- 1 - HC-KAR NC: 2025:KHC-D:9650-DB MFA No. 101452 of 2025 IN THE HIGH COURT OF KARNATAKA, DHARWAD BENCH DATED THIS THE 4TH DAY OF AUGUST, 2025 PRESENT THE HON'BLE JUSTICE SMT. ANU SIVARAMAN AND THE HON'BLE MR. JUSTICE S.R. KRISHNA KUMAR MISCELLANEOUS FIRST APPEAL NO. 101452 OF 2025 (AA) BETWEEN: M/S. ABUSEEM ENTERPRISES A PARTNERSHIP FIRM R/BY ITS SHRI. MOHAMMAD YUSUF SIRKAZI, AGE: 59 YEARS, OCC: MANAGER, R/O.LIG 137 ASHOK NAGAR, BELAGAVI, KARNATAKA-590016. …APPELLANT (BY SRI. PRANAV S. KATAGERI, ADVOCATE) AND: M/S. PUSHKRAJ INFRA PROJECTS, R/BY ITS PROPRIETOR SHRI. KULDEEP RATANLAL MANDOWARA 35 MEGDOOT COLONY, SAMBHAJI NAGAR, SATARA-415002 (MAHARASHTRA STATE) …RESPONDENT (BY SRI. SHIVASAI M. PATIL, ADVOCATE) THIS MFA IS FILED U/S.37 OF ARBITRATION AND CONCILIATION ACT, 1996, PRAYING TO SET ASIDE THE IMPUGNED ORDER DATED 11.03.2025 PASSED IN F.R ARBITRATION PETITION NO.12/2025 ON I.A.NO.2 BY PRL. DISTRICT AND SESSIONS JUDGE, BELAGAVI AND THEREBY SET ASIDE ARBITRAL AWARD DATED 17.01.2024 IN A. CASE (MSS) NO.001/2023 PASSED BY THE SOLE ARBITRATOR BY ALLOWING THIS APPEAL AND THEREBY REMAND FOR FRESH ARBITRAL PROCEEDINGS. Digitally signed by CHANDRASHEKAR LAXMAN KATTIMANI Location: High Court of Karnataka, Dharwad Bench - 2 - HC-KAR NC: 2025:KHC-D:9650-DB MFA No. 101452 of 2025 THIS APPEAL COMING ON FOR ORDERS THIS DAY, THE COURT DELIVERED THE FOLLOWING: CORAM: THE HON'BLE SMT. JUSTICE ANU SIVARAMAN AND THE HON'BLE MR. JUSTICE S.R. KRISHNA KUMAR ORAL JUDGMENT (PER: THE HON'BLE MR. JUSTICE S.R. KRISHNA KUMAR) This appeal by the petitioner in FR AP No.12/2025 is directed against the impugned order on I.A.No.2 dated 11.03.2025 whereby the Principal District and Sessions Judge, Belagavi (for short, ‘trial Court’) dismissed the application I.A.No.2 filed by the petitioner under Section 34(3) of the Arbitration and Conciliation Act, 1996 (for short, ‘said Act of 1996’) and consequently dismissed the petition filed by the appellant. 2. Heard learned counsel for the appellant, learned counsel for the respondent and perused the material on record. 3. A perusal of the material on record would indicate that the respondent instituted arbitration proceedings in Arbitration Case (MSS) No.1/2023 before the sole arbitrator against the appellant herein. The appellant remained ex-parte in the said arbitration proceedings and did not contest the same and the same culminated - 3 - HC-KAR NC: 2025:KHC-D:9650-DB MFA No. 101452 of 2025 in an arbitral award dated 17.01.2024 passed by the Arbitral Tribunal. Being aggrieved by the said arbitral award dated 17.01.2024 passed by the Arbitral Tribunal, the appellant filed a petition/application under Section 34 of the said Act of 1996 on 01.03.2025. Along with the said application/petition filed under Section 34 of the said Act of 1996, the appellant also filed an application – I.A.No.2 under Section 34(3) seeking condonation of delay of 275 days in filing the petition/application under Section 34 of the said Act of 1996. The said application and main petition having been opposed by the respondent, the trial Court proceeded to pass the impugned order declining to condone the delay on the ground that the Section 34 application/petition having been filed beyond the maximum statutory period of 120 days, the petitioner would not be entitled to prosecute the petition on merits and consequently refused to condone the delay and dismissed the application as well as the petition thereby confirming the arbitral award passed by the Arbitral Tribunal in favour of the respondent against the appellant who is before this Court by way of present appeal. - 4 - HC-KAR NC: 2025:KHC-D:9650-DB MFA No. 101452 of 2025 4. Learned counsel for the appellant reiterated the various contentions urged in the memorandum of appeal and referred to the material on record in order to point out that the appellant was not aware of the arbitration proceedings before the Arbitral Tribunal nor was aware of the arbitral award having been passed against him. It is also contended that the appellant obtained certified copy of the award only on 07.02.2025 and the application/petition filed by him under Section 34 of the said Act of 1996 on 01.03.2025 was well within the prescribed period of limitation of 90 days as contemplated under Section 34 (3) of the said Act of 1996. It was further submitted that without recording a finding as to whether the appellant received copy of the arbitral award after its pronouncement, the trial Court fell in error in coming to the erroneous conclusion that the application/petition filed by the appellant was beyond the prescribed period of 