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IN THE HIGH COURT OF KARNATAKA AT BENGALURU

DATED THIS THE 7

TH

DAY OF APRIL, 2026

PRESENT

THE HON'BLE MRS. JUSTICE ANU SIVARAMAN

AND

THE HON'BLE MS. JUSTICE TARA VITASTA GANJU

COMMERCIAL APPEAL NO.95 OF 2023

BETWEEN:

SRI. L.VIVEKANANDA

AGED ABOUT 51 YEARS,

S/O LATE RAMAKRISHNAPPA,

R/AT NO.8, 13

TH

‘A’ MAIN ROAD,

NEW THIPPASANDRA,

BENGALURU-560038.

…APPELLANT

(BY SRI. SAMPATH A.,ADVOCATE)

AND:

1. M/S. HANDY 101 SOLUTIONS

AND SERVICE PVT. LTD.,

NO 10, SHANTHI NILAYAM,

WIND TUNEEL ROAD,

MURUGESHPALYAM, HAL POST,

BENGLAURU-560017.

2. MR. PETER PUSHPARAJ

AGED ABOUT 62 YEARS,

S/O LATE MR. JOSHPH PUSHPARAJ,

R/AT NO - G-2, MEMPHIS, NO.7,

LONGFORD ROAD, BENGALURU-560025.

…RESPONDENTS

(BY SRI. VASANTH.V.FERNANDES, ADVOCATE)

R

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THIS COMAP/COMMERCIAL APPEAL FILED UNDER

SECTION 37 OF ARBITRATION AND CONCILIATION ACT R/W

SECTION 13 (1-A) OF THE COMMERCIAL COURTS ACT, 2015 ,

PRAYING TO SET ASIDE THE JUDGMENT AND ORDER DATED

28.09.2022 IN COM.A.P.NO.41/2022 PASSED BY THE LEAR NED

LXXXV ADDITIONAL CITY CIVIL AND SESSIONS JUDGE (CCH -

86) AND CONSEQUENTLY SET ASIDE THE AWARD DATED

31.01.2022 PASSED BY THE LEARNED SOLE ARBITRATOR IN

A.C.NO.5/2020 AT ARBITRATION AND CONCILIATION CENTR E,

BENGALURU (DOMESTIC AND INTERNATIONAL), SO AS TO

MEET THE ENDS OF JUSTICE AND EQUITY. IA NO. 1/2023 FOR

CD IN FILING IA NO.1/2023 IS FILED UNDER SECTION 5 OF

THE LIMITATION ACT, PRAYING THAT THIS HONBLE COURT

MAY BE PLEASED TO CONDONE THE DELAY OF 85 DAYS IN

FILING THE ABOVE APPEAL, SO AS TO MEET THE ENDS OF

JUSTICE AND EQUITY.

THIS APPEAL HAVING BEEN RESERVED FOR JUDGMENT

ON 25.03.2026, THIS DAY, COMING ON FOR

PRONOUNCEMENT OF JUDGMENT WAS DELIVERED THEREIN AS

UNDER:

CORAM: HON'BLE MRS. JUSTICE ANU SIVARAMAN

&

HON'BLE MS. JUSTICE TARA VITASTA GANJU

CAV JUDGMENT

(PER: HON'BLE MS. JUSTICE TARA VITASTA GANJU)

1. The present Appeal under Section 37 of the

Arbitration and Conciliation Act, 1996 [hereinafter referred

to as the ‘Act’] impugns the Judgment and Order dat ed

28.09.2022, passed in Com.A.P.No.41/2022 by the

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learned LXXXV Additional City Civil And Sessions Judge, at

Bengaluru (CCH-86), whereby the Commercial Court ha s

dismissed a Petition filed under Section 34 of the Act

(hereinafter referred to as the ‘Impugned Judgment’ )

thereby upholding an Award dated 31.01.2022 passed in

A.C.No.5/2020, by a Sole Arbitrator appointed by th is

Court (hereinafter referred to as the ‘Arbitral Award’).

