M/S PEPPER INTERACTIVE COMMUNICATIONS vs M/S CRESURGE E BUSINESS SOLUTION PVT LTD
- Court
- Karnataka High Court
- 1 -
HC-KAR
NC: 2026:KHC:53041
WP No. 28906 of 2026
CNR: KAHC010626542026
IN THE HIGH COURT OF KARNATAKA AT BENGALURU
TH
DATED THIS THE 24 DAY OF SEPTEMBER, 2026
BEFORE
THE HON'BLE MR. JUSTICE K. V. ARAVIND
WRIT PETITION NO. 28906 OF 2026 (GM-CPC)
BETWEEN:
1. M/S. PEPPER INTERACTIVE COMMUNICATIONS
NO.19/5-19/6, 6TH FLOOR,
KAREEM TOWERS, CUNNINGHAM ROAD,
BENGALURU - 560 052,
AUTHORIZED REPRESENTATIVE,
MR. ROSHAN MOHAN.
…PETITIONER
(BY SRI. HIRAN KRISHNASWAMY, ADVOCATE)
AND:
1. M/S. CRESURGE E BUSINESS
SOLUTION PVT. LTD.,
A REGISTERED PRIVATE LIMITED COMPANY
HAVING ITS OFFICE AT 3RD FLOOR,
MANANDI PLAZA, ST. MARKS ROAD,
SHANTALA NAGAR, ASHOK NAGAR,
BENGALURU - 560 050.
AUTHORIZED REPRESENTATIVE,
MR. AKSHAY KUMAR.
…RESPONDENT
Digitally signed
by VINUTHA B
S
Location: High
Court of
Karnataka
(BY SRI. CHINTAN CHINNAPPA AND
SRI. N. VENKATESH KAMATH, ADVOCATES)
- 2 -
HC-KAR
NC: 2026:KHC:53041
WP No. 28906 of 2026
CNR: KAHC010626542026
THIS WRIT PETITION IS FILED UNDER ARTICLE 227 OF
THE CONSTITUTION OF INDIA PRAYING TO SET ASIDE THE
IMPUGNED ORDER DATED 23.07.2026 PASSED BY THE LD.
LXXXII ADDL DISTRICT AND SESSIONS JUDGE (COMMERCIAL
COURT), AT BENGALURU (CCH83) IN COM.AP.11/2026 (ORDER
ENCLOSED AS ANNEXURE A) AND ETC,.
THIS PETITION, COMING ON FOR PRELIMINARY
HEARING, THIS DAY, ORDER WAS MADE THEREIN AS UNDER:
CORAM: HON'BLE MR. JUSTICE K. V. ARAVIND
ORAL ORDER
The present writ petition impugns the order dated
23.07.2026 passed in Com.A.P.No.11/2026 by the LXXXII
Additional City Civil and Sessions Judge, Bengaluru (for short,
‘the Commercial Court’), whereby the Commercial Court
ordered stay of the operation and execution of the award in
Execution Petition No.1143/2025, subject to the deposit of 75%
of the awarded amount.
2. Learned counsel appearing for the petitioner submits that
the Commercial Court committed an error in entertaining the
application seeking stay of the award, when the petition itself
was filed with a delay of 346 days. Learned counsel submits
- 3 -
HC-KAR
NC: 2026:KHC:53041
WP No. 28906 of 2026
CNR: KAHC010626542026
that the withdrawal of the application filed under Section 5 of
the Limitation Act, on the premise that there was no delay, is
contrary to the email correspondence issued by the Arbitration
and Conciliation Centre, Bengaluru, produced at Annexure-F,
whereby the passing of the award was notified to the
respondent herein for further compliance.
2.1 Learned counsel further submits that the petition is not
maintainable for non-compliance with Section 19 of the Micro,
Small and Medium Enterprises Development Act, 2006 (for
short, ‘the Act’), as no pre-deposit was made before
presentation of the petition. It is submitted that the right to
maintain an application under Section 19 is conditional and, in
the absence of compliance with the statutory requirement, no
right accrues to the applicant.
2.2 Learned counsel further submits that the deposit
contemplated under Section 19 of the Act includes the amount
awarded together with the interest directed to be paid under
the arbitral award. It is submitted that, under the impugned
order, the direction to deposit 75% of the awarded amount has
been erroneously interpreted as requiring deposit of 75% of the
- 4 -
HC-KAR
NC: 2026:KHC:53041
WP No. 28906 of 2026
CNR: KAHC010626542026
principal amount alone, excluding interest. It is contended that,
until the issue of delay was adjudicated, the Commercial Court
ought not to have granted any further relief to the respondent.
3. Per contra , Sri Chintan Chinnappa and Sri N. Venkatesh
Kamath, learned counsel appearing for the respondent, submit
that the statement regarding the delay of 346 days was made
reckoning the limitation from the date of the award. However,
it is submitted that the period of limitation would commence
from the date of receipt of the award. As no award was served
on the respondent, the question of commencement of limitation
would not arise. It is, therefore, submitted that the application
filed under Section 5 of the Limitation Act was subsequently
withdrawn, having been filed under an erroneous
understanding.
3.1 It is further submitted that no award was served on the
respondent till the date of filing of the petition. In view of the
aforesaid circumstance, the Commercial Court proceeded to
consider the application seeking stay of the award while
keeping the issue of limitation open.
