MISC. Petition No. 592 of 2024 · The High Court
Case Details
- 1 - NC: 2025:KHC:12209 CMP No. 592 of 2024 IN THE HIGH COURT OF KARNATAKA AT BENGALURU DATED THIS THE 20TH DAY OF MARCH, 2025 BEFORE THE HON'BLE MR JUSTICE ASHOK S.KINAGI CIVIL MISC. PETITION NO. 592 OF 2024 BETWEEN: 1. PARK PLACE TECHNOLOGIES INDIA PRIVATE LIMITED HAVING ITS REGISTERED OFFICE AT SURVEY NO. 414/190/13 SUITE NO. 208, 2ND FLOOR PSR COMPLEX, BANNERGHATA ROAD BANGALORE, KARNATAKA, INDIA – 560 076. REPRESENTED BY ITS AUTHORIZED REPRESENTATIVE MR. AKASH THAKUR …PETITIONER Digitally signed by SUNITHA K S Location: HIGH COURT OF KARNATAKA (BY SRI. JIDESH KUMAR .M.D, ADVOCATE) AND: 1. MINEFLARE TECHNOLOGIES PRIVATE LIMITED (THROUGH ITS DIRECTORS MADHUMITA PATHAK AND MADAN DEVI) HAVING ITS REGISTERED OFFICE AT 328, IST STAGE, INDIRA NAGAR BANGALORE, KARNATAKA, INDIA – 560 038. …RESPONDENT
Legal Reasoning
(BY SMT. NIDHI M. PATIL, ADVOCATE) THIS CIVIL MISC. PETITION IS FILED UNDER SEC.11(6) OF ARBITRATION AND CONCILIATION ACT 1996, PRAYING TO APPOINT A Ld. SOLE ARBITRATOR WITH A DIRECTION TO - 2 - NC: 2025:KHC:12209 CMP No. 592 of 2024 ENTER REFERENCE IN TERMS OF CLAUSE 17 OF THE PURCHASE ORDER DATED 25.09.2023 MARKED AS ANNEXURE-D AND AS PER THE ARBITRATION NOTICE DATED 15.10.2024 ISSUED BY THE PETITIONER AND MARKED AS ANNEXURE-H AND ADJUDICATE THE DISPUTE BETWEEN THE PETITIONER AND THE RESPONDENT. 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(6) of the Arbitration and Conciliation Act for the appointment of an arbitrator to resolve the dispute between the petitioner and the respondent under clause No.17 of the Purchase order dated 29.09.2023 vide Annexure-D. 2. Brief facts leading rise to the filing of this petition are as follows: The respondent approached the petitioner, expressing interest in engaging the petitioner’s services and in need of ‘urgent support’, pursuant to which the petitioner issued a statement of work (SOW) detailing the - 3 - NC: 2025:KHC:12209 CMP No. 592 of 2024 goods and services proposed to be offered by the petitioner. The respondent agreed to the terms of the above SOW and engaged the petitioner’s services by issuing a purchase order dated 25.09.2023. It is pertinent to mention that post-issuance of the purchase order, certain terms of the purchase order were further mutually amended by both parties, accordingly, amending the payment terms from ‘quarterly’ payments to ‘monthly’. As per the terms of the said purchase order and the SOW, various invoices were to be issued against the work commissioned by the petitioner. The petitioner duly provided the services from time to time to the respondent and raised various invoices , which as per the amended payment terms of the purchase order, were to be cleared within 30 days from their respective dates of issuance. The respondent failed to clear its pending obligations within the stipulated time, compelled the petitioner to issue a demand notice dated 04.04.2024, post which the respondent finally made a part payment of Rs.9,92,634/- through Bank transfer on 15.04.2024. - 4 - NC: 2025:KHC:12209 CMP No. 592 of 2024 3. The respondent failed to comply with its obligation of timely payment in consonance with the payment terms of the purchase order. Therefore, it breached the terms of the purchase order. The respondent preferred to terminate the purchase order vide email dated 07.05.2024 arbitrarily. Terminating the purchase order does not absolve the respondent from its financial obligation of paying the outstanding amount to the petitioner, which as of the date stands at Rs.17,17,802.78/-. The petitioner, with the bona fide intent of resolving the dispute, sent a legal notice dated 04.09.2024 to the respondent, calling upon them to clear the outstanding dues within 10 days. The respondent did not reply to the legal notice. The petitioner issued a legal notice invoking the arbitration clause dated 15.10.2024 under Section 21 of the Arbitration and Conciliation Act, 1996, to adjudicate a dispute that has arisen between the parties as per clause 17 of the purchase order. The respondent replied to the legal notice, denied to acknowledge any pending dues and did not accord its - 5 - NC: 2025:KHC:12209 CMP No. 592 of 2024 concern to appointment of the sole arbitrator suggested by the petitioner. Hence, he prays to allow the petition. 