MISC. Petition No. 303 of 2024 · The High Court
Case Details
- 1 - NC: 2025:KHC:9550 CMP No. 303 of 2024 IN THE HIGH COURT OF KARNATAKA AT BENGALURU DATED THIS THE 6TH DAY OF MARCH, 2025 BEFORE THE HON'BLE MR JUSTICE ASHOK S.KINAGI CIVIL MISC. PETITION NO. 303 OF 2024 BETWEEN: M/S. SANITECH ENGINEERS AND CONSULTANT PVT. LTD., HAVING REGISTERED OFFICE AT #8-2-686/K/15, FOURTH FLOOR, OPP. AUDI SHOW ROOM, ROAD NO. 12, BANJARA HILLS, HYDERABAD – 500034] REPRESENTED BY ITS MANAGING DIRECTOR (BY SRI. AJAY J. NANDALIKE, ADVOCATE FOR SRI. MANU K., ADVOCATE) …PETITIONER AND: Digitally signed by SUNITHA K S Location: HIGH COURT OF KARNATAKA ZUARI INFRAWORLD INDIA LTD., (EARLIER KNOWN AS ADVENTZ INFRAWORLD INDIA LTD.,) HAVING REGISTERED OFFICE AT JUBILEE BUILDING 3RD FLOOR, NO. 45, MUSEUM ROAD, BANGALORE-560025. REPRESENTED BY ITS GENERAL MANAGER ALSO AT THE CHIEF FINANCIAL OFFICER OF ZUARI INFRAWORLD INDIA LTD., HAVAING OFFICE AT 1ST FLOOR, ADVENTZ CENTRE, 28, UNION, ST. SHIVAJINAGAR, BANGALORE, KARNATAKA-560001.
Legal Reasoning
(BY SRI. RAVI SHANKAR R., ADVOCATE) …RESPONDENTS - 2 - NC: 2025:KHC:9550 CMP No. 303 of 2024 THIS CIVIL MISC. PETITION IS FILED UNDER SEC.11 (4) OF THE ARBITRATION AND CONCILIATION ACT 1996 READ WITH THE ARBITRATION AND CONCILIATION (AMENDMENT) ACT, 2019 PRAYING TO A) APPOINT THE SECOND ARBITRATOR ON BEHALF OF THE RESPONDENTS TO CONSTITUTE THE ARBITRAL TRIBUNAL AND REFER THE DISPUTES TO THE ARBITRAL TRIBUNAL PURSUANT TO CLAUSE 21 OF THE WORK ORDER DATED 18/02/2013 PRODUCED AS PER ANNEXURE-A. B) AWARDING COSTS INCURRED IN FILING THE PRESENT PETITION TO THE PETITIONER, AND C) PASS ANY SUCH OTHER AND FURTHER ORDER (S) AS THIS HONBLE COURT MAY DEEM FIT AND PROPER IN THE FACTS AND CIRCUMSTANCES OF THE CASE. THIS PETITION, COMING ON FOR ADMISSION, THIS DAY, ORDER WAS MADE THEREIN AS UNDER: CORAM: HON'BLE MR JUSTICE ASHOK S.KINAGI ORAL ORDER This Civil Miscellaneous Petition is filed under Section 11(5) & (6) of The Arbitration and Conciliation Act, 1996, read with the Arbitration and Conciliation (Amendment) Act, 2019 for appointment of an Arbitrator to resolve the dispute arising between the parties in terms of Clause 21 of the Work Order dated 18.02.2013 vide Annexure-A. 2. Brief facts leading rise to the filing of this petition are as follows: - 3 - NC: 2025:KHC:9550 CMP No. 303 of 2024 The petitioner entered into a contract with the respondent vide Work Order dated 18.02.2013 agreeing to provide their services in Infrastructure and Public Health Engineering works in Phase –I of the project, titled Zuari Garden City, situated at KRS Road, Karnataka. After the completion of the project, there remained certain unutilized material stocks on the project site, which the respondent sought to retain and use it for the other Phases of their project. Therefore, the respondent requested the petitioner to raise appropriate invoices for the balance material stock under the Work Order. 3. The petitioner raised an invoice for the supply of material stock for Rs.6,14,048/-. The petitioner raised a second invoice on 01.11.2018 for Rs.16,89,715/-. The respondent neither released the payment nor responded to the communication sent by the petitioner requesting payment. The petitioner issued a demand notice dated 24.12.2019 under the Insolvency and Bankruptcy Code 2016 (hereinafter referred to as ‘IBC’ for short). The - 4 - NC: 2025:KHC:9550 CMP No. 303 of 2024 respondents replied to the demand notice. The dispute having arisen, the petitioner issued a notice on 24.02.2022 invoking the arbitration Clause under Clause 21.1 of the work order and requested the respondent to nominate an Arbitrator of their choice for the Arbitral Tribunal within a period of 30 days for the appropriate adjudication of the dispute. The respondents replied to the arbitration notice on 31.03.2022, denying the averments made in the arbitration notice and failing to nominate an Arbitrator to constitute the Arbitral Tribunal. Hence, this petition. 4. The respondents filed a statement of objections contending that the claim made by the petitioner is barred by limitation and further contended that the claim made by the petitioner is outside the scope of the work order dated 18.12.2013 and hence, pray to dismiss the petition. 