Dismissed

Sri. Shivappa Dhulappa Hulkunde v. Sri L Narasimhaiah

Karnataka HC23 Feb 2024COMAP/3/2024

Case brief

AI extract

What is this about?

Appeal challenging confirmation of a sole arbitrator's award in a partnership dispute over M/s Kalyan Travels, where the claimant was awarded dues, monthly payments with interest, and refund of a security deposit. The court upheld findings that the firm was not dissolved within seven days and notices were duly served, and dismissed the appeal.

What the court decided

AI extract

Sri. Shivappa Dhulappa Hulkunde Vs Sri L Narasimhaiah — Arbitration | Karnataka HC (2024)

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COMAP No.3/2024

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IN THE HIGH COURT OF KARNATAKA AT BENGALURU

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DATED THIS THE 23^RD DAY OF FEBRUARY, 2024

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PRESENT

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THE HON’BLE MR. P.S. DINESH KUMAR, CHIEF JUSTICE

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AND

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THE HON’BLE MR. JUSTICE T.G. SHIVASHANKARE GOWDA

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COMMERCIAL APPEAL NO. 3 OF 2024

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BETWEEN:

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SRI. SHIVAPPA DHULAPPA HULKUNDE NO. 27-7, TEMPLE ROAD BASAVAKALYANA, BIDAR GULBARGA DIST.

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SINCE DEAD, REPRESENTED BY HIS LEGAL REPRESENTATIVES

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1(A). DR. MAMTA PATIL W/O C.K. PATIL D/O LATE SHIVAPPA HOLKUNDE AGED ABOUT 49 YEARS NO.26, LAXMI LAYOUT BASAVESHWARANAGARA HUBBALLI, DARWAD DIST …APPELLANT

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(BY SHRI. VISHWANATH SABARAD, ADVOCATE)

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AND:

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SRI. L. NARASIMHAIAH S/O LATE LAXMIPATHAIAH AGED ABOUT 76 YEARS NO.193, 47^TH CROSS, 2^ND MAIN 6^TH BLOCK JAYANAGAR BENGALURU-82 …RESPONDENT

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(BY SHRI. L. NARASIMHAIAH, PARTY-IN-PERSON)

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COMAP No.3/2024

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THIS COMMERCIAL APPEAL IS FILED UNDER SECTION 13(1A) OF COMMERCIAL COURTS ACT R/W SECTION 37(1)(c) OF THE ARBITRATION AND CONCILIATION ACT, 1996, PRAYING TO ISSUE NOTICE / SUMMONS TO RESPONDENT, CALL FOR RECORDS, HEAR THE PARTIES AND SET ASIDE THE IMPUGNED JUDGMENT AND ORDER DATED 16.12.2023 PASSED IN COM.A.P.NO.09/2023 ON THE FILE OF COURT OF THE LXXXIII ADDL. CITY CIVIL AND SESSIONS JUDGE AT BENGALURU CITY (CCH NO.84) CONFIRMING THE AWARD DATED 20.08.2010 IN ARBITRATION CASE ON THE FILE OF ARBITRAL TRIBUNAL OF SRI. SANGOLLI, RETIRED DISTRICT JUDGE AND SOLE ARBITRATOR BENGALURU AND ALLOW THE ABOVE APPEAL IN THE INTEREST OF JUSTICE AND EQUITY.

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THIS COMMERCIAL APPEAL, HAVING BEEN HEARD AND RESERVED FOR JUDGMENT ON 14.02.2024, COMING ON FOR PRONOUNCEMENT OF JUDGMENT THIS DAY, CHIEF JUSTICE PRONOUNCED THE FOLLOWING:-

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JUDGMENT

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This appeal by the plaintiff is directed against the

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judgment dated December 16, 2023 in COM.A.P.No.09/2023

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passed by the LXXXIII Additional City Civil and Sessions Judge (CCH-84), Bangalore.

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We have heard Shri. Vishwanath Sabarad, learned Advocate for the appellant/plaintiff and Shri. L. Narasimhaiah, Party-in-person for

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respondent/defendant.

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COMAP No.3/2024

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For the sake of convenience, the parties shall be referred to as per their status in the Trial Court.

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The instant petition arises from the order dated 20.08.2010 passed by the Sole Arbitrator, Shri. N.S. Sangolli, whereby the Arbitral Tribunal has partly allowed the petition filed by respondent (Claimant therein). The Arbitral Award reads as follows:

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“Claims petition partly allowed R1-to supply to the Claimant profit and loss accounts and all other relevant books of accounts pertaining to the business run as per the partnership agreement Ex.C11 and pay ₹.12,500/- per month from February 2003 till 28.11.2008 with interest at 9% p.a.,

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R-2 is directed to release ₹.2,00,000/- deposited as security deposit by the claimant following their rules governing the refund of security deposit within 6 months from the date of the receipt of the copy of this Award.

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Award to be drawn up accordingly.”

