Karnataka High Court
M/S Associated Constructions vs The Executive Engineer on 23 May, 2023
Bench: H.P.Sandesh
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CRP No. 29 of 2022
C/W CRP No. 33 of 2022
IN THE HIGH COURT OF KARNATAKA AT BENGALURU R
DATED THIS THE 23RD DAY OF MAY, 2023
BEFORE
THE HON'BLE MR JUSTICE H.P.SANDESH
CIVIL REVISION PETITION NO.29 OF 2022 (IO)
C/W.
CIVIL REVISION PETITION NO.33 OF 2022 (IO)
IN CIVIL REVISION PETITION NO.29 OF 2022:
BETWEEN:
M/S. ASSOCIATED CONSTRUCTIONS,
CIVIL ENGINEERS AND CONTRACTORS,
NO.144, 11TH B CROSS,
NIPUNA HERITAGE ROAD,
KODIGEHALLI, VIRUPAKSHIPURA,
VIDYARANYAPURA POST,
BANGALORE - 560 097.
REPRESENTED BY ITS MANAGING PARTNER
SRI K. MUNIKRISHNA.
...PETITIONER
Digitally signed (BY SRI VIKRAM HUILGOL, SENIOR COUNSEL FOR
by SHARANYA T
Location: HIGH SRI MOHAN C., ADVOCATE)
COURT OF
KARNATAKA
AND:
1. THE EXECUTIVE ENGINEER,
KARNATAKA HOUSING BOARD,
DISTRICT CO-ORDINATION OFFICE,
BELLARY - 583 101.
2. SRI M.V.S. RAO,
SOLE ARBITRATOR,
NO.282, ARAKERE GATE, LAKSHMI LAYOUT,
7TH CROSS, 2ND MAIN ROAD,
BANNERGHATTA ROAD,
BANGALORE - 560 076.
...RESPONDENTS
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CRP No. 29 of 2022
C/W CRP No. 33 of 2022
(BY SRI BASAVARAJ SABARAD, SENIOR COUNSEL ALONG
WITH SRI H.L. PRADEEP KUMAR, ADVOCATE FOR R-1,
SRI NAGENDRA A, ADVOCATE FOR R-2)
THIS CRP IS FILED UNDER SECTION 115 OF CPC,
AGAINST THE ORDER DATED 18.06.2020 PASSED IN A.S.NO.
12/2017 ON THE FILE OF THE LXIX ADDITIONAL CITY CIVIL
AND SESSIONS JUDGE, (CCH.NO.23) BENGALURU,
DISMISSING THE APPLICATION FILED UNDER ORDER 7 RULE
11 OF CPC, FOR REJECTION OF PLAINT.
IN CIVIL REVISION PETITION NO. 33/2022:
BETWEEN:
M/S. ASSOCIATED CONSTRUCTIONS,
CIVIL ENGINEERS AND CONTRCTORS,
NO.144, 11TH B CROSS,
NIPUNA HERITAGE ROAD,
KODIGEHALLI, VIRUPAKSHIPURA,
VIDYARANYAPURA POST,
BANGALORE-560097.
REPRESENTED BY ITS MANAGING PARTNER
SRI K. MUNIKRISHNA.
...PETITIONER
(BY SRI VIKRAM HUILGOL, SENIOR COUNSEL FOR
SRI MOHAN C., ADVOCATE)
AND:
1. THE EXECUTIVE ENGINEER,
KARNATAKA HOUSING BOARD,
DISTRICT CO-ORDINATION OFFICE,
GULBARGA-585101.
2. SRI M.V.S. RAO,
SOLE ARBITRATOR,
NO.282, ARAKERE GATE, LAKSHMI LAYOUT,
7TH CROSS, 2ND MAIN ROAD,
BANNERGHATTA ROAD,
BANGALORE-560076.
...RESPONDENTS
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CRP No. 29 of 2022
C/W CRP No. 33 of 2022
(BY SRI BASAVARAJ SABARAD, SENIOR COUNSEL ALONG
WITH SRI H.L. PRADEEP KUMAR, ADVOCATE FOR R-1,
SRI NAGENDRA A, ADVOCATE FOR R-2)
