said correspondences clearly goes to show that the arbitration proceedings were initiated well within the period of limitation of three years and the notice of arbitration dated 26.03.2007 was issued well within time.
37. In addition the applicant has always approached all forums with clean hands and has never misused any of the proceedings for any illegal/unlawful gain.
38. The applicant has been fighting for the last two decades for the adjudication of its legitimate rights. The first /15/ Com.A.S.88/2019 respondent has at all stages in the last two decades, deliberately tried to scuttle its rights one way or the other.
39. Due to the numerous litigation between the first respondent and the KIADB, and the subsequent conduct of the first respondent in no adhering to its obligations under the MOU, the applicant was not able to proceed further with the development of the schedule property. However, the applicant was always ready and willing to fulfill its obligations as stipulated in the MOU including paying the balance amount of ₹.25 lakhs to the first respondent. For the applicant to approach various statutory authorities to obtain necessary statutory approvals, sanctions and clearances for developing the schedule property, the first respondent was required to execute a Power of Attorney to the Applicant, which the respondent failed to execute, even as on date.
40. Even though the MOU stipulated that upon execution of the MOU, the applicant can enter the schedule property for the purpose of executing and implementing various covenants of the MOU and to enable the applicant to bring the land architects, Surveyors, other professionals, prospective customers and clients, the first respondent never let the applicant to enter the schedule property for the purpose of enabling the applicant to implement the clauses of the MOU.
/16/ Com.A.S.88/2019 The first respondent despite repeated requests by the applicant failed to handover the site till date for development activities as per the terms embodied in the MOU. Since, 1999, the applicant based on the representations by the first respondent and in terms of the MOU, has invested heavily for the purpose of developing the schedule property. The first respondent for reasons best known to it is deliberately trying to scuttle the legitimate rights of the applicant and is today contending that the MOU has stood terminated, which is wholly untenable and illegal.
41. As the first respondent has not complied with the several obligations mentioned in the MOU, the first respondent is not entitled to unilaterally terminate the said MOU. The applicant has not committed any breach of the terms of the said MOU, as falsely alleged by the first respondent. The applicant had approached the first respondent on several occasions and held deliberations and discussions requesting it to abide by the terms of the MOU and to put the applicant in possession and also to execute the Power of Attorney in its favor to start the development of the schedule property. However, the first respondent intentionally failed to adhere to its obligations. The conduct of the first respondent is tainted by malafides and displays the oblique motive of the first /17/ Com.A.S.88/2019 respondent to defeat the solemn MOU entered into between the parties.
42. The MOU dated:16.08.1999 entered in to between the parties continues to be valid and subsisting. The fact that the applicant has always been and continues to be ready and willing to perform its part of the obligation is evident from the fact that it has already paid a sum of ₹.25,00,000/- to the respondent. The first respondent is duty bound to abide by its obligations under the MOU.
43. The applicant has suffered huge financial and other losses because of the unreasonable and untenable stand of the first respondent and the breach of the said MOU committed by the first respondent. With the intention of developing the schedule property, the applicant invested heavily, both in terms of time and money, however the first respondent has committed breach of its obligations, due to which the applicant has been illegally denied the benefit of developing the schedule property and earning rental income to reap the benefit out of the same since the respondent and the KIADB entered into the lease-cum-sale agreement dated:07.06.2007.
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44. The impugned award suffers from various other defects that will be pointed out at the time of hearing. Hence, the suit.
45. After the service of notice the defendant/respondent appeared before the Court and has filed the statement of objections. The summary of the Statement of Objections filed by the Respondent is as under:
46. The present suit filed under Section 34 of Arbitration & Conciliation Act, 1996 is not maintainable in law. The applicant ought to have filed the suit under section 37 of the Act, as Section 37(2)(a) specifically provides that an Appeal under Section 37 shall also lie to a Court, inter alia from an order granting of the Arbitral Tribunal, accepting the plea referred in sub section (2) or (3) of Section 16 of the Act. Hence, the present suit is not maintainable. In order to overcome rigor and auto-limitations of section 37 of the Act, the present suit is filed under Section 34 of the Act. Hence, the suit is liable to be dismissed.
47. Even if the suit is filed under Section 37 of the Act then also the suit would not have been maintainable having regard to scope of Section 37 of the Act.
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48. The present suit is not maintainable on the grounds on which the suit is filed. The Court, which exercises jurisdiction under section 34 of the Act is not a Court of first appeal as provided under the provisions of CPC. The proceedings under section 34 of the Act are proceedings sui generis and cannot at all be held to be similar to proceedings under Order XLI CPC and as such the present suit is not maintainable.
49. The Court exercising the jurisdiction under section 34 of the Act cannot re-appreciate the facts and more so, when the same were not before the Arbitral Tribunal and the object of the Act is providing an expeditious alternative binding dispute resolution process with minimal court intervention. Hence, the present suit is not maintainable.
50. The proceedings under Section 34 of the Act are summary in nature and the Court cannot entertain new and fresh evidence as it would obliterate the very aim and object of the Act and prolong the process of adjudication under Section 34 of the Act.
51. It is settled law that the Court in exercise of powers under Section 34 of the Act does not sit in appeal over the /20/ Com.A.S.88/2019 arbitral award and may interfere on merits on the limited grounds provided under Section 34(2)(b)(ii) of the Act.
