Writ Petition No. 19317 of 2024 · The High Court
Case Details
- 1 - NC: 2025:KHC:6979 WP No. 19317 of 2024 C/W WP No. 2015 of 2025 IN THE HIGH COURT OF KARNATAKA AT BENGALURU DATED THIS THE 17TH DAY OF FEBRUARY, 2025 BEFORE THE HON'BLE MR JUSTICE R DEVDAS WRIT PETITION NO. 19317 OF 2024 (GM-RES) WRIT PETITION NO. 2015 OF 2025 (LB-BMP) C/W IN WP No. 19317/2024 BETWEEN: 1. BRUHATH BANGALORE MAHANAGARA PALIKE, CORPORATION BUILDINGS, HUDSON CIRCLE, N.R. SQUARE, BANGALORE - 560 002, REPRESENTED BY ITS CHIEF COMMISSIONER. Digitally signed by JUANITA THEJESWINI Location: HIGH COURT OF KARNATAKA 2. THE CHIEF ENGINEER, SWD, BRUHATH BANGALORE MAHANAGARA PALIKE, 9TH FLOOR, JAYANAGARA SHOPPING COMPLEX, 4TH FLOOR, JAYANAGARA, BANGALORE - 560 011. (BY SRI. SATYANAND B.S., ADVOCATE) …PETITIONERS - 2 - NC: 2025:KHC:6979 WP No. 19317 of 2024 C/W WP No. 2015 of 2025 AND: 1. THE INSTITUTION OF ENGINEERS (INDIA), AN ISO 9001:2015 CERTIFIED ORGANISATION, (ESTABLISHED 1920, INCORPORATED BY ROYAL CHARTER 1936), NO.8, GOKHALE ROAD, KOLKATA - 700 020. 2. DR. I. SATYANARAYANA RAJU, FIE ARBITRATOR, H NO.6-3-903/A/1 FLAT-201, CHINMAYI RESIDENCY SOMAJIGUDA, HYDERABAD - 500 082. 3. M/S. VDB PROJECTS (P) LTD.,
Legal Reasoning
HAVING ITS REGISTERED OFFICE AT NO.842/A, 3RD FLOOR, 100 FT. ROAD, INDIRANAGAR, BANGALORE - 560 038. BY ITS EXECUTIVE DIRECTOR MR. ABHISHEK REDDY. (BY SRI.ROHAN TIGADI, ADVOCATE FOR R3; R2 SERVED - UNREPRESENTED) …RESPONDENTS THIS W.P. IS FILED UNDER ARTICLES 226 AND 227 OF THE CONSTITUTION OF INDIA PRAYING TO CALL FOR THE ENTIRE RECORDS FROM THE R-1 PERTAINING TO THE APPOINTMENT OF THE R-2 AS AN ARBITRATOR AS PER ANNEXURE - A; QUASH THE UNILATERAL APPOINTMENT OF AN ARBITRATOR BY THE R-1 VIDE LETTER BEARING NO. SDG/SFCIT/631/402 DATED 04.04.2024 BANGALORE ANNEXURE - A CONSEQUENTLY ALLOW THIS WRIT PETITION AND ETC., - 3 - NC: 2025:KHC:6979 WP No. 19317 of 2024 C/W WP No. 2015 of 2025 IN WP NO. 2015/2025 BETWEEN: VDB PROJECTS PRIVATE LIMITED, A COMPANY INCORPORATED UNDER THE COMPANIES ACT, 1956, HAVING OFFICE AT. 842/A, 3RD FLOOR, 100 FEET ROAD, INDIRANAGAR, BENGALURU - 560 038. (REPRESENTED BY AUTHORIZED REPRESENTATIVE VASANTHA P. RAI). ...PETITIONER (BY SRI. ROHAN VEERANNA TIGADI.,ADVOCATE) AND: 1. COMMISSIONER, BRUHAT BENGALURU MAHANAGARA PALIKE, N.R SQUARE, BENGALURU - 560 002. 2. EXECUTIVE ENGINEER, MAHADEVAPURA ZONE, BRUHUT BENGALURU MAHANAGARA PALIKE, 9TH FLOOR, JAYANAGARA, SHOPPING COMPLEX, 4TH BLOCK, JAYANAGARA, BANGALORE - 560 011. 3. THE CHIEF ENGINEER, STORM WATER DRAIN, BRUHUT BENGALURU MAHANAGARA PALIKE, 9TH FLOOR, JAYANAGARA, - 4 - NC: 2025:KHC:6979 WP No. 19317 of 2024 C/W WP No. 2015 of 2025 SHOPPING COMPLEX, 4TH BLOCK, JAYANAGARA, BANGALORE - 560 011. (BY SRI. SATYANAND B S., ADVOCATE) ...RESPONDENTS NO.MU.A/BRU.NI.GA/PR/01/2024-25 THIS W.P. IS FILED UNDER ARTICLE 226 OF THE CONSTITUTION OF INDIA PRAYING TO QUASH THE LETTER DATED BEARING 11.09.2024 (ANNEXURE - A) ISSUED BY R-2 LETTER BEARING 05.10.2024 NO.MU.A/BRU.NI.GA/PR/01/2024-25 NO. - (ANNEXURE MU.A/BRU.NI.GA/PR/891/2024-25 11.11.2024 (ANNEXURE - B2) ISSUED BY R-2 AND LETTER BEARING NO. 01.01.2025 MU.A/BRU.NI.GA/PR/894/2024-25 (ANNEXURE - C) ISSUED BY R-3 AND ETC., BEARING LETTER DATED DATED DATED B1) THESE PETITIONS, COMING ON FOR PRELIMINARY HEARING, THIS DAY, ORDER WAS MADE THEREIN AS UNDER: CORAM: HON'BLE MR JUSTICE R DEVDAS ORAL ORDER Writ Petition No.19317/2024 is filed at the hands of the Bruhat Bengaluru Mahanagara Palike (for short 'the BBMP') against M/s. VDB Projects (P) Ltd., and also against the Institute of Engineers (India) and the Arbitrator questioning the impugned order at Annexure-A passed by the Institute of Engineers (India), on the application filed by the M/s. VDB Projects (P) Ltd., for appointment of an Arbitrator to resolve - 5 - NC: 2025:KHC:6979 WP No. 19317 of 2024 C/W WP No. 2015 of 2025 the dispute between M/s. VDB Projects (P) Ltd and the BBMP arising out of an agreement dated 03.04.2017. 2. The other, writ petition is filed by M/s. VDB Projects (P) Ltd., aggrieved by the subsequent action on the part of the BBMP where four notices have been issued for recovering Rs.3,51,76,894/- under a previous contract namely Mahadevpura contract and the existing contract namely Challaghatta contract. Since both the writ petitions arise between the common parties, the petitions are clubbed, heard
