SRI MADHUSUDAN REDDY vs SMT MARIYAMMA
- Court
- Karnataka High Court
IN THE HIGH COURT OF KARNATAKA AT BENGALURU
TH
DATED THIS THE 6 DAY OF NOVEMBER, 2026
PRESENT
THE HON'BLE MRS. JUSTICE ANU SIVARAMAN
AND
THE HON'BLE MR. JUSTICE T.P.VIVEKANANDA
MISCELLANEOUS FIRST APPEAL NO.2778 OF 2020 (AA)
C/W
MISCELLANEOUS FIRST APPEAL NO.2799 OF 2020 (AA)
IN MFA No.2778/2020
BETWEEN:
SRI MADHUSUDAN REDDY
S/O K. PAPI REDDY
AGED ABOUT 36 YEARS
TH
HOUSE NO.641/B, 5 CROSS
HAL-II STAGE
KODIHALLI
Digitally
signed by
PAVITHRA
N
Location:
High Court
of Karnataka
BANGALORE-560 008
…APPELLANT
(BY SRI. P. B. RAJU, ADVOCATE)
AND:
1. SMT. ASHA T.
W/O SRI SHIVAKUMAR
AGED ABOUT 38 YEARS
ND
R/AT FLAT NO.204, II FLOOR
SCION VISTA APARTMENTS
2
TH
5 CROSS
G. M. PALYA
BANGALORE-560 075
2. SRI VENUGOPAL T.
S/O LATE THAMANNA
AGED ABOUT 43 YEARS
3. SRI MANOHAR H. T.
S/O LATE THAMANNA
AGED ABOUT 41 YEARS
4. SMT. P. GANGAMMA
S/O LATE THAMANNA
AGED ABOUT 74 YEARS
SL. NO. 2 TO 4 ARE
RESIDENTS OF HITHERAHALLI VILLAGE
BUDIGERE POST, CHANNARAYAPATNA HOBLI
DEVANAHALLI TALUK
BANGALORE DISTRICT
5. SRI SURAJ R. MANJESHWAR
SOLE ARBITRATOR
OFFICE AT NO.11
ST
1 FLOOR, 17-F CROSS
INDIRANAGAR-II STAGE
BANGALORE 560 038
…RESPONDENTS
(BY SRI. VENKATACHALAPATHI S. K., ADVOCATE FOR R1 TO R4;
R5 IS SERVED AND UNREPRESENTED)
3
THIS MFA IS FILED UNDER SECTION 37 (1)(c) OF THE
ARBITRATION AND CONCILIATION ACT, AGAINST THE ORDER
DATED 20.01.2020 PASSED IN A.S.NO.15004/2019, ON THE FILE
TH
OF THE V ADDITIONAL DISTRICT JUDGE, BENGALURU RURAL
DISTRICT AT DEVANAHALLI, ALLOWING THE APPLICATION FILED
UNDER SECTION 34 OF ARBITRATION AND CONCILIATION ACT
1996.
IN MFA NO. 2799/2020
BETWEEN:
SRI MADHUSUDAN REDDY
S/O K. PAPI REDDY
AGED ABOUT 36 YEARS
HOUSE NO.641/B
TH
5 CROSS, HAL-II STAGE
KODIHALLI, BANGALORE 560 008
...APPELLANT
(BY SRI. P. B. RAJU, ADVOCATE)
AND:
1. SMT. MARIYAMMA
W/O LATE SRI N. BYRAPPA
AGED ABOUT 82 YEARS
R/AT FLAT NO.204
ND
II FLOOR, SCION VISTA APARTMENTS
4
TH
5 CROSS, G. M. PALYA
BANGALORE 560 075
2. SRI SURAJ R. MANJESHWAR
SOLE ARBITRATOR
OFFICE AT: NO.11
ST
1 FLOOR, 17-F CROSS
INDIRANAGAR II STAGE
BANGALORE 560 038
...RESPONDENTS
(BY SRI. KESHAV K., ADVOCATE FOR R1;
R2 IS SERVED AND UNREPRESENTED)
THIS MFA IS FILED UNDER SECTION 37(1)(c) OF
ARBITRATION AND CONCILIATION ACT, AGAINST THE
JUDGMENT AND AWARD DATED 20.01.2020 PASSED IN A.S.