2. I.A. No.1/2023 has been filed seeking condonatio n of

delay of 85 days to file the present appeal. The learned

counsel for the appellant/claimant has contended that the

appeal could not be filed within time, however, in terms of

the judgment of the Supreme Court in the case of

Government of Odisha, Department of Water

Resources vs. Gayatri Projects Limited

1

, even a delay

of 75 days has been condoned by the Supreme Court.

3. Although the respondents stand served, there is no

presence on their behalf. However, in view of the

pendency of this appeal for almost three years, and the

1

2025 SCC OnLine 2736

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fact that this matter is listed for admission today, this

Court deems it apposite to hear the appeal.

4. As stated above, I.A.No.1/2023 has been filed by the

appellant/claimant, which sets out that the reason for the

delay was because the appellant/claimant had a busy

schedule and was travelling out of station and could not

instruct his counsel. The relevant paragraphs of th e

Affidavit are set out below:

“2. I humbly submit that pursuant to the

aforesaid order, I was not keeping well for some

time and also due to busy schedule of the business

work I was travelling out of station hence I could

not instruct my counsel to prefer the above

statutory appeal in time. Therefore, there is a delay.

3. I submit that there is no malafide intention in

filing the appeal belatedly due to the aforesaid

Bonafide reasons. If this application is not allowed, I

would be put to great hardship and prejudice and on the

other hand, no hardship of prejudice would be caused to

the Respondent if this application is allowed.”

[Emphasis Supplied]

5. The Supreme Court in the case of State of

Maharashtra Vs. Borse Bros. Engineers &

Contractors (P) Ltd.

2

has explained that in the case of

commercial disputes, delay should be condoned merel y by

2

(2021) 6 SCC 460

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way of an exception and not by way of a Rule. It has been

explained that the expression ‘sufficient cause’ is not

elastic enough to cover long delays, which are beyond the

period provided for in the appeal. It has further been held

that merely because the Government is involved, a

different yardstick for condonation of delay cannot be

made. The relevant extract is below:

“58. Given the object sought to be achieved under

both the Arbitration Act and the Commercial Courts

Act, that is, the speedy resolution of disputes, th e

expression “sufficient cause” is not elastic enough

to cover long delays beyond the period provided by

the appeal provision itself. Besides, the expression

“sufficient cause” is not itself a loose panacea for the ill

of pressing negligent and stale claims. This Court,

in Basawaraj v. LAO [Basawaraj v. LAO, (2013) 14 SC C

81] , has held : (SCC pp. 85-88, paras 9-15)

“9. Sufficient cause is the cause for which the

defendant could not be blamed for his

absence. The meaning of the word “sufficient”

is “adequate” or “enough”, inasmuch as may

be necessary to answer the purpose intended.

Therefore, the word “sufficient” embraces no

more than that which provides a platitude,

which when the act done suffices to

accomplish the purpose intended in the facts

and circumstances existing in a case, duly

examined from the view point of a reasonable

standard of a cautious man. In this context,

“sufficient cause” means that the party should

not have acted in a negligent manner or there

was a want of bona fide on its part in view of

the facts and circumstances of a case or it

cannot be alleged that the party has “not

acted diligently” or “remained inactive”.

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However, the facts and circumstances of each case

must afford sufficient ground to enable the court

concerned to exercise discretion for the reason that

whenever the court exercises discretion, it has to

be exercised judiciously. The applicant must satisfy the court that he was prevented by any

“sufficient cause” from prosecuting his case,

and unless a satisfactory explanation is

furnished, the court should not allow the

application for condonation of delay. The court

has to examine whether the mistake is

bona fide or was merely a device to cover an

ulterior purpose. (See Manindra Land & Building

Corpn. v. Bhutnath Banerjee [Manindra Land &

Building Corpn. v. Bhutnath Banerjee, AIR 1964 SC

1336], Mata Din v. A. Narayanan [Mata Din v.

A.Narayanan, (1969) 2 SCC 770] Parimal v. Veena

[Parimal v. Veena, (2011) 3 SCC 545 : (2011) 2

SCC (Civ) 1] and Maniben Devraj Shah v. Municipal

Corpn. of Brihan Mumbai [Maniben Devraj Shah v.