4. Learned counsel for the respondent did not file the statement of objections and submitted no objection to appoint an Arbitrator in terms of clause 17 of the purchase order. 5. Heard the arguments of the learned counsel of the parties. 6. The petitioner issued statement of work (SOW) in pursuant of the purchase order dated 25.09.2023; subsequently, by mutual consent, the parties amended the payment terms from quarterly payments to monthly. The petitioner raised various invoices as per the amended payment terms of the purchase order. The respondent did not clear the invoices. Hence, the petitioner issued demand notice dated 04.04.2024. The respondent finally made part payment of Rs.9,92,000/- through Bank transfer on 15.04.2024. Hence, prays to allow the petition. - 6 - NC: 2025:KHC:12209 CMP No. 592 of 2024 7. Learned counsel for the respondent submits no objection to allow the petition. 8. Perused the records and considered the submissions of the learned counsel for the parties. 9. The point that arises for consideration is as follows: ‘Whether the petitioner made out a ground to refer the dispute to the arbitrator to adjudicate the dispute that has arisen between the parties under clause 17 of the purchase order dated 25.09.2023 vide Annexure-‘D’ as per provisions of the Arbitration and Conciliation Act, 1996’? 10. The respondent failed to comply with its obligation to make timely payments. The respondent is due Rs.17,17,802.78/-. The petitioner issued a legal notice on 04.09.2024 calling upon the respondent to clear the outstanding dues. The respondent did not reply to the legal notice. The petitioner invoked the arbitration clause under Section 21 of the Arbitration and Conciliation Act, - 7 - NC: 2025:KHC:12209 CMP No. 592 of 2024 1996, for adjudication of a dispute between the parties. However, the respondent replied to the legal notice, and refused to accord its consent to the appointment of the sole arbitrator suggested by the petitioner. I have perused the purchase order dated 25.03.2024. Clause No.17 of the purchase order provides a reference to the arbitrator, which reads as follows: “17. Arbitration: All disputes, differences, claims and demands arising under or pursuant to or touching this agreement shall be referred to Arbitration of a sole Arbitrator to be appointed by the Director, Mineflare Technologies. Such Arbitration shall be held in Bangalore and shall be subject to and governed by the provisions of the Arbitration and Conciliation Act of 1996 or any statutory modification or re-enactment thereof. Any or all matters under disputes arising hereunder, the appropriate courts in Bangalore alone to the exclusion of all courts, shall have jurisdiction to entertain and try them.” 11. The perusal of the purchase order discloses, it provides an arbitration clause that all the disputes, - 8 - NC: 2025:KHC:12209 CMP No. 592 of 2024 differences, claims, and demands arising under or pursuant to, shall be referred to arbitration by a sole Arbitrator to be appointed by the Director. Admittedly, the respondent issued a purchase order to the petitioner, but the respondent did not pay the outstanding amount to the petitioner. A dispute has arisen between the parties. Hence, the said dispute has to be resolved through an Arbitrator. Admittedly, there is an arbitration clause. The dispute has to be resolved between the parties to the
Decision
petition by an Arbitrator. In view of the above discussion, I answer the point for consideration in the affirmative. 12. Accordingly, I proceed to pass the following: ORDER i. The Civil Miscellaneous Petition is allowed. ii. Hon’ble Justice Mr. Subhash B. Adi, Former Judge, High Court of Karnataka, is appointed as an Arbitrator to resolve the dispute between the parties in terms of clause 17 of the purchase order dated 25.09.2023 as per the provisions of Arbitration and Conciliation Act, 1996. - 9 - NC: 2025:KHC:12209 CMP No. 592 of 2024 iii. The office is directed to communicate this order to the learned Arbitrator and Arbitration and Conciliation Center, Bengaluru. Sd/- (ASHOK S.KINAGI) JUDGE sks