TH
NO.15003/2019 ON THE FILE OF THE V ADDITIONAL DISTRICT
JUDGE, BENGALURU RURAL DISTRICT AT DEVANAHALLI,
BENGALURU ALLOWING THE APPLICATION FILED UNDER
SECTION 34 OF ARBITRATION AND CONCILIATION ACT, 1996.
THESE MISCELLANEOUS FIRST APPEALS HAVING BEEN
HEARD AND RESERVED FOR JUDGMENT ON 18.09.2026 AND
COMING ON FOR PRONOUNCEMENT OF JUDGMENT THIS DAY,
ANU SIVARAMAN J., PRONOUNCED THE FOLLOWING:
CORAM: HON'BLE MRS. JUSTICE ANU SIVARAMAN
and
HON'BLE MR. JUSTICE T.P.VIVEKANANDA
5
CAV JUDGMENT
(PER: HON'BLE MRS. JUSTICE ANU SIVARAMAN)
These Miscellaneous First Appeals are filed by the
appellant under Section 37 of the Arbitration and
Conciliation Act, 1996 ('Arbitration Act' for short) challenging
the judgments dated 20.01.2020 passed by the learned V
Additional District and Sessions Judge, Bengaluru Rural
District at Devanahalli ('trial Court' for short) in A.S.
No.15004/2019 and 15003/2019, wherein the trial Court
allowed the petition filed by respondents No.1 to 4 in MFA
No.2779/2020 and respondent No.1 in MFA No.2779/2020,
respectively under Section 34 of the and set aside the award
dated 24.06.2019 passed by the learned Sole Arbitrator.
2. We have heard Shri. PB Raju learned counsel
appearing for the appellant in both the appeals, Shri. Keshav
K learned counsel appearing for respondent No.1 in MFA
No.2779/2020 and Shri. Venkatachalapathi S K learned
counsel appearing for respondents No.1 to 4 in MFA
No.2778/2020.
6
3. The learned counsel appearing for the appellant
submits that the parties herein entered into a Memorandum
of Understanding ('MoU' for short) and a Supplementary
MoU, both dated 10.06.2016. The MOUs related to the joint
development of land measuring 5 acres in Sy.No.220/P52
(old Sy.No.109/10) of Handrahalli Village, Channarayapatna
Hobli, Devanahalli Taluk, Bengaluru Rural District ('Schedule
A property'). Under the MOUs, respondents No.1 in MFA
No.2778/2020 and respondents No.1-4 in 2779/2020 and
others agreed to execute a comprehensive Joint
Development Agreement. Before doing so, they were to
discharge the mortgage loan of Rs.50,00,000/- availed from
Axis Bank against the Schedule A property. They were also
to provide a 30 feet wide road to the property through
Sy.No.203/1 and 203/2 of the same village, which belong to
them. Further, they were to have the survey number
rectified from 220/P52 to 109/10 and effect phodi. The
appellant paid an advance of Rs.15,00,000/-, and the
balance of Rs.35,00,000/- was payable on execution of the
Joint Development Agreement and Power of Attorney.
7
4. It is submitted that alleging breach of the MOUs
by the petitioners/respondents herein, the appellant invoked
the arbitration clause by notice dated 31.07.2017, and the
Sole Arbitrator was appointed. The learned Arbitrator took
up the matter on 28.10.2017 and issued notice to the
respondents. By the award dated 24.06.2019, the learned
Arbitrator allowed the claim. Respondents No.1 to 4 and
others were directed to discharge the mortgage loan,
provide the 30 feet wide road access, and rectify the survey
number and effect phodi and execute the MoU and the
Supplementary MoU dated 10.06.2016.
5. Respondents No.1- 4 in MFA No.2778/2020 and
respondent No.1 in MFA No.2779/2020 challenged the award
in A.S.No. 15004/2019 and 15003/2019, respectively
before the trial Court. The trial Court had considered two
issues, namely, whether the award passed in contravention
of Section 29A of the Arbitration (Amendment) Act, 2015 is
sustainable under law and whether the applicants have
made out any ground to set aside the impugned award?
