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2022 Supreme(Kar) 51

IN THE HIGH COURT OF KARNATAKA AT KALABURAGI BENCH
S.R. KRISHNA KUMAR, K.S. HEMALEKHA, JJ.
Bhimashankar Sahakari Sakkare Karkhane Niyamita – Appellant
Versus
Walchandnagar Industries Ltd. – Respondent
M.F.A. No. 201018 of 2018
Decided On : 23-02-2022

Advocates:
Advocate Appeared:
For the Appellant : Sri. I.S. Uppin.
For the Respondents: Sri. Pradeep Nayak, Sri. Mahadev S. Patil, Sri. Vikas Mahendra, Smt. Anupama Hebbar, Smt. Varsha Shivanagouda, Smt. Mahika Hegade, Smt. Shailaja Agarwal, Sri. Vedanth Anand, Sri. Nishanth S. Kadur, Sri. Shahnawaz Mamadapur, Smt. Prerana A.N.

Point of Law : If the extended/discretionary/condonable period of 30 days as contemplated in the proviso to Section 34(3) of the said Act of 1996 expires on a day on which the court is closed, a party would not be entitled to the benefit of Section 4 of the Limitation Act.

Headnote:

Constitution of India,1950 - Article 142 read with Article 141 - General Clauses Act, 1897 - Sections 10 and 10(1) - Limitation Act, 1963 - Sections 4, 2 , 24, 6 and 5 - Arbitration and Conciliation Act, 1996 - Sections 34(3), 23(4) and 29A - Negotiable Instruments Act, 1881 - Section 138 - Commercial Courts Act, 2015 - Section 12A - Seeking specific performance of agreement - Claim of compensation - Appellant society registered under Karnataka Co-operative Societies Act filed a claim petition against respondent before learned Sole Arbitrator seeking specific performance of agreement and supplemental agreement said to have been entered into between parties and in alternative for compensation and for other reliefs - Petition filed by appellant was opposed and contested by respondent who also put forth a counter claim. During the pendency of arbitral proceedings before the Sole Arbitrator - Respondent filed an application I.A. No. 5 for framing of an additional issue and requesting Arbitrator to treat said additional issue as a preliminary issue - Learned Arbitrator treated said issue as a preliminary issue and after having heard both sides, Arbitrator proceeded to pass an award dismissing claim petition on ground that Arbitral Tribunal did not have jurisdiction to proceed further and that claim put forth by appellant was barred by limitation.

Finding of the Court: Court is closed would stand excluded and a party would be entitled to file an application on reopening day without any necessity of seeking condonation of delay in view of Section 4 of the Limitation Act and/or Section 10 of General Clauses Act - extended/discretionary/condonable period of 30 days as contemplated in the proviso to Section 34(3) of said Act of 1996 expires on a day on which court is closed, a party would not be entitled to the benefit of Section 4 of the Limitation Act and said period of 30 days expires during the period when court is closed, a party cannot take recourse to Section 4 of the Limitation Act and/or Section 10 of General Clauses Act and file a Section 34 application/petition after Court reopens and an application seeking condonation of delay under the proviso to Section 34(3) would not be maintainable; needless to state that as held in aforesaid decisions - Court are of considered opinion that the impugned order passed by Trial Court dismissing the application for condonation of delay and consequently the Section 34 application/petition does not suffer from any illegality or infirmity warranting interference by this Court in the present appeal. Under these circumstances - we are of the considered opinion that Trial Court was fully justified in rejecting application.

Result: Appeal dismissed

JUDGMENT :

S.R. KRISHNA KUMAR, J.

1. This appeal is directed against the impugned judgments and orders dated 02.04.2018 passed in Arbitration Application No. 2/2017 by the III Additional District Judge, Vijayapura (for short ‘the Trial Court’) whereby the interlocutory application I.A. No. 1 and the additional affidavit filed by the appellant for condonation of delay under Section 5 of the Limitation Act 1963 (for short ‘the Limitation Act’) were dismissed by the Trial Court which consequently also dismissed the aforesaid Application No. 2/2017 filed by the appellant under Section 34 of the Arbitration and Conciliation Act, 1996 (for short ‘the said Act of 1996’).

2. Briefly stated, the facts giving rise to the present appeal are as under:

    The appellant, a society registered under the Karnataka Co-operative Societies Act filed a claim petition against the respondent before the learned Sole Arbitrator (Former Judge of this Court) seeking specific performance of agreement dated 17.07.1997 and supplemental agreement dated 16.01.2001 said to have been entered into between the parties and in the alternative for compensation of Rs. 11,362.73 lakhs and for other reliefs. The said petition filed by the appellant was opposed and contested by the respondent who also put forth a counter claim. During the pendency of the arbitral proceedings before the Sole Arbitrator, the respondent filed an application I.A. No. 5 for framing of an additional issue and requesting the Arbitrator to treat the said additional issue as a preliminary issue. The said application having been opposed by the appellant herein, the learned Arbitrator allowed I.A. No. 5 and framed an additional issue regarding constitution of the Arbitral Tribunal and its jurisdiction to adjudicate upon the claim put forth by the appellant. Thereafter, the learned Arbitrator treated the said issue as a preliminary issue and after having heard both sides, the Arbitrator proceeded to pass an award dismissing the claim petition on the ground that the Arbitral Tribunal did not have jurisdiction to proceed further and that the claim put forth by the appellant was barred by limitation. It is relevant to state that the said award was passed by the Arbitral Tribunal on 24.08.2016.

3. Aggrieved by the aforesaid award dated 24.08.2016, the appellant herein preferred an application/petition under Section 34 of the said Act of 1996 on 02.01.2017 before the Trial Court. The said application/petition was filed by the appellant on 02.01.2017, i.e. the date on which the Trial Court reopened after the 2016 Winter/Christmas Vacations for the Trial Courts which was from 19.12.2016 to 01.01.2017.

4. In the aforesaid petition filed under Section 34 of the said Act of 1996, the appellant specifically stated at paragraph-26 of the application/petition relating to limitation that the Arbitral Tribunal having passed the award on 24.08.2016, the application/petition was out of time and that accordingly a separate application for condonation of delay was filed by the appellant. The said application I.A. No. 1 was filed by the appellant under Section 34(3) of the said Act of 1996 read with Section 5 of the Limitation Act and Section 151 CPC seeking condonation of delay of 24 days in filing the application/petition under Section 34 of the said Act of 1996. In the affidavit in support of the application, in addition to reiterating the facts of the case, at paragraph Nos.6 and 7, the Managing Director of the appellant - Co-operative Society stated that copy of the arbitral award dated 24.08.2016 was received by the appellant on 24.08.2016 itself and the same having been forwarded to the learned Senior Counsel for legal opinion which was furnished on 18.11.2016, the matter relating to challenging the arbitral award was placed before the Board of Management on 30.11.2016, on which day a decision was taken to file the aforesaid application/petition under Section 34 of the said Act of 1996; however, the process of obtainin

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