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IN THE HIGH COURT OF KARNATAKA AT BENGALURU
K.S.MUDAGAL, J.
Smt.Sairabanu W/o. Late T.M.Thahir - Appellant
Versus
Prakash Acharya S/o. Mohana Acharya – Respondent
Miscellaneous First Appeal No.5701 of 2019 (AA)
Decided on : 07-10-2021
condonation of delay - Arbitration Suit - Arbitration and Conciliation Act, 1996 - Section 34(3), Section 3, Section 5 - The court discussed the delay in filing the appeal, service of arbitration award, and the application of Section 34(3) of the Arbitration and Conciliation Act, 1996. The court found that the delay was not satisfactorily explained, and the chances of the appellants succeeding in the appeal were bleak. The application for condonation of delay and the appeal were dismissed with costs.
Fact of the Case:
The plaintiffs filed an appeal after their application for condonation of delay was rejected, leading to the dismissal of the suit. The delay in filing the appeal was 31 days. The dispute arose from the alleged oral lease agreement for two buses and subsequent arbitration proceedings.
Finding of the Court:
The court found that the delay of 31 days was not satisfactorily explained. It also concluded that the chances of the appellants succeeding in the appeal were bleak. The application for condonation of delay and the appeal were dismissed with costs.
Issues: The main issue was the delay in filing the appeal and the service of the arbitration award. The court also considered the grounds for condonation of delay and the history of the case.
Ratio Decidendi: The court held that the delay was not satisfactorily explained and the chances of the appellants succeeding in the appeal were bleak. It also emphasized the importance of explaining each day's delay and the application of relevant provisions of the Arbitration and Conciliation Act, 1996.
Final Decision: The application for condonation of delay and the appeal were dismissed with costs. Another application did not survive for consideration and was disposed of accordingly.
JUDGMENT :
Aggrieved by the rejection of their application for condonation of delay and consequent dismissal of the suit in AS No.11/2018, the plaintiffs have preferred the above appeal. There is delay of 31 days in filing the appeal. Therefore they have filed I.A.No.1/2019 for condonation of delay.
2. Appellant No.1 is the wife and appellant Nos.2 and 3 are sons of late T.M.Thahir. T.M.Thahir was the registered owner of two buses bearing No.KA-20-D-4444 and KA-20-D-3333. Those buses were purchased by Sundaram Finance Limited under hire purchase agreements.
3. According to the appellants, the respondent had taken those buses on oral lease agreement for plying for a period of two years between 01.02.2003 and 01.02.2005. It is their further case that the respondent did not operate the buses properly and caused damage to them and did not even pay the lease amount. According to the appellants on 18.11.2004, T.M.Thahir terminated the lease and directed the respondent to return the vehicles. T.M. Thahir died on 30.01.2005.
4. The respondent got issued notice dated 04.03.2005 to the appellants claiming that T.M.Thahir had entered into agreement of sale with respect of the aforesaid two buses and received consideration of Rs.16,70,000/-. It was his further contention that as agreed between the parties, the respondent remitted Rs.4,00,000/- to Sundaram Finance the hire purchaser as the advance sale consideration. Still the appellants did not sell the vehicle and issued the reply denying the agreement.
5. Again on 02.04.2005, the respondent issued another notice demanding payment of Rs.4,00,000/-. The matter was referred to the Arbitrator. The Arbitration proceedings took place in Arbitration Petition No.7/2005. The appellants though appeared before the Arbitrator did not contest the case. Therefore the Arbitrator by his award dated 22.02.2006 allowed the claim petition of the respondent awarding Rs.4,07,855/- with 18% interest per annum on the Principal award amount of Rs.4,00,000/-.
6. The appellants challenged the said award in AS No.24/2006 before the District Judge, Udupi. On 11.09.2018 the learned District Judge decreed the said arbitration suit and set aside the award dated 22.02.2006. The District Judge granted liberty to the respondent to refer the dispute again to the Arbitrator as per the agreement of sale.
7. Again the respondent nominated the Arbitrator and fresh arbitration proceedings were conducted in Arbitration Petition No.7/2005. In the second round also, the appellants though engaged an advocate did not contest the matter. Again the Arbitrator passed award on 10.03.2014 allowing claim petition of Rs.4,00,000/- with interest at the rate of 18% per annum.
8. The respondent filed Execution Petition No.55/2016 against the appellants and the notice of the execution petition was served on them in 2016 only. They filed AS No.11/2018 on 04.06.2018. Since there was delay of four years, they filed I.A.No.3 under Section 5 of the Limitation Act to condone the delay.
9. The learned District Judge on hearing the parties by order dated 14.06.2018 allowed the application for condonation of delay. The respondent challenged that order before this Court in CRP No.333/2018.
10. In Arbitration Suit No.11/2018, the appellants had filed I.A.No.2 for stay of the proceedings in Execution Case No.55/2016. The learned District Judge allowed I.A.No.2 and I.A.No.3 simultaneously.
11. The order granting stay was challenged before this Court in W.P.No.30657/2018. This Court allowed C.R.P. No.333/2018 on 17.12.2018 holding that to the proceedings under Section 34 of the Arbitration and Conciliation Act, 1996 (for short ‘the Act’), Section 34(3) of the Act applies, the order in question was without application of mind and remanded the matter to the Trial Court to decide the application by a speaking order.
12. After such remand, the Trial Court again heard both side and by impugned order rejected the application for condonation of delay with cost of Rs.3,000/-
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