8
6. The trial Court answered the first question in the
negative and the second in the affirmative. It was found
from the arbitral order sheet that the Arbitrator entered
upon the reference on 28.10.2017, and that the respondents
appeared on 22.11.2017. It was held that, under Sections
29A(1) and (3) of the Arbitration Act, the award had to be
made within 12 months, extendable by a further 6 months
with the consent of the parties. The maximum time available
to the Tribunal was therefore 18 months, and any extension
beyond that could only be granted by the Court under
Section 29A(4) of the Act.
7. It was further held that the Arbitration Act does
not require any party to file an application or raise an
objection for the mandate to terminate. Termination follows
automatically once the period expires. Since the award was
passed beyond 18 months, it could not stand. In the instant
case, the award itself violated a statutory mandate, and
such an award cannot be allowed to stand merely because a
9
party did not object. Therefore, the award was set aside as
patently illegal.
8. The learned counsel appearing for the appellant
contends that the scope of interference under Section 34 of
the Arbitration Act is narrow. It is further pointed out that
the other respondents before the Arbitral Tribunal, namely
respondents No.2, 3, 4, 5, 7 and 8 there, did not challenge
the award and must be taken to have accepted it. It is
further contended that respondents No.1 to 4 took part in
the arbitral proceedings voluntarily. They did not object to
the jurisdiction of the Sole Arbitrator. If the respondents
believed that the time had lapsed and the Tribunal had lost
its authority, they were required to raise that plea before the
Tribunal under Section 16 of the Arbitration Act. However,
they raised it only in 2019, after the matter had been
reserved for award. It is therefore argued that they waived
their objection, and Section 4 of the Arbitration Act applies.
9. It is further contended that under Sections
29A(5) and 2(h) of the Arbitration Act, only a party to the
Arbitration Agreement can seek an extension of time. The
10
trial Court, incorrectly accepted respondent No.1's
contention that the Arbitrator ought to have approached the
Court for extension. It is also contended that the trial Court
erred in holding that the mandate terminates automatically
without any objection from the parties. It is contended that
the willing participation of the parties itself amounts to
consent to extension under Section 29A(3) of the Arbitration
Act, since the Act does not require express written consent.
10. It is further contended that the Court has power
under Section 29A(4) of the Arbitration Act to extend the
period even after it has expired. The trial Court ought to
have extended the time on his own and validated the
proceedings and the award. It is argued that the purpose of
Section 29A of the Arbitration Act is to ensure speedy
disposal. It is not meant to nullify proceedings in which the
parties participated without objection.
11. The learned counsel appearing for the appellants
places reliance on the following judgments:-
•
C. Velusamy v. K. Indhera, vide order dated 03.02.2026
passed in SLP(C) No. 6551/2025;
11
•
Government of India and Another v. Sri Devraj Urs
Medical College , vide order dated 04.08.2026 passed in
Civil Appeal No.10669/2010;
•
Rajkumar Singh v. Madhukar & Another , vide order
dated 25.07.2017 passed in Civil Revision Application
No.78/2016;
•
Shipping Corporation of India Ltd. v. Machado Brothers
& Ors., vide order dated 25.03.2004 passed in Civil
Appeal No.1855-1856/2004;
•
M/s. Balaji Developers v. M.G.Gangaiah , vide order
dated 08.07.2022 passed in W.P.No.23837/2021;
•
Sri. Ashish K Philip v. M/s. Caledon Technologies India
Pvt. Ltd., vide order dated 16.04.2025 passed in W.P.
No.8842/2025;
•
Union of India v. M/s. M.K.Infrastructure (P) Ltd., vide
order dated 08.05.2025 passed in Arb. A. No.04/2024;
•
Board of Control for Cricket in India v. Kochi Cricket
Pvt.Ltd., vide order dated 15.03.2018, passed in (2018) 6
SCC 287;
•
Shapoorji Pallonji & Co. Pvt. Ltd. v. Jindal Thermal
Power Ltd., vide order dated 23.01.2020, passed in
O.M.P.(Misc.) (Comm.) 512/2019;
12
•
ONGC Petro Additions Ltd. v. Fernas Construction Co.