Municipal Corpn. of Brihan Mumbai, (2012) 5 SCC

157 : (2012) 3 SCC (Civ) 24])…

59. Likewise, merely because the Government is

involved, a different yardstick for condonation of

delay cannot be laid down. This was felicitously stated

in Postmaster General v. Living Media (India) Ltd.

[Postmaster General v. Living Media (India) Ltd., (2012)

3 SCC 563: (2012) 2 SCC (Civ) 327 : (2012) 2 SCC (C ri)

580:(2012) 1 SCC (L&S) 649] [“Postmaster General”], as

follows: (SCC pp. 573-74, paras 27-29)

“27. It is not in dispute that the person(s)

concerned were well aware or conversant with the

issues involved including the prescribed period of

limitation for taking up the matter by way of filing a

special leave petition in this Court. They cannot

claim that they have a separate period of limitation

when the Department was possessed with

competent persons familiar with court proceedings.

In the absence of plausible and acceptable

explanation, we are posing a question why the

delay is to be condoned mechanically merely

because the Government or a wing of the

Government is a party before us.

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28. Though we are conscious of the fact that in a

matter of condonation of delay when there was no

gross negligence or deliberate inaction or lack of

bona fides, a liberal concession has to be adopted

to advance substantial justice, we are of the view

that in the facts and circumstances, the Department

cannot take advantage of various earlier decisions.

The claim on account of impersonal machinery and

inherited bureaucratic methodology of making

several notes cannot be accepted in view of the

modern technologies being used and available. The

law of limitation undoubtedly binds everybody,

including the Government.

29. In our view, it is the right time to inform

all the government bodies, their agencies and

instrumentalities that unless they have

reasonable and acceptable explanation for the

delay and there was bona fide effort, there is

no need to accept the usual explanation that

the file was kept pending for several

months/years due to considerable degree of

procedural red tape in the process. The

government departments are under a special

obligation to ensure that they perform their duties

with diligence and commitment. Condonation of

delay is an exception and should not be used as an

anticipated benefit for the government

departments. The law shelters everyone under the

same light and should not be swirled for the benefit

of a few.”

[Emphasis is supplied]

5.1 The Supreme Court has in Borse Brothers case

further held that given the object of speedy dispos al

sought to be achieved by the Commercial Courts Act,

2015, for appeals filed under Section 37 of the Arbitration

and Conciliation, 1996, that are governed by Articles 116

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and 117 of the Limitation Act, 1963, the delay is t o be

condoned by way of an exception and not a Rule. The

relevant extract is below:

“63.Given the aforesaid and the object of speedy

disposal sought to be achieved both under the

Arbitration Act and the Commercial Courts Act, for

appeals filed under Section 37 of the Arbitration

Act that are governed by Articles 116 and 117 of

the Limitation Act or Section 13(1-A) of the

Commercial Courts Act, a delay beyond 90 days, 30

days or 60 days, respectively, is to be condoned by

way of exception and not by way of rule. In a fit

case in which a party has otherwise acted bona

fide and not in a negligent manner, a short delay

beyond such period can, in the discretion of the

court, be condoned, always bearing in mind that the

other side of the picture is that the opposite party may

have acquired both in equity and justice, what may now

be lost by the first party's inaction, negligence or laches.”

[Emphasis Supplied]

6. A reading of the Affidavit annexed to I.A.No.1/2 023

shows that the appellant has failed to furnish any cause

whatsoever for condonation of delay, other than sta ting

that the appellant was travelling out of station and was

busy. It further states that the application must be allowed

to meet the ends of justice.

6.1 As stated above, the Supreme Court in the Borse

Brothers case has held that in a case where a party has

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acted in a bonafide manner, a short delay may be

condoned in exceptional circumstances. The contenti ons

which are reproduced in paragraph No.4 do not make out

any cause for condonation of delay much less suffic ient

cause. The party cannot be said to have acted in a

bonafide manner.