THIS CRP IS FILED UNDER SECTION 115 OF CPC,
AGAINST THE ORDER DATED 18.06.2020 PASSED IN
AS.NO.13/2017 ON THE FILE OF THE LXIX ADDITIONAL CITY
CIVIL AND SESSIONS JUDGE, (CCH.NO.70), BENGALURU,
DISMISSING THE APPLICATION FILED UNDER ORDER 7 RULE
11 OF CPC.
THESE PETITIONS COMING ON FOR FINAL HEARING
THIS DAY, THE COURT MADE THE FOLLOWING:
ORDER
These two civil revision petitions are filed before
this Court under Section 115 of CPC challenging the
order passed by the LXIX Additional City Civil and
Sessions Judge (Commercial Court, CCH-89), Bangalore
in A.S.Nos.12/2017 and 13/2017, dismissing the
applications filed by the revision petitioner before the
Court invoking the provisions under Section Order 7 Rule
11 of CPC, wherein prayed the Court to reject the
arbitration suit filed under Section 34 of the Arbitration
and Conciliation Act, 1996 ('the said Act' for short). In
support of the application, one of the partner of the
defendant in the said suit filed an affidavit stating that an
agreement was entered into between the KHB through
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C/W CRP No. 33 of 2022
the plaintiff and the defendant herein on 23.03.1992 for
the construction of the houses and when the dispute was
arisen between the parties, the matter was referred to
the arbitrator. The arbitrator having considered the
material available on record, passed the award directing
the defendants to pay the arbitral award amount. Being
aggrieved by the said arbitral award, a suit is filed by
respondent No.1 herein before the Court questioning the
very award passed by the arbitrator. The defendant
before the arbitration suit filed an application contending
that the very suit is filed beyond the limitation period and
the period allowed under Section 34(3) of the Act is only
for a period of three months and on satisfaction, further
one month period can be condoned. But in the case on
hand, it is contended that the arbitration award was
passed on 01.01.2014 and the same was communicated
and in pursuance of the communication, a letter was also
written to the State Government for satisfaction of the
arbitration award. Even an execution petition was filed
and in the execution petition also appeared and filed the
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C/W CRP No. 33 of 2022
statement of objections and even if taken the date of
appearance before the executing Court and also filing of
the objection statement, the suit is hopelessly barred by
limitation.
2. The learned counsel for the petitioner would
vehemently contend that the very contention of the
respondent before the suit filed in A.S.No.12/2017 and
13/2017 is that the arbitration award is served on
03.10.2016 and the suit is within time cannot be
accepted. The Trial Court while considering the
application filed under Order 7 Rule 11 of CPC ignored
the same and comes to the conclusion that service is on
03.10.2016 considering the averments made in the plaint
and hence the very approach of the Trial Court is
erroneous and hence it requires interference of this
Court.
3. Per contra, the learned counsel for respondent
No.1 would contend that under Section 31(5) of the Act,
it is very clear that arbitration award shall be made in
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C/W CRP No. 33 of 2022
writing and shall be signed by the members of the
Arbitration Tribunal and sub-Section (5) is clear that
after the arbitral award is made, a signed copy shall be
delivered to each party. The learned counsel submits
that the party before the arbitrator is the Executing
Engineer, who entrusted the work to the petitioner herein
and no copy is delivered to the Executing Engineer and
merely copy is sent to the Chief Engineer cannot be a
proper service. The learned counsel submits that while
entertaining the application under Order 7 Rule 11 of
CPC, the Court has to consider the averments of the
plaint and not the defence of the petitioner herein and
only considering the averments made in the plaint, the
Court can invoke Order 7 Rule 11 of CPC.
4. The learned counsel in support of his
argument relied upon the judgment of the Apex Court in
the case of C. NATRAJAN v. ASHIM BAI AND
ANOTHER reported in (2007) 14 SCC 183 and brought
to the notice of this Court paragraph No.8 of the
judgment, wherein it is observed that an application for
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C/W CRP No. 33 of 2022
rejection of the plaint can be filed if the allegations made
in the plaint even if given face value and taken to be
correct in their entirety appear to be barred by any law.
The question as to whether a suit is barred by limitation
or not would, therefore, depend upon the facts and
circumstances of each case. For the said purpose, only
the averments made in the plaint are relevant. At this
stage, the Court would not be entitled to consider the
case of the defence.
5. The learned counsel also relied upon the
judgment of the Apex Court in the case of SRI
BISWANATH BANIK AND ANOTHER v. SMT.
SULANGA BOSE AND OTHERS reported in 2022 Live
Law (SC) 280 and brought to the notice of this Court
paragraph No.7 of the judgment, wherein discussed with
regard to provision under Order 7 Rule 11 of CPC on the
ground of limitation. It is observed that at this stage
what is required to be considered is the averments in the
plaint. For the aforesaid purpose, the Court has to
consider and read the averments in the plaint as a whole.