52. The Respondent has furnished the following facts for the consideration of the Court.
53. The respondent herein was put in lawful possession of Schedule Property as a lessee by KIADB by virtue of registered lease cum sale agreement dated 21.02.1979 executed by KIADB in favor of the respondent. However, KIADB acted detrimentally to the interest of respondent over the Schedule Property compelling the respondent to file a suit in OS No.159/1990 against KIADB for permanent injunction restraining the KIADB from interfering with its peaceful possession and enjoyment of Schedule Property which came to be decree vide judgment and decree dated 23.09.1996.
54. The KIADB filed RA No.190/1996 against the judgment passed in OS.No.159/1990 which came to be dismissed by appellate Court vide Order dated 05.04.1997. The KIADB challenged the judgment and decree passed in Original Suit and RA before the Hon'ble High Court of Karnataka in RSA No.501/1997 which also came to be dismissed by the Hon'ble High Court of Karnataka vide its order dated 08.012.1997. the KIADB challenged the order /21/ Com.A.S.88/2019 dated 08.12.1997 passed by the Hon'ble High Court of Karnataka in RSA 501/1997 before the Hon'ble Supreme Court of India by filing SLP (Civil) No.17126/1998 and the Hon'ble Supreme Court of India dismissed the said SLP by virtue of its order dated 03.12.1999. In the meanwhile subsequent to the order dated 08.12.1997 passed by the Hon'ble High Court of Karnataka in RSA No.501/1997 the applicant approached the respondent herein and requested the respondent to enter into a joint development agreement in order to develop the Schedule Property. The respondent appraised the applicant of the series of litigation pending between the respondent and KIADB and also appraised the claimant that the order dated 08.12.1997 passed by the Hon'ble High Court of Karnataka in RSA No.501/1997 was yet to attain finality in as much as KIADB was well within its right to prefer the Spl.Leave petition before the Hon'ble Supreme Court of India challenging the order dated 08.12.1997 passed by the Hon'ble High Court of Karnataka in RSA No.501/1997. The claimant knowing full well the suit property had a great potentiality yet persisted and promised to resolve the differences between the respondent and KIADB using its good officers and thereby requested the respondent to enter into a development agreement. Under these circumstances the respondent relying on the assurances of the claimant that it would resolve the differences between /22/ Com.A.S.88/2019 the KIADB and the respondent executed a Memorandum of Understanding dated 16.08.1999.
55. The respondent has quoted various clauses of MOU in its statement of Objections.
56. The SLP filed by KIADB in SLP(Civil ) No.17126/1998 came to be dismissed by the Hon'ble Supreme Court of India on 03.12.1999 and in terms of Clause 15 of MOU the respondent on obtaining the copy of said order dated 03.12.1999 passed by the Hon'ble Supreme Court of India furnished a copy of said order to the claimant on 15.12.1999. Thus, the terms of the MOU dated 16.08.1999 were to be implemented by the claimant from 15.12.1999. The respondent again furnished a copy of the order of the Hon'ble Supreme Court of India to KIADB and also the claimant by virtue of letter dated 21.12.1999.
57. The time frame for the implementation of MOU commenced from 150.12.1999 as per MOU the applicant was liable to pay the further sum of ₹.25,00,000/- to the respondent on or before 180 days from 15.12.1999 i.e., on or before 12.06.2000. Since the said payment was not made by the applicant by 12.06.2000 the claimant became a defaulter in terms of article 2.3 and in terms of 7.2 of MOU. The initial /23/ Com.A.S.88/2019 payment made by the claimant stood forfeited and the MOU stood terminated automatically and as such the MOU having stood terminated on 12.06.2000 itself the claim petition filed by the applicant before the Hon'ble Arbitral Tribunal was belated and barred by limitation. Even if 21.12.1999 is reckoned on which the time would began to run for the purpose of the claimant complying with the obligations under the MOU i.e., the date on which the letter was addressed by the respondent to the applicant the time frame of 180 days to pay the balance amount as it is specifically admitted in para 11 page No.4 of claim petition that the copy of the order passed by the Hon'ble Supreme Court of India was furnished to applicant on 21.12.1999 would commence. Even then the payment of the balance had to be made by 18.06.2000. Since the said payment was not made by 18.06.2000 the claimant became a defaulter in terms of Article 2.3 and in terms of Article 7.2 of the MOU. The initial payment made by the applicant stood forfeited and the MOU stood terminated automatically at least on 18.06.2000. Though, the MOU in question stood automatically terminated on 12.06.2000 on alternately on 18.06.2000 for the reasons stated above the respondent as a matter of abundant caution addressed a notice dated: 22.07.2000 to the claimant bringing to the notice of the claimant the termination of MOU. Since the said notice of termination dated 22.07.2000 though has been /24/ Com.A.S.88/2019 challenged by the claimant in the claim petition by seeking declaration that the same is not binding on the claimant has been suppressed by the claimant and has not been produced by the claimant along with claim petition and for the said reason the respondent has produced the same before the learned Arbitral Tribunal.
58. The respondent herein has produced the said notice dated 22.07.2000 addressed by the respondent to the applicant and a copy of postal acknowledgment for having issued through UCP issued by the post office Delhi High Court Delhi along with objections to claim petition before the learned Arbitral Tribunal and the said documents are produced at Annexure.
