- (1.) We grant leave to appeal.
(2.) This appeal is directed against judgment dated 29/30-7-1999 of the High Court of Karnataka given in revision filed by the respondent whereby High Court set aside the orders dated 24-5-1999 and 21-6-1999 of the Principal District Judge, Raichur. By order dated 24-5-1999 the Principal District Judge, Raichur issued warrants of attachment of moveable properties of the respondent as described in the application for execution filed by the appellant. By order dated 21-6-1999 the learned Principal District Judge dismissed the application of the respondent praying for lifting of the attachment already issued against it.
(3.) Appellant is a building contractor. Respondent is a Government company of the Government of Karnataka under the Companies Act, 1956. Respondent awarded the contract for construction of a school building at Hatti in District Raichur to the appellant. An agreement dated 9-3-1995 was duly entered into. Clause 35 of the agreement contained the arbitration clause. Disputes and differences having arisen appellant moved the Chief Justice of the High Court of Karnataka under Section 11 of the Arbitration and Conciliation Act, 1996 (for short the 'Act') for appointment of an arbitrator. The application was allowed and Mr. H.S. Bhat, Chief Engineer (retired), who was resident of Bangalore was appointed as an arbitrator with a direction to complete the arbitration proceedings and to submit his Award within four months. Arbitration proceedings were held at Bangalore where also the Award dated 28-8-1998 was made. Arbitrator awarded some of the claims of the appellant while disallowing a few others, Respondent filed application for setting aside the Award by making an application under Section 341 of the Act in the Court of Principal City Civil Judge, Bangalore. While this application was pending appellant as decree-holder filed an application for execution of the Award in the Court of Principal District Judge, Raichur. It was on this application that orders for attachment of properties of the respondent were issued. When respondent sought lifting of its attachment by filing an application, the same was dismissed. Aggrieved respondent went to the High Court in revision. High Court allowed the revision of the respondent and set aside the two orders of the Principal District Judge, Raichur which we have mentioned above. Now it is the appellant who has come to this Court. 1 34. Application for setting aside arbitral award.- (1) Recourse to a Court against an arbitral award may be made only by an application for setting aside such award in accordance with sub-section (2) and sub-sction (3). (2) An arbitral award may be set aside by the Court only if- (a) the party making the application furnishes proof that- (i) a party was under some incapacity; or (ii) the arbitration agreement is not valid under the law to which the parties have subjected it or, failing any indication thereon,under the law for the time being in force; or (iii) the party making the application was not given proper notice of the appointment of an arbitrator or of the arbitral proceedings or was otherwise unable to present his case; or (iv) the arbitral award deals with a dispute not contemplated by or not falling within the terms of the submission to arbitration, or it contains decisions on matters beyond the scope of the submission to arbitration : Provided that, if the decisions on matters submitted to arbitration, can be separated from those not so submitted, only that part of the arbitral award which contains decisions on matters not submitted to arbitration may be set aside; or (v) the composition of the arbitral tribunal or the arbitral procedure was not in accordance with the agreement of the parties, unless such agreement was in conflict with a provision of this Part from which the parties cannot derogate, or, failing such agreement, was not in accordance with this part; or (b) the Court finds that- (i) the subject-matter of the dispute is not capable of settlement by arbitration under the law for the time being in force, or (ii) the arbitral award is in conflict with the public policy of India. Explanation.- Without prejudice to the generality of sub-clause (ii), it is hereby declared, for the avoidance of any doubt, that an award is in conduct with the public policy of India if the making of the award was induced or affected by fraud or corruption or was in violation of Section 75 or Section 81. (3) An application for setting aside may not be made after three months have elapsed from the date on which the party making that application had received the arbitral award or, if a request had been made under Section 33, from the date on which that request had been disposed of by the arbitral tribunal : Provided that if the Court is satisfied that the applicant was prevented by sufficient cause from making the application within the said period of three months it may entertain the application within a further period of thirty days, but not thereafter. (4) On receipt of an application under sub-section (1), the Court may, where it is appropriate and it is so requested by a party, adjourn the proceedings for a period of time determined by it in order to give the arbitral tribunal an opportunity to resume the arbitral proceedings or to take such other action as in the opinion of arbitral tribunal will eliminate the grounds for setting aside the arbitral award.;