7. The judgement in the Government of Odisha’s

case does not help the appellant either, inasmuch as the

delay of 75 days therein was condoned only on the

Supreme Court being satisfied that sufficient cause had

been shown, in line with the principles laid down in Borse

Brothers case.

8. In view of the settled law, this Court is not inclined to

condone the delay in the present case. Accordingly, I.A.

No.1/2023 is dismissed. However, this Court has bri efly

examined the contentions of the learned counsel for the

appellant/claimant as well and found the same to be sans

merit. The only contention that has been raised by the

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learned counsel for the appellant/claimant before t his

Court on the merits of this case, is that the learn ed

Arbitral Tribunal wrongly interpreted the clauses of the

Share Purchase Agreement [hereinafter referred as t he

‘SPA’].

9. The appellant/claimant and respondent entered in to

a SPA dated 30.03.2020, whereby the appellant/claim ant

has agreed to purchase 20% of the shares of the

respondent No.1/company for a sum of Rs.10,00,000/-

(Rupees Ten Lakhs). It is the case of the appellant /

claimant that there was a breach of clauses (c) and (d) of

the SPA and based on the breach, he exercised his right to

transfer the shares back to the Promoters by sendin g a

Notice dated 01.08.2018. Since the Notice was not a cted

upon, a Claim Petition was filed seeking recovery of the

sum of Rs.35,00,000/- (Rupees Thirty Five Lakhs) fr om

the respondents.

10. The respondents contended that the exercise of

power to transfer their shares back was not a valid

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exercise and that a combined reading of clauses (l) and

(m) of the SPA ousts the claim of the appellant/claimant.

Thus, it was prayed that the claim petition be dismissed

with costs.

11. The learned Arbitral Tribunal formulated three issues,

below:

“i. Whether the claimant proves that the respondent s

to pay a sum of Rs.35,00,000/- in terms clause (l)

of the share purchase agreement dated

30.03.2010?

ii. Whether the claimant proves that the respondent s

are liable to pay a sum of Rs.8,92,500/- towards

interest for the period from 01.08.2019 to

31.12.2019?

iii. Whether the respondents prove that the

Arbitration proceedings is not maintainable /

barred in view of the pendency of

O.S.No.7201/2012 on the file of the Additional City

Civil Judge Bengaluru (CCH-45)?”

12. The learned Arbitral Tribunal after examining the SPA

found that the ‘option to exit’ of the appellant/claimant is a

qualified option and not an absolute option. It fur ther

found that in terms of the oral evidence of the

appellant/claimant (PW1), as set out in his examina tion-

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in-chief, there was an admission by the appellant/claimant

that the option was only exercised on 01.08.2018 and not

previously. The relevant extract is below:

“I state that, exercising my rights under clause (1) of the

Share Purchase Agreement dated 30.03.2010, vide

notice dated 01.08.2018, I intended to exit from th e

company and claimed a sum of Rs.35,00,000/- (Rupees

Thirty-Five Lakhs Only) within fifteen days from th e

receipt of the said notice.”

[Emphasis Supplied]

12.1. The learned Arbitral Tribunal further held that the

option to exit was to be exercised after the expiry of the

period prescribed under clause (l) of the SPA and it was

required to be exercised after 30.03.2015 but was o nly

exercised on 01.08.2018. The learned Arbitral Tribu nal

relied upon Clauses (l) and (m) of the SPA to hold that the

appellant/claimant was required to exercise the exit option

strictly at the end of the stipulated period of five years

from the date of the agreement, i.e., on or before

30.03.2015. The learned Arbitral Tribunal interpreted the

expression “at the end of the period of 5 years” as not

permitting exercise of the option after the expiry of the

said period. It was further held that the Notice da ted

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01.08.2018, being beyond the prescribed period, was not

in compliance with Clause (l) of the SPA. The learn ed

Arbitral Tribunal also relied upon Clause (m) to conclude

that the agreement itself was valid only for a period of five

years and, admittedly not having been renewed, the right

to exercise the exit option did not subsist thereaf ter.

Accordingly, the learned Arbitral Tribunal held that the

appellant/claimant, having failed to act strictly in terms of

the said clauses, was not entitled to seek payment of

Rs.35,00,000/- or any other relief.