59. The claimant after having received the said notice dated 22.07.2000 and even otherwise being fully aware of the said automatic termination of the MOU has suppressed the same and after nearly 4 years i.e., on 21.01.2004 has filed A.A. No.3/2004 under Section 9 of the Act suppressing the said notice dated 22.07.2000 inter alia praying the Hon'ble Court be pleased to pass an order of temporary injunction restraining the respondent or anyone claiming through or under it from claiming that the MOU dated 16.08.1999 between the claimant and the respondent herein stands canceled and from entering /25/ Com.A.S.88/2019 into any agreement whatsoever in respect of the Schedule Property within a person. In the said A.A.No. 3/2004 filed by the claimant on 21.01.2004 the claimant has made several averments at para 19, 20 ,22, 24, 25 , 28 which establish that the claimant was indeed aware of termination of MOU by then. The claimant filed the above mentioned application AA 3/2004 on 21.01.2004 suppressing the fact that the MOU stood terminated automatically on 12.06.2000 or at least on 18.06.2000 because of the default of the claimant and also suppressing the said notice dated 22.07.2000 much after the period of limitation had lapsed and thus the mere filing of said A.A.No. 3/2004 would not keep the cause of action alive and as such by the time A.A.No. 3/2004 was filed by the Claimant the claim itself was dead and was not available to be made and it was hopelessly barred by limitation.
60. Further that the very fact that the applicant did not have any negotiation or conciliation or discussion with the respondent from 2000 till the date of filing of arbitration application in 2004 establishes that the claimant was aware of the said termination and had accepted the said termination as a fait accompli and that it was never interested to implement the MOU and perform its part of the obligations in terms of the MOU.
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61. The Claimant having neither challenged the said automatic termination of MOU on 12.06.2000 or at least on 18.06.2000 nor the notice dated:22.07.2000 and also not having initiated any legal proceeding against the respondent herein with the period of Limitation, filed Arbitration Application No.3/2004 on 21.01.2004 only as a matter of an afterthought, which would not keep the period of Limitation alive, and as such no claim in any form was maintainable without laying a challenge to the automatic termination of MOU for its default and to the said notice dated:22.07.2000. The said A.A. No:03/2004 appears to have been allowed exparte by the Hon'ble Court of XXV Addl., City Civil Judge, Bangalore on 04.01.2007 restraining the answering Respondent herein from entering in to any agreement with any person in respect of the Schedule property and further directed the Applicant herein to commence the arbitration proceedings by referring the dispute to the Arbitrator within three months from the date of order, failing which, it was ordered that the said order of Temporary Injunction would stand extinguished after the expiry of the said time granted by the Hon'ble Court.
62. The applicant ought to have initiated the Arbitration Proceedings on or before 03.02.2007, which the applicant failed to do. The applicant has falsely alleges that it addressed /27/ Com.A.S.88/2019 a letter dated:26.03.2007 to the Respondent requesting the appointment of an arbitrator and further alleges that the respondent as not received the same. The notice dated:26.03.2007 alleged to have been addressed by the applicant to the respondent for the appointment of an arbitrator was not served on the respondent, as the applicant has intentionally and deliberately issued the said notice to a wrong address, the fact of which is well established by the postal covers that have been returned, which have been produced by the applicant along with the claim petition.
63. The Applicant was aware of correct address of the Respondent. Even otherwise the notice dated:26.03.2007 alleged to have been issued by the Claimant to the Respondent for the appointment of an arbitrator cannot renew the cause of action or keep the alleged claim alive or subsisting, as even the said alleged notice dated:26.03.2007 is barred by limitation, in as much as, the MOU stood automatically terminated on 12.06.2000 or on 18.06.2000 for its default, for the reasons mentioned herein above or at least on 22.07.2000 i.e. on receiving the notice dated 22.07.2000.
64. The Claimant in A.A.No:3/2004 admits that the Respondent started claiming that the MOU between the Claimant and the Respondent stood canceled. The said notice /28/ Com.A.S.88/2019 which is alleged to have been addressed by the Claimant on 26.03.2007 is beyond 3 years from 14.01.2004, and even on this count, the said notice shall have to be outside the period of limitation, in terms of Section 43 of A & C Act, 1996 r.w. Article 54 of Limitation Act.
65. The Claimant chose to reopen A.A.No:3/2004 by filing an application seeking to reopen the said case under Section 151 of CPC,. The said application was dismissed by the Court on 03.06.2013 stating that the Claimant has not complied with earlier order by not initiating the Arbitration Proceedings, within three months from the date of order. This order has attained finality.
66. The respondent has stated about proceedings in CMP No:98/2008 before the Hon'ble High court of Karnataka and SLP(Civil) No:4056/2018 before the Hon'ble Supreme Court of India and commencement of Arbitral Proceeding before the learned Arbitral Tribunal.
67. The Respondent appeared before the Hon'ble Tribunal and filed application under Section 16 of the Act praying the Tribunal to reject the claim petition of the Claimant as being barred by Limitation.
/29/ Com.A.S.88/2019
68. The Hon'ble Tribunal on appreciating the evidence on record and submissions of the parties to the lis returned a categorical finding that the Claim Petition was clearly barred by Limitation and accordingly dismissed the claim Petition on that ground.
69. The Respondent has denied the averments made in the plaint/petition filed under Section 34 of the Act and reiterated the facts and law stated above.
70. The Respondent has prayed the Court to dismiss the suit with exemplary costs.
71. The learned Counsel for the Claimant and Respondent have addressed their respective arguments apart from filing written arguments.
