Karnataka High Court

M/S. S. K. Construction vs Union Of India on 5 November, 2025

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                                                         COMAP No. 513 of 2025


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                        IN THE HIGH COURT OF KARNATAKA AT BENGALURU

                             DATED THIS THE 5TH DAY OF NOVEMBER, 2025

                                               PRESENT
                          THE HON'BLE MR. VIBHU BAKHRU, CHIEF JUSTICE
                                                 AND
                             THE HON'BLE MR. JUSTICE C.M. POONACHA
                                COMMERCIAL APPEAL NO. 513 OF 2025
                   BETWEEN:

                   1.   M/S. S.K. CONSTRUCTION
                        REP. BY ITS MANAGING PARTNER
                        SHRI K. SRIDHAR REDDY
                        AGED ABOUT 62 YEARS
                        FLAT NO.P1, ADARSH BLOOMS
                        NO.6, GOPAL REDDY LAYOUT
                        DODDA BANASWADI
                        BANGALORE - 560 043.
Digitally signed
by PRABHAKAR                                                      ...APPELLANT
SWETHA
KRISHNAN           (BY SRI HARISHCHANDRA REDDY P., ADVOCATE)
Location: High
Court of
Karnataka
                   AND:


                   1.   UNION OF INDIA
                        (CAO/CN/BNC), SOUTH WESTERN RAILWAY
                        REPRESENTED BY
                        DEPUTY CHIEF ENGINEER/CN/N/BNC
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                                     NC: 2025:KHC:44591-DB
                                 COMAP No. 513 of 2025


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   18, MILLERS ROAD,
   BANGALORE CANTONMENT,
   BANGALORE - 560 046


                                         ...RESPONDENTS
(BY SRI K. ARVIND KAMATH, ASGI A/W
SRI AJAY PRABHU M., ADVOCATE)

     THIS COMMERCIAL APPEAL IS FILED UNDER SECTION

13 (1-A) OF THE COMMERCIAL COURT ACT, 2015 READ WITH

UNDER SECTION 37 (1) (C) OF THE ARBITRATION AND

CONCILATION ACT, 1996 PRAYING TO ALLOW THE PRESENT

COMMERCIAL APPEAL BY SETTING ASIDE THE JUDGMENT

DATED 20.08.2024 IN COM.A.P. NO.90/2022 PASSED BY THE

LXXXVII ADDITIONAL CITY CIVIL AND SESSIONS JUDGE AT

BENGALURU (CCH-88) (ANNEXURE NO.E) AND UPHELD THE

AWARD OF THE HON'BLE ARBITRATORS DATED 20.05.2022

(ANNEXURE No.C) IN RESPECT OF CLAIM NOS.1,2 AND 27

ALONG WITH INTEREST & ETC.


     THIS APPEAL, COMING ON FOR ORDERS, THIS DAY,

JUDGMENT WAS DELIVERED THEREIN AS UNDER:
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                                           NC: 2025:KHC:44591-DB
                                         COMAP No. 513 of 2025


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CORAM: HON'BLE MR. VIBHU BAKHRU, CHIEF JUSTICE
       and
       HON'BLE MR. JUSTICE C.M. POONACHA


                        ORAL JUDGMENT

(PER: HON'BLE MR. VIBHU BAKHRU, CHIEF JUSTICE)

1. The appellant has filed the present appeal under Section

37(1)(c) of the Arbitration and Conciliation Act, 1996 [the A&C Act]

impugning the common order dated 20.08.2024 [impugned order]

passed by the learned Commercial Court in COM.A.P.No.90/2022

and COM.A.P.No.100/2022. The present appeal is confined to the

impugned order insofar as it relates to COM.A.P.No.90/2022.

2. The appellant had filed the said petition under Section 34 of

the A&C Act assailing an arbitral award dated 23.08.2011

[impugned award] delivered by the Arbitral Tribunal.

3. The impugned award is rendered in context of the disputes

that had arisen between the parties in connection with the contract

agreement dated 19.08.2011 [the Agreement] for execution of the

works described as:

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"Arsikere - Birur Patch doubling - Kadur yard remodeling including formation, ballast, track linking, regrading, construction of minor bridges, RUB, PSC, FOB, platform, PF shelters and other miscellaneous works."

4. It is stated that the appellant had preferred thirty claims.

However, except claims for release of performance guarantee and

security deposit (Claim No.2) and for price variation for an amount

of Rs.1,71,076/- (Claim No.27), all claims were rejected. The

respondent had also preferred counter claims, which were rejected.

Accordingly, the Arbitral Tribunal granted an award for a sum of

Rs.70,71,076/- in favour of the appellant. The Arbitral Tribunal also

awarded simple interest at the rate of 7% p.a. on the said amount

in the event, the same was not disbursed within the period of 90

days from publication of the impugned award.

5. As noted above, both the parties had preferred their

respective applications under Section 34 of the A&C Act for setting

aside the impugned award.

