An arbitral award can only be set aside on limited grounds as defined in Section 34 of the Arbitration Act, and claims are not barred by limitation if notice of refusal is not received.

JUDGMENT :

ANU SIVARAMAN, J.

1. This appeal is filed under Section 13 (1-A) of the Commercial Courts Act, 2015 challenging the Judgment dated 21.09.2023 passed by LXXXV Additional City Civil and Sessions Judge, Bengaluru (CCH-86) ('Commercial Court' for short) in Commercial Appeal No.93/2023.

2. We have heard Shri. Nandakumar C.K. learned senior counsel as instructed by Shri. Sridhar Chakravarthi M.V. learned counsel appearing for the appellants.

3. Notice had been ordered by way of substituted service to the respondents on 06.06.2024 and duly served. However, there is no representation on behalf of the respondents.

4. The subject matter of the dispute between the parties was the handing over of built-up area to the appellants, who were the landowners on the basis of Joint Development Agreement dated 11.06.2008 and Supplementary Joint Development Agreement dated 18.03.2010. The matter was referred to arbitration and an arbitral award was passed on 27.06.2022, allowing the claim in part. The respondents herein filed an arbitration petition under Section 34 of the Arbitration and Conciliation Act, 1996 ('Arbitration Act' for short) challenging an arbitral award dated 27.06.2022. The same was allowed and the award was set aside. The claimants are in appeal under Section 13 (1-A) of the Commercial Courts Act, 2015.

5. The learned senior counsel appearing for the appellants submits that there was no justification on the part of the Commercial Court in having interfered with the arbitral award. It is submitted that the parties had entered into a registered Joint Development Agreement dated 11.06.2008 and a Registered Supplementary Joint Development Agreement dated 18.03.2010. The Supplementary Joint Development Agreement provided for completion of construction within 18 months with a grace period of six months. It was further provided that after completion of the construction, 28% of the built-up area would be handed over by the developer to the appellants. Alleging that the built-up area in floor number 4 and 5 and the corresponding parking space was not handed over, the appellants sought reference of the dispute to arbitration. Thereafter, they filed CMP No.94/2018, which was allowed and the sole arbitrator was appointed to adjudicate the disputes between the parties. The arbitrator allowed the claim of the appellants in part and held that they were entitled to 28% of the build-up area in the fourth and fifth floors of the schedule property along with corresponding extent of parking space and ordered compensation of Rs.2,25,000/- per month, if the respondents fail to honour the award within three months.

6. In the Section 34 application preferred by the respondents herein, the Commercial Court held that the time to complete the construction having ended on 18.03.2012, the claim preferred by the appellants on 21.12.2017, was barred by limitation. The application was allowed and the award was set aside. It was found that the finding in the arbitral award that limitation for raising the main claim starts only when the claimant has notice of refusal to handover 28% of the built-up area in floors 5 and 6, is contrary to the agreement entered into between the parties by way of Ex.P2 - Supplementary Joint Development Agreement. It was found that the claim was barred by limitation and the finding on limitation entered into in the award is a patent illegality that vitiates the award.

7. The learned senior counsel appearing for the appellants submits that the respondents being put on notice by the sole arbitrator filed their st