72. The learned counsel for the Plaintiff/claimant has relied on the following decisions in support of his case.
Sl.No. Name of the parties Citations 1 Indian Farmers Fertilizers Co- (2018) 2 SCC 534 operative Llimted Vs.Bhadra Products 2 Bharat Sanchar Nigam Limited (2021) 5 SCC 738 and Another Vs. Nortel Networks India Private Limited 3 Gunwantbhai Mulchand Shah (2006) 3 SCC 634 /30/ Com.A.S.88/2019 and Others Vs. Anton Elis Farel and Others 4 Salim D.Aboatwala and Ors., MANU/SC0657/2021 Vs.Shamalji Oddhavji Thakkar and Ors., 5 Urvashiben and Another Vs. (2019) 13 SCC 372 Krishnakant Manuprasad Trivedi 6 G.Thimmaraya Setty & Ors., Vs. W.P.No.39969 of Smt.Mallamma & Ors., 2016 before Hon'ble High Court of Karnataka 7 Sri.K.G.Venkatesh Vs. W.P.No.42492 of Sri.G.E.Prabhakar 2018 before Hon'ble High Court of Karnataka 8 State Through Land Acquisition 1998 SCC Online Officer, Bidar Vs. Abdul Raheem Kar 405 Khan 9 T.Lakshmaiah Setty and another 1995 SCC Online Vs. M/s.J.A.S. Combine Kar 488 Developers and Promoters by its Managing Partner 10 Associate Builders Vs. Delhi (2015) 3 SCC 49 Development Authority 11 South East Asia Marine (2020) 5 SCC 164 Engineering and Constructions Limited Vs. Oil India Limited 12 Patel Engineering Ltd., Vs. North MANU/SC/ Eastern Electric Power 0447/2020 Corporation Ltd., 13 Dyna Technologies Pvt., Ltd., Vs. (2019) SCC Online Crompton Greaves Ltd., SC 1656 14 Food Corporation of India Vs. 2004 12 SCC 360 /31/ Com.A.S.88/2019 Assam State Cooperative Marketing and Consumer Federation Ltd., and Others 15 Prabhakaran and Others Vs. 2006 4 SCC 484 M.Azhagiri Pillai
73. The learned counsel for the defendant/respondent has relied on the following decisions in support of his case.
Sl.No. Name of the parties Citations
1 Pandurang Dhondi Chougule Vs. (1996) 1 SCR 102
Maruti Hari Jadhav
2 Royal Palms (India ) Pvt.,Ltd. Vs. 2009 SCC Online
Bharat Shantilal Shah, Bom 51
3 Hardesh Ores (P) Ltd. Vs. Hede (2007) 5 SCC 614
and Co.,
4 Mahboob Pasha Vs. Syed 1987 SCC Online
Zaheeruddin Kar 145
5 Rathnavathi V Kavita (2015) 5 SCC 223
Ganashamda
6 K.Kallai V.Ningegowda 1981 SCC Online
Kar 130
7 Mahboob Pasha Vs.Syed 1987 SCC Online
Zaheeruddin Kar 145
8 BSNL Vs. Nortel Networks (2021) 5 SCC 738
(India) (P) Ltd.,
9 Nagindas Ramdas Vs. (1974) 1 SCC 242
Dalpatram Ichharam
10 Praveen Saini Vs. Reetu Kapur, (2018 SCC Online
Del 6500
11 Canara Nidhi Ltd. Vs. (2019) 9 SCC 462
M.Shashikala
/32/
Com.A.S.88/2019
12 Union of India Vs. Eash Coast 1998 SCC Online
Boat Builders & Engineers Ltd., Del 581
13 Nirma Ltd. Vs. Lurgi Energic Und 2002 SCC Online
Entsorgung GMBH, Germany Guj 272
14 Tamil Nadu Water Supply and MANU/TN/
Drainage Board Vs. Aban 0914/2001
Constructions and Ors.,
74. I have gone through the materials available on record. I have carefully followed the ratio of above precedents and applied to the facts of the case.
75. The following Points arise for my determination.
(1) Whether the Plaintiff has made out any grounds as set out under Section 34 of Arbitration & Conciliation Act, 1996 so as to set aside the Award dated: 09.03.2019 passed 2-1 majority by the learned Arbitral Tribunal in A.C.No:2314? (2) What Order?
76. My findings on the above points are as follows:-
Point No. 1 : - In the Negative Point No. 2 : - As per final orders for the following /33/ Com.A.S.88/2019 REASONS
77. Point No.1: The Plaintiff has filed this suit under section 34 of Arbitration & Conciliation Act, 1996 praying the Court to set aside the Arbitral Award passed by a majority decision dated:19.03.2019 in the Arbitration Case A.C.No:2134 between the Plaintiff and Defendant No:1 and grant such other reliefs.
78. In order to determine the suit it is useful to refer to Section 34 of Arbitration and Conciliation Act, 1996 which reads as under:
ARBITRATION AND CONCILIATION ACT, 1996 [Section : 34] Application for setting aside arbitral award (1) Recourse to a Court against an arbitral award may be made only by an application for setting aside such award in accordance with sub-section (2) and sub-section (3).
(2) An arbitral award may be set aside by the Court only if- (a) the party making the application furnishes proof that-
(i) a party was under some incapacity; or
(ii) the arbitration agreement is not valid under the law to which the parties have subjected it or, failing any indication thereon, under the law for the time being in force; or
(iii) the party making the application was not given proper notice /34/ Com.A.S.88/2019 of the appointment of an arbitrator or of the arbitral proceedings or was otherwise unable to present his case; or
(iv) the arbitral award deals with a dispute not contemplated by or not falling within the terms of the submission to arbitration, or it contains decisions on matters beyond the scope of the submission to arbitration:
Provided that, if the decisions on matters submitted to arbitration can be separated from those not so submitted, only that part of the arbitral award which contains decisions on matters not submitted to arbitration may be set aside; or
(v) the composition of the arbitral Tribunal or the arbitral procedure was not in accordance with the agreement of the parties, unless such agreement was in conflict with a provision of this Part from which the parties cannot derogate, or, failing such agreement, was not in accordance with this Part; or
(b) the Court finds that-
(i) the subject-matter of the dispute is not capable of settlement by arbitration under the law for the time being in force, or
(ii) the arbitral award is in conflict with the public policy of India.