12.2 The learned Arbitral Tribunal also relied on t he

evidence of the appellant/claimant who deposed as P W1,

who in his cross-examination stated that the SPA (Ex.P1)

was not renewed at any point of time and neither wa s

there an ‘Addendum’ or a ‘Corrigendum’ to the SPA t o

accept the contentions of the appellant/claimant. T hus,

interpreting the SPA, the learned Arbitral Tribunal held

that the claimant is not entitled for the relief sought in the

claim petition and the claim was dismissed.

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13. Aggrieved by the dismissal of its claim, the

appellant/claimant filed a petition under Section 34 of the

Act and contended that the learned Arbitral Tribunal lost

sight of the contention of the parties and it wrong ly

interpreted the meaning of clause (l) of the SPA. It was

further contended that the interpretation by the Arbitral

Tribunal that the option must be exercised immediat ely

after the expiry of 5 years was incorrect.

13.1 The respondents on the other hand contended that

since there was only one interpretation possible to the

clause of the SPA and since the learned Arbitral Tribunal

interpreted the same, relying on the settled law in this

behalf, under Section 34, the Court cannot interfere even

if the Court has a different view.

14. The learned Commercial Court, relied on the

judgments in the cases of SAIL vs. Gupta Brother Steel

Tubes Limited

3

and Sumitomo Heavy Industries

3

2009 (10) SCC 63

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Limited vs. ONGC Limited

4

to hold that since the Court

cannot sit in an appeal over the Award of the learn ed

Arbitral Tribunal nor can it go into the reasonableness of

the contents of the award, the Court cannot substitute its

view with that of the Arbitrator or Arbitral Tribunal. Thus,

the challenge to the Award came to be dismissed by the

Commercial Court.

15. It is settled law that an Arbitrator examines t he

quality of evidence placed before him when he delivers his

Award and a view which is possible on the facts as set

forth by the Arbitrator must be relied upon. This C ourt

while sitting in a Coordinate Bench in the Delhi High Court,

relying on the judgments of the Supreme Court in the case

of Delhi Airport Metro Express (P) Ltd. v. DMRC

5

and

Indian Oil Corporation Ltd. v. Shree Ganesh

Petroleum

6

, has in the case of Deputy Commissioner

4

2010 (11) SCC 296

5

(2022) 1 SCC 131

6

(2022) 4 SCC 463

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of Police versus Score Information Technologies

7

held as follows:

“20. The Arbitrator examines the quality and

quantity of evidence placed before him when he

delivers his Arbitral Award and a view, which is

possible on the facts as set forth by the Arbitrato r

must be relied upon. In Delhi Airport Metro Express

(P) Ltd. v. DMRC, the Supreme Court has held that the

very object of the Act is that there should be minimal

judicial interference with an Award. It is further

held that the Arbitral Tribunal holds the final

authority in both facts and law and contravention

of law not linked to public policy is beyond the

scope of judicial interference under “patent

illegality”:

“28. This Court has in several other judgments

interpreted Section 34 of the 1996 Act to stress on

the restraint to be shown by Courts while examining

the validity of the arbitral awards. The limited

grounds available to Courts for annulment of arbitral

awards are well known to legally trained minds.

However, the difficulty arises in applying the well-

established principles for interference to the facts of

each case that come up before the Courts. There is

a disturbing tendency of Courts setting aside

arbitral awards, after dissecting and

reassessing factual aspects of the cases to

come to a conclusion that the award needs

intervention and thereafter, dubbing the award

to be vitiated by either perversity or patent

illegality, apart from the other grounds

available for annulment of the award. This

approach would lead to corrosion of the object

of the 1996 Act and the endeavours made to

preserve this object, which is minimal judicial

interference with arbitral awards. That apart,

several judicial pronouncements of this Court would

become a dead letter if arbitral awards are set aside

by categorising them as perverse or patently illegal

7

2024 SCC OnLine Del 4555

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without appreciating the contours of the said

expressions.

