- 1 - HC-KAR NC: 2026:KHC:35722 MFA No. 5216 of 2020 IN THE HIGH COURT OF KARNATAKA AT BENGALURU DATED THIS THE 14TH DAY OF JULY, 2026 BEFORE THE HON'BLE MR. JUSTICE PRADEEP SINGH YERUR MISCELLANEOUS FIRST APPEAL NO. 5216 OF 2020 (AA) BETWEEN: SRI GANGA HANUMAIAH S/O. CHIKKA HANUMAIAH AGED ABOUT 47 YEARS R/O. KUDLUR VILLAGE MAGADI TALUK RAMANAGARA DISTRICT - 562 127. …APPELLANT (BY SRI CHANDRASHEKAR L., ADVOCATE) AND: 1. NATIONAL HIGHWAYS AUTHORITY OF INDIA SY.NO.13, NAGASANDRA VILLAGE 14TH K.M.FROM BANGALORE-TUMKURU ROAD BANGALORE - 560 073 REPT. BY PROJECT DIRECTOR NHAI, PIU, BANGALORE. 2. THE DEPUTY COMMISSIONER AND RAMANAGARA DISTRICT RAMANAGARA. 3. THE SPECIAL LAND ACQUISITION OFFICER AND COMPETENT AUTHORITY NH-48, NELAMANGALA HASSAN SECTION KUNIGAL, TUMKUR DISTRICT. …RESPONDENTS (BY SRI PRASAD K.R. RAO, ADVOCATE FOR R1 AND R3; SRI B.J. ESHWARAPPA, AGA FOR R2) Digitally signed by GAVRIBIDANUR SUBRAMANYA GUPTA SREENATH Location: HIGH COURT OF KARNATAKA - 2 - HC-KAR NC: 2026:KHC:35722 MFA No. 5216 of 2020 THIS MFA IS FILED UNDER SECTION 37(1)(C) OF ARBITRATION AND CONCILIATION ACT, PRAYING TO SET ASIDE THE JUDGMENT AND AWARD DATED 04.06.2019 PASSED IN ARBITRATION SUIT NO.23/2016 BY THE PRINCIPAL DISTRICT AND SESSIONS JUGE, RAMANAGARA. THIS APPEAL, COMING ON FOR ADMISSION, THIS DAY, JUDGMENT WAS DELIVERED THEREIN AS UNDER: CORAM: HON'BLE MR. JUSTICE PRADEEP SINGH YERUR ORAL JUDGMENT This appeal is preferred by the appellant, who was defendant No.1 before the District Court, challenging the judgment and award dated 04.06.2019 passed in Arbitration Suit No.23/2016 by the Principal District and Sessions Judge, Ramanagara (for short, 'District Court'). 2. Parties shall be referred to as per their ranking before the District Court. 3. The facts of the case are as follows: The plaintiff is the National Highways Authority of India. The Central Government, for the purpose of widening, maintenance, management and operation of National Highway No.48, namely the Nelamangala–Hassan - 3 - HC-KAR NC: 2026:KHC:35722 MFA No. 5216 of 2020 Section, issued a preliminary notification dated 17.11.2006 under Section 3-A(1) of the National Highways Act, 1956 (for short, ‘NH Act’), declaring its intention to acquire the lands specified in the schedule thereto. Thereafter, a final notification dated 26.10.2007 was issued under Section 3- D of NH Act, declaring that the lands specified in the schedule to the said notification shall vest absolutely in the Central Government free from all encumbrances. Among the lands so acquired was land bearing survey No.30/3, measuring 911 square meters, situated at Kudlur Village. 3.1 Thereafter, defendant No.3, after considering the sale statistics obtained from the office of the Sub-Registrar for the preceding three years and the guidance value prevailing as on the date of issuance of the preliminary notification, determined the market value of the acquired lands at ₹2,15,560/- per acre for dry agricultural lands, ₹6,62,080/- per acre for wet agricultural lands and ₹2,69,450/- per acre for industrial lands. Insofar as the land belonging to defendant No.1 is concerned, - 4 - HC-KAR NC: 2026:KHC:35722 MFA No. 5216 of 2020 compensation for the acquisition of 911 square meters in survey No.30/3 was determined at ₹48,283/- towards the value of the land and ₹46,748/- towards the value of the trees, aggregating to a total compensation of ₹96,031/-. 3.2 Being dissatisfied with the award passed by defendant No.3, defendant No.1 preferred an application before defendant No.2-Deputy Commissioner and Arbitrator, Ramanagara district, seeking enhancement of compensation. By the impugned award, defendant No.2 enhanced the compensation to ₹10,00,000/- per acre and also enhanced the compensation awarded towards the trees from ₹46,748/- to ₹2,25,000/-. 3.3 Aggrieved by the said arbitral award, the plaintiff has instituted the suit under Section 34(2) of the Arbitration and Conciliation Act, 1996 (for short, 'the Act'), contending, inter alia, that defendant No.2 failed to properly appreciate the facts and material available on - 5 - HC-KAR NC: 2026:KHC:35722 MFA No. 5216 of 2020 record while enhancing the compensation and that the arbitral award is contrary to law and liable to be set aside. 