[Explanation 1.-For the avoidance of any doubt, it is clarified that an award is in conflict with the public policy of India, only if,-
(i) the making of the award was induced or affected by fraud or corruption or was in violation of section 75 or section 81; or /35/ Com.A.S.88/2019
(ii) it is in contravention with the fundamental policy of Indian law; or
(iii) it is in conflict with the most basic notions of morality or justice.
Explanation 2.-For the avoidance of doubt, the test as to whether there is a contravention with the fundamental policy of Indian law shall not entail a review on the merits of the dispute.
(2A) An arbitral award arising out of arbitrations other than international commercial arbitrations, may also be set aside by the Court, if the Court finds that the award is vitiated by patent illegality appearing on the face of the award: Provided that an award shall not be set aside merely on the ground of an erroneous application of the law or by reappreciation of evidence.
(3) An application for setting aside may not be made after three months have elapsed from the date on which the party making that application had received the arbitral award or, if a request had been made under section 33 , from the date on which that request had been disposed of by the arbitral Tribunal:
Provided that if the Court is satisfied that the applicant was prevented by sufficient cause from making the application within the said period of three months it may entertain the application within a further period of thirty days, but not thereafter.
(4) On receipt of an application under sub-section (1), the Court may, where it is appropriate and it is so requested by a party, adjourn the proceedings for a period of time determined by it in order to give the arbitral Tribunal an opportunity to resume the arbitral proceedings or to take such other action as in the opinion of arbitral Tribunal will eliminate /36/ Com.A.S.88/2019 the grounds for setting aside the arbitral award.
[(5) An application under this section shall be filed by a party only after issuing a prior notice to the other party and such application shall be accompanied by an affidavit by the applicant endorsing compliance with the said requirement.
(6) An application under this section shall be disposed of expeditiously, and in any event, within a period of one year from the date on which the notice referred to in sub- section (5) is served upon the other party.
79. As per the mandate of Section 34 of the Act and the ratio of various judicial precedents, the Court while exercising jurisdiction under Section 34 of Arbitration & Conciliation Act, 1996 shall not act as an Appellate Court. The Court shall not interfere with the Award passed by the Arbitral Tribunal lightly without there being grounds as contemplated under Section 34 of the Act. The Court shall not modify/alter/remand the impugned award by assuming power of an Appellate Authority. This Court is not entitled to re-appreciate the evidence and substitute its view to the view taken by the Arbitral Tribunal. It is settled law that the Court while dealing with an application under Section 34 of Arbitration & Conciliation Act, 1996 is required to exercise its jurisdiction within the frame work of Section 34 and Section 34 (2A) of the Act. The Plaintiff has to establish that the impugned order is against to the /37/ Com.A.S.88/2019 fundamental law of India and must be patently illegal. The Court has to act within the frame work of Section 34 of the Act.
80. The Learned Tribunal has formulated two questions while deciding I.A.No:1/2018 filed by the Respondent under Section 16 of Arbitration and Conciliation Act, 1996.
1. Whether this Tribunal lacks jurisdiction to address this reference?
2. Whether the Claim Petition is liable to be dismissed at the threshold, as being barred by Limitation?
81. The Learned Tribunal has ruled that it is competent to address the Claim Petition and address the concern of the Respondent that it is barred by limitation, on the face of it, and that it ought to be rejected on that ground alone.
82. The Learned Tribunal has held that the Claim petition filed by the Claimant is barred by Limitation and passed the impugned Award.
83. The Claimant is seeking the leave of the Court to produce letter dated:14.07.2004 and 18.08.2004 alleged to have written by the Respondent, which were not furnished before the Arbitral Tribunal and canvassed that if those letters /38/ Com.A.S.88/2019 are taken in to consideration the Claim Petition cannot be held to have been barred by limitation.
84. Admittedly the Claimant has not furnished these letters before the Arbitral Tribunal. The Claimant now intends to produce these letters with a contention that these letters would show the fact that the Claim Petition was not barred by Limitation. The Respondent has submitted that this Court cannot allow the claimant to produce these letters in view of scope of Section 34 of the Act.
85. Section 34 (2) (a) of the Act provides that An Arbitral award may be set aside by the Court only if -(a) the party making the application establishes on the basis of the record of the arbitral tribunal etc., The mandate of law is very clear a plaintiff may assail the Award passed by the Arbitrator only on the basis of materials available before the Arbitrator. This mandate makes it amply clear that the Court exercising jurisdiction under section 34 of the Act shall not allow the parties to place new or fresh evidence in a Section 34 A & C proceeding. The proceeding contemplated under Section of 34 of Arbitration & Conciliation Act, 1996 cannot be equated to a proceeding under Order XLI of CPC., as this Court is not sitting in appeal over the Award passed by the learned Arbitral Tribunal cannot exercise /39/ Com.A.S.88/2019 powers/jurisdiction to allow the parties to adduce additional evidence as has been envisaged under XLI Rule 27 CPC. This position of Law is very clear from the scheme and procedure contemplated under the provisions of Arbitration & Conciliation Act. When this Court is precluded from re-appreciating the evidence available before the Arbitral Tribunal and prohibited from modifying or remanding the matter under consideration, it cannot entertain new or fresh evidence to be placed by the aggrieved party. In such circumstances permitting a party to place new or fresh evidence before this Court serves no purpose as the Court cannot look in to such fresh or new evidence. The Claimant by seeking to introduce new or fresh evidence in the form of placing letter dated:14.07.2004 and 18.08.2004 intends to have re-appreciation of evidence and facts, which is not a countenance in law. Hence, the prayer of the Claimant to permit it to place letter dated:14.07.2004 and 18.08.2004 is rejected.
