Bangalore District Court
M S Wipro Limited vs Argon Solutions on 6 January, 2026
KABC010028222017
IN THE COURT OF LXVII ADDL CITY CIVIL AND
SESSIONS JUDGE; BENGALURU CITY (CCH.No.68)
PRESENT
SMT.RASHMI.M.
BA.LL.B., LL.M.
LXVII ADDL CITY CIVIL & SESSIONS JUDGE,
BENGALURU.
Dated this the 6th day of January 2026.
A.S.No.26/2017
PLAINTIFF : M/s.Wipro Limited,
A Company incorporated &
Registered under the provisions
of Indian Companies Act, 1956
and having its Registered Office
at : Wipro Limited,
Doddakannealli,
Sarjapur Road,
Rep. by its Director.
(By Sri.R.C., Advocate)
.Vs.
DEFENDANTS : 1. Argon Solutions,
A Proprietorship Concern,
Having its Office at No.226,
Shree Anantha Panathur,
Bhoganahalli Road,
Varthur Post,
Kadabisanahalli,
Bengaluru.
A.S.No.26/2017
2
Rep. by its Proprietor,
Shri.K.Shivananda Rao & its
Head Operations
Smt.Shalini K.Rao.
2. Sri.Kukkaje Ramakrishna Bhat,
District Judge (Retd.)
Sole Arbitraror,
Arbitration Centre-Karnataka,
(Domestic & International)
(By Sri.Giridhar, Advocate)
JUDGMENT
The Memorandum of Appeal is filed by the appellant under Section 34 of Arbitration and Conciliation Act, 1996 against the Award passed by the learned Arbitrator/defendant No.2 in A.C.No.128/2015, dated:15.09.2016 and prays to set aside the said Award.
2. Brief facts of the case are as under:
The plaintiff company and the defendant No.1 proprietorship concern entered into a Master Service Agreement (MSA) dated:15.01.2013 under which the defendant No.1 was to provide training services for their employees of the plaintiff's company,amongst the various terms and conditions stated in the said MSA Clause 11 of pertinent to note inasmuch as the defendant No.1 is under a legal obligation under the said Clause to take steps to prevent "unauthorised A.S.No.26/2017 3 persons" entering the premises of plaintiff company for training, amongst other clauses on providing effective services, on maintaining ethics, being professional, etc. the defendant No.1 failed to perform its obligation thereunder and committed fraud upon the plaintiff company by sending a person by name Abhishek in place of Manish Jha as a Trainer in campus of plaintiff company at Pune in 2013, the same being a case of impersonation, fraud and breach of contract, the plaintiff company terminated the contract vide Ex.R.4, dated:31.10.2013 and sent by email dated:7.11.2013. The defendant No.1 filed an Arbitration Suit challenging the termination as illegal and the same has been allowed vide Arbitration Award dated:15.09.2016.
3. Being aggrieved by the said award dated:15.09.2016 in A.C.No.128/2015 is challenged on the following grounds.
It is alleged that the the Arbitral Award is illegal, arbitrary, without application of mind, without appreciating the evidence on record. The defendant No.2/Sole Arbitrator exceeded his jurisdiction conferred by MSA/Contract between the parties. The defendant No.2 has exceeded his jurisdictional and committed patent illegality by holding that the termination letter of the plaintiff was not valid and legal merely on the ground that Clause 18 of the MSA required 30 days notice to be provided in the notice and that the plaintiff A.S.No.26/2017 4 did not provide so, which is not the subject matter of the dispute in as much the allegation of the plaintiff is that the defendant has committed fraud and impersonation and that in such a case, there is no question of 'curing'; the breach of 30 days in as much as the fraud/impersonation was 'incurable'. The learned Sole Arbitrator/defendant No.2 ought to have restricted his finding on the fraud/impersonation ground and has exceeded his jurisdiction by holding that 30 days period ought to have been given by plaintiff which is not attracted in the case and not subject matter of arbitration. The learned Sole Arbitrator/defendant No.2 further exceeded his jurisdiction and committed patent illegality on one hand holding that the case is to be decided on 'preponderance of probabilities', but on the other hand is expecting the level of evidence to be produced by the plaintiff on the ground of fraud/impersonation as if it were a criminal case and has to be proved beyond reasonable doubt. That the learned Sole Arbitrator/defendant No.2 ought to have held on merits that there was no reason to disbelieve the finding of security agencies of plaintiff company and R.W.1 giving evidence based on record, registers, admission letters of imposter, police complaint, etc., ought to have restricted his