Reference Application U/S 8 Of Arbitration Act Should Be Filed Within 120 Days From Date Of Service Of Summons: Karnataka High Court
Soumya Chakrabarti
25 Dec 2024 6:40 PM IST
The Karnataka High Court Bench of Justice Hemant Chandangoudar has held that a reference application under Section 8 of the Arbitration and Conciliation Act, 1996, should have been filed within a period of 120 days from the date of service of summons to the defendant, which was long passed before 20.03.2019. Thus, where the reference application under Section 8 of the Act was made long after the expiry of the outer limit of 120 days from the date of service of summons, such a reference could not be construed to have been made at the earliest.
Brief Facts:
The petitioner challenged the order passed by the Additional City Civil and Sessions Judge, Bangalore, by which the application filed by the respondent No.1 under Section 8(1) of the Arbitration and Conciliation Act, 1996, came to be allowed. The said order was affirmed vide order, preferred by the petitioner seeking a review of the earlier order. The petitioner filed a suit for the recovery of a sum of Rs.16,29,311.74 along with interest at the rate of 18% per annum, and was decreed ex parte.
Thereafter, defendant No.1 filed an application under Order IX, Rule 13 of the CPC, 1908, and the trial court restored the suit by order dated 20.02.2019. Subsequently, defendant No.1 filed an application under Section 8(1) of the Act, seeking referral of the dispute to arbitration, as stipulated in Clause 12 of the partnership deed. Aggrieved by the order allowing the application and the dismissal of the review petition by order dated 06.01.2022, the petitioner has filed the present petition under Section 115 of CPC, 1908 against the order passed by the Additional City Civil and Sessions Judge, Bangalore.
Observation of the court:
The court noted that in view of the legal principles established with reference to the unamended and amended Section 8 of the Act, the application under Section 8 should have been filed within an outer limit of not later than 120 days as stipulated under amended Order 8 Rule 1 of CPC from the date of service of summons, which provides for filing of written statement.
Further the court relied on the case of Booz Allen (2011) and held that a reference application under Section 8 of the Act, should have been filed within a period of 120 days from the date of service of summons to the defendant, which was long passed before 20.03.2019. Thus, where the reference application under Section 8 of the Act was made long after the expiry of the outer limit of 120 days from the date of service of summons, such a reference could not be construed to have been made at the earliest.
Finally, the court allowed the petition.
Case Title: SRI.THANGAVELU. R v. SHRI. SANTHOSH. J
Case Number: CRP No. 265 of 2022
Counsel for the Petitioner: SRI. PRASAD K R RAO., ADVOCATE
Counsel for the Respondent: SRI. ABHINAV R, ADVOCATE
Date of Judgment: 12.12.2024