6. The learned Commercial Court faulted the Arbitral Tribunal

for not taking into account relevant facts into consideration while

rejecting the claims made by the appellant and concluded that the

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same vitiated the impugned award on the ground of patent

illegality. The appellant being aggrieved by the said decision, has

filed the present appeal.

7. The present appeal has been filed after an inordinate delay

of three-hundred and forty days.

8. The appellant has filed an application seeking condonation of

delay in filing the present appeal.

9. The appellant explains that after the impugned award was

set aside by the impugned order, it had issued a letter dated

28.12.2024 for appointing an independent arbitrator as the disputes

between the parties remained unresolved.

10. As noted above, the learned Commercial Court had found

that the Arbitral Tribunal had rendered the impugned award without

examining the relevant facts and had thus, faulted the Arbitral

Tribunal.

11. The appellant claims that he did not receive any response to

his request for appointment of an arbitrator. The appellant sates

that the respondent was ready and willing to appoint an arbitrator

provided the appellant waived its right under Section 12(5) of the

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A&C Act. Since the appellant was not willing for the same, it filed a

petition under Section 11(6) of the A&C Act (being CMP

No.157/2025) before the learned Single Judge of this Court for

appointment of an independent or impartial Arbitrator. However, the

said petition was rejected by the learned Single Judge of this Court

by an order dated 26.06.2025. The learned Single Judge observed

that since the claim of the appellant had been rejected by the

learned Commercial Court, the question seeking appointment of an

Arbitrator was not tenable, without the appellant exhausting the

remedy under Section 37 of the A&C Act.

12. The appellant claims that the present appeal is filed pursuant

to the observations made by the learned Single Judge in the said

petition.

13. The question whether the disputes are required to be

re-adjudicated by an Arbitral Tribunal in view of the impugned order

is entirely a separate question. In the event, the parties desire to

have the disputes re-adjudicated by appointment of an Arbitrator,

they are required to avail of remedies as available for constitution

of an Arbitral Tribunal.

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14. Needless to state that if the appellant is dissatisfied with the

order dated 26.06.2025 passed by the learned Single Judge in

CMP No.157/2025, the appellant would require to exercise his

remedies. However, the delay in filing the present petition cannot

be explained on the ground that the learned Single Judge has

rejected the appellant's prayer for appointment of an Arbitrator.

15. Clearly, the above captioned petition cannot be founded on

the fact that the appellant's application for appointment of an

Arbitrator has been rejected.

16. Thus, we are unable to accept that an inordinate delay of 340

days is required to be condoned for the reason that the appellant

had initiated proceedings for constitution of an Arbitral Tribunal to

decide the disputes afresh, which was rejected.

17. In N.V. International v. State of Assam, (2020) 2 SCC 109

: (2020) 1 SCC (Civ) 275, the Supreme Court held that the Court

would have no jurisdiction to condone the delay in filing an appeal

under Section 37 of the A&C Act beyond the period of 30 days as

stipulated in the proviso of Section 34(3) of the A&C Act. The said

decision was subsequently, overruled by the Supreme Court in

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Government of Maharashtra v. M/s. Borse Brothers Engineers

& Contractors Pvt. Ltd. : (2021) 6 SCC 460.

18. We consider it apposite to refer to the following extract in the

said decision:

"53. However, the matter does not end here. The question still arises as to the application of Section 5 of the Limitation Act to appeals which are governed by a uniform 60-day period of limitation. At one extreme, we have the judgment in N.V. International [N.V. International v. State of Assam, (2020) 2 SCC 109 :

(2020) 1 SCC (Civ) 275] which does not allow condonation of delay beyond 30 days, and at the other extreme, we have an open-ended provision in which any amount of delay can be condoned, provided sufficient cause is shown. It is between these two extremes that we have to steer a middle course.

54. One judicial tool with which to steer this course is contained in the Latin maxim ut res magis valeat quam pereat. This maxim was fleshed out in CIT v. Hindustan Bulk Carriers [CIT v. Hindustan Bulk Carriers, (2003) 3 SCC 57] as follows : [ Followed in the separate opinion delivered by Pasayat, J. in Ashoka Kumar Thakur v. Union of India, (2008) 6 SCC 1 : 3 SCEC 35 (see paras 333-34).] (SCC pp. 73-74, paras 14-21) "14. A construction which reduces the statute to a futility has to be avoided. A statute or any enacting provision therein must be so construed as to make it effective and operative on the principle expressed in the maxim ut res magis valeat quam pereat i.e. a liberal construction should be put upon written instruments, so as to uphold them, if possible, and carry into effect the

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intention of the parties. [See Broom's Legal Maxims (10th Edn.), p. 361, Craies on Statutes (7th Edn.), p. 95 and Maxwell on Statutes (11th Edn.), p.

221.]

15. A statute is designed to be workable and the interpretation thereof by a court should be to secure that object unless crucial omission or clear direction makes that end unattainable.