finding on principles of civil procedure and rules of evidence for determining civil cases. Further the learned Sole Arbitraror committed patent illegality in holding that evidence produced by A.S.No.26/2017 5 the plaintiff is hearsay. The defendant No.2 exceeded his jurisdiction and committed patent illegality by holding that the Registers of security which were not available in original are not to be relied upon and the admission and confession letters of Abhishek/imposter which are produced in original are also not to be relied upon and the admission and confession letters of Abhishek/imposter which are produced in original are also not to be relied upon, which findings are perverse and biased, erupting from sympathy towards the lady entrepreneur vis-a-vis large company like the plaintiff. The defendant No.2 exceeded his jurisdiction and committed patent illegality by holding that the defendant No.1 has not admitted fraud/impersonation, further Manish Jha is a freelancer not employee of defendant No.1, which are not the subject matter of the arbitration. The learned Sole Arbitrator ought to have limited himself to finding whether the defendant No.1 was liable, further vicariously liable for fraud/impersonation, irrespective of whether Manish Jha was freelancer/employee and irrespective of the fact that the defendant No.1 has admitted the fraud/impersonation or not. The learned Sole Arbitraror failed to appreciate within the jurisdiction that it was an open and shut case of impersonation not requiring admission on part of defendant No.1 and irrelevant whether Manish Jha was freelancer or employee of defendant No.1 and impersonation being directly a case A.S.No.26/2017 6 of fraud amounts to violation of MSA and termination letter was valid and legal. The learned Sole Arbitrator/defendant No.2 has committed patent illegality in overlooking Clause 29(i) of MSA as per which the defendant No.1 is liable for losses or damages on account of its agents/employees/representatives. The defendant No.2 has exceeded his jurisdiction and committed patent illegality by blowing out of proportion the issue of stay of 20 days of imposter in campus of plaintiff company and not understanding the issue on hand that 20 days of entry and exit by staying in campus need not strictly mean staying day and night, in any case the same was irrelevant. Hence, exceeded his jurisdiction by determining extraneous issues. The learned Sole Arbitrator committed patent illegality in holding that Indemnity Clause 17 of the MSA is restricted to infringement of IP rights, overlooking that Sub-Clause 5 of Clause 17 provides for 'any failure of supplier to perform his obligations under this order' as a ground for seeking indemnity. The defendant No.2 has exceeded his jurisdiction and committed patent illegality by commenting on plaintiff's employee-witness R.W.1 as being careless/not verifying cameras, etc/ having ill motive which are false and irrelevant for determining the issue on hand as to whether termination was valid and legal for impersonation/fraud/fundamental breach of MSA. Further more, the Sole Arbitrator committed A.S.No.26/2017 7 patent illegality in holding that employees of plaintiff were inimical to the defendant No.1 and having put embargo they lifted the same showed it was done without reason, etc., which are all illegal on fact of the award. The defendant No.2 has exceeded his jurisdiction and committed patent illegality in awarding damages of Rs.10,00,000/- as there was no wrongful or illegal termination and failed to appreciate that the defendant No.1 is bound by terms of MSA, particularly Clause 11 of the MSA, also in purchase order dated:11.07.2013 it is provided that the plaintiff is not liable to pay any direct, speculative or consequential damages, thus defendant No.1 ought to have been responsible of the said impersonation. The learned Sole Arbitrator has exceeded his jurisdiction and committed patent illegality in awarding Rs.33,66,411.09 as due towards pending invoices payable by the plaintiff to the defendant No.1 and completely ignored the finding and evidence that complete reconciliation was done between the parties and all dues were settled. The defendant No.2 has exceeded his jurisdiction and committed patent illegality in awarding Rs.1,00,000/- towards loss of opportunity on account of late payments and holding that the respondent has to bear consequences of an "irresponsible behaviour" whereas completely giving a go-by