Inc, vide order dated 21.07.2020, passed in O.M.P.
(Misc.) (Comm.) 256/2019, I.A. 4989/2020;
•
M/S Sara International Pvt. Ltd. v. South Eastern
Railways & Anr . vide order dated 11.12.2020, passed in
Arb. No. 28/2020;
•
TATA Sons Pvt. Ltd. v. Siva Industries & Holdings Ltd.
& Ors. vide order dated 01.05.2023, passed in Arbitration
Case (Civil) No. 38/2017;
•
RKEC Projects Ltd. v. The Cochin Port Trust & Anr., vide
order dated 20.03.2024, passed in I.A. No.1/2013 in Ar.
No. 53/2019; and
•
Ayyasamy v. A. Shanmugavel & Ors., vide order dated
27.08.2024, passed in C.M.A (MD). No.108/2020.
12. The learned counsels appearing for the
petitioner/respondents contend that, the award is barred by
Section 29A of the Arbitration Act. The respondents' case is
that the Arbitrator entered upon the reference on
31.07.2017, as recorded in the award itself, and respondent
No.1 appeared on 22.11.2017. Therefore, the award ought
to have been passed by 30.07.2018, but it was passed only
on 24.06.2019. The parties did not consent to an extension
13
under Section 29A(3) of the Arbitration Act, and the Court
did not extend the period under Section 29A(4) of the
Arbitration Act. It is pointed out that, when the claimant
filed I.A.No.2 on 15.05.2019 seeking an injunction and
police protection, respondent No.1 filed objections on
27.05.2019. In those objections, it was specifically stated
that the mandate of the Arbitrator had terminated. Despite
this, the Arbitrator passed orders on I.A. No.2 on
10.06.2019, relying on Section 19 of the Arbitration Act and
observing that the parties had agreed to the procedure he
adopted. It is contended that this shows bias and undue
haste on the part of the Arbitrator, who passed the award
more than ten months after his mandate had expired.
13. It is also contended that the Schedule A property,
does not match the position on the ground. It is landlocked,
and can only be reached by crossing the Schedule B
property and another landlocked property belonging to one
Shri. Ramachandrappa. It is argued that the award is
therefore incapable of implementation, and the dispute was
not capable of settlement by arbitration. It is further
14
submitted that Axis Bank had initiated recovery proceedings
against Shri. Shivakumar in O.A. No.2183/2014 before DRT-
I, which was allowed on 19.06.2015. It is contended that in
view of Section 34 of the Securitisation and Reconstruction
of Financial Assets and Enforcement of Security Interest Act,
2002, the Arbitrator had no jurisdiction over the property,
and that the claimant suppressed these proceedings. It is
further contended that the award is patently illegal, contrary
to the substantive law, and in conflict with the public policy
of India.
14. In Shapoorji Pallonji and Co. Pvt. Ltd. v.
Jindal India Thermal Power Ltd. , reported in 2020 SCC
OnLine Del 2611 , the Delhi High Court held that the
amended Section 29A(1) of the Arbitration Act, being
procedural law, would apply to arbitrations pending on the
date of the amendment. In ONGC Petro Additions Ltd. v.
Fernas Construction Co. Inc . , reported in 2020 SCC
OnLine Del 2582 , the Delhi High Court followed Shapoorji
Pallonji's case (supra) and held that the amended Section
29A(1) of the Arbitration Act, would apply to all arbitrations
15
seated in India which were pending as on 30.08.2019 and
had commenced after 23.10.2015. The decision of the
Orissa High Court in SARA International Pvt. Ltd. v.
South Eastern Railways and Another , reported in 2020
SCC OnLine Ori 973 adopted a similar position. These
decisions have been affirmed by the Apex Court in Tata
Sons Pvt. Ltd. v. Siva Industries and Holdings Ltd. and
Others reported in (2023) 5 SCC 421 , wherein the Apex
Court held that since Section 29-A(1), as amended, is
remedial in nature, it should be applicable to all pending
arbitral proceedings as on the effective date i.e. 30-8-2019."