86. The Claimant is contending that a question as to whether the claim is barred by limitation would not amount to a ruling on its own jurisdiction in terms of Section 16 of the Act.
87. The Claimant is contending that the Tribunal cannot decline consideration of the Claim Petition being barred by the /40/ Com.A.S.88/2019 law of Limitation or otherwise, for an inherent lack of jurisdiction. As held by the Tribunal itself, the Tribunal can consider the plea of Limitation on merits, as the same is not an embargo on the Tribunal's Jurisdiction. In absolute contravention of its own finding, the Tribunal proceeds to consider Section 16 application being an ouster to its jurisdiction. The Tribunal unilaterally upholds all the false and frivolous contentions raised by the Respondent to hold that the Claim petition is barred by limitation. These findings are wholly arbitrary and have been returned without application of mind whatsoever.
88. The Respondent is contending that averments made by the claimant regarding the finding of the Tribunal regarding its jurisdiction to entertain a plea of limitation under section 16 of the Act is not maintainable and the question of jurisdiction goes to the root of the competence of the Court to entertain the matter as such the grounds urged by the claimant deserves to be rejected.
89. In order to determine the rival contentions it is necessary to refer to Section 16, 28 and 43 of Arbitration & Conciliation Act, 1996, which reads as under:
/41/ Com.A.S.88/2019 ARBITRATION AND CONCILIATION ACT, 1996 [Section : 16] Competence of arbitral Tribunal to rule on its jurisdiction (1) The arbitral Tribunal may rule on its own jurisdiction, including ruling on any objections with respect to the existence or validity of the arbitration agreement, and for that purpose,-
an arbitration clause which forms part of a contract shall be treated as an agreement independent of the other terms of the contract; and a decision by the arbitral Tribunal that the contract is null and void shall not entail ipso jure the invalidity of the arbitration clause.
(2) A plea that the arbitral Tribunal does not have jurisdiction shall be raised not later than the submission of the statement of defence;
however, a party shall not be precluded from raising such a plea merely because that he has appointed, or participated in the appointment of, an arbitrator.
(3) A plea that the arbitral Tribunal is exceeding the scope of its authority shall be raised as soon as the matter alleged to be beyond the scope of its authority is raised during the arbitral proceedings.
(4) The arbitral Tribunal may, in either of the cases referred to in sub-section (2) or sub-section (3), admit a later plea if it considers the delay justified.
(5) The arbitral Tribunal shall decide on a plea referred to in sub-section (2) or sub-section (3) and, where the arbitral Tribunal takes a decision rejecting the plea, /42/ Com.A.S.88/2019 continue with the arbitral proceedings and make an arbitral award.
(6) A party aggrieved by such an arbitral award may make an application for setting aside such an arbitral award in accordance with section 34.
Section : 28 Rules applicable to substance of dispute (1) Where the place of arbitration is situate in India,-
(a) in an arbitration other than an international commercial arbitration, the arbitral Tribunal shall decide the dispute submitted to arbitration in accordance with the substantive law for the time being in force in India;
(b) in international commercial arbitration,-
(i) the arbitral Tribunal shall decide the dispute in accordance with the rules of law designated by the parties as applicable to the substance of the dispute; (ii) any designation by the parties of the law or legal system of a given country shall be construed, unless otherwise expressed, as directly referring to the substantive law of that country and not to its conflict of laws/rules;
(iii) failing any designation of the law under clause (a) by the parties, the arbitral Tribunal shall apply the rules of law it considers to be appropriate given all the circumstances surrounding the dispute.
(2) The arbitral Tribunal shall decide ex aequo et bono or as amiable compositeur only if the parties have expressly authorized it to do so.
(3) While deciding and making an award, the arbitral tribunal shall, in all /43/ Com.A.S.88/2019 cases, take into account the terms of the contract and trade usages applicable to the transaction.
Section : 43 Limitations (1) The Limitation Act, 1963 , shall apply to arbitrations as it applies to proceedings in court.
(2) For the purposes of this section and the Limitation Act, 1963 ,an arbitration shall be deemed to have commenced on the date referred in section 21 .
(3) Where an arbitration agreement to submit future disputes to arbitration provides that any claim to which the agreement applies shall be barred unless some step to commence arbitral proceedings is taken within a time fixed by the agreement and a dispute arises to which the agreement applies, the Court, if it is of opinion that in the circumstances of the case under hardship would otherwise be caused, and notwithstanding that the time so fixed has expired, may on such terms, if any, as the justice of the case may require, extend the time for such period as it thinks proper.
(4) Where the Court orders that an arbitral award be set aside, the period between the commencement of the arbitration and the date of the order of the Court shall be excluded in computing the time prescribed by the Limitation Act, 1963 , for the commencement of the proceedings (including arbitration) with respect to the dispute so submitted.
/44/ Com.A.S.88/2019
90. A combined reading of above provisions makes it amply clear that the provisions of Limitation Act, 1963 are applicable to Arbitration proceedings save those provisions where there are specific departures from the application of general provisions of Limitation Act.
