Mr Maaz Ahmed Sharief vs M/S Puruvankara Projects Ltd
2022 Latest Caselaw 9979 Kant

     IN THE HIGH COURT OF KARNATAKA AT BENGALURU
         DATED THIS THE 30TH DAY OF JUNE, 2022
                        PRESENT
       THE HON'BLE MR. JUSTICE P.S.DINESH KUMAR

                           AND
         THE HON'BLE MR. JUSTICE C.M. POONACHA
                   COMAP NO.251/2021

BETWEEN

MR. MAAZ AHMED SHARIEF
S/O AZIZ SHARIEF
R/AT NO. 548, 8TH MAIN
4TH BLOCK, KORAMANGALA
BENGALURU -560034
                                              ...APPELLANT
(BY SRI H.RAMACHANDRA, ADVOCATE)

AND

1.     M/S PURUVANKARA PROJECTS LTD.,
       (PRESENTLY KNOWN AS
       M/S PURUVANKARA LTD.)
       A COMPANY INCORPORATED UNDER
       THE PROVISIONS OF COMPANIES ACT 1956
       HAVING ITS REGISTERED OFFICE
       AT NO. 130/1, ULSOOR ROAD,
       BENGALURU -560042.

2.     MR. RIYAZ AHMED SHARIEF
       S/O AZIZ SHARIEF
       AGED ABOUT YEARS
       R/AT NO. 85, TAREEN BLOCK
       3RD BLOCK, JAYANAGAR
       BENGALURU -560011
                                        ...RESPONDENTS
(BY SRI SANJAY NAIR, ADVOCATE FOR R1)
                               2




      THIS COMAP IS FILED UNDER SECTION 13(1-A) OF THE
COMMERCIAL COURTS ACT, 2015, PRAYING TO SET ASIDE THE
IMPUGNED ORDER PASSED IN COMMERCIAL A.S.NO.149/2018
PASSED BY THE HON'BLE LXXXVII ADDL. CITY CIVIL AND
SESSIONS JUDGE (EXCLUSIVE DEDICATED COMMERCIAL
COURT) AT BENGALURU (CCH-88) DATED 01.07.2021
CONSEQUENTLY    AWARD     IN  CMP   NO.83/2006   DATED
17.12.2012 PASSED BY THE SOLE ARBITRATOR IS ALSO LIABLE
TO BE SET ASIDE AND TO REMAND THE CASE TO THE HON'BLE
SOLE ARBITRATOR.

      THIS COMAP COMING ON FOR ADMISSION ON
16.06.2022 AND HAVING BEEN HEARD AND RESERVED FOR
JUDGMENT, THIS DAY    POONACHA J., PRONOUNCED THE
FOLLOWING:

                        JUDGMENT

This Appeal is filed challenging the judgment dated

01.07.2021 passed in Commercial AS No.149/2018 filed

under Section 34 of the Arbitration and Conciliation Act,

1996 (hereinafter referred to as the 'Act' for short) as well

as the Arbitral Award dated 17.12.2012 passed in CMP

No.83/2006.

2. The Appellant herein was arrayed as

Respondent No.2 before the Sole Arbitrator and he is

Plaintiff No.2 before the Commercial Court. Respondent

No.1 herein was Claimant before the Sole Arbitrator and

Defendant/Respondent before the Commercial Court.

Respondent No.2 herein was arrayed as Respondent No.1

before the Sole Arbitrator and Plaintiff No.1 before the

Commercial Court. It is also pertinent to note herein that

Commercial AS No.149/2018 filed before the Commercial

Court was filed by the Appellant herein as well as

Respondent No.2, whereas the present appeal has been

filed only by the Appellant who was Plaintiff No.2 before

the Commercial Court. Appellant is represented as the

GPA holder of the Respondent No.2.

3. For the sake of convenience, the parties will be

referred to as per their ranking before the Sole Arbitrator.

4. The Claimant filed the claim petition before the

Sole Arbitrator seeking for specific performance of the

Agreement dated 24.02.2003 and for the other reliefs.

The Sole Arbitrator vide Award dated 17.12.2012 ordered

that the Claimant was entitled for specific performance of

the Agreement dated 24.02.2003 and Sale Deed was

required to be executed by the Respondents in favour of

the Claimant, as also to deliver original title deeds and put

the Claimant in possession on receipt of the balance sale

consideration from the Claimant at the rate of Rs.310 per

sq.ft.

5. The Respondents being aggrieved by the

Arbitral Award, filed Commercial AS No.149/2018. The

Claimant contested the said proceedings. The Commercial

Court, after giving an opportunity to all the parties, vide its

judgment dated 01.07.2021, dismissed the application

filed by Respondents. Hence this appeal under Section 37

of the Act.