29. Patent illegality should be illegality which goes to the root of the matter. In other words,

every error of law committed by the Arbitral

Tribunal would not fall within the expression

“patent illegality”. Likewise, erroneous

application of law cannot be categorised as

patent illegality. In addition, contravention of

law not linked to public policy or public interest

is beyond the scope of the expression “patent

illegality”. What is prohibited is for Courts to

reappreciate evidence to conclude that the

award suffers from patent illegality appearing

on the face of the award, as Courts do not sit in

appeal against the arbitral award. The

permissible grounds for interference with a

domestic award under Section 34(2-A) on the

ground of patent illegality is when the

arbitrator takes a view which is not even a

possible one, or interprets a clause in the

contract in such a manner which no fair-minded

or reasonable person would, or if the arbitrator

commits an error of jurisdiction by wandering

outside the contract and dealing with matters

not allotted to them. An arbitral award stating no

reasons for its findings would make itself susceptible

to challenge on this account. The conclusions of the

arbitrator which are based on no evidence or have

been arrived at by ignoring vital evidence are

perverse and can be set aside on the ground of

patent illegality. Also, consideration of documents

which are not supplied to the other party is a facet of

perversity falling within the expression “patent

illegality”.

[Emphasis is ours]

21. Interpretation of a contract is a matter for an

Arbitrator to determine. Even if such interpretatio n

gives rise to an erroneous application of law, the

Courts will generally not interfere, unless the err or

is palpably perverse or illegal and goes to the roo t

of the matter. It is therefore to be seen whether the

interpretation given by the Arbitral Tribunal is such that a

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fair minded or reasonable person could conclude as well,

or if the interpretation by the Arbitral Tribunal is patently

illegal.

xxx xxx xxx

23. The Arbitral Tribunal examined and interpreted the

provisions of the Contract and found the termination of

the Contract to be illegal and awarded damages to t he

respondent. The learned Single Judge upheld all the findings of the Arbitral Tribunal after examining

the same. The findings of the Arbitral Tribunal are

not patently illegal or against public policy.

xxx xxx xxx

25. The Supreme Court in Indian Oil Corporation

Ltd. v. Shree Ganesh Petroleum, had held that

where the terms of a contract are capable of more

than one interpretation, the Court cannot interfere

with the Award only if the Court is of the opinion

that another interpretation would have been a

better one. Reliance is placed on the following extract of

the Indian Oil case:

“45. The Court does not sit in appeal over the award

made by an Arbitral Tribunal. The Court does not

ordinarily interfere with interpretation made by the

Arbitral Tribunal of a contractual provision, unless

such interpretation is patently unreasonable or

perverse. Where a contractual provision is

ambiguous or is capable of being interpreted in

more ways than one, the Court cannot interfere

with the arbitral award, only because the Court

is of the opinion that another possible

interpretation would have been a better one. ”

[Emphasis is ours]

16. An examination of the SPA reflects that it is in the

nature of an agreement for investment with the

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appellant/claimant investing into the respondent No .1/

Company, who stands represented by respondent No.2.

17. At this stage, it is apposite to extract the relevant

clauses of the SPA, which are set out below:

“Clause (b): The parties hereby agree that Handy 10 1,

the Company has been valued at Rs.50,00,000/-

(Rupees fifty lakh only) based on the present assets such

as furniture, computers, software and resources cos t

which are brought in to the Company by Mr.Peter

Pushparaj from his old establishment.

Clause (c): It is hereby agreed that liability if any beyond

Rs.5 lakhs towards the company from the date of

incorporation till march 31st 2010 will be paid by the

Mr.Peter Pushparaj and not by the company.

xxx xxx xxx

Clause (h) The parties hereto agree to increase the

authorized capital of the Company (Handy 101) to

Rs.50,00,000/- consisting of 5000 equity shares of Rs.

100/- each to be subscribed by the promoters group and

investor in the following ratios:-

Promoter Group 80%

Mr.L.Vivekananda/Nominee 20%

Further capital if any required by Handy 101 in

addition to the said issued equity share capital

shall be decided from time to time by mutual

consent between the parties hereto in writing.