91. It is useful to refer to Section 3 of Limitation Act, 1963 to know whether the Arbitral Tribunal is justified in rejecting the claim of the Claimant at the threshold, which reads as under:
LIMITATION ACT, 1963 Section : 3 Bar of limitation (1) Subject to the provisions contained in section 4 to Rule 24 (inclusive), every suit instituted, appeal preferred, and application made after the prescribed period shall be dismissed, although limitation has not been set up as a defence.
(2) For the purposes of this Act- (a) a suit is instituted,- (i) in an ordinary case, when the plaint is presented to the proper officer;
(ii) in the case of a pauper, when his application for leave to sue as a pauper is made; and
(iii) in the case of a claim against a company which is being wound up by the court, when the claimant first sends in his claim to the official liquidator;
any claim by way of a set off or a counter claim, shall be treated as a /45/ Com.A.S.88/2019 separate suit and shall be deemed to have been instituted -
(i) in the case of a set off, on the same date as the suit in which the set off is pleaded;
(ii) in the case of a counter claim, on the date on which the counter claim is made in court;
(c) an application by notice of motion in a High Court is made when the application is presented to the proper officer of that court.
92. A reading of Section 3 of Limitation makes it clear that a Court/authority is vested with the jurisdiction dismiss a suit/claim filed after the expiry of prescribed period of Limitation though there is no plea of Limitation raised by the defendant/opponent. The present claim petition does not fall within the exceptions carved out under Section 4 to 14 of Limitation Act. It is not the case of the Claimant that it has suffered some legal disability as such it could not file the Claim petition within the prescribed period of Limitation. In the absence of any exception as carved out under Section 4 to 14 of the Limitation Act, 1963 the Claim petition filed by the Claimant has to be conformed to Section 3 of the Limitation Act. The Claimant is asserting that it has filed the claim petition within the prescribed period of limitation and is not relying on any exception/s as envisaged under the Limitation Act.
/46/ Com.A.S.88/2019
93. In view of Section 16 of Arbitration and Conciliation Act, 1996 the Arbitral Tribunal has jurisdiction to consider whether the Claim Petition filed by the Claimant conforms to the provisions of Limitation Act at the threshold. In this case, the Respondent has filed I.A.No:1/2018 by invoking Section 16 of the Act, 1996. The Arbitral Tribunal even in the absence of such an application is empowered to take a decision on the question of limitation by invoking Section 3 of the Limitation Act, 1963 by considering the materials placed by the Claimant.
94. The Respondent is not disputing the time line of the events that occurred from the date of entering in to contract by the Claimant and the Respondent till initiating Arbitral proceeding by the Claimant by issuing a notice as contemplated under Section 21 of the Act. The respondent has disputed the assertions made by the Claimant but not the time line. When the Respondent has not disputed the time line of the events furnished by the Claimant, there is no necessity to probe in to the same by conducting a trial. It is significant to note that the Claimant gets a right to have a trial to adjudicate upon the question of Limitation when it passes through initial barrier created under Section 3 of Limitation Act, 1963. A trial to determine the question of Limitation is necessary when the Claimant seeks to take shelter under one or more exceptions carved out to Section 3 of the Limitation /47/ Com.A.S.88/2019 Act under Section 4 to 14 of the Limitation Act, 1963. When the Claimant has not raised any plea of exceptions the Tribunal has rightly exercised its Jurisdiction to invoke Section 3 of the Limitation Act, 1963 to hold the claim is barred by Section 3 of Limitation Act, 1963. In these circumstances the Claimant is not entitled to find fault with the findings of the learned Arbitral Tribunal.
95. It is necessary to have a look to the time line of the events. On 21.02.1979, KIADB executed and registered a lease cum sale deed in favor of the respondent in respect of the schedule property. The suit filed by the Respondent in O.S.No:159/1990 against KIADB for permanent injunction restraining the KIADB from interfering with its peaceful possession and enjoyment of the schedule property, came to be decreed on 23.09.1996. The R.A.No:190/1996 filed by the KIADB against the judgment passed in O.S.No:159/1990 came to be dismissed on 05.04.1997. The R.S.A.No:501/1997 filed by the KIADB against judgment in O.S.No:59/1990 and R.A.No:190/1996 came to be dismissed by the Hon'ble High Court of Karnataka on 08.12.1997. The KIADB filed SLP(Civil) No:17126/1998 before the Hon'ble Supreme Court of India.
96. On 16.08.1999, the Claimant and the Respondent entered in to MOU in respect of suit schedule property /48/ Com.A.S.88/2019 agreeing mutual terms and conditions. They have specifically agreed that the Claimant shall assist the Respondent to get the absolute sale deed from the KIADB within 270 days from the date of MOU subject to Article 15 and also agreed that the except as stated in Article 7.1 the claimant shall not be deemed to commit default if the performance of obligations is delayed or prevented by force majeure.
97. The Claimant has paid ₹.25,00,000/- to the Respondent on 16.08.1999 and has agreed to pay balance amount as envisaged under Article 7 of MOU.
98. The Hon'ble Supreme Court of India dismissed SLP(Civil) No:17126/1998 filed by KIADB vide orders dated:03.12.1999.
99. The Respondent has furnished a copy of the order of the Hon'ble Supreme Court of India to the Claimant on 15.12.1999. The Respondent requested KIADB to execute the sale deed vide letters dated:21.12.1999.
100. The Claimant was to perform its obligation by paying further sum of ₹.25,00,000/-within 180 days from 15.12.1999 (the date on which the Respondent informed the Claimant /49/ Com.A.S.88/2019 about the orders the Hon'ble Supreme Court of India) i.e. on or before 12.06.2000.