(See Whitney v. IRC[Whitney v. IRC, 1926 AC 37 (HL)] , AC at p. 52 referred to in CIT v. S. Teja Singh [CIT v. S. Teja Singh, AIR 1959 SC 352] and Gursahai Saigal v. CIT [Gursahai Saigal v. CIT, AIR 1963 SC 1062] .)

16. The courts will have to reject that construction which will defeat the plain intention of the legislature even though there may be some inexactitude in the language used.

(See Salmon v. Duncombe[Salmon v. Duncombe, (1886) LR 11 AC 627 (PC)] , AC at p.

634, Curtis v. Stovin [Curtis v. Stovin, (1889) LR 22 QBD 513 (CA)] referred to in S. Teja Singh case [CIT v. S. Teja Singh, AIR 1959 SC 352] .)

17. If the choice is between two interpretations, the narrower of which would fail to achieve the manifest purpose of the legislation, we should avoid a construction which would reduce the legislation to futility, and should rather accept the bolder construction, based on the view that Parliament would legislate only for the purpose of bringing about an effective result. (See Nokes v. Doncaster Amalgamated Collieries Ltd. [Nokes v. Doncaster Amalgamated Collieries Ltd., 1940 AC 1014 (HL)] referred to

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in Pye v. Minister for Lands for NSW [Pye v. Minister for Lands for NSW, (1954) 1 WLR 1410 (PC)] .) The principles indicated in the said cases were reiterated by this Court in Mohan Kumar Singhania v. Union of India [Mohan Kumar Singhania v. Union of India, 1992 Supp (1) SCC 594 : 1992 SCC (L&S) 455] .

18. The statute must be read as a whole and one provision of the Act should be construed with reference to other provisions in the same Act so as to make a consistent enactment of the whole statute.

19. The court must ascertain the intention of the legislature by directing its attention not merely to the clauses to be construed but to the entire statute; it must compare the clause with other parts of the law and the setting in which the clause to be interpreted occurs. (See R.S. Raghunath v. State of Karnataka[R.S. Raghunath v. State of Karnataka, (1992) 1 SCC 335 :

1992 SCC (L&S) 286] .) Such a construction has the merit of avoiding any inconsistency or repugnancy either within a section or between two different sections or provisions of the same statute. It is the duty of the court to avoid a head-on clash between two sections of the same Act. (See Sultana Begum v. Prem Chand Jain [Sultana Begum v. Prem Chand Jain, (1997) 1 SCC 373] .)

20. Whenever it is possible to do so, it must be done to construe the provisions which appear to conflict so that they harmonise. It should not be lightly assumed that Parliament had given with one hand what it took away with the other.

21. The provisions of one section of the statute cannot be used to defeat those of another unless it is

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impossible to effect reconciliation between them. Thus a construction that reduces one of the provisions to a "useless lumber" or "dead letter" is not a harmonised construction. To harmonise is not to destroy."

55. Reading the Arbitration Act and the Commercial Courts Act as a whole, it is clear that when Section 37 of the Arbitration Act is read with either Article 116 or 117 of the Limitation Act or Section 13(1-A) of the Commercial Courts Act, the object and context provided by the aforesaid statutes, read as a whole, is the speedy disposal of appeals filed under Section 37 of the Arbitration Act. To read Section 5 of the Limitation Act consistently with the aforesaid object, it is necessary to discover as to what the expression "sufficient cause" means in the context of condoning delay in filing appeals under Section 37 of the Arbitration Act.

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58. Given the object sought to be achieved under both the Arbitration Act and the Commercial Courts Act, that is, the speedy resolution of disputes, the expression "sufficient cause" is not elastic enough to cover long delays beyond the period provided by the appeal provision itself. Besides, the expression "sufficient cause" is not itself a loose panacea for the ill of pressing negligent and stale claims....

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63. Given the aforesaid and the object of speedy disposal sought to be achieved both under the Arbitration Act and the Commercial Courts Act, for appeals filed under Section 37 of the Arbitration Act that are governed by Articles 116 and 117 of the

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Limitation Act or Section 13(1-A) of the Commercial Courts Act, a delay beyond 90 days, 30 days or 60 days, respectively, is to be condoned by way of exception and not by way of rule. In a fit case in which a party has otherwise acted bona fide and not in a negligent manner, a short delay beyond such period can, in the discretion of the court, be condoned, always bearing in mind that the other side of the picture is that the opposite party may have acquired both in equity and justice, what may now be lost by the first party's inaction, negligence or laches."

19. As noted above, although, the Supreme Court had overruled

the decision that the jurisdiction of the Court to condone the delay

was confined to 30 days in terms of the proviso to Section 34 (3) of

the A&C Act, the Court had clarified that inordinate delays could

not be condoned bearing in mind the legislative intent. And, the

expression 'sufficient cause' is not elastic enough to accommodate

inordinate delays in matters involving commercial disputes.

20. Given the legislative intent, we are unable to accept that the

delay of 340 days in filing the present appeal, ought to be

condoned. The application―I.A.No.1/2025 is accordingly

dismissed. Consequently, the appeal is dismissed.

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