to the defendant No.1's action of impersonation/fraud/breach/ irresponsible behaviour, which award is biased and perverse. The A.S.No.26/2017 8 defendant No.2 has exceeded his jurisdiction and committed patent illegality in holding that Rs.20,00,000/- forfeited by plaintiff is not proper and invalid, by attempting to seek justification in Clauses of MSA by completely overlooking and appreciating that in such cases, costs of training, manpower, etc., to a tune of Rs.20,00,000/- incurred by the plaintiff and the same going waste on account of defendant No.1's act of fraud/impersonation, the plaintiff is entitled to forfeit the said amount. The learned Sole Arbitrator has exceeded his jurisdiction and committed patent illegality in awarding Rs.2,00,000/- on the ground that the plaintiff company being a huge organization having international fame harassed a smaller organization and the same is perverse and biased based on mere sympathy and compassion, not on valid and legal principles. The learned Sole Arbitrator has exceeded his jurisdiction and committed patent illegality in awarding costs of arbitral proceedings, which is perverse and biased in as much as it is defendant No.1 indulging in activities of impersonation that led to dispute between the parties and the plaintiff has been dragged to arbitration on their account. Thus, the Arbitral Award is liable to be set aside under Section 34(2a) of the Arbitration and Conciliation Act, 1996 in as much as the defendant No.1 has exceeded his jurisdiction and rendering decision on matters beyond scope of the submission of arbitration. Furthermore, A.S.No.26/2017 9 the Arbitral Award is also vitiated by patent illegality appearing on the face of the Award and is liable to be set aside even on the ground of Section 34(2A) of Arbitration and Conciliation Act, as amended in 2015. Hence, call for records and to set aside the Arbitral Award passed by the learned Sole Arbitrator in A.C.No.128/2015 dated:15.09.2016 and to dismiss the award and also to allow the counter claim of the plaintiff made before the learned Sole Arbitrator and to seek for such other relief as the court deems fit under the facts and circumstances of the case.
4. The defendant No.1 has filed detailed written statement contending that the application instituted for seeing aside the Award dated:15.09.2016 is not maintainable either in law or on facts of the case. The Award came to be passed on 15.09.2016. In terms of Section 34(3) of Arbitration and Conciliation Act, the application for setting aside the order under Section 34 ought to have been filed or on before 14.12.2016 being the culmination of three months. In terms of proviso to Section 34(3), a further period of 30 days is provided to prefer an application to set aside the Award provided, the court is satisfied that the applicant was prevented by sufficient cause from making the application within a period of 3 months. The said further period of 30 days after the expiry of 3 months from 14.12.2016 has been come to an end on 13.01.2017. Therefore, it is A.S.No.26/2017 10 submitted that the application under Section 34 preferred is beyond 3 months and the beyond additional period of 30 days and consequently the application is liable be set aside the Award as barred by limitation and barred by the provision of Arbitration and Conciliation Act and consequently the entire proceedings require to be dismissed. The defendant has further contended that the delay if any cannot be condoned and the time fixed by the statute cannot be enlarged by this court and hence the delay is fatal to the further proceedings and incapable of being cured and consequently the entire petition will have to be dismissed in entirety. The Award passed on 15.09.2016 which was the date fixed for pronouncement of the Award. The communication dated:16.09.2016 of the Arbitration Center was merely an administrative act if limitation of the Award having been passed. Under these circumstances, the respondent No.1 submits that the present application under Section 34 of Arbitration and Conciliation Act is barred by law of limitation and hence it requires to be dismissed. Further the communication dated 16.09.2016 of the Arbitration Centre was merely an administrative act if intimation of the Award having been passed. Under these circumstances, the Respondent No.1 submits that the present Application under Section 34 is barred by limitation and hence Petition itself requires to be dismissed.
