H.G. Ramesh. J.

1. This revision petition by the Central Ware Housing Corporation is directed against the judgment dated 18.04.2011 passed by the Appellate Court namely the Court of the VI Additional City Civil Judge, Bangalore City, in Arbitration Case no.1/2005. By the impugned judgment, the Appellate Court has allowed the appeal filed by respondent no.1 under Section 37 of the Arbitration and Conciliation Act, 1996 (‘the Arbitration Act’ for short) by setting aside the order dated 20.10.2004 passed by the sole Arbitrator and remitting the matter to the Arbitrator to decide the matter on merits.

2. The Arbitrator had dismissed the claim of respondent no.1 made in connection with a contract relating to construction of a godown and ancillary buildings etc., at the Central Warehouse, Whitefield, Bangalore, as not maintainable on the ground that respondent no.1 did not invoke the arbitration clause (clause 25 of the Contract) within 90 days from the date stipulated therein and as there was no extension of time under Section 43(3) of the Arbitration Act by the jurisdictional court, respondent no.1's claim was deemed to have been waived and barred as per Clause 25 of the Contract. Being aggrieved, respondent no.1 preferred an appeal under Section 37 of the Arbitration Act. The Appellate Court, by the judgment impugned herein, has held that the clause in the Contract seeking to extinguish the right of respondent no.1 on expiry of the specified period is void as contrary to Section 28(b) of the Contract Act, 1872. It also held that this was a fit case wherein it could extend the time to submit the dispute to arbitration in exercise of the power under Section 43(3) of the Arbitration Act on the ground of undue hardship. Accordingly, it has set aside the order of the sole Arbitrator and has remitted the matter to the Arbitrator to consider the matter on merits.

3. I have heard Sri M. Aswathanarayana Reddy, learned counsel appearing for the petitioners and Sri Aditya Sondhi, learned counsel appearing for respondent no.1, perused the impugned judgment and the record of the Appellate Court.Learned counsel for the petitioners, in support of the revision petition, relied on the judgment of the Honourable Supreme Court in H.P. State Forest Company Ltd. versus M/s. United India Insurance Co. Ltd. (AIR 2009 SC 1407). He submitted that the impugned judgment of the Appellate Court is contrary to the law laid down by the Honourable Supreme Court in H.P.State Forest Company Ltd. and sought to justify the order of the Arbitrator. He also submitted that no extension of time under Section 43(3) of the Arbitration Act is permissible unless the application for extension of time was filed in Court before commencement of arbitral proceedings. In support of his submission, he referred to a judgment of the Madras High Court in E. Muralidharan versus M/S. Venkataraman & Co. (AIR 2009 Madras 40); he specifically referred to para 15 thereof. Learned Counsel for respondent no.1 supported the impugned judgment by relying on the amendment to Section 28 of the Contract Act by Act 1 of 1997 and also by relying on several judgments of various High Courts.

4. The only question that requires to be determined in this revision petition is as to whether Clause 25 of the Contract is void as being contrary to Section 28(b) of the Contract Act, 1872?

It is relevant to state that Clause 25 of the Contract provides for extinguishment of the right to claim, if no demand for arbitration relating to the claim is made within 90 days from the date referred to therein. Relevant portion of Clause 25 of the Contract reads as follows:

"It is also a term of the contract that if the Contractor(s) does/do not make any demand for Arbitration in respect of any claim/s in writing within 90 days of receiving the intimation from the Corporation that the bill is ready for payment, the claim of the contractor(s) will be deemed to have been waived and absolutely barred and the corpora