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5. Respondent’s case before the Tribunal is that,

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North East Karnataka Road Transport Corporation¹ had allotted tender to respondent to run buses on hire from

1 ‘NEKRTC’ for short

COMAP No.3/2024

20.04.2001 to 19.09.2006 and he had deposited Rs.2,00,000/as security deposit with NEKRTC. In meanwhile, Late Shivappa-plaintiff and respondent entered into a partnership deed dated 29.12.2001 under the name

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and style ‘M/s. Kalyan Travels’. He had invested Rs.6,75,000/- as opening capital. It was agreed that respondent would be entitled for 51% share out of the payments received from the NEKRTC. The NEKRTC made payments in name of the partnership firm as agreed between the partners. However, plaintiff was withholding the amounts legitimately due and payable to the respondent. Respondent issued a legal notice. In response, plaintiff paid ₹1,50,000/- on 11.02.2003, thereafter, plaintiff did not pay any amount. On 28.11.2009, respondent issued notice calling upon plaintiff to give consent to appoint one Sri.Prof.M.Narayana Reddy as sole Arbitrator and the plaintiff did not accede to the same. Respondent filed a Company Petition² , wherein this Court directed to appoint Arbitrators to adjudicate the dispute between plaintiff-Late

2 COMP No. 07/2009

COMAP No.3/2024

Shivappa and the respondent. Hence, respondent

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approached the Arbitral Tribunal.

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Plaintiff’s case is that, Late Shivappa entered into a Partnership Deed dated 29.12.2001 and it was named ‘M/s. Kalyan Travels’. The investment made by Late Shivappa was Rs. 6,00,000/- and respondent invested Rs. 75,000/- and the total investment was Rs.6,75,000/-. Due to loss in the business, a Deed of Dissolution was executed on 17.03.2002 with effect from 05.01.2002. The partnership firm was in existence only for 7 days. Late Shivappa was not keeping well and taking advantage of the same, respondent filed a C.M.P. No. 07/2009 before this Court. Respondent obtained an ex-parte Arbitral Award dated 18.02.2010. Aggrieved by the Arbitral Award, plaintiff filed the instant petition under Section 34 of the Arbitral and Conciliation Act, 1996 and the same was dismissed. Hence, this appeal.

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COMAP No.3/2024

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7. Based on the above pleadings, the Commercial

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Court has framed following points for consideration:

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(1) Whether the Plaintiff has made out any grounds as set out under Section 34 of Arbitration & Conciliation Act, 1996 so as to set aside the Award dated:20^th August 2010 passed by the learned Arbitral Tribunal in Arbitratin Case between Sri. L. Narasimhaiah and Sri. Shivappa Dhulappa Hulkunde and NEKRTC?

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(2) Whether the Plaintiff has made out any grounds as set out under Section 34 of Arbitration & Conciliation Act, 1966 so as to set Arbitration Case between Sri.L.Narasimhaih and Sri. Shivappa Dhulappa Hulkunde and NEKRTC?

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(3) What Order?

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Answering point No. (1) and (2) in the negative,

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the Commercial Court has dismissed plaintiff’s petition.

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Shri. Sabarad, for the plaintiff, mainly submitted that respondent has suppressed the fact about the Deed of Dissolution and obtained the ex-parte Arbitral Tribunal by playing fraud; that the notice/ summons issued to the late Shivappa were not duly served; and the learned Arbitrator

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has not given any proper reasoning.

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COMAP No.3/2024

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Shri. L. Narasimhaiah, appearing as party

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in-person, argued in support of the impugned petition.

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We have carefully heard the rival contentions and perused the records.

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Based on the submissions made on both the sides, the point that arises for our consideration is:

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Whether the impugned order calls for any interference?

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Undisputed fact of the case is, Late Shivappa entered into a Partnership Deed dated 29.12.2001 and it was named ‘M/s. Kalyan Travels’.

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Plaintiff has urged two main contentions. Firstly, the partnership firm was dissolved vide Dissolution Deed dated 17.03.2002 with effect from 05.01.2002. The partnership firm was in existence only for seven days i.e.,

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COMAP No.3/2024

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from 29.12.2001 to 05.01.2002. On this aspect, the learned

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Trial Judge has recorded his finding as follows:

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“41. The plaintiff is contending that the partnership between the Claimant and Shivappa Dhulappa Holkunde was dissolved by virtue of dissolution deed dated 17.03.2002 with effect from 05.01.2002. The partnership was in force for a period of seven days only. It is not possible to conceive that how the parties could come to the conclusion that their partnership business is making loss within a span of seven days. Dr.Prashanth Holkunde the brother of the plaintiff herein in his objections statement filed in Ex.No.681/2011 has stated that the partnership was in force till 17.03.2012, the date of dissolution. The Plaintiff is contending that Shivappa Dhulappa Holunde passed away on 28.03.2017. She has not furnished copy of death or any other documents to support the date of death of Shiva Dhulappa Holkunde.”

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Secondly, that the summons was not served on plaintiff. We have perused the Arbitral Award dated 20.08.2010. We may record that the Sole Arbitrator has noted thus:

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“Though notices were sent to the respondents by RPAD they did not appear. It is clear that claimant sent a copy of the claim petition to R-1 by RPAD he did not respond. So the proceedings were conducted in his absence.”

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COMAP No.3/2024

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In view of the aforementioned findings recorded

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by the Trial Court and the Sole Arbitrator, in our opinion, the contentions urged on behalf of plaintiff are untenable and we are at one with the view taken by the learned Trial Judge.

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Hence, we answer the point for consideration in the negative .

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Resultantly, this appeal does not merit

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consideration and accordingly, it is dismissed .

No costs.

Sd/CHIEF JUSTICE

Sd/-

JUDGE

SPS

Sri. Shivappa Dhulappa Hulkunde v. Sri L Narasimhaiah

Case brief

What is this about?

What the court decided

Sri. Shivappa Dhulappa Hulkunde v. Sri L Narasimhaiah

Case brief

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