6. Learned counsel for the Appellant, in support

of this Appeal, urged the following contentions:

(a) that the document that was sought to be relied

upon by the Sole Arbitrator was insufficiently stamped and

hence, the same could not be relied upon by the Sole

Arbitrator;

(b) that the Appellant did not have sufficient

opportunity to put forth his case before the Sole Arbitrator;

(c) that the MOU dated 24.02.2003 was not a

registered document and having regard to Section

17(1)(a) of the Indian Registration Act, 1908 (hereinafter

referred to as "the Act, 1908" for short), the document

can be looked into only for collateral purposes and the Sole

Arbitrator gravely erred in considering the said document

in its entirety and ordering specific performance of the

same; and

(d) that the Commercial Court erred in not

exercising its jurisdiction under Section 34 of the Act in

interfering with the Award made by the Sole Arbitrator.

7. Per contra, the learned counsel for Respondent

No.1 contended:

(a) that the document which the Appellant is

alleging to be insufficiently stamped was not produced

either before the Sole Arbitrator or before the Commercial

Court or in this Appeal in a manner known to law and

hence, it is not open to the Appellant to put forth the said

contention regarding insufficiency of stamping in the

present Appeal for the first time;

(b) that the contention regarding insufficiency of

stamp is put forth before this Court for the first time and

the said contention was not put forth either before the Sole

Arbitrator or before the Commercial Court. Under the

circumstances, the Appellant is not entitled to put forth the

said contention regarding insufficiency of stamping in the

present Appeal for the first time;

(c) notwithstanding the fact that the contention

regarding insufficiency of stamping of the document is not

liable to be considered by this Court, no possession was

handed over under the said document, the stamp duty

paid is sufficient and the said document is not a

compulsorily registerable document as contemplated under

Section 17(1)(a) of the Indian Registration Act, 1908;

(d) that the Application filed under Section 34 for

setting aside the Arbitral Award made by the Sole

Arbitrator was barred by time; and

(e) that the Commercial Court, while considering

the Application filed under Section 34 of the Act

challenging the Award made by the Sole Arbitrator, has

followed the settled principles of law regarding the scope

of interference in Arbitral Awards and has rightly rejected

the Application filed under Section 34 of the Act.

8. We have given our anxious consideration to

the contentions put forth by the learned counsel for the

respective parties and perused the material on record.

9. Having regard to the contentions put forth by

the counsel for the respective parties, the point that arises

for our consideration is, "Whether the Commercial Court

erred in law in dismissing the Application filed under

Section 34 of the Act and in not interfering with the

Arbitral Award made by the Sole Arbitrator"?

10. The counsel for the Appellant has vehemently

contended that no sufficient opportunity was provided to

the Respondents before the Sole Arbitrator to contest the

claim made by the Claimant. It is pertinent to note that

the same contention was urged by the Appellant before the

Commercial Court and the Commercial Court has

considered the contentions of the parties in detail with

regard to the said aspect of the matter, more particularly

in paragraphs 13, 15, 17, 18 and 19 of the judgment dated

01.07.2021 and rightly rejected the said contention

because, it is forthcoming from the material on record that

Respondents had entered appearance and represented by

an Advocate before the learned Arbitrator, but they failed

to file any statement even after a lapse of more than nine

months. Hence, we find no good ground to interfere with

the finding recorded by the Commercial Court on this

aspect.

11. The other aspect that has been recorded by

the Commercial Court is, the application filed under

Section 34 of the Act was barred by limitation. It is

relevant to note that the Arbitral Award was passed on

17.12.2012 and the application under Section 34 of the Act

was preferred on 13.07.2018.

12. Section 34(3) of the Act specifically stipulates

that an application for setting aside the Award is required

to be made within three months. The proviso to Section

34(3) of the Act provides a further period of thirty days

within which an application under Section 34 could be

entertained provided, sufficient cause is demonstrated that

the applicant was prevented from making such application

within the stipulated time. The proviso further mandates

that beyond the said further period of thirty days, the

application cannot be entertained. As noticed by the

Commercial Court, the settled proposition of law as held in

the case of P.Radha Bai v. Ashok Kumar and another,

reported in (2019) 13 SCC 445, whereunder the Hon'ble

Supreme Court has held that the Arbitration Act being a

"special law" a specific period of limitation is stipulated

under Section 34(3) of the Act and there is no provision

under the Limitation Act dealing with challenging an Award

passed under the Arbitration Act, the provisions of the

Limitation Act cannot be applied for the purpose of

extending the period of limitation beyond what is

prescribed under Section 34(3) of the Act. Having noticed

the said aspect of the matter, the Commercial Court has

recorded a categorical finding that the application filed

under Section 34 of the Act is barred by time. The

Appellant has not been able to demonstrate as to how the

said finding on the aspect of limitation is erroneous or bad

in law and liable to be interfered with. Under the

circumstances, the said finding with regard to limitation as

recorded by the Commercial Court does not call for

interference.

