- 1 - CMP No.460 of 2021 IN THE HIGH COURT OF KARNATAKA AT BENGALURU DATED THIS THE 31ST DAY OF JANUARY, 2025 BEFORE THE HON'BLE MR JUSTICE SACHIN SHANKAR MAGADUM CIVIL MISC. PETITION NO.460 OF 2021 BETWEEN: M/S. GURUMURTHY REDDY AND CO CONTRACTORS HAVING ITS REGISTERED OFFICE AT NO.59, 4TH BLOCK, 8TH 'B' MAIN, KORAMANGALA LAYOUT BENGALURU - 560 034 REPRESENTED BY NARAYANA REDDY. …PETITIONER (BY SRI. H. PAVANCHANDRA SHETTY, ADVOCATE) AND: 1. 2. THE CHAIRMAN MANAGING DIRECTOR HINDUSTAN AERONAUTIC LIMITED REGISTERED OFFICE AT NO.15/1, CUBBON ROAD BENGALURU - 560 061. THE DIRECTOR (H.R.) HINDUSTAN AERONAUTIC LIMITED REGISTERED OFFICE AT NO.15/1, CUBBON ROAD BENGALURU - 560 061. 3. THE GENERAL MANAGER FACILITY MANAGEMENT DIVISION NEAR SPORTS CLUB, HAL Digitally signed by NAGARAJA B M Location: HIGH COURT OF KARNATKA - 2 - CMP No.460 of 2021 BENGALURU-560 017. …RESPONDENTS (BY SRI. PRADYUMNA L. NARASIMHA, ADVOCATE FOR R3; R1 AND R2 SERVED) THIS CIVIL MISC. PETITION IS FILED UNDER SEC.11(5) OF THE ARBITRATION AND CONCILIATION ACT 1996, PRAYING TO APPOINT ANY HON'BLE RETIRED DISTRICT JUDGE AS AN ARBITRATOR TO ADJUDICATE THE ABOVE DISPUTE AS PER PARA No.5 IN AGREEMENT DATED 27.05.2010 IN ANNEXURE A IN ACCORDANCE WITH LAW. THIS CIVIL MISC. PETITION HAVING BEEN HEARD AND RESERVED FOR ORDERS ON 29.01.2025, THIS DAY ORDER WAS PRONOUNCED THEREIN, AS UNDER: CORAM: HON’BLE MR. JUSTICE SACHIN SHANKAR MAGADUM CAV ORDER This Civil Miscellaneous Petition is filed under Section 11(5) of the Arbitration and Conciliation Act, 1996 (for short 'the Act') seeking appointment of sole Arbitrator to resolve the dispute and difference between the parties in terms of service contract agreement entered into between petitioner and respondents on 27.05.2010. 2. Petitioner herein filed a recovery suit in O.S.No.6866/2015. The respondents herein tendered appearance and filed application under Section 8 of the Act - 3 - CMP No.460 of 2021 requesting the Court to dismiss the suit as not maintainable on the ground that there is an arbitration clause pertaining to the dispute. The Court having heard the parties on I.A.No.1 allowed the application filed by the respondents under Section 8 of the Act thereby directing parties to approach an Arbitrator to get their disputes resolved insofar as suit claim is concerned. 3. The petitioner pursuant to directions issued by the Court while deciding Section 8 application, issued notice dated 23.07.2021 and thereby invoked the arbitration clause and nominated an Arbitrator to adjudicate the dispute between the petitioner and respondents. 4. The respondents issued a reply notice denying the claim of the petitioner on the ground that petitioner's claims are ex-facie time barred and this cannot be referred to arbitration. The respondents contended that claim sought to be referred to arbitration is not supported or substantiated by any documents. - 4 - CMP No.460 of 2021 5. This petition is filed under Section 11(5) seeking appointment of sole Arbitrator. 6. On receipt of notice, the respondents have appeared through learned counsel and statement of objections is filed. The respondents through statement of objections have cited the following judgments to substantiate that the claim sought to be arbitrated by the petitioner are ex-facie dead claim and therefore, barred by limitation on the date of commencement of arbitration proceedings. 1) Arif Azim Company Limited vs. Aptech Limited - (2024) 5 SCC 313; 2) B and T AG vs. Ministry of Defence -Arbitration Petition No.13 of 2023, Supreme Court of India; 3) Bharat Sanchar Nigam Limited and Another vs. Nortel Networks India Pvt. Ltd., - (2021) 5 SCC 738; 4) Panchu Gopal Bose vs. Board of Trustees for Port of Calcutta - (1993) 4 SCC 338. 7. Learned counsel for the respondents has also contended that suit was filed in 2015 and therefore, - 5 - CMP No.460 of 2021 petitioner could not have invoked arbitration clause by issuing a notice under Section 21 of the Act in 2021. 8. The petitioner has sought to counter the respondents' arguments by relying on the judgment rendered by the Hon'ble Apex Court in Arif Azim Company Limited vs. Aptech Limited (supra). 9. Upon a thorough review of the petition, annexures, and supporting documents, this Court is satisfied that the petitioner has complied with the procedural requirements under Section 11(4) of the Act. The respondents have not disputed the existence of an arbitration clause, as evident from the records. Instead, the respondents have sought dismissal of the suit by filing an application under Section 8 of the Act in O.S.No.6866/2015. 10. Based on the principles laid down by the Hon'ble Apex Court in Arif Azim Company Limited vs. Aptech Limited (supra), this Court finds that the issue - 6 - CMP No.460 of 2021 requires further evidence. This Court cannot conclusively determine whether the claim is ex-facie barred by limitation. The question of whether the filing of an application under Section 8 could itself constitute a cause of action is a matter to be decided by the Arbitrator. Notably, the present arbitration petition was filed within three years from the date the respondents failed to comply with the notice invoking arbitration, as issued by the petitioner. Additionally, this Court has noted the Hon'ble Apex Court’s observations regarding the legislative gap concerning the absence of a statutory time limit for invoking an arbitration clause. 11. Section 21 of the Act, by its plain language, indicates that the period of limitation commences from the date on which the notice issued under the said provision is served on the opposite party. In the present case, whether the petition filed under Section 11(5) of the Act is barred by limitation involves a complex question. This issue, therefore, warrants examination by the Arbitrator. - 7 - CMP No.460 of 2021 12. While leaving the issue of limitation open, this Court concludes that the petitioner has satisfied the procedural requirements under Section 11(4) of the Act. 13. In the light of the aforesaid clause of arbitration and the contentions advanced by the petitioner and respondents, this Court proceeds to pass the following: ORDER (i) Civil Miscellaneous Petition is allowed appointing Sri. Basavantharaya Patil, Retired District Judge, as the sole Arbitrator to enter reference of the disputes between the petitioner and the respondents and conduct proceeding at the Arbitration and Conciliation Centre (Domestic and International), Bengaluru according to the Rules governing the said Arbitration Centre; (ii) All contentions inter se parties are left open for adjudication in the arbitration proceedings; (iii) Office is directed to communicate this order to the Arbitration and Conciliation Centre and to Sri. Basavantharaya Patil, Retired District - 8 - CMP No.460 of 2021 Judge, as required under the Arbitration and Conciliation Centre Rules, 2012. SD/- (SACHIN SHANKAR MAGADUM) JUDGE CA