Further issue of Equity Shares, if any, shall be in

the same proportion as stated hereinabove unless

otherwise mutually agreed between the parties

hereto in writing and in case any of these parties

not taking their share of additional capital, option

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to take the same is available to Mr.Peter Pushparaj

/ Handy 101 Employees.

Clause (i) The third party (Investor) hereby agrees to

bring in his portion of equity in consideration of

his appointment as a Director in Handy 101 and he w ill

remain as a Director of the Company as long as his

investment by way of shareholdings of 20% remain. A ny

change in constitution of the Board will be done in

consultation with the Third party.

xxx xxx xxx

Clause (k) Neither party (promoter and Third part)

sell, transfer or otherwise encumber equity share

held by them for a minimum period of 3 years from

the date of allotment . Each shareholder shall

undertake not to sell, assign or transfer any shares of

the Company without first obtaining the prior retur n

consent of the other shareholder.

Clause (l): At the end of the period of 5 years fro m

the date of this agreement, the Third party shall

have an option to exit by transferring his shares

to Promoters group represented by Mr.Peter

Pushparaj at an agreed value of Rs. 35 Lacs for

equity investment of Rs. 10 Lacs (three and half

times the value of investment).

Clause (m): this SPA is valid for a period of five

years from the date hereof unless renewed for

further period/s as may be mutually agreed to in

writing between the parties hereto”

[Emphasis Supplied

]

17.1 These clauses reflect that the appellant/claimant is

investing into the respondent No.1/Company and in return

for 20% of shareholding in the Company. The investm ent

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has a lock-in period of three (3) years. It reflects that the

SPA is valid for 5 years and at the end of 5 years, the

appellant/claimant would have the option to transfe r his

shareholding at three and half times the value of h is

investment of Rs.10,00,000/-, for a value of

Rs.35,00,000/.

18. Undisputably, the SPA was neither extended nor

renewed. It thus came to an end of 5 years, i.e., o n

30.03.2015. At that time, the appellant/claimant did not

exercise his option to exit. He waited for another three

years and then exercised his option belatedly and after the

SPA had expired.

19. An examination of the Arbitral Award shows that the

learned Arbitral Tribunal has examined the clauses of the

SPA, as well as the evidence produced by the parties and

has given a finding based thereon including, with reference

to the admissions made by the appellant/claimant (P W1)

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during his examination/cross-examination. The relev ant

extract is set out below:

“14. A careful reading of the clause (1) above

makes it clear that the claimant has an option to

exit from the company, but such an option is not

an absolute one. On the other hand, the same is a

qualified one. The qualifications are:

i. that the option shall be exercised at the end

of the period of 5 years from the date of the

agreement i.e., at the end of 5 years from

30.03.2010.

ii. the option can be exercised only by way of

transferring his shares to promoters group.

iii. such a promoter group shall be represented

by Mr.Peter Pushparaj, i.e., the respondent

No.2 herein.

15. If the option to exit is exercised by fulfilling

all the above qualification, then the claimant is

entitled for 35 Lakhs being the agreed value of

equity investment of Rs.10 Lakhs. It is the specific

case of the claimant that he has exercised the option

to exit by way of the letter/notice dated 01.08.2018

vide Ex-P4.

Therefore, it is necessary to refer to the contents of

Ex-P4 and the oral evidence of the claimant who

was examined as PW-1 to ascertain the fact as

to whether the option was exercised by him

strictly in terms of the said clause (1).

xxx xxx xxx

…Admittedly, the date of exercising the option as

per the admission of claimant himself is

01.02.2018. The period of 5 years from

30.03.2010 ends on 30.03.2015 whereas, the

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letter/notice by which the option is said to have been exercised is dated 01.08.2018. Therefore,

there can be no doubt that the option was exercised

after the expiry of the period prescribed under clause

(1) of the share purchase agreement vide Ex-P1.

xxx xxx xxx

18. ... The claimant having not exercised the

option to exist from the company in terms of the

time limit prescribed under the said clause (1)

remains to be an ordinary shareholder of the

company and as such his entitlement is only on the

share held by him in the company and is not entitled

for the agreed value of Rs.35 Lakhs.