A.S.No.26/2017 11
5. Heard. Both sides have filed written arguments.
6. The learned advocate for petitioner/plaintiff has relied upon the following decisions.
1. Ssangyong Engg. & Construction Co. Ltd. .Vs. NHA1 (2019) 15 SCC 131 ;
2. Patel Engg. Ltd. .Vs. North Eastern Electric Power Corpn. Ltd. (2020) 7 SCC 167 ;
3. SBI General Insurance Co. Ltd. .Vs. Krish Spinning (2020 SCC OnLine SC 1754) ;
4. Vidya Drolia .Vs. Durga Trading Corpn. (2019) 20 SCC 406 ;
5. OM Industries .Vs. Birla Precision Technologies Ltd. (2023 SCC OnLine NCLT 419) ;
6. Union of India .Vs. Bharat Enterprise (2023 SCC OnLine SC 369) ;
7. D.Khosla & amp.Co., .Vs. Union of India (2024) 9 SCC 476 ;
8. Bharathi Knitting Co. .Vs. DHL Worldwide Express Courier (1996) 4 SCC 704 ;
9. Kailash Nath Associates .Vs. DDA (2015) 4 SCC 136 ;
10. Air India Ltd. .Vs. Gati Ltd. (2015 SCC OnLine Del. 10220) ;
11. Government of Goa .Vs. Goa Urban Co-operative Bank Ltd. (2010) SCC OnLine Bom.1653) ;
12. Union of India .Vs. Tecco Trichy Engineers & Contractors (2005) 4 SCC 239 ;
A.S.No.26/2017 12
13. State of Maharashtra .Vs. ARK Builders Private Limited (2011) 4 SCC 616 ;
14. Madan Pal Singh & 2 others .Vs. M/s.Ambika Installments Limited & another (2024 AHC:143920 -DB) ;
15. State & another .Vs. P.P.Poulose (2011) SCC J & K 280) ;
16. ONGC Lts .Vs. Afcons Gunanusa JV (2024) 4 SCC 481.
He has also relied upon the decision reported in H.P.Housing & Urban Development Authority .Vs. Ranjit Singh Rana (2012) 4 SCC 505.
7. On the basis of the above pleadings, the points that arise for my determination are as under :
1. Whether the Arbitration Suit filed is barred by limitation ?
2. Whether the arbitration award passed in AC No.128/2015 dated:15.09.2016 is ab-initio-void and violation of principles of natural justice and against to the public policy ?
3. Whether there is any ground made out by the plaintiff as per Section 34 of Arbitration and Conciliation Act to set aside the Award dated:15.09.2016 ?
4. What Order ?
8. My findings on the above points are as under :
POINT No.1 : Negative,
A.S.No.26/2017
13
POINT No.2 : Negative,
POINT No.3 : Negative,
POINT No.4 : As per the final order,
for the following :
REASONS
9. POINT No.1 : It is the specific contention of the
defendant No.1 is that the present Arbitration Suit is barred by limitation as the Award was passed on 15.09.2016. In terms of Section 34(3) of Arbitration and Conciliation Act 1996, an application for setting aside under Section 34 of the Act has to be filed on or before 14.12.2016 being the culmination of 3 months. In terms of proviso to Section 34(3), the further period of 30 days is provided to prefer an appeal to set aside the Award provided that the court is satisfied that the applicant was prevented by sufficient cause from making the application within 3 months. The said further period of 30 days after expiry of 3 months from 14.12.2016 comes to an end on 13.01.2017, while the present suit is filed on 1.02.2017. Hence the present suit is barred by limitation.
10. In this regard, the learned advocate for plaintiff has relied upon the decision reported in (2011) 4 SCC 623 (Priyadarshni Dental College & Hospital .Vs. Union of India), wherein the Hon'ble Supreme Court A.S.No.26/2017 14 has observed that "it is well established that the limitation prescribed under Section 34(3) of the Act will commence from the date a signed copy of the Award is delivered to the party making the application for setting it aside". Also has relied upon the decision reported in AIR 2012 J & K 24 (State & another .Vs. P.P.Poulose), wherein the Hon'ble High Court of Jammu & Kashmir has observed as under:
"The delivery of an arbitral award under sub-section (5) of Section 31 is not a matter of mere formality. It is a matter of substance. It is only after the stage under Section 31 has passed that the stage of termination of arbitral proceedings within the meaning of Section 32 of the Act arises. The delivery of arbitrary award to the party, to be effective, has to be "received" by the party. This delivery by the arbitral tribunal and receipt by the party of the award sets in motion several period of limitation such as an application for correction and interpretation of an award within 30 days under Section 33(1), an application for making an additional award under Section 33(4) and an application for setting aside an award under Section 34(3) and so on. As this delivery of the copy of award has the effect of conferring certain rights on the party as also A.S.No.26/2017 15 bringing to an end the right to exercise those rights on expiry of the prescribed period of limitation which would be calculated from that date, the delivery of the copy of award by the tribunal and the receipt thereof by each party constitutes an important stage in the arbitral proceedings".
11. Further he has relied upon the decision reported in (2024) 4 SCC 481 (ONGC Ltd. .Vs. Afcons Gunanusa JV), wherein Their Lordships have held as under:
"Arbitration - Arbitration and conciliation Act, 1996 - Sections 34, 36 and 39 - Arbitral award - Copy thereof not supplied due to non-payment of share of arbitrator's cost -
Commencement of limitation for challenge to such award - Held, Section 34 makes the physical receipt of an arbitral award the beginning point for the time computed under Section 34(3) to be assessed, as only that would enable a party to apply for setting aside the award or for implementing it - Thus, if there is no receipt of the award, the time does not begin to run, and there can be no question of the time limit expiring - To avoid such a scenario on account of non-payment of share of arbitrator's costs, a party wishing to obtain the benefit under the award A.S.No.26/2017 16 ought to pay the costs, to ensure that the other parties obtain their copies of the award, so that the time under Section 34(3) begins to run, and after its expiry, the award be deemed to be a decree - Arbitration Act, 1940, Sections 14 and 38".