3.4 The plaintiff contended that the arbitral award passed by defendant No.2 is perverse, illegal, capricious, arbitrary and contrary to the fundamental principles governing the Arbitration and Conciliation Act, 1996. It was further contended that defendant No.2 has committed a gross error in failing to adhere to the mandate of Section 3-G(7)(a) of NH Act, while determining the compensation payable to defendant No.1. On these and other grounds urged in the suit, the plaintiff sought to set aside the award passed by defendant No.2-Deputy Commissioner and Arbitrator, Ramangara district. Upon consideration of the pleadings and the material placed on record, the suit came to be decreed by judgment and decree dated 04.06.2019. 3.5 It is stated that, along with the suit, the plaintiff filed I.A.No.1 under Section 5 of the Limitation Act, 1963, - 6 - HC-KAR NC: 2026:KHC:35722 MFA No. 5216 of 2020 seeking condonation of delay in filing the suit. The plaintiff contended before the District Court that, owing to an oversight, the arbitral award was not challenged within the prescribed period of limitation. It was averred that a large number of arbitral awards had been passed during the relevant period and that the plaintiff had challenged all such awards. However, the present arbitral award could not be challenged on account of bona fide reasons, as the concerned Authorities had inadvertently lost sight of and failed to keep track of the award. Therefore, it was contended that the delay was purely due to administrative and organisational in nature, it was neither intentional nor deliberate and had occurred due to bona fide reasons. On the said grounds, the plaintiff sought condonation of delay in filing the suit. 3.6 The said delay application was opposed by defendant No.1 by filing objections, contending that the suit was hopelessly barred by limitation. It was contended that the plaintiff had failed to challenge the arbitral award - 7 - HC-KAR NC: 2026:KHC:35722 MFA No. 5216 of 2020 within the period prescribed under law and had not furnished any satisfactory or sufficient explanation for the inordinate delay in filing the suit. Accordingly, defendant No.1 sought dismissal of both I.A.No.1 filed under Section 5 of the Limitation Act, 1963 and the suit itself. Defendant Nos.2 and 3 remained ex parte before the trial Court. 3.7 On the basis of the pleadings and rival contentions made by both parties, the trial Court framed the following points for consideration: "1. Whether the Plaintiff’s suit is barred by limitation? 2. Whether the impugned Award passed in No.LAQ.NH-48/CA/CR-4/2008-09 dated 29.07.2010 is liable to be set aside? 3. To what order?" 3.8 Upon consideration of the oral and documentary evidence placed on record and the submissions made by the parties, the District Court allowed I.A.No.1 filed under Section 5 of the Limitation Act, 1963 and condoned the delay in filing the suit. Thereafter, by the impugned - 8 - HC-KAR NC: 2026:KHC:35722 MFA No. 5216 of 2020 judgment and decree, the District Court decreed the suit filed by the plaintiff and set aside the arbitral award dated 29.07.2010 passed in Case No.LAQ/NH-48/CA/CR-4/2008- 09 by defendant No.2–Deputy Commissioner and Arbitrator, Ramanagara district. Consequently, the matter was remitted to defendant No.2–Deputy Commissioner and Arbitrator, Ramanagara district, for fresh disposal in accordance with law. It is this judgment and decree passed by the District Court that is called in question in the present appeal by defendant No.1, who is the appellant before this Court. 4. Learned counsel for appellant–defendant No.1 vehemently contended that the impugned judgment and decree passed by the District Court is illegal, arbitrary and unsustainable in law and therefore, liable to be set aside. It is further contended that the District Court has failed to consider the most crucial aspect, namely, that the inordinate delay in filing the suit could not have been condoned in the facts and circumstances of the case. - 9 - HC-KAR NC: 2026:KHC:35722 MFA No. 5216 of 2020 According to the learned counsel, the District Court has committed a serious error in allowing I.A.No.1 filed under Section 5 of the Limitation Act, 1963 and condoning the delay without there being sufficient cause. 