Telangana High Court
M/S Sai Surface Coating Technologies vs Mr. Basava Venkata Subba Rao on 15 July, 2026
1
*THE HON'BLE JUSTICE MOUSHUMI BHATTACHARYA
AND
*THE HON'BLE JUSTICE GADI PRAVEEN KUMAR
+ COMMERCIAL COURT APPEAL No.1 OF 2026
% 15-07-2026
# M/s. Sai Surface Coating Technologies,
Rep. by its Managing Partner and Three Others
...Appellants
vs.
$ Basava Venkata Subba Rao
... Respondent
!Counsel for the Appellants: Mr. A. Venkatesh, Senior Counsel
representing Mr. I. Ramana Reddy,
counsel.
^Counsel for Respondent: Mr. M.S. Chandresh
<Gist :
>Head Note :
? Cases referred
1. C.Velusamy v. K.Indhera, 2026 INSC 112
2. 2024 SCC OnLine SC 2494
2
IN THE HIGH COURT FOR THE STATE OF TELANGANA
AT HYDERABAD
THE HON'BLE JUSTICE MOUSHUMI BHATTACHARYA
AND
THE HON'BLE JUSTICE GADI PRAVEEN KUMAR
COMMERCIAL COURT APPEAL No.1 OF 2026
DATE OF JUDGMENT: 15.07.2026
Between:
M/s. Sai Surface Coating Technologies,
Rep. by its Managing Partner and Three Others
.....Appellants
AND
Vs.
Basava Venkata Subba Rao
... Respondent
Mr. A. Venkatesh, learned Senior Counsel representing Mr. I. Ramana Reddy,
learned counsel appearing for the appellants.
Mr. M.S. Chandresh, learned counsel appearing for the respondent.
JUDGMENT:
(Per Hon’ble Justice Moushumi Bhattacharya)
1. The present Commercial Court Appeal has been filed under
section 37 of The Arbitration and Conciliation Act, 1996 (1996 Act)
read with section 13 of the Commercial Courts Act, 2015 (2015 Act)
challenging the order dated 19.11.2025 passed by the learned
Commercial Court, Ranga Reddy District dismissing an Appeal filed
by the appellants assailing an order passed by the Arbitral Tribunal
on 01.02.2025.
3
2. The appellants herein are the respondents; the respondent is
the claimant before the Arbitral Tribunal. The respondent/claimant
filed an application under section 17 of the 1996 Act before the
learned Sole Arbitrator for appointment of a Forensic Auditor for
verifying the books of accounts of the appellant No.1/Firm from F.Y.
2014-15 onwards. The learned Arbitrator allowed the said
application by appointing an Auditor and directed the Auditor to
furnish the balance sheet of the appellant No.1/Firm from F.Y.
2014-15 onwards. Challenging the said order, the appellants filed
COP No.14 of 2025 before the Commercial Court challenging the
order passed by the Arbitrator on 01.02.2025.
3. We have heard learned Senior Counsel appearing for the
appellants and learned counsel appearing for the
respondent/claimant.
4. The primary issue argued by Senior Counsel appearing for the
appellants is that the order passed by the Arbitrator on 01.02.2025
should be set aside since the mandate of the Arbitrator under
section 29A(4) of the 1996 Act expired on 06.01.2025. Senior
Counsel submits that the Arbitrator was hence disabled from
passing the impugned order dated 01.02.2025 and should be set
aside on that ground alone.
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5. Learned counsel appearing for the respondent submits that
the mandate of the Arbitrator was first restored by the order of the
Commercial Court dated 22.10.2024 in COP No.32 of 2024 by
extending the mandate for a further period of six months from
22.10.2024 and the mandate was later restored on 19.11.2025 by
the Commercial Court and the mandate was extended for a further
six months from 19.11.2025. Counsel takes a preliminary objection
of maintainability of the present Commercial Court Appeal.
6. We wish to clarify that we do not intend to go into the merits
of the dispute i.e., whether the Arbitrator was right in allowing the
respondent’s application for appointment of a Forensic Auditor for
verifying the books of accounts of the appellant No.1/Firm from F.Y.
