Smt.Jayashree N Kumar vs. M/S. Kavi Basaveshwara Silk Traders

Facts

The appellants, Smt. Jayashree N Kumar and Sri Rakshith N. Kumar, filed a Miscellaneous First Appeal (MFA) before the High Court of Karnataka. The appeal was against an order dated March 17, 2025, passed by a Sole Arbitrator at the Arbitration and Conciliation Centre, Bengaluru, in A.C.No.685/2023. The Arbitrator had dismissed an application filed by the appellants under Order 11 Rule 5 of the Code of Civil Procedure (CPC) for summoning documents from the custody of respondents 1, 2, and 4. The appellants sought to set aside this order. The dispute arose from the accounts of a partnership firm, identified as a commercial dispute under the Commercial Courts Act.

Held

The Court took the memo filed by the appellants on record. Accordingly, the appeal was dismissed as withdrawn. The Court noted that if the appellants initiated proceedings before the concerned Commercial Court, they would be entitled to the benefit of Section 14 of the Limitation Act for the period between the date of filing the appeal and the date of its withdrawal. Additionally, as requested, the certified copy of the impugned order dated March 17, 2025, was directed to be returned to the counsel for the appellant upon furnishing a photocopy, which would be kept on record. The interlocutory application (IA.No.1/2025) filed for stay was disposed of as it did not survive for consideration due to the withdrawal of the appeal. The Court did not decide on the merits of the original application before the Arbitrator or the maintainability of the appeal before the High Court, as the appeal was withdrawn.

Key Issues

1. Whether the High Court has the jurisdiction to entertain an appeal against an order passed by an Arbitrator, specifically when the application before the Arbitrator was for summoning documents under Order 11 Rule 5 CPC, and the underlying dispute pertains to partnership accounts. Contentions of the Appellants: The appellants argued that the appeal was maintainable before the High Court under Section 37(2)(b) of the Arbitration and Conciliation Act, 1996. They submitted a memo seeking withdrawal of the appeal, stating that in view of the definition of 'Court' under Section 2(e) of the Act, the appeal should have been filed before the Commercial Court, as the dispute was a commercial dispute under Section 2(c)(xv) of the Commercial Courts Act, with a specified value exceeding Rs. 3 lakhs under Section 2(i). They sought permission to withdraw with liberty to file an appeal before the Commercial Court and requested the benefit of Section 14 of the Limitation Act, 1963. Contentions of the Revenue/State: The judgment does not record any specific arguments from the respondents (Revenue/State).