5. Heard the arguments of the learned counsel for the petitioner and the respondent. - 5 - NC: 2025:KHC:9550 CMP No. 303 of 2024 6. Learned counsel for the petitioner submits that the petitioner has entered into a contract with the respondent vide work order dated 18.02.2013, agreeing to provide their services in public health engineering works in phase –I of the project titled Zuari Garden City situated in KRS Road, Karnataka. After the completion of the project, the petitioner has submitted the invoices on 30.10.2018 and 01.11.2018 for the release of payment. Respondent did not release the payment as per the invoices dated 30.10.2018 and 01.11.2018. He submits that the petitioner issued a demand notice calling upon the respondents to release the payment. The respondents did not release the payment. The petitioner issued an Arbitration notice, invoking Arbitration Clause. He submits that there is an Arbitration Clause in the Work Order and that a dispute has arisen between the petitioner and respondent regarding the Work Order. Hence, prays to allow the petition. - 6 - NC: 2025:KHC:9550 CMP No. 303 of 2024 7. Per contra, learned counsel for the respondent submits that the claim made by the petitioner does not form part of the work order. It is outside the scope of the Work Order. It is submitted that there is no Arbitration Clause for the claim which the petitioner makes and he also submits that the claim made by the petitioner is barred by the limitation. Hence, on these grounds prays to dismiss the petition. 8. Perused the records and considered the submissions of the learned counsel for the parties. 9. The point that arises for my consideration is as follows: the dispute “Whether the petitioner has made a ground to refer for to adjudication in terms of Clause 21.1 of the Work Order dated 18.02.2013, as per the provisions of Arbitration and Conciliation Act, 1996?” the Arbitrator 10. It is not in dispute that the petitioner and the respondent have entered into a Work Order dated 18.02.2013 agreeing to provide their services in Public - 7 - NC: 2025:KHC:9550 CMP No. 303 of 2024 Health Engineering Works in phase –I of project titled Zuari Garden City situated in KRS Road, Karnataka. The project competed in 2017. There remained certain unutilized material stock on a project which the respondent sought to retain and use for another phase of their project. The respondents requested the petitioner to raise the appropriate invoices for the balance of material stock under the Work Order. Accordingly, the petitioner raised invoices dated 30.10.2018 and 01.11.2018 for Rs.6,14,048/- and Rs.16,89,715/- respectively. 11. The respondent did not release the payment as per the invoices above. The petitioner issued a demand notice on 24.12.2019 under the IBC. The respondent replied to the demand notice contending that the invoices raised are outside the scope of the Work Order. The petitioner invoking the Arbitration Clause under Clause 21.1, got issued an Arbitration notice on 24.02.2022 proposing the name of Mr. Aiyan Lewis, Advocate, C-14, Jyothi Complex, No.1, 34/1, Infantry Road, Bengaluru - 8 - NC: 2025:KHC:9550 CMP No. 303 of 2024 560001, as the Arbitrator to the Arbitral Tribunal. The respondent replied to the Arbitration notice vide Annexure- L, wherein the respondents declined to nominate the advocate as a Arbitrator. 12. Admittedly there is an Arbitral clause in the Work Order. Further, the question, whether the invoices raised by the petitioner are outside the scope of the Work Order, is the matter to be adjudicated by the Arbitrator. The said aspect cannot be decided in an application under Section 11(6) of the Arbitration and Conciliation Act, 1996 as the scope of the petition is very limited while entertaining such application. The Court is required to see whether an arbitration Clause exists. Admittedly, in this case, there exists an Arbitration clause in the Work Order. 13. In view of the above discussion, the petitioner has made out a ground to refer the matter to an Arbitrator in terms of clause 21 of the Work Order dated 18.02.2013. Accordingly, I answer the point for - 9 - NC: 2025:KHC:9550 CMP No. 303 of 2024 consideration in the affirmative and proceed to pass the following:
Decision
ORDER The Civil Miscellaneous Petition is allowed. Hon’ble Justice Sri. C.R. Kumaraswamy, Former Judge, High Court of Karnataka is appointed as an Arbitrator to resolve the dispute between the parties in terms of Clause 21. 1 of the Work Order dated 18.02.2013 as per the provisions of the Arbitration and Conciliation act, 1996. The office is directed to communicate this Order to the learned Arbitrator and to the Arbitration and Conciliation Centre, Bengaluru. All the contentions of the parties are kept open including the alleged claim which does not found the part of the Work Order. SD/- (ASHOK S.KINAGI) JUDGE BVK