2014-15 onwards. The Parties are entitled to make an application
under section 17(1) of the 1996 Act for interim measures during the
arbitral proceedings for a wide range of interim protections as may
appear to be just to the Arbitral Tribunal as per section 17(1)(e).
The respondent filed such application and was granted the relief
prayed for. The objection raised by the appellants to the prayer for
appointment of a Forensic Auditor was purely on the merits of the
dispute, including that granting such relief would amount to
allowing the final prayer in violation of the provisions of the Code of
Civil Procedure, 1908.
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7. The appellants further argued on various other grounds
before the Commercial Court including that the books of accounts
should be furnished only from F.Y. 2020-21 onwards and not from
F.Y. 2014-15. The respondent/claimant in turn urged that the
respondent/claimant, as a working partner, was deprived of access
to the Books of Accounts of the appellant No.1/Firm and was also
kept in the dark with regard to the affairs of the Firm.
8. The primary argument of the appellants before this Court – as
well as Commercial Court – was that the Arbitrator was
incompetent to pass the order on 01.02.2025 since the Arbitrator’s
mandate had expired on 06.01.2025. Therefore, we wish to deal
with this contention as the preliminary point.
Decision
9. The admitted sequence of events presented on behalf of the
parties including the following relevant dates:
July, 2023 The claimant (respondent) filed an IA before the
Arbitrator for the appointment of a Forensic
Auditor for verifying the Books of Accounts of the
appellant No.1/Firm from F.Y. 2014-15 onwards.
12.09.2023 The appellants filed a counter in the said IA.
05.01.2024 The 12-month period for passing the Arbitral
Award expired under section 29A(1) of the 1996
Act.
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06.07.2024 An additional 6-months expired under section
29A(3) of the 1996 Act.
07.08.2024 The respondent/claimant filed COP No.32 of
2024 before the Commercial Court for extension
of the Arbitrator’s mandate under section 29A(4)
of the 1996 Act.
22.10.2024 The Commercial Court allowed COP No.32 of
2024 by extending the Arbitrator’s mandate for a
period of 6 months from 06.07.2024.
06.01.2025 The Arbitrator’s additional 6-month mandate
expired under section 29A(4) of the 1996 Act.
01.02.2025 The Arbitrator allowed the IA filed by the
claimant appointing the Forensic Auditor.
27.03.2025 The respondent/claimant filed COP No.20 of
2025 before the Commercial Court for extension
of the Arbitrator’s mandate under section 29A(4)
of the 1996 Act.
19.11.2025 The Commercial Court allowed COP No.20 of
2025 by extending the Arbitrator’s mandate for a
period of 6 months from 19.11.2025.
03.01.2026 The appellants filed the present appeal.
The Statutory Scheme under section 29A of the 1996 Act
10. Section 29A of the 1996 Act sets out the time period for an
Arbitral Tribunal to make an Award. Section 29A(1) stipulates that
an Award in a non-commercial arbitration shall be made by the
Arbitral Tribunal within twelve months from the date of completion
of the pleadings. Section 23 enumerates the procedure for filing of
Statement of Claim and Defence. Section 23(4) stipulates that the
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Statement of Claim and Defence under section 23 shall be
completed within six months from the date the Arbitrator receives a
Notice in writing regarding his/her appointment. Section 29A(1)
specifically refers to section 23(4).
11. Section 29A(3) provides a window for extension of the
mandate for making the Arbitral Award under section 29A(1),
subject to the Parties consenting for such an extension. The
extension however is limited to a period of six months from the
timeframe under section 29A(1), that is, twelve months from the
date of completion of pleadings, including an additional period of six
months.
12. Section 29A(4) tightens the outer limit for making the Award
by stipulating that the mandate of the Arbitrator shall terminate if
the Award is not made within the timeline prescribed under section
29A(1) or the extended period under section 29A(3).
13. Section 29A(4) however saves the Arbitrator’s mandate where
the competent Court, either prior to or after the expiry of the period
specified under sub-sections (1) and (3) of section 29A, extends the
period for making of the Award. The second proviso to section
29A(4) (inserted with effect from 30.08.2019) contemplates an
application being made before the Court under section 29A(5) for
8
the purpose of extending the mandate of the Arbitrator and,
importantly, provides that the mandate of the Arbitrator shall
continue till the disposal of the said application.