4.1 It is further contended that the arbitral award was passed on 29.07.2010, whereas the arbitration suit came to be instituted in the year 2016. Thus, there was a delay of more than six years in challenging the arbitral award before the District Court. It was submitted that such an inordinate and unexplained delay could not have been condoned in the absence of sufficient cause and that the District Court has committed a grave error and perversity in entertaining the suit by allowing the application for condonation of delay. 4.2 It is further contended that, in terms of Section 34(3) of the Act, 1996, an application for setting aside an arbitral award is required to be filed within a period of three months from the date of receipt of the arbitral - 10 - HC-KAR NC: 2026:KHC:35722 MFA No. 5216 of 2020 award. The proviso to Section 34(3) of the Act, empowers the Court to condone the delay only upto a further period of thirty days, upon the applicant showing sufficient cause for not making the application within the prescribed period, but not thereafter. In the present case, the challenge to the arbitral award has been instituted beyond the maximum period prescribed under Section 34(3) of the Act and therefore, the proceedings are clearly barred by limitation. 4.3 It is further contended that there is a delay of more than five years and five months in preferring the application before the District Court challenging the arbitral award. It is submitted that such an inordinate delay is far beyond the period of limitation prescribed under Section 34(3) of the Act. Therefore, by no stretch of imagination could the District Court have condoned the delay beyond the prescribed period of three months and the additional period of thirty days contemplated under the proviso to Section 34(3) of the Act. Consequently, it is - 11 - HC-KAR NC: 2026:KHC:35722 MFA No. 5216 of 2020 contended that the District Court lacked the jurisdiction to entertain the application and pass the impugned judgment by setting aside the arbitral award. 4.4 It is further contended that the Hon'ble Apex Court, in a catena of decisions, particularly in the State of Himachal Pradesh and Another v. Himachal Techno Engineers and Another reported in (2010) 12 Supreme Court Cases 210, has categorically held that the limitation prescribed under Section 34(3) of the Act, is mandatory in nature. It has been held that the Court may condone the delay only upto a further period of thirty days, upon the applicant showing sufficient cause and not thereafter. Therefore, once the maximum period of three months and the additional thirty days has expired, the Court has no jurisdiction to entertain an application under Section 34 of the Act. In the present case, the challenge to the arbitral award having been instituted after a delay of more than five years and five months, the District Court - 12 - HC-KAR NC: 2026:KHC:35722 MFA No. 5216 of 2020 could not have entertained the application or condoned such an inordinate delay. 4.5 It is further contended that the findings recorded by the Special Land Acquisition Officer-cum-Competent Authority (SLAO & CA) are based on the material available on record and do not suffer from any illegality, perversity or infirmity. It is submitted that there was no justification for the District Court to interfere with the arbitral award and enhance the compensation. Accordingly, he prays that the impugned judgment and award be set aside and that the present appeal be allowed. 5. Per contra, learned counsel for respondent-plaintiff vehemently contends that the impugned judgment and award passed by the District Court does not suffer from any illegality or perversity warranting interference by this Court. It is submitted that the District Court, upon considering the entire material on record and the grounds urged in the application challenging the arbitral award, has - 13 - HC-KAR NC: 2026:KHC:35722 MFA No. 5216 of 2020 rightly come to the conclusion that sufficient cause was made out to entertain the proceedings. Accordingly, the District Court has set aside the arbitral award dated 29.07.2010 passed by defendant No.2-Deputy Commissioner and Arbitrator, Ramanagara district and remitted the matter to defendant No.2-Deputy Commissioner and Arbitrator, Ramanagara district, for fresh disposal in accordance with law. Therefore, it is contended that the impugned judgment and award is well- reasoned, legal and proper and does not call for any interference by this Court. Hence, he seeks dismissal of the appeal. 