101. The Claimant at para 11 of the SOC has stated that the Claimant has addressed a Letter to KIADB along with the copy of order dated:03.12.1999 passed by the Hon'ble Supreme Court of India and requested to execute and register absolute sale deed.
102. On 13.07.2000, the KIADB filed O.S.No:421/2000 against the Respondent for recovery of possession of the schedule property.
103. On 22.07.2000 the Respondent wrote a letter informing the claimant that the MOU stands terminated because of its failure to comply with terms of MOU.
104. The Claimant has filed A.A.No:3/2004 on 21.01.2004 alleging that on 14.01.2004 the Respondent started claiming that the MOU stood canceled.
105. The Claimant is contending that it has issued Notice to the Delhi Address of the Respondent requesting for appointment of Arbitrator. The Respondent is contending that it has not received the said notice and sent to wrong address.
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106. On 07.06.2007 the KIADB executed a fresh lease cum sale deed in favor of the Respondent. O.S.No:421/2000 filed by the KIADB ended in a compromise on 26.06.2007. The Claimant filed CMP 98/1998 u/s.11 of the Act, before the Hon'ble High Court of Karnataka on 13.08.2008. The CMP was disposed of by the Hon'ble High Court of Karnataka vide orders dated:26.10.2017. The Respondent filed SLP(Civil) No:4056/2018 before the Hon'ble Supreme Court of India and the Hon'ble Supreme Court of India relegated the parties to Indian Council of Arbitration vide orders dated:05.03.2018.
107. The learned Arbitral Tribunal considering the averments made in para 19, 20, 22, 24, 25, 28, made by the claimant in application filed under section 9 of the Act in A.A.No:3/2004, has observed that 'the Claimant did not choose to take any such steps till after the application was allowed and relief was granted, conditionally by the Court after a gap of three years. Even thereafter the respondent had not been unable to place the respondent on notice of the proceedings initiated, nor was able to serve the notice naming an arbitrator even as late as March 2007. It was only in the year 2008 that an application under Section 11 came to be filed.'
108. The Learned Tribunal has come to the conclusion that the Claimant had knowledge of refusal on the part of the /51/ Com.A.S.88/2019 respondent to perform its obligations under MOU on 14.01.2004. The Claimant has filed application under Section 9 of the Act on that information and held that the cause of action arose on that day and time began to run. The Tribunal further observed that it is not the case of the Claimant that any steps had been taken to initiate arbitration proceedings by the end of January 2007, any claim raised thereafter would be clearly barred by limitation.
109. It is evident from the materials available on record particularly the averments made in the application filed under section 9 of the Act in A.A.No:3/2004, that the Claimant came to know about the refusal of the Respondent to perform its part of the obligations under MOU. The Claimant has initiated Arbitral proceedings by issuing notice dated: 26.03.2007 after the lapse of 3 years from the date of alleged cause of action i.e. 11.04.2004.
110. Article 54 of Limitation Act deals with filing of suit for specific performance of an agreement, which reads as under:
54. For specific Three years The date performance of a fixed for the contract. performance, or, if no such date is fixed, when the plaintiff has /52/ Com.A.S.88/2019 noticed that performance is refused.
111. The Limitation to file a suit for specific performance starts to run from the date fixed for performance, if no date is fixed it starts to run from the date of knowledge of refusal on the part of defendant to perform his obligations. In this case the Claimant has stated in its Application filed under section 9 of the Act about the knowledge of refusal on the part of the respondent. A statement/admission made in a pleading stands on high pedestal than oral admission. The Claimant is not entitled to contend contrary to the admission made by in A.A.No:3/2004. In view of Article 54 of Limitation Act, the claim petition filed by the Claimant before the Tribunal is barred by limitation.
112. The findings of the learned Tribunal on the question of Limitation are based on the materials placed before it. The Learned Tribunal has applied the law applicable to the facts and has arrived at a just conclusion to dismiss the claim petition as barred by limitation.
113. This Court is precluded from re-appreciating the materials available before the Tribunal regarding finding of /53/ Com.A.S.88/2019 facts arrived at by the Learned Tribunal. The Court has to exercise its jurisdiction within the limits permissible under Section 34 of Arbitration and Conciliation Act, 1996.
114. The Plaintiff has not made out any grounds to interfere with the findings of learned Tribunal or to differ with the reasons assigned by the Tribunal to arrive at the findings. The Learned Tribunal has considered all the facets of dispute in right perspective and arrived at the final conclusion to dismiss the claim petition. The Plaintiff has not made out any grounds to interfere with the impugned Award. The Plaintiff has not made out any grounds to set aside the well reasoned Award passed 2-1 majority by the learned Arbitral Tribunal. The Arbitral Tribunal has not exceeded its reference and has followed the due process of law. Accordingly, POINT No.1 is answered in the NEGATIVE.
115. Point No.2: In view of the findings on the above point, I pass the following:
ORDER Application/suit filed under section 34 of Arbitration & Conciliation act, 1996 by the plaintiff is hereby dismissed with cost.
/54/ Com.A.S.88/2019 The Award dated: 09.03.2019 passed 2-1 majority by the learned Arbitral Tribunal in A.C.No:2314 is hereby confirmed. (Dictated to the Stenographer, corrected, signed and then pronounced by me in the open court on 29 th day of AUGUST, 2022) (S.J.KRISHNA) LXXXIX ADDL.CITY CIVIL & SESSIONS JUDGE, BENGALURU. (CCH-90) * * * * FPpo Digitally signed by S SJ J KRISHNA KRISHNA Date: 2022.09.01 07:18:06 -0400