14. Section 29A(5) reiterates the extension of the mandate by
clarifying that the Court may extend the mandate on an application
filed by any of the Parties to the Arbitration, but may only be
granted for sufficient cause and on such terms and conditions as
the Court may deem fit and impose.
15. Only the sub-sections of section 29 relevant to the present
adjudication have been enumerated above. A reading of the
provisions would indicate that while the Framers intended to ensure
conclusion of arbitration proceedings in the shortest possible time,
the mandate of the Arbitrator was to be presumed during the length
of the arbitration unless the Court finds that the proceedings were
delayed for reasons attributable to the Arbitral Tribunal – first
proviso to section 29A(4).
16. In such cases, the Court would be empowered to substitute
one or all of the Arbitrators and reconstitute the Arbitral Tribunal –
section 29A(6) and (7), respectively. Similarly, the 1996 Act
incentivizes timely delivery of arbitral awards by providing that the
Arbitral Tribunal is entitled to receive additional fees, as agreed
9
upon by the parties, if the award is made within six months from
the date on which the Arbitral Tribunal enters upon the reference
as under section 29A(2).
The 1996 Act contemplates a Seamless Transition from Termination
to Continuation of the Mandate
17. Section 29A underscores the mandate remaining undisturbed
and intact save and except where the parties decline to extend the
mandate under section 29A(3) or the Court refuses to extend the
mandate under section 29A(5).
18. As stated in the above paragraphs, the second proviso to
section 29A(4) constitutes a deeming provision where the mandate
is deemed to continue during pendency of an application made for
extension under section 29A(5) till disposal of the application.
19. With reference to the captioned subject, that is, the seamless
transition between termination and continuation section 29A
reinforces continuation of the arbitration even where the mandate of
the Arbitrator is temporarily interrupted or terminated.
20. This would be evident from section 29A(6) which authorises
the Court to substitute the Arbitrator(s) in an application under
section 29A(4), while contemplating continuation of the arbitral
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proceedings from the stage reached prior to such substitution and
from the date of appointment of the substituted arbitrator(s).
Section 29A(6) of the 1996 Act expressly states that the arbitral
proceedings shall continue from the
‘stage already reached and on the basis of the evidence
and material already on record, and the Arbitrator(s)
appointed under this section shall be deemed to have
received…’
21. It would hence be abundantly clear that a substituted
Arbitrator shall not hear the proceedings afresh from the point of
his/her appointment but treat the arbitration as a continuing
proceeding.
22. The continuity is again reinforced in section 29A(7) of the
1996 Act which continues in the same vein as section 29A(6) by
stipulating that
‘the Arbitral Tribunal thus reconstituted shall be deemed
to be in continuation of the previously appointed Arbitral
Tribunal’
23. Section 29A would hence firmly establish that the provision
does not envisage a hesitant or frequently-interrupted arbitration
with the mandate being discontinued on grounds extraneous to
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section 29A. The presumption is that the mandate will remain from
start to finish, that is, from commencement of the arbitration under
section 21 till making of the final arbitral Award and termination of
proceedings under section 32(1). In other words, the 1996 Act does
not encourage arbitrations being suddenly brought to a halt upon
expiry of the Arbitrator’s mandate and particularly when the
arbitration is underway.
The 1996 Act does not envisage Breakage of the Mandate except for
the Contingencies provided under section 29A.
24. The arrangement of the sub-sections under section 29A would
make it clear that the mandate of the Arbitrator is deemed to
remain undisturbed until the Award is made. Sub-sections (1) and
(3) of Section 29A fix the outer limit of the time-frame (twelve + six
months) within which the Award must be made. However, section
29A(4) stops the guillotine from cutting the mandate off immediately
upon completion of eighteen months in view of the fact that the
Court has been conferred with the power to extend the mandate
under section 29A(5). The stretching of the mandate finds form in
the words in section 29A(4):
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‘… the mandate of the Arbitrator(s) shall terminate unless the Court
has, either prior to or after the expiry of the period,… extended the
period’.