6. Having heard learned counsel for appellant- defendant No.1 and learned counsel for respondent- plaintiff, the points that arises for consideration are as follows: "1. Whether the impugned judgment and award passed in the Arbitration Suit is sustainable in law? - 14 - HC-KAR NC: 2026:KHC:35722 MFA No. 5216 of 2020 2. Whether the impugned judgment and award calls for interference by this Court?" 7. Having regard to the factual background of the case and the rival submissions advanced by learned counsels for parties, it is apparent that there is no dispute with regard to the fact that defendant No.2, acting as the Competent Authority and Arbitrator, passed an award in Case No.LAQ.NH-48/CA/CR-4/2008-09 on 29.07.2010. It is also not in dispute that while challenging the aforesaid arbitral award, the plaintiff filed a suit under Section 34(2) of the Act, after a delay of more than five years and five months. Along with the said suit, an application seeking condonation of delay was also filed. The said application was vehemently opposed by the appellant-defendant No.1. 8. It is seen from the record that, on the basis of the rival pleadings, the District Court framed an issue as to whether the suit was barred by limitation. Despite framing of such an issue and notwithstanding the admitted delay of more than five years and five months in instituting the - 15 - HC-KAR NC: 2026:KHC:35722 MFA No. 5216 of 2020 suit, the District Court proceeded to condone the delay, set aside the arbitral award and remitted the matter to defendant No.2-Deputy Commissioner and Arbitrator, Ramanagara district, for fresh disposal in accordance with law. It is in the above factual background that the legality and correctness of the impugned judgment and award fall for consideration before this Court. 9. It is relevant to extract the provisions of Section 34(3) of the Act, along with the proviso thereto, which reads as under: "Section 34(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 may entertain the application within a further period of thirty days, but not thereafter." - 16 - HC-KAR NC: 2026:KHC:35722 MFA No. 5216 of 2020 10. A plain reading of Section 34(3) of the Act, along with the proviso thereto, leaves no room for ambiguity. The provision contemplates an application for setting aside an arbitral award. It expressly mandates that no such application shall be entertained if it is made after the expiry of three months from the date on which the party making the application had received the arbitral award. The proviso to Section 34(3) of the Act, further provides 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 may entertain the application within a further period of thirty days, but not thereafter. 11. On a careful reading of Section 34(3) of the Act and the proviso thereto, it is abundantly clear that any party intending to challenge an arbitral award is required to file an application within a period of three months from the date of receipt of the arbitral award. The statutory mandate is explicit that such an application cannot be - 17 - HC-KAR NC: 2026:KHC:35722 MFA No. 5216 of 2020 entertained beyond the said period, except to the limited extent permitted under the proviso. If a party is unable to file an application within the prescribed period of three months from the date of receipt of the arbitral award, but is able to satisfy the Court that it was prevented by sufficient cause from making the application within the said period, the Court may, in exercise of the limited discretion conferred under the proviso to Section 34(3) of the Act, entertain the application within a further period of thirty days. Upon being satisfied that the applicant was prevented by sufficient cause from filing the application within the prescribed period of three months, the Court may condone the delay and entertain the application within a further period of thirty days. However, the proviso to Section 34(3) categorically stipulates "but not thereafter." 