Point of Law : A litigant who deliberately avoids taking notices and does not file written statement for a long time cannot take advantage of statutory provision on limitation after the award was passed depriving the respondent fruits of his success.

ORDER :

P. Naveen Rao, J.

CRP No.1354 of 2021 :

The respondent, M/s.Shriram City Union Finance Limited has sanctioned a sum of Rs.25,00,000/- to the first petitioner herein. Petitioners 2 and 3 are the Co-borrowers/Guarantors. The petitioners had agreed to repay the loan amount with financial charges, bringing the total payable amount to Rs.45,62,250/- to be payable in 60 installments. The petitioners had failed to pay the full loan amount and committed default.

2. As loan is not discharged by the petitioners, the respondent invoked the arbitration clause. A Claim Statement was made by the respondents before the sole Arbitrator on 27.04.2016. The petitioners filed their defence statement on 21.12.2016. The Arbitrator passed the award on 27.12.2017.

3. As the amount quantified by the Arbitrator was not paid, the respondent-M/s. Shriram City Union Finance Limited filed E.P.No.1432 of 2018 in ARB Case No.220 of 2016 in the Court of III Additional District Judge at Warangal, seeking enforcement of the award. The Execution Court over-ruled the objection raised by the petitioners and declared that decree holder is entitled for recovery of amount and allowed Execution Petition. Aggrieved thereby, this revision is filed.

CRP NO.1934 of 2021 :

4. The respondent, M/s. Shriram City Union Finance Limited has sanctioned a sum of Rs.20,00,000/- to the first petitioner herein. Petitioners 2 and 3 are Co-borrowers/ Guarantors. The petitioners had agreed to repay the loan amount with financial charges, bringing the total payable amount to Rs.36,49,980/- to be payable in 60 monthly installments. The petitioners had failed to pay the full loan amount and committed default.

5. As loan is not discharged by the petitioners, the respondent invoked the arbitration clause. A Claim Statement was made by the respondents before the sole Arbitrator on 27.04.2016. The petitioners filed their defence statement on 18.10.2016. The Arbitrator passed the award on 09.08.2017.

6. As the amount quantified by the Arbitrator was not paid, the respondent- M/s.Shriram City Union Finance Limited filed E.P.No. 1125 of 2018 in ARB Case No.33 of 2016 in the Court of VII Additional District at Warangal, seeking enforcement of the award.

7. Heard Sri P.V. Ramana, learned counsel for the petitioners in both revision petitions, and Sri P. Gangaiah Naidu, learned senior counsel appearing for Sri N. Srikanth Goud, learned counsel for sole respondent in CRP No.1354 of 2021, and for first respondent in CRP No.1934 of 2021.

8. As the issue raised in both revision petitions is same, both revisions are considered together.

9.1. The learned counsel for the petitioners contended that as the award was not passed within one year from the date of filing claim by the first respondent, M/s. Shriram City Union Finance Limited, the award is a nullity and therefore cannot be enforced. He contended that the execution Court failed to consider the objection raised by the petitioners on the issue of nullity of the order passed by the sole Arbitrator in the Arbitration Claim Petition Nos.220/2016 and 33/2016, respectively, on the face of Section 29A(1) and Section 29A(3) of the Arbitration and Conciliation Act, 1996 (for short, ‘the Act, 1996’).

9.2. He would submit that plea of nullity can be raised in execution proceedings. Further, scope of challenge to the award under Section 34 is limited and this plea could not be urged. The learned counsel for petitioners argued that as per Section 29A(1) of the Act, 1996, as in force, an award should be made within a period of twelve months from the date of Arbitral Tribunal enters upon the reference. Section 29A(3) of the Act, 1996 gives power to the parties to extend this time period for a further period not exceeding six months. Section 29A(4) of the Act, 1996 specifies that if the award is not passed within the time period prescribed in clause-1 or clause-3 then the mandate of arbitrator would terminate. Since arbitrator was not competent to pass award, as it is a