25. The specific words of section 29A(4) signify that the mandate
may also be extended ‘after the expiry of the period’, i.e., after
exhausting the twelve + six months window for making of the
Award. In other words, the application under section 29A(5) may
also be made after the mandate of the Arbitrator expires under
section 29A(1) or (3) subject to the parties consenting for such
extension.
26. The underlying import of section 29A of the 1996 Act with
reference to keeping the mandate intact would also be evident from
the second proviso to section 29(A)(4) which states that
‘The mandate of the Arbitrator shall continue till disposal of the
application made under section 29A(5) for extension of the period
beyond twelve + six months.’
27. Section 29A(4) of the 1996 Act, read with the second proviso
thereto, would thus mean that
(i) an application for extension of the mandate can be made
after expiry of twelve + six months,
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(ii) the mandate of the Arbitrator shall continue during
pendency of the application for the extension of mandate
under section 29A(5), even where the mandate has expired
after the completion of twelve + six months as under
28. The power conferred on the Court to extend the mandate and
also to keep the mandate alive during the pendency of the
application for extension is balanced out by the obligation on the
Court under section 29A(9) to dispose of the application under
section 29A(5) as expeditiously as possible and preferably within
sixty days from the service of notice of the application on the
opposite party.
29. Therefore, it is evident that the mandate of the Arbitrator is
not a fragile thread which snaps after every break in the timeline
but one which remains intact and robust despite exhaustion of the
statutory windows. The intention of the Legislature is to secure the
arbitral proceedings and to ensure that the arbitration is taken to
its logical conclusion by way of a binding Award 1. Section 29A
contains express red flags against prolonging the arbitral process
1
C.Velusamy v. K.Indhera, 2026 INSC 112
14
and making of the Award. The Court is authorised to impose
exemplary costs upon the parties under section 29A(8) in fit cases.
The Facts of the Present Case
30. The twelve-month period for making of the Award under
section 29A(3) of the 1996 Act came to an end on 05.01.2024. The
parties gave their consent for an additional six-month extension till
06.07.2024. The respondent filed the extension application under
section 29A(5) on 07.08.2024. The respondent’s application was
allowed on 22.10.2024 extending the mandate till 06.01.2025. The
Arbitrator passed the order on 01.02.2025.
31. Although much emphasis has been placed on 06.01.2025 as
the end of the arbitrator’s mandate, and disabling the Arbitrator
from passing the order on 01.02.2025, the significance is rendered
futile since the Arbitrator’s mandate was restored on 19.11.2025 on
an application made by the respondent on 27.03.2025. The
Commercial Court allowed the application on 19.11.2025 extending
the mandate for a further period of six months.
32. Section 29A(4) permits filing of an application for extension of
mandate even after the expiry of the mandate. The second proviso
to section 29A(4) on the other hand stipulates that where an
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application for extension of the mandate is pending under Section
29A(5), the mandate of the arbitrator shall continue until the
disposal of such application. Hence, the mandate would be deemed
to continue from 27.03.2025 till 19.11.2025 under section 29A(4).
Therefore, the only so-called break in the mandate would be from
06.01.2025 – 27.03.2025. However this gap would also be filled
in – retrospectively – once the mandate was restored on 19.11.2025.
Any other interpretation would do injustice to the arbitrator and be
contrary to section 29A(4) which contemplates applying for
extension even after expiry.
33. In essence, the fact that the impugned order was passed on
01.02.2025, cannot be extricated from the live thread of the
mandate and seen as a break in the continuity of the mandate.
This would be contrary to the Scheme of section 29A as well as the
well-established precedent on the subject: Rohan Builders v. Berger
Paints 2.
34. In this context, it may be worthwhile to point to an
incongruity or gap between section 29A(4) with the second proviso
thereto. Section 29A(4) permits an application for extension of the
mandate to be made even after the expiry thereof specified under
2
2024 SCC OnLine SC 2494
16
sub-sections (1) and (3) of section 29A (twelve + six months).