- 5 -
HC-KAR
NC: 2026:KHC:53041
WP No. 28906 of 2026
CNR: KAHC010626542026
3.2 Learned counsel further submits that Section 16 of the
2006 Act provides for interest at three times the bank rate
notified by the Reserve Bank of India, which is to be computed
on a monthly basis. However, under the impugned award, the
learned Arbitrator has directed payment of interest at the rate
of 15% per month. It is submitted that, since the manner in
which the interest is to be computed itself is an issue pending
consideration before the Commercial Court, the interest
component cannot, at this stage, be included while determining
the amount to be deposited under Section 19 of the Act.
4. In support of their respective submissions, learned
counsel for both parties have relied upon the decisions of the
Delhi High Court in Indian Oil Corpn. Ltd. v. Fepl
Engineering (P) Ltd. , 2020 SCC OnLine Del 2799 , and of
the High Court of Calcutta in Board of Major Port Authority
for the Shyama Prasad Mookerjee Port v. Marine Craft
Engineers (P) Ltd. , 2023 SCC OnLine Cal 2200 .
5. Learned counsel appearing for the respondent, fairly
submits that, in order to demonstrate the bona fides of the
respondent, the respondent is willing to deposit the entire
- 6 -
HC-KAR
NC: 2026:KHC:53041
WP No. 28906 of 2026
CNR: KAHC010626542026
awarded amount together with interest at the rate of 15% per
annum, as computed in the Chartered Accountant’s certificate
produced as Document No.7 before the Commercial Court,
amounting to Rs.4,32,992/-.
6. Considered the submissions made by learned counsel for
the parties.
7. It is evident from the pleadings that the petition was filed
with a statement that it was presented with a delay of 346
days, along with an application under Section 5 of the
Limitation Act seeking condonation of delay. On 23.07.2026,
learned counsel for the respondent withdrew the said
application, contending that the period of limitation is to be
reckoned from the date of service of the award and that, in the
absence of such service, the question of limitation would not
arise. However, the Commercial Court has kept the question of
limitation open for consideration.
8. In view of the issue of limitation being pending
consideration before the Commercial Court, if the submissions
advanced by learned counsel for both parties are adjudicated
- 7 -
HC-KAR
NC: 2026:KHC:53041
WP No. 28906 of 2026
CNR: KAHC010626542026
upon in the present petition, the same is likely to prejudice the
interests of both parties. Accordingly, the said contentions are
kept open to be urged before and considered by the
Commercial Court.
9. Insofar as the rate of interest awarded by the learned
Arbitrator is concerned, the same is required to be considered
in the light of Section 16 of the Act. On a plain reading of the
award, it appears that interest has been awarded at the rate of
15% per month. However, a perusal of Section 16 of the Act
indicates that the rate of interest is to be determined with
reference to the bank rate notified by the Reserve Bank of India
and multiplied by three. The said provision deals with the rate
of interest, whereas the manner of computation is required to
be considered separately. Section 16, prima facie , comprises
two aspects: first, the rate of interest; and secondly, the
manner of computation of the quantum of interest. The
interpretation and applicability of Section 16 itself is a matter
pending consideration before the Commercial Court.
10. Section 19 of the Act mandates pre-deposit of the
amount in terms of the decree or award. In the present case,
- 8 -
HC-KAR
NC: 2026:KHC:53041
WP No. 28906 of 2026
CNR: KAHC010626542026
however, the quantum of interest payable under the award is
itself not free from dispute. The quantum of the amount
payable, including the interest component, is yet to be
determined.
11. In similar circumstances, the Division Bench of the Delhi
High Court, in Indian Oil Corpn. Ltd. v. Fepl Engineering
(P) Ltd. , 2020 SCC OnLine Del 2799 , accepted the deposit
of 75% of the principal amount awarded as sufficient to
demonstrate the bona fides of the appellant and entertained
the appeal. In the present case, the respondent has fairly
submitted that it is willing to deposit the entire awarded
amount together with interest at the rate of 15% per annum.
12. Though it is contended that the pre-deposit is required to
be made prior to the presentation of the petition, the Delhi High
Court, in the aforesaid judgment, entertained the appeal upon
the deposit being made subsequent to its presentation.
13. In view of the larger issues raised before the trial Court,
which both parties would be entitled to agitate before the said
Court, this Court is inclined to interfere with the impugned
- 9 -
HC-KAR
NC: 2026:KHC:53041
WP No. 28906 of 2026
CNR: KAHC010626542026
order only to a limited extent, by issuing the following
directions:
I. The trial Court shall adjudicate the issue of limitation
before proceeding to consider the petition on merits.
II. The impugned order dated 23.07.2026 stands modified to
the extent that the respondent herein shall deposit entire
award amount together with interest at the rate of 15%
per annum, within the period stipulated by the
Commercial Court.
III. In the event the deposit has already been made, the
respondent shall deposit the differential amount within
the time stipulated by the trial Court.
IV. The contentions raised by the respective parties shall be
considered by the trial Court on their own merits, without
being influenced by any observations made in the present
order.
V. Amount of Rs.4,32,992/- referred to hereinabove is
tentative and not conclusive, and shall be subject to
adjudication by the trial Court. All rights and contentions
of the parties are kept open.
- 10 -
HC-KAR
NC: 2026:KHC:53041
WP No. 28906 of 2026
CNR: KAHC010626542026
With the above observations and directions, the writ petition
stands disposed of .
Sd/-
(K. V. ARAVIND)
JUDGE
DDU
List No.: 1 Sl No.: 42