15. The learned counsel for the appellant has relied
on Board of Control for Cricket in India v. Kochi
Cricket Pvt. Ltd . , reported in (2018) 6 SCC 287 ,
wherein the Apex Court, referring to Hitendra Vishnu
Thakur v. State of Maharashtra reported in (1994) 4
SCC 602 , observed that the timelines laid down in
Section 29A of the Arbitration Act, though procedural in
nature, create new obligations, and that a procedural
statute should not generally be applied retrospectively,
16
where the result would be to create new obligations or to
impose new duties in respect of transactions already
accomplished. In Shipping Corporation of India Ltd. v.
Machado Brothers and Others , reported in (2004) 11
SCC 168 , the Apex Court held that the Court may take
note of subsequent events which render the original
proceeding infructuous. However, in the instant case the
amendment which came into force on 30.08.2019 cannot
be applied to arbitral proceedings which had already
terminated with the award dated 24.06.2019.
16. In Rohan Builders (India) Pvt. Ltd. v. Berger
Paints India Ltd. reported in (2025) 10 SCC 802 , the
Apex Court held that the mandate of the Arbitral Tribunal
terminates on the expiry of the period under Section 29A
of the Arbitration Act, unless it is extended by the Court.
In RKEC Projects Ltd. v. The Cochin Port Trust and
Another passed in I.A. No.1/2023 in A.R.
No.53/2019 passed on 20.03.2024 , held that the Court
may extend the mandate even after the award has been
passed, if sufficient cause is shown on an application
17
under Section 29A(5) of the Arbitration Act. In C.
Velusamy v. K. Indhera reported in 2026 INSC 112 ,
the Apex Court further held that an award passed after
the expiry of the mandate is ineffective and
unenforceable, unless the Court extends the mandate on
an application under Section 29A(5) on sufficient cause
being shown.
17. Having considered the contentions advanced and
the decisions on the point, we are of the opinion that even if
the 2019 Amendment to the Arbitration Act is held to be
retroactive in operation as being procedural, the said
Amendment cannot be made applicable to the award in
question in the instant case, which had already been
rendered on 24.06.2019, that is, before the amendment was
notified. Therefore, as on the date of the Notification of the
2019 Amendment on 30.08.2019, there was no proceeding
whatsoever pending before the arbitrator for the application
of the procedural law retroactively. The award had already
been rendered on 24.06.2019, which was way beyond the
period provided under Section 29A of the Arbitration Act, as
18
stood as on the said date. This aspect of the matter has
been clearly considered by the District Court as well.
18. The language of Section 29A of the Arbitration
and Conciliation Act is quite decisive. The provision as it
stood before the amendment of 2019 specifically stated that
the award shall be made within a period of 12 months from
the date the Arbitral Tribunal enters upon the reference.
Section 29A(3) provided that the parties may, by consent,
extend the period specified in sub-section (1) for a further
period not exceeding 6 months. However, Section 29A(4)
specifies that, if the award is not made within the period
specified in sub-section (1) or the extended period specified
under sub-section (3), the mandate of the arbitrator(s) shall
terminate unless the Court has, either prior to or after the
expiry of the period so specified, extended the period. It is
therefore clear that, if the award is not made within 12
months of the Tribunal entering on the reference or the
extended period of 6 months then, the mandate of the
arbitrator would cease unless the time is extended by the
Competent Court. In the instant case, even if the period for
19
passing the award is deemed to have been extended by 6
months by the conduct of the parties, the mandate of the
arbitrator would have ceased on the expiry of 18 months
from the arbitrator entering on the reference since there was
no attempt to extend the time by approaching the Court
under Section 29A (4) of the Act. The contention raised that
the parties had not objected to the award being passed
beyond the statutory time limit cannot make any difference
since the mandate of the Arbitral Tribunal stood terminated
on the expiry of 18 months.
19. In the said circumstances, we are of the opinion
that the decisions which are relied on to contend that the
2019 Amendment being procedural would apply to pending
arbitrations, cannot make any difference to the situation
available in the instant case. Accordingly, the Miscellaneous
First Appeals are dismissed.
20
All pending Interlocutory Applications shall stand
disposed of in both the appeals.
Sd/-
(ANU SIVARAMAN)
JUDGE
Sd/-
(T.P.VIVEKANANDA)
JUDGE
cp*/PN