12. Under the circumstances, no discretion or leeway is vested in the Court to entertain an application filed beyond the period of three months from the date of - 18 - HC-KAR NC: 2026:KHC:35722 MFA No. 5216 of 2020 receipt of the arbitral award and the further grace period of thirty days contemplated under the proviso to Section 34(3) of the Act, even if sufficient cause is shown. The jurisdiction of the Court to condone the delay is confined only to the additional period of thirty days. Once the aggregate period of three months and the further period of thirty days expires, the Court becomes functus officio insofar as entertaining an application under Section 34 of the Act, is concerned. Consequently, an application instituted beyond the said period for setting aside the arbitral award is barred by limitation and is not maintainable in law. 13. In the present case, the proceedings under Section 34(2) of the Act, came to be instituted after a delay of nearly six years from the date of the arbitral award. Such an inordinate delay is ex facie beyond the period of limitation prescribed under Section 34(3) of the Act. Consequently, the application was, per se, not - 19 - HC-KAR NC: 2026:KHC:35722 MFA No. 5216 of 2020 maintainable and ought to have been rejected at the threshold itself on the ground of limitation. 14. It is relevant to extract para-5 of the judgment in State of Himachal Pradesh and Another stated supra, which reads as follows: "5. Having regard to the proviso to Section 34(3) of the Act, the provisions of Section 5 of the Limitation Act, 1963 will not apply in regard to petitions under Section 34 of the Act. While Section 5 of the Limitation Act does not place any outer limit in regard to the period of delay that could be condoned, the proviso to sub-section (3) of Section 34 of the Act places a limit on the period of condonable delay by using the words "may entertain the application within a further period of thirty days, but not thereafter". Therefore, if a petition is filed beyond the prescribed period of three months, the court has the discretion to condone the delay only to an extent of thirty days, provided sufficient cause is shown. Where a petition is filed beyond three months plus thirty days, even if sufficient cause is made out, the delay cannot be condoned." - 20 - HC-KAR NC: 2026:KHC:35722 MFA No. 5216 of 2020 15. It is also relevant to extract para-8 of the judgment in the case of State of West Bengal v/s Rajpath Contractors and Engineers Limited reported in (2024) 7 Supreme Court Cases 257, which reads as follows: "8. As per Section 12(1) of the Limitation Act, the day from which the limitation period is to be reckoned must be excluded. In this case, the period of limitation for filing a petition under Section 34 will have to be reckoned from 30-6-2022, when the appellants received the award. In view of Section 12(1) of the Limitation Act, 30-6-2022 will have to be excluded while computing the limitation period. Thus, in effect, the period of limitation, in the facts of the case, started running on 1-7-2022. The period of limitation is of three months and not ninety days. Therefore, from the starting point of 1-7-2022, the last day of the period of three months would be 30-9-2022. As noted earlier, the pooja vacation stated on 1-10-2022." 16. Under these circumstances, it is apparently clear that, without any ambiguity, there is no scope for invoking or entertaining an application under Section 5 of the - 21 - HC-KAR NC: 2026:KHC:35722 MFA No. 5216 of 2020 Limitation Act, 1963, for condonation of delay, beyond the period expressly prescribed under Section 34(3) of Act thereof. The District Court has committed an illegality and material irregularity in misconstruing the scope and ambit of Section 34(3) of the Act. The impugned judgment and award discloses a failure to properly appreciate the statutory bar contained therein and reflects non- application of judicial mind to the mandatory provisions governing limitation. Consequently, the District Court erroneously entertained the arbitration suit, condoned the delay, set aside the arbitral award and remitted the matter to defendant No.2-Deputy Commissioner and Arbitrator, Ramangara district, for fresh disposal, despite the proceedings being ex facie barred by limitation. 17. Accordingly, I pass the following: ORDER i. The appeal is allowed; ii. The impugned judgment and award dated 04.06.2019 passed in Arbitration Suit No.23/2016 by the Principal District and - 22 - HC-KAR NC: 2026:KHC:35722 MFA No. 5216 of 2020 Sessions Judge, Ramanagara, is hereby set aside as the suit is barred by the law of limitation. iii. Consequently, the arbitral award dated 29.07.2010 passed in LAQ.NH-48/CA/CR- 4/2008-09 by defendant No.2-Deputy Commissioner and Arbitrator, Ramangara District, is affirmed. Sd/- (PRADEEP SINGH YERUR) JUDGE CPN List No.: 1 Sl No.: 20