Petition U/S 34 Of Arbitration Act Cannot Be Decided Without Summoning Entire Record To Verify Service Of Notice: Karnataka HC
The Karnataka High Court bench of Justice Hanchate Sanjeevkumar has held that a petition under Section 34 of the Arbitration and Conciliation Act, 1996 (Arbitration Act) cannot be decided without first summoning the entire arbitration record to determine whether the notice was actually served on the other party. Brief Facts: Respondent No. borrowed a loan from the Appellant and when...
The Karnataka High Court bench of Justice Hanchate Sanjeevkumar has held that a petition under Section 34 of the Arbitration and Conciliation Act, 1996 (Arbitration Act) cannot be decided without first summoning the entire arbitration record to determine whether the notice was actually served on the other party.
Brief Facts:
Respondent No. borrowed a loan from the Appellant and when the Respondent committed default in repaying the amount, arbitration proceedings were initiated under clause 22(a) of the Hire Purchase Agreement.
The Arbitrator conducted the proceedings in Manipal and passed an award. Respondent No. 1 challenged the award under section 34 of the Arbitration Act before the District Judge who set aside the award against Respondent No. 1. The Appellant has now preferred the present appeal under section 37 of the Arbitration Act against this order of the District Judge.
Contentions:
The Appellant submitted that the District Judge, Madikeri does not have jurisdiction to entertain the Arbitration suit under Section 34 of the Arbitration Act as the entire transaction was in Udupi District and as per the clause of Arbitration Agreement, the Arbitration sitting would be within Udupi District only.
Per contra, the Respondent submitted that since respondent No.1 is a resident of Kodagu-Madikeri District therefore, the District Judge has jurisdiction and further submitted that no notice has been served on respondent No.1.
Observations:
The court noted that it is clear after reviewing the impugned order that the District Judge did not summon the arbitration records to verify whether notice was served on the Respondent No. 1 or not.
The court observed that before adjudicating the petition under section 34 of the Arbitration Act, the District Judge should have summoned the arbitration records. Given that the notice of reference was returned as addressee left and notice of inquiry as addressee refused. Since it was essential for the purpose of adjudication, the District Judge ought to have considered whether the notice was served or not.
Accordingly, the court held that after perusal of the arbitration records, the District Judge was directed to decide whether he is having jurisdiction to entertain the Arbitration Suit under Section 34 of the Arbitration filed before the District Court in Kodagu Madikeri District and whether the appointment of sole Arbitrator is in accordance with law.
Accordingly, the present appeal was allowed and the impugned order was set aside.
Case Title: M/S. MAHA RASHTRA APEX CORPORATION LTD Versus SRI. P.K.MOHAMMED and Ors.
Case Number:MFA No. 11925 of 2012
Order Date: 7/03/2025
SRI. M H HANEEF, ADVOCATE FOR R1