Decision
together and are been disposed of by this common order. 3. The writ petition filed at the hands of the BBMP is directed against the impugned order at Annexure-A where the Institute of Engineers (India), at the instance of M/s. VDB Projects (P) Ltd., has appointed an Arbitrator to resolve the dispute arising out of agreement dated 03.4.2017 (Challaghatta contract). Respondent No.2-Dr.I.Satyanarayana Raju has been appointed as the Sole Arbitrator to resolve the dispute. Learned counsel for the BBMP submits that under the general conditions of contract clause-56 which pertains to arbitration, it provides a list of organizations who may be approached for appointing an Arbitrator. The list contains 7 organizations and the Institute of - 6 - NC: 2025:KHC:6979 WP No. 19317 of 2024 C/W WP No. 2015 of 2025 Engineers (India) does not find place in the said list and therefore, the respondent could not have approached the said organization for appointment of Arbitrator. Moreover, no notice was issued to the BBMP before appointing the Sole Arbitrator. 4. Learned counsel for the respondents has placed reliance on two decisions of the Apex Court in the case of NARAYAN PRASAD LOHIA Vs. NIKUNJ KUMAR LOHIA AND OTHERS reported in (2002) 3 SCC 572 and BHAVEN CONSTRUCTION Vs. EXECUTIVE ENGINEER, SARDAR SAROVAR NARMADA NIGAM LIMITED AND ANOTHER reported in (2022) 1 SCC 75 to contend that in both the judgments the Hon'ble Supreme Court has considered Section 16 (2) of the Arbitration And Conciliation Act, 1996 and held that the avenue open for a person regarding the jurisdiction of the Arbitral Tribunal/Arbitrator would vest with the Arbitral Tribunal itself and the Arbitral Tribunal is mandated to consider such objections which goes to the root of its jurisdiction. In that view of the matter, learned counsel respondent-VDB Projects (P) Ltd submits that the writ petition filed by BBMP is not maintainable and the same should be dismissed while relegating the petitioner to the Arbitral Tribunal which passed - 7 - NC: 2025:KHC:6979 WP No. 19317 of 2024 C/W WP No. 2015 of 2025 the order of appointment of Arbitrator for consideration of the question as to whether the Institute of Engineers (India) has jurisdiction to constitute the Arbitral Tribunal/Arbitrator. 5. Insofar as the other writ petition is concerned learned counsel for the respondent submits that subsequent to the initiation of the proceedings at the hands of the respondents seeking arbitration of the dispute arising under the agreement dated 03.04.2017, the BBMP issued 4 notices to the respondents seeking to recover certain amounts already paid under the previous contract. Heretoo, it is the contention of the learned counsel for the respondents that BBMP cannot proceed unilaterally to recover any amount from the respondents and it is bound to proceed only in terms of the contract which provides for settlement of disputes by arbitration. 6. Per contra, learned counsel for the BBMP contends that the general conditions of contract enlists 7 organizations whom either of the aggrieved party could approach for appointment of an Arbitrator and The Institute of Engineers (India) is not found in the said list of 7 organizations. Therefore, even in accordance with the judgement, in the case of NARAYAN PRASAD LOHIA (supra) relied upon by the - 8 - NC: 2025:KHC:6979 WP No. 19317 of 2024 C/W WP No. 2015 of 2025 learned counsel for the respondents, under certain circumstances, it is still permissible for a party to approach this Court under Article 226 or 227 of the Constitution of India. Learned counsel submits that since the name of the organization, the Institute of Engineers (India) does not find place in the list of 7 organisations provided in clause-56 of the contract, the BBMP is entitled to approach this Court under Article 226 or 227 of the Constitution of India. 