90 days as well as the condonable/extendable period of 30 days and consequently the impugned order passed by the trial Court deserves to be set aside and the matter remitted back to the trial Court for reconsideration of I.A.No.2 afresh in accordance with law. - 5 - HC-KAR NC: 2025:KHC-D:9650-DB MFA No. 101452 of 2025 5. Per contra while supporting the impugned order, the learned counsel for the respondent does not dispute that the trial Court did not record any finding as to whether the arbitral award was served upon the appellant for the purpose of computing the period of limitation. It is however submitted that the appellant was aware of the arbitration proceedings and deliberately/ intentionally did not participate in the same and was also conscious/aware of the arbitral award and did not exercise due diligence in challenging the same within the prescribed period of limitation or the extendable/condonable period of limitation and as such, there is no merit in the appeal and the same is liable to be dismissed. 6. A perusal of the material on record would indicate that it is an undisputed fact that the arbitral award was passed on 17.01.2024 and that the appellant obtained the certified copy of the same on 07.02.2025 and the filed the petition/application on 01.03.2025 under Section 34 of the said Act of 1996. Having noticed the aforesaid undisputed facts, it was incumbent upon the trial Court to record a finding as to whether the arbitral award was indeed served upon the - 6 - HC-KAR NC: 2025:KHC-D:9650-DB MFA No. 101452 of 2025 appellant or is he had received the same as required under Section 34(3) of the said Act of 1996, which reads as under: “34. Application for setting aside arbitral award. (1) Recourse to a Court against an arbitral award may be made only by an application for setting aside such award in accordance with sub-section (2) and sub-section (3). (2) An arbitral award may be set aside by the Court only if- (a) the party making the application [establishes on the basis of the record of the arbitral tribunal that:]- (i) a party was under some incapacity; or (ii) the arbitration agreement is not valid under the law to which the parties have subjected it or, failing any indication thereon, under the law for the time being in force; or (iii) the party making the application was not given proper notice of the appointment of an arbitrator or of the arbitral proceedings or was otherwise unable to present his case; or (iv) the arbitral award deals with a dispute not contemplated by or not falling within the terms of the submission to arbitration, or it - 7 - HC-KAR NC: 2025:KHC-D:9650-DB MFA No. 101452 of 2025 contains decisions on matters beyond the scope of the submission to arbitration: PROVIDED that, if the decisions on matters submitted to arbitration can be separated from those not so submitted, only that part of the arbitral award which contains decisions on matters not submitted to arbitration may be set aside; or (v) the composition of the arbitral Tribunal or the arbitral procedure was not in accordance with the agreement of the parties, unless such agreement was in conflict with a provision of this Part from which the parties cannot derogate, or, failing such agreement, was not in accordance with this Part; or (b) the Court finds that- (i) the subject-matter of the dispute is not capable of settlement by arbitration under the law for the time being in force, or (ii) the arbitral award is in conflict with the public policy of India. [Explanation I: For the avoidance of any doubt, it is clarified that an award is in conflict with the public policy of India, only if,- (i) the making of the award was induced or affected by fraud or corruption or was in violation of section 75 or section 81; or - 8 - HC-KAR NC: 2025:KHC-D:9650-DB MFA No. 101452 of 2025 (ii) it is in contravention with the fundamental policy of Indian law; or (iii) it is in conflict with the most basic notions of morality or justice. Explanation 2. - For the avoidance of doubt, the test as to whether there is a contravention with the fundamental policy of Indian law shall not entail a review on the merits of the dispute.] [(2A) An arbitral award arising out of arbitrations other than international commercial arbitrations, may also be set aside by the Court, if the Court finds that the award is vitiated by patent illegality appearing on the face of the award: PROVIDED that an award shall not be set aside merely on the ground of an erroneous application of the law or by re-appreciation of evidence.] (3) An application for setting aside may not be made after three months