12. In view of the law laid down in the aforesaid decisions and taking into consideration Section 34(3) of Arbitration and Conciliation Act reads thus :
"An application for setting aside an award shall not be entertained by the have elapsed from the date on which court, if it is made after three months the applicant had received the arbitral The proviso to this Section award. was further provides that if the court is satisfied that the applicant prevented by sufficient cause from making the application within the prescribed time, it may entertain the application with a further period of 30days, but where not thereafter. The an importance of period fixed under Section 34 is highlighted under 1996 Act by Section 36 which stipulates that application to set aside the arbitral the time for making award under Section 34 has expired, the award shall be enforced under the Code of Civil Procedure, 1908 in the same manner as it was a decree of the court. In catena of cases, the Supreme Court has held that the mentioned under Section 34(3) cannot be extended. It is pertinent to note that Section 34(3) A.S.No.26/2017 17 places emphasis on the "receipt" of the award"
13. Taking into consideration the law laid down by the Hon'ble Supreme Court in the aforesaid decsision, it is observed that the limitation starts not from the date of passing of the Award by the Arbitrator or from the date on which the Arbitrator signed the Award. But the limitation starts from the date on which the party received the copy of the Award. Hence the present Arbitration Suit is not barred by limitation as contended by the defendant No.1. Accordingly, the Point No.1 is answered in the Negative.
14. POINT No.2 & 3 : Since both these points are interconnected to each other, they have been taken up together for discussion in order to avoid the repetition of facts.
15. Before adverting to the grounds urged by the Plaintiff in its pleading and arguments, it is relevant to mention Section 34(1) and (2) of the Arbitration and Conciliation Act, 1996, which reads as follows:
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 A.S.No.26/2017 18 accordance with sub-section (2) and sub-
section (3).
(2) An arbitral award may be set aside by the court only if,- the party making the application furnish (a) 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 that part of the arbitral award which contains separated from those not so submitted, only 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 this Part from which the parties cannot agreement was in conflict with a provision of derogate, or, A.S.No.26/2017 19 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) of clause (b), it is hereby declared, for the avoidance of any doubt, that an award is in conflict 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."
16. The first ground urged by the plaintiff is that the Hon'ble Arbitrator ought to have restricted his finding on the fraud/impersonation ground has exceeded his jurisdiction that the termination letter of the plaintiff was not valid and legal merely on the ground of Clause 18 of MSA required 30 days notice to be provided and it is not subject of arbitration.
17. In this regard, it is necessary to note that the learned Arbitrator has framed 1st Issue as "Whether the claimant proves that the termination of Master Service Agreement dated:15.01.2013 is A.S.No.26/2017 20 not legal and valid?". The said issue has been answered in the Affirmative.
18. In view of the contention taken by both the sides and documents placed before the Arbitration Tribunal, it is pertinent to note that Ex.C.1 is the copy of the Master Service Agreement dated:15.01.2013. The said Agreement is not disputed by the plaintiff. It is contended that the defendant No.1 was under the legal obligation as per Clause 11 to take steps to prevent 'unauthorised persons" from entering the premises of the plaintiff company for training and they were bound to give efficient service. But the defendant No.1 sent a imposter Abhishek in place of Manish Jha as a trainer into the plaintiff's company campus at Pune in 2013. Hence the plaintiff terminated the contract vide Ex.R.4 dated:31.10.2013 and sent email dated:7.11.2023.
19. The MSA states about Clause 11 and about Termination is as under :
"The Supplier shall take steps reasonably required by Wipro to prevent unauthorized persons being admitted to the premises. The Supplier agrees that the Supplier shall be solely and exclusively liable and responsible for the health and safety during deployment of its personnel in Wipro premises. It is the sole responsibility of the Supplier to ensure that the A.S.No.26/2017 21 Supplier's personnel/agent/sub contractors shall abide by the Safety Manual of Wipro. Any claim, loss or damages caused due to the negligence of supplier's personnel/agent/sub contractors within Wipro premises shall be borne by