- 1 - HC-KAR NC: 2026:KHC:13909 WP No. 29966 of 2024 IN THE HIGH COURT OF KARNATAKA AT BENGALURU DATED THIS THE 6TH DAY OF MARCH, 2026 BEFORE THE HON'BLE MR. JUSTICE SACHIN SHANKAR MAGADUM WRIT PETITION NO. 29966 OF 2024 (GM-RES) BETWEEN: 1. THE PROJECT DIRECTOR NATIONAL HIGHWAYS AUTHORITY OF INDIA (MINISTRY OF ROAD TRANSPORT AND HIGHWAYS) PROJECT IMPLEMENTATION UNIT HASSAN, NO. 44/1, A1, 1ST MAIN KUVEMPU ROAD, INDIRA NAGARA SATHYAMANGALA LAYOUT HASSAN - 573 201. 2. SPECIAL LAND ACQUISITION OFFICER AND COMPETENT AUTHORITY NH-75, HASSAN - BANTWALA SECTION NO. HIG-64, DTDC COURIER OFFICE BUILDING, 1ST FLOOR, KHB COLONY CHENNAPATTANA OPPOSITE KSRTC NEW BUS STAND, HASSAN - 573 201. …PETITIONERS (BY SRI. VASANTH S. KOPPAR SRI. HANUMANTHA REDDY G.,ADVOCATE) AND: 1. K.K. LOKESH S/O KARIGOWDA AGED ABOUT 68 YEARS RESIDENT AT MAVANOOR VILLAGE KASABA HOBLI, ALUR TALUK HASSAN DISTRICT-573 213. Digitally signed by AL BHAGYA Location: HIGH COURT OF KARNATAKA - 2 - HC-KAR NC: 2026:KHC:13909 WP No. 29966 of 2024 2. THE DEPUTY COMMISSIONER AND ARBITRATOR, HASSAN DISTRICT - 573 201. …RESPONDENTS (BY SRI. RAJESH MAHALE, SENIOR ADVOCATE FOR SRI. N.N. DAMODAR, ADVOCATE FOR R1; SRI. ADITYA DIWAKARA, AGA FOR R2) THIS W.P. IS FILED UNDER ARTICLE 227 OF THE CONSTITUTION OF INDIA, PRAYING TO QUASH AND SET ASIDE THE ORDER PASSED BY THE PRINCIPAL DISTRICT AND SESSIONS JUDGE, HASSAN IN I.A. NO. 2/2023 IN ARBITRATION PETITION NO. 36/2023 DATED 25.04.2024 VIDE ANNX-A. THIS PETITION, COMING ON FOR PRELIMINARY HEARING 'B' GROUP, THIS DAY, ORDER WAS MADE THEREIN AS UNDER: CORAM: HON'BLE MR. JUSTICE SACHIN SHANKAR MAGADUM ORAL ORDER Petitioners are assailing the order of the Court below passed on I.A.No.2 filed under Section 36(2) and Section 151 of Code of Civil Procedure, wherein the prayer to stay the award dated 17.03.2023 passed by respondent No.2 is rejected on the ground that the application filed under Section 34 of the Arbitration and Conciliation Act, 1996 (for short 'the Act, 1996') is barred by limitation as it is filed beyond 120 days. - 3 - HC-KAR NC: 2026:KHC:13909 WP No. 29966 of 2024 2. Learned counsel appearing for the petitioners, reiterating the grounds urged in the writ petition, vehemently contends that the Court below ought to have first considered and decided the application filed under Section 34(3) of the Arbitration and Conciliation Act, 1996 seeking condonation of delay, before adverting to the stay application filed by the petitioners under Section 36(2) of the Act, 1996. He would submit that the stay application has been rejected on the premise that the application filed under Section 34 is barred by limitation, as it was presented beyond the outer limit of 120 days. 3. Referring to Section 34(3) of the Act, 1996, learned counsel would contend that the Court below was required to determine the question of limitation with reference to the date on which the arbitral award was served on the petitioners. According to him, without undertaking any such examination and without first deciding the application seeking condonation of delay, the Court below proceeded to consider the stay application - 4 - HC-KAR NC: 2026:KHC:13909 WP No. 29966 of 2024 and rejected the same on the ground that Section 34 application itself was barred by limitation. 4. Per contra, learned Senior Counsel appearing for respondent No.1 would submit that the petitioners never insisted upon or pressed for hearing of the delay condonation application before the Court below. Having suffered an adverse order on I.A.No.2, the petitioners cannot now be permitted to approbate and reprobate by contending that the Court below ought not to have examined the question of limitation while considering the application filed under Section 36(2) seeking stay of the award. 5. Learned Additional Government Advocate appearing for respondent No.2 has also supported the impugned order and submits that the writ petition does not warrant interference by this Court. 6. Having heard the learned counsel appearing for the parties and having perused the material on record, the - 5 - HC-KAR NC: 2026:KHC:13909 WP No. 29966 of 2024 short question that arises for consideration is whether the Court below committed an error in rejecting the stay application filed in I.A.No.2 under Section 36(2) of the Arbitration and Conciliation Act, 1996 on the ground that the application filed under Section 34 challenging the award is barred by limitation. 7. The petitioners, calling in question the arbitral award dated 17.03.2023, have filed an application under Section 34(1) of the Act. Along with the said application, two interlocutory applications were filed, one seeking condonation of delay and another seeking stay of the operation of the award dated 17.03.2023. However, it is rather surprising to note that the Court below, without first adjudicating the application seeking condonation of delay, proceeded to consider the stay application filed under Section 36(2) and while rejecting the same adverted to the question of limitation, ultimately holding that the application filed under Section 34(1) itself is barred by limitation. - 6 - HC-KAR NC: 2026:KHC:13909 WP No. 29966 of 2024 8. If the aforesaid significant aspects are taken into consideration, this Court is of the