13. At the time of arguments, counsel for the

Appellant vehemently contended that the MOU dated

24.02.2003 is insufficiently stamped and the same was

required to be impounded and this aspect is not looked

into by the Sole Arbitrator as well as the Commercial

Court. Counsel for the Appellant also relied on the

following judgments in support of the said contention;

1) N.N.Global Mercantile Pvt.Ltd., v.

Indo Unique Flame Ltd., and Ors., reported in (2021) 4 SCC 379; and

2) Widescreen Holdings Private Limited & Anr., Etc., v. Religare Finvest Limited & Anr., Etc., reported in 2022 LiveLaw (SC) 435.

14. It is to be noted that the contention regarding

insufficiency of payment of stamp duty on the MOU dated

24.02.2003 was not raised either before the Sole

Arbitrator or before the Commercial Court.

Notwithstanding the same, it is to be noted that the stamp

duty payable on the MOU at the relevant point of time i.e.,

the date of the MOU as per Article 5(iii)(e)(iv) of the

Karnataka Stamp (Amendment) Act, 1995, was Rs.200/-.

Hence, the said MOU dated 24.02.2003 is sufficiently

stamped. Under the circumstances, the decisions relied

upon by the counsel for the Appellant are inapplicable to

the facts of the present case.

15. Section 17 of the Act, 1908 stipulates the

documents of which registration is compulsory. Section

17(1) of the Act, 1908 stipulates the documents which are

compulsorily registerable. Section 17(1)(a) of the Act,

1908 applies to the documents where the benefit of part

performance is sought to be taken. Section 17(2) of the

Act, 1908 lists out the documents where Section

17(1)(a)(b) and (c) shall not apply. The learned counsel

for the Appellant is unable to demonstrate how Section 17

of the Act, 1908 will apply in the present case in respect of

the MOU in question. Under the circumstances, the said

contention put forth by the learned counsel for the

Appellant is also liable to be rejected.

16. It is also noticed by the Commercial Court that

a memo was filed furnishing a copy of the order sheet in

EP No.1764/2013, which discloses that after the Award has

been executed and a copy of the Sale Deed which was

executed pursuant to the Arbitral Award was furnished

before the Commercial Court and that the Claimant had

taken possession of the property by depositing the

consideration amount of Rs.1,22,66,190/- on 30.01.2019

itself.

17. The scope of interference under Section 37 of

the Act has been the subject matter of various judicial

pronouncements [(1) SSANGYONG Engineering and

Construction Company Limited v. National Highways

Authority of India (NHAI), reported in (2019) 15 SCC

131; (2) Patel Engineering Limited v. North Eastern

Electric Power Corporation Limited, reported in (2020)

7 SCC 167;(3) PSA SICAL Terminals Pvt. Ltd., v. Board

of Trustees of V.O Chidambranar Port Trust Tuticorin

and Others, reported in 2021 SCC OnLine SC 508; and

(4) Delhi Airport Metro Express Private Limited v.

Delhi Metro Rail Corporation Limited, reported in

(2022) 1 SCC 131)]. Considering the settled proposition of

law, as laid down in the aforementioned judgments, we are

of the considered opinion that the Commercial Court has

rightly exercised its jurisdiction under Section 34 of the Act

and refused to interfere with the Arbitral Award dated

17.12.2012 passed by the Sole Arbitrator. The Commercial

Court has considered the application filed under Section 34

of the Act by noticing the settled proposition of law with

regard to the scope of interference contemplated under

Section 34 of the Act and correctly appreciated the

relevant aspects of the matter and rightly refused to

interfere with the Award passed by the Sole Arbitrator.

Thus the Appellant has failed to demonstrate that the

judgment dated 01.07.2021 passed in Commercial AS

No.149/2018 warrants interference by this Court under

Section 37 of the Act.

18. It is open to the Appellant to participate in

EP.No.1764/2013 and agitate the same in accordance with

law.

19. In view of the above, this appeal must fail and

it is accordingly dismissed.

In view of the dismissal of the appeal, IA.3/2021

does not survive for consideration and is accordingly,

disposed of.

No costs.

Sd/-

JUDGE

Sd/-

JUDGE nd