xxx xxx xxx

20. Though there exists no pleading to the effect that

the claimant has transferred the shares to the said

promotors group in terms of clause (1) of the Ex.P4,

with a view to find out as to whether he has spoken

anything in his evidence about the transfer of his

shares to the said promotors group, I have carefully

perused the deposition of PW1. In the process I

find that the affidavit of PW1 in lieu of

examination-in-chief is nothing but the

repetition of the Claim petition. On the other

hand, in his cross-examination he categorically

admits as "It is true to state that, I have not

issued any notice prior to the date mentioned at

Ex.P4". Therefore, I find considerable force in the

argument of Sri. Vasanth V Fernandes that apart from

expressing his intention to exit from the company by

issuing the said letter/notice dated 01.08.2018 vide

Ex.P4 nothing has been done in furtherance of the

same for fixing the liability on the respondents to pay

a sum of Rs.35 Lakhs to the claimant. The claimant

having failed to act strictly in terms of clause (1)

of the said share purchase agreement, which is

the foundation of the claim, in my opinion he is

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not entitled to seek a direction to the respondents to pay a sum of Rs.35 Lakhs at the

hands of this Tribunal on the strength of the said

clause (1) at Ex.P1 and the notice/letter dated

01.08.2018 at Ex.P4.

21. Sri. Vasanth V Fernandes further by referring to

clause (m) of Ex.Pl argued that in view of the

period prescribed therein and that the same was

not renewed for further period by mutual

concert in writing, the right to exercise the

option to exit from the company conferred on

the claimant ceases to be in force. As such, I have

perused the said clause (m) of Ex.P1. It reads as

under:

"(m) This SPA is valid for a period of five years

from the date hereof unless renewed for further

period/s as may be mutually agreed to in

writing between the parties hereto".

22. The above clause makes it clear that the original period of 5 years prescribed for the

validity of the agreement can be renewed for

further periods by mutual consent, but such

renewal shall be necessarily by writing between the

parties. In order to find out as to whether there is a

renewal of the said SPA, I have carefully perused the

evidence of the claimant i.e., PW1, who in his cross-

examination categorically admits as "The share

purchase agreement at Ex.P1 was not renewed

at any point of time. There is no addendum to

Ex.P1. Similarly, there is no corrigendum to

Ex.P1". Therefore, the argument of Sri. Vasanth V

Fernandes that the claimant cannot enforce his right

under clause (1) of the SPA at Ex.P1 on account to the

fact that the validity of the agreement is only for a

period of 5 years from 30.03.2010 which come to an

end on 30.03.2015 and that the same was not

renewed at any point of time as admitted by the

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claimant himself requires to be sustained and

resultantly on this ground also the claim against the

respondents is liable to be rejected. Accordingly, Issue

No.1 is answered in the negative.”

[Emphasis Supplied]

19.1 In addition, the learned Arbitral Tribunal has

examined the evidence and found an admission by the

appellant/claimant (PW1) during his examination/cro ss-

examination in the following terms:

“The share purchase agreement at Ex.P1 was

not renewed at any point of time. There is no

addendum to Ex.P1. Similarly, there is no

corrigendum to Ex.P1 ”

[Emphasis Supplied]

20. The learned Counsel for the appellant/claimant has

been unable to show to the Court as to how the

interpretation given by the learned Arbitral Tribunal suffers

from any illegality.

21. The interpretation given by the learned Arbitra l

Tribunal in its interpretation of the SPA is neither patently

illegal nor ignores the evidence produced by the pa rties

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before the Arbitral Tribunal. In view of the settled law as

discussed above, merely because another interpretation is

possible, it is not a ground to set aside the award.

22. In any event and as stated above, this appeal i s

barred by limitation. Thus, the appeal is dismissed both

on the ground of being barred by limitation, as well as on

merits. All pending applications stand closed.

Sd/-

(ANU SIVARAMAN)

JUDGE

Sd/-

(TARA VITASTA GANJU)

JUDGE

JJ/YN

List 4 Sl.No.1