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C/W CRP No. 33 of 2022
The learned counsel brought to the notice of this Court
paragraph No.7.4 of the judgment, wherein it is observed
with regard to the consideration of the averments made
in the plaint with regard to barred by limitation. It is
observed that it is the settled proposition of law that the
plaint cannot be rejected partially. Even otherwise, the
reliefs sought are interconnected. Whether the plaintiffs
shall be entitled to any relief under Section 53A of the
Transfer of Property Act or not has to be considered at
the time of trial, but at this stage it cannot be said that
the suit for the relief sought under Section 53A would not
be maintainable at all and therefore the plaint is liable to
be rejected in exercise of powers under Order 7 Rule 11
of CPC. It is also observed that the High Court has
committed a grave error in allowing the application under
Order 7 Rule 11 of CPC in rejecting the plaint.
6. The learned counsel also relied upon the
judgment of the Apex Court in the case of STATE OF
MAHARASHTRA AND OTHERS v. ARK BUILDERS
PRIVATE LIMITED reported in (2011) 4 SCC 616 and
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C/W CRP No. 33 of 2022
brought to the notice of this Court paragraph Nos.13, 14
and 15, wherein it is discussed with regard to Section 34
of the Act. In paragraph No.13, an observation is made
that the expression "party making that application had
received the arbitral award" cannot be read in isolation
and it must be understood in light of what is said earlier
in Section 31(5) that requires a signed copy of the award
to be delivered to each party. Reading the two
provisions together it is quite clear that the limitation
prescribed under Section 34(3) would commence only
from the date a signed copy of the award is delivered to
the party making the application for setting it aside. The
learned counsel brought to the notice of this Court
paragraph No.14 wherein extracted paragraph No.8 of
the judgment of the Apex Court in the case of Union of
India v. Tecco Trichy Engineers and Contractors,
wherein it is observed with regard to the compliance of
Section 33(1) of the Act and also considering the
limitation under Section 34(3). As this delivery of the
copy of the award has the effect of conferring certain
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C/W CRP No. 33 of 2022
rights on the party as also bringing to an end the right to
exercise those rights on expiry of the prescribed period of
limitation which would be calculated from that date, the
delivery of the copy of the award by the Tribunal and the
receipt thereof by each party constitutes an important
stage in the arbitral proceedings.
7. The learned counsel also brought to the notice
of this Court paragraph No.15 of the judgment, wherein
the Apex Court discussed the legal position on the issue
may be stated thus. If the law prescribes that a copy of
the order/award is to be communicated, delivered,
dispatched, forwarded, rendered or sent to the parties
concerned in a particular way and in case the law also
sets a period of limitation for challenging the order/award
in question by the aggrieved party, then the period of
limitation can only commence from the date on which the
order/award was received by the party concerned in the
manner prescribed by the law.
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C/W CRP No. 33 of 2022
8. The learned counsel referring these judgments
would vehemently contend that the arbitrator has not
served the copy of the arbitral award to the party, who is
a party in the arbitral award and hence there cannot be a
proper service of award. The learned counsel submits
that if the copy was served on 03.10.2016 and suit is
filed within the period of limitation i.e., within three
months i.e., in the month of January 2017 and hence the
Court has to take note of the averments made in the suit
itself. The learned counsel brought to the notice of this
Court paragraph No.3.1 of the memorandum of
arbitration suit, wherein it is very clear that a signed
copy of the award was served on the plaintiff by
defendant No.2 sole arbitrator vide letter dated
26.09.2016 and received on 05.10.2016 by the plaintiff.
The learned counsel submits that the suit is filed within
the time prescribed under Section 34(3) of the Act and
the same has to be looked into and not the defence of
the revision petitioners.
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C/W CRP No. 33 of 2022
9. In reply to the arguments of the learned
counsel for respondent No.1, the learned counsel for the
petitioner submits that the documents which have been
produced along with the memo of documents is very
clear that there was a correspondence between the State
Government and KHB for having had the knowledge of
the arbitral award dated 01.01.2014 and consequent
upon, the same was received by the KHB on 04.01.2014
and the letter was sent to the Principal Secretary of the
State Government on 07.01.2014 and reference is also
made in the said letter and hence they are having the
knowledge about the award and the same has to be
calculated from that date and the very contention of the
learned counsel for respondent No.1 cannot be accepted.
The learned counsel brought to the notice of this Court
document No.8, wherein sought for information from the
KHB and the Chief Engineer has given the information
with regard to addressing the letter on 22.02.2014 and
also on 08.01.2014 for release of award amount and the
same has to be considered.
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C/W CRP No. 33 of 2022
10. Having heard the respective learned counsel
and also on perusal of the material available on record,
there is no dispute with regard to the fact that the work
was entrusted to the petitioner herein for construction of
the houses under the Ashraya Scheme. The dispute
between the parties is with regard to the work done by
the petitioner herein and the matter was entrusted to the
arbitration and arbitrator has passed the arbitral award
on 01.01.2014. Admittedly, the arbitration suit is filed in
the month of January 2017 and in the averments it is
made clear in the arbitration suit that the copy was
served on 05.10.2016 in terms of the letter dated
26.09.2016 and limitation has to be calculated based on
the averments made in the Arbitration Suit No.12/2017.