7. Having heard the learned counsels for the parties and on perusing the petition papers, this Court is of the considered opinion that even if the submission of the learned counsel for the is accepted that the judgement relied upon by the learned counsel would make provision under certain circumstances for a party to approach this Court under Article 226 or 277 of the Constitution of India, nevertheless having regard to the fact that the name Institute of Engineers (India) is found in one of the documents exhibited before this Court where both the BBMP and M/s. VDB Projects (P) Ltd are parties, this case would not fit into the category of rarest circumstances. As rightly submitted by the learned counsel for the petitioner Section 16 (2) of the Act clearly provides for a - 9 - NC: 2025:KHC:6979 WP No. 19317 of 2024 C/W WP No. 2015 of 2025 plea which could be raised before the Arbitral Tribunal that it does not have jurisdiction and if such a contention is raised, the Arbitral Tribunal is bound to consider the same. Further Section 16(6) of the Act also enables a party aggrieved of such an order of the Arbitral Tribunal touching upon its own jurisdiction, to seek to set aside such an order by filing an appeal under Section 34 of the act. In that view of the matter, this Court is of the considered opinion that the writ petition filed at the hands of the respondent-BBMP cannot be maintained. The avenue open for the BPMP will be to raise such an objection before the Arbitral Tribunal regarding the jurisdiction of the Tribunal to consider the dispute raised by the respondents. If such an objection is raised, the Arbitral Tribunal is bound to consider the objection and pass necessary orders regarding its own jurisdiction to entertain the dispute raised at the hands of the respondents. 8. Insofar as the other writ petition that is filed at the hands of the M/s. VDB Projects (P) Ltd., the petitioner is aggrieved of the notices issued by BBMP to recover certain amounts arising out of a previous contract (Mahadevpura contract) and the present contract (Challaghatta contract). It is - 10 - NC: 2025:KHC:6979 WP No. 19317 of 2024 C/W WP No. 2015 of 2025 clear that the contract would bind the parties for arbitration. That being so, even if the impunged notices are issued by the BBMP for recovery of certain amounts, it will have to follow the arbitration clause provided in the contract which is binding the two parties. Therefore, all further proceedings pursuant to the notices issued by the BBMP shall follow the procedure of arbitration. 9. For the reasons stated above this Court proceeds to pass the following: ORDER i. Writ petition No.19317/2024 filed by the BBMP stands dismissed while reserving liberty to the BPMP to file an application before the Arbitral Tribunal namely Institute of Engineers (India) in terms of Section 16(2) of the Act, regarding the jurisdiction of the Arbitral Tribunal to consider such a dispute raised at the hands of BBMP. ii. Since the arbitration proceedings were stayed at the hands of this Court by order dated 22.07.2024 and the writ petition filed at the hands of the BBMP is - 11 - NC: 2025:KHC:6979 WP No. 19317 of 2024 C/W WP No. 2015 of 2025 dismissed by this order, permitting the BBMP to file an application before the Arbitral Tribunal namely respondent No.1-Institute of Engineers (India) raising objection regarding the jurisdiction of the organization to entertain such an application at the hands of the respondent for appointment of an Arbitrator, till consideration of the application, the arbitrator shall not proceed any further. iii. Needless to observe that depending on the orders that could be passed by the respondent No.1, if the Arbitrator is permitted to proceed, the time spent by the parties before this Court, till the orders that could be passed by respondent No.1 shall be taken into consideration for the purpose of Section 29-A of the Act. iv. Writ petition No.2015/2025 is partly allowed while directing the BBMP which has issued the impugned notices that it shall proceed only in accordance with the arbitral clauses binding the parties whether it is the existing Challaghatta contract or the Mahadevpura contract. - 12 - NC: 2025:KHC:6979 WP No. 19317 of 2024 C/W WP No. 2015 of 2025 All contentions are left open. Any observation made in this order shall not prejudice the case of either of the parties before the Arbitral Tribunal. Sd/- (R DEVDAS) JUDGE RKA; List No.: 1 Sl No.: 13