have elapsed from the date on which the party making that application had received the arbitral award or, if a request had been made under section 33, from the date on which that request had been disposed of by the arbitral Tribunal: PROVIDED that if the Court is satisfied that the applicant was prevented by sufficient cause from making the application within the said period of three months it - 9 - HC-KAR NC: 2025:KHC-D:9650-DB MFA No. 101452 of 2025 may entertain the application within a further period of thirty days, but not thereafter. (4) On receipt of an application under sub-section (1), the Court may, where it is appropriate and it is so requested by a party, adjourn the proceedings for a period of time determined by it in order to give the arbitral tribunal an opportunity to resume the arbitral proceedings or to take such other action as in the opinion of arbitral Tribunal will eliminate the grounds for setting aside the arbitral award. P(5) An application under this section shall be filed by a party only after issuing a prior notice to the other party and such application shall be accompanied by an affidavit by the applicant endorsing compliance with the said requirement. (6) An application under this section shall be disposed of expeditiously, and in any event, within a period of one year from the date on which the notice referred to in sub-section (5) is served upon the other party.” 7. As stated supra, before recording a finding as to whether application/petition filed by the appellant was barred by limitation or not, it was essential that the trial Court recorded a finding as to the actual date of receipt of the arbitral award by the appellant and thereafter proceed to decide as to - 10 - HC-KAR NC: 2025:KHC-D:9650-DB MFA No. 101452 of 2025 whether the application/petition filed by the petitioner was barred by limitation or not. In fact, the trial Court dismisses the application by holding that merely because the copy of the award was not furnished to the appellant immediately after passing of the same cannot be the ground to come to the conclusion that the petition filed under Section 34 was filed within the period of limitation. In our considered opinion, in the absence of any finding recorded by the trial Court as to the actual date of receipt/service of the arbitral award by the appellant, the finding recorded by the trial Court that I.A.No.2 cannot be allowed and that the petition was barred by limitation is contrary not only to the provision contained in Section 34(3), but also the material on record warranting interference by this Court in the present appeal. Under these circumstances, we are of the view that the impugned order passed by the trial Court dismissing I.A.No.2 as barred by limitation and consequently dismissing Section 34 petition/ application filed by the appellant deserves to be set aside and the matter remitted back to the trial Court for reconsideration of I.A.No.2 afresh in accordance with law. - 11 - HC-KAR NC: 2025:KHC-D:9650-DB MFA No. 101452 of 2025 8. In the result, we proceed to pass the following: ORDER i. Appeal is allowed. ii. Impugned order dated 11.03.2025 passed in FR AP No.12/2025 by the Principal District and Sessions Judge, Belagavi is set aside. iii. The matter is remitted back to the trial Court for reconsideration of I.A.No.2 afresh in accordance with law. iv. Appellant and respondent undertake to appear before the trial Court without awaiting further notice on 28.08.2025. The trial Court shall reconsider I.A.No.2 and provide sufficient and reasonable opportunity to both sides and dispose of I.A.No.2 and thereafter proceed further in accordance with law. v. All rival contentions in all aspects of the matter are kept open and no opinion is expressed on the merits/demerits of the rival contentions. vi. The entire amount deposited by the appellant shall be transmitted to the trial Court. - 12 - HC-KAR NC: 2025:KHC-D:9650-DB MFA No. 101452 of 2025 vii. It is further directed that till reconsideration of I.A.No.2 by the trial Court and its disposal, the * interim order passed in the present appeal shall continue is remained in force and operate between the parties. viii. Parties are directed to co-operate with the trial Court for expeditious disposal of I.A.No.2 without seeking unnecessary adjournments under any circumstances whatsoever. ix. In view of disposal of appeal, pending I.As. do not survive and the same are accordingly disposed off. Sd/- (ANU SIVARAMAN) JUDGE Sd/- (S.R. KRISHNA KUMAR) JUDGE CLK CT:ANB List No.: 1 Sl No.: 10 * Corrected Vide Chamber order Dated 11.08.2025 Sd/- (SRKKJ)