considered view that the procedure adopted by the Court below suffers from a fundamental procedural infirmity. It is a settled principle of law, consistently reiterated by the Hon’ble Apex Court as well as by this Court, that a belated appeal, petition or application does not acquire legal existence unless the delay in filing the same is first condoned by the Court. In other words, unless the Court exercises its discretion and condones the delay, the proceedings instituted beyond the prescribed period of limitation cannot be treated as validly instituted in the eye of law. 9. In the present case, the Court below, without first deciding the application seeking condonation of delay, permitted the parties to advance arguments on the stay application filed under Section 36(2) of the Arbitration and Conciliation Act, 1996. Such a course adopted by the Court below is clearly impermissible. The Court was required, as a matter of procedural discipline, to first examine the - 7 - HC-KAR NC: 2026:KHC:13909 WP No. 29966 of 2024 application seeking condonation of delay and record its finding on the question of limitation. Entertaining the stay application without adjudicating the delay application and thereafter rejecting the stay primarily on the ground that the application under Section 34 is barred by limitation clearly demonstrates that the procedure adopted by the Court below is legally unsustainable and fundamentally flawed. 10. A plain reading of sub-section (3) of Section 34 of the Arbitration and Conciliation Act, 1996 would indicate that the limitation for filing an application to set aside the arbitral award begins to run from the date on which the party making the application receives the arbitral award. The statutory scheme therefore mandates that the Court must necessarily examine the factual aspect relating to the date of receipt or service of the arbitral award while determining whether the application under Section 34 is within the prescribed period of limitation or falls within the extended period contemplated under the proviso to - 8 - HC-KAR NC: 2026:KHC:13909 WP No. 29966 of 2024 Section 34(3). This determination is not a mere formality but a jurisdictional requirement, since the Court’s power to entertain the application beyond the prescribed period is circumscribed by the outer limit stipulated in the proviso. Therefore, before expressing any view on the maintainability of the application under Section 34 or on any interlocutory relief sought therein, the Court below was required to adjudicate upon the application filed under Section 34(3) seeking condonation of delay after affording both parties an opportunity of hearing. 11. This Court is also informed by the learned counsel appearing for both sides that pursuant to the interim directions issued by this Court during the pendency of the present writ petition, the petitioners have deposited the arbitral amount, excluding the interest component. In view of the said deposit, the interest of the respondent- award holder stands substantially safeguarded for the present. Having regard to the procedural irregularity noticed by this Court and also taking into account the fact - 9 - HC-KAR NC: 2026:KHC:13909 WP No. 29966 of 2024 that the monetary interest of the respondent is adequately protected by virtue of the deposit made before this Court, this Court is of the opinion that the ends of justice would be met if the matter is remitted to the Court below. Accordingly, the Court below is required to first consider and decide the application seeking condonation of delay filed under Section 34(3) of the Act, 1996, after affording reasonable opportunity to both parties. Only upon adjudication of the said application shall the Court below proceed to consider the application under Section 34 on merits and pass appropriate orders in accordance with law. 12. With these observations, this Court proceeds to pass the following: ORDER (i) The writ petition is allowed in part; (ii) The impugned order dated 25.04.2024 passed in Arbitration Petition No.36/2023 by the - 10 - HC-KAR NC: 2026:KHC:13909 WP No. 29966 of 2024 Principal District and Sessions Judge, Hassan, vide Annexure-A is hereby set aside; (iii) The matter is remitted to the Court below with a direction to first consider and decide the application filed by the petitioners seeking condonation of delay under Section 34(3) of the Arbitration and Conciliation Act, 1996, after affording an opportunity of hearing to both parties. Only upon adjudication of the said delay application shall the Court below proceed to consider the application filed under Section 34 on its merits and pass appropriate orders in accordance with law; (iv) Since the parties are represented by their respective learned counsel, they are directed to appear before the Court below on 01.04.2026 without expecting any further notice; (v) The amount deposited before this Court pursuant to the interim directions shall be transmitted to the Principal District and Sessions Judge, Hassan, to be kept subject to further orders to be passed in Arbitration Petition No.36/2023; - 11 - HC-KAR NC: 2026:KHC:13909 WP No. 29966 of 2024 (vi) All contentions of the parties are kept open. Sd/- (SACHIN SHANKAR MAGADUM) JUDGE CA List No.: 2 Sl No.: 24