The Apex Court in its judgment in the case of C.
Natrajan (supra) made it clear that the Court has to
look into the averments made in the plaint and only the
averments made in the plaint are relevant. Further, it is
observed that at this stage the Court would not be
entitled to consider the case of the defence. The
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C/W CRP No. 33 of 2022
petitioner is relying upon the document for having made
the correspondence between the State Government and
KHB that they are having the knowledge and those
documents are nothing but the defence and also it is
settled law that while considering an application under
Order 7 Rule 11 of CPC, the Court has to consider the
averments of the plaint while rejecting the plaint. The
judgment referred by the learned counsel for respondent
No.1 in the case of C. Natrajan (supra) is aptly
applicable to the case on hand and the Court has to look
into the averments made in the plaint which has been
referred in paragraph No.3.1 of the arbitration suit.
11. The Apex Court in the judgment in the case of
Sri Biswanath Banik (supra), discussed with regard to
consideration of averments in the plaint as a whole in
paragraph Nos.7 and 7.4. The Apex Court in the
judgment in the case of ARK Builders Private Limited
(supra) in paragraph Nos.13, 14 and 15 considering the
proviso of Section 34 of the Arbitration Act in detail
discussed the scope of Sections 31, 33(4), 33(1) and
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34(3) of the Act, wherein it is categorically held that it is
not mere formality serving of copy and the same is
mandatory. The legal position on the issue may be
stated thus. If the law prescribes that a copy of the
order/award is to be communicated, delivered,
dispatched, forwarded, rendered or sent to the parties
concerned in a particular way and in case the law also
sets a period of limitation for challenging the order/award
in question by the aggrieved party, then the period of
limitation can only commence from the date of which the
order/award was received by the party concerned in the
manner prescribed by the law.
12. The provision under Section 31(5) of the Act is
clear that after arbitral award is made, a signed copy
shall be delivered to each party. In the case on hand,
for having delivered the copy of the award to the party
i.e., the Executive Engineer, no material is placed before
the Court. The learned counsel for the petitioner would
contend that the very arbitrator has appeared and filed
an affidavit before the Court that it is personally
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C/W CRP No. 33 of 2022
delivered and apart from that, the same is sent through
post. For having served the copy personally, no
document is placed before the Court and no doubt, the
postal receipt for having sent the same is also produced
before the Court and acknowledgement for having
delivered the arbitration award is not produced before
the Court. Section 31(5) of the Act is clear that a signed
copy shall be delivered to each party and no doubt the
correspondence is made by the Chief Secretary of the
KHB with regard to award is concerned and in compliance
of Section 31(5) of Act, no material is placed before the
Court. When such being the case, the very contention of
the learned counsel for the petitioner cannot be
accepted.
13. It is important to note that when the
arbitration suit was filed before the Court, the office
objection was raised with regard to limitation is
concerned. The Court considered the office objection and
passed the order dated 08.02.2017, wherein comes to
the definite conclusion having considered the averments
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C/W CRP No. 33 of 2022
made in the plaint that it is specifically stated that it was
received by the plaintiff on 03.10.2016 and the same is
within limitation period. It is important to note that this
order has not been challenged by the revision petitioner
and the same has attained its finality. No doubt, this
order was passed when the office objection is raised with
regard to the limitation is concerned prior to the
appearance of the revision petitioner. Even on
appearance also, when the Court has given the definite
finding that the suit is not barred by limitation and the
same is filed within the period of three months from the
date of receipt of arbitral award, the same ought to have
been challenged and instead of challenging the said
order, an application is filed under Order 7 Rule 11 of
CPC and while dismissing the application, the Trial Court
comes to the conclusion that the Court cannot sit and
again consider the same issue by entertaining the
application under Order 7 Rule 11 of CPC and the said
observation is made in paragraph No.10 of the order.
The Trial Court has not committed any error in dismissing
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C/W CRP No. 33 of 2022
the application and the Trial Court has taken note of the
averments made in the plaint, particularly in paragraph
No.31.1 and while exercising the power under Order 7
Rule 11 of CPC, the Court has to look into the averments
of the plaint and not committed any error. Hence, I do
not find any error committed by the Trial Court in
rejecting the application filed under Order 7 Rule 11 of
CPC.
14. In view of the discussions made above, I pass
the following:
ORDER
Both the petitions are dismissed.
Sd/-
JUDGE
MD