However, sub-section (4) of section 29A does not address a situation
where the Award or any order was made/passed after expiry of the
mandate. This is at odds with the second proviso to Section 29A(4),
under which the mandate is deemed to continue during the
pendency of an application for extension of the mandate under
35. The only possible construction, which can bridge the gap
between section 29A(4) and its second proviso, is to interpret the
latter as encompassing a situation where the application for
extension is made after expiry of the mandate and where the
mandate is ultimately restored. This would lend efficacy to the
deeming provision in the second proviso to section 29A(4) and fill in
the vacuum.
36. The following sequence may simplify the construction.
(i) The Arbitrator’s mandate expires after exhaustion of the
timeframes under section 29A(1) and (3) expires under
(ii) An application is made for extension of the mandate under
section 29A(5) after expiry of the mandate as permitted to
be made under section 29A(4);
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(iii) The mandate revives upon filing of such application and
continues during pendency of the application till disposal
of the same under the second proviso section 29A(4); and
(iv) The application for extension of mandate would be subject
to the decision of the Court under section 29A(5) and on
such terms as the Court may impose.
37. The above four steps, when transposed to the present facts,
would mean that the order dated 01.02.2025 passed by the
Arbitrator cannot be set aside solely on the ground of absence of
mandate where the application for extension of mandate was filed
soon after i.e., on 27.03.2025 and allowed by the Commercial Court
on 19.11.2025.
Conclusion
38. We thus disagree with the argument made on behalf of the
appellants that the order of the learned Arbitrator should be set
aside on the ground of the Arbitrator did not have the mandate to
pass the order as on 01.02.2025.
Maintainability
39. The appellants are aggrieved by the order dated 01.02.2025
passed by the Arbitrator appointing a Forensic Auditor for
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examining the Books of Accounts of the appellant No.1/Firm from
F.Y. 2014-15 onwards. The said order was passed in an application
filed by the respondent under section 17 of the 1996 Act. The
appellants challenged the order dated 01.02.2025 before the
Commercial Court under section 37(2)(b) of the Act which allows an
appeal to lie to a Court from an order passed by the Arbitral
Tribunal. The Commercial Court thereafter dismissed the
appellants’ appeal on merits by way of the impugned order.
40. The appellants initially preferred a Civil Revision Petition
before this Court under Article 227 of the Constitution of India. The
Registry took an objection as to the maintainability of the Civil
Revision Petition and Senior Counsel appearing for the revision
petitioners sought to withdraw the CRP with leave of the Court to
file the present Commercial Court Appeal. The present Appeal was
filed thereafter.
41. Counsel appearing for the respondent raised a point as to the
maintainability of the present Appeal. Upon hearing the
submissions, this Court finds that the present Appeal filed under
section 37(2)(b) of the 1996 Act is not maintainable for the reason
that the appellants have already exhausted the remedy of Appeal
under section 37(2)(b) before the Commercial Court in COP No.14 of
19
2025 by challenging the order dated 01.02.2025 passed by the
Arbitrator.
42. Section 37(3) specifically stipulates that no Second Appeal
shall lie from an order passed in an Appeal under this section, but
does not take away the right of Appeal before the Supreme Court.
The appellants have clearly treated the present Appeal as a Second
Appeal filed under section 37 of the 1996 Act from the impugned
order passed by the Commercial Court on 19.11.2025. The order
dated 19.11.2025 was also passed under section 37(2)(b) of the
1996 Act.
43. Therefore, the only conclusion possible from the clear
statutory provision is that the present Appeal is not maintainable
and the appellants have to file the Second Appeal before the
Supreme Court from the impugned order passed by the Commercial
Court.
44. Therefore, notwithstanding the fact that we have expressed
our opinion on the order passed by the Arbitrator on 01.02.2025 as
one which cannot be set aside on the ground of lack of mandate, we
are also constrained to hold that the present Appeal is not
maintainable.
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45. COMCA No.1 of 2026, along with all connected applications,
is accordingly dismissed. There shall be no order as to costs.
___________________________________
MOUSHUMI BHATTACHARYA, J
_____________________________
GADI PRAVEEN KUMAR, J
DATE: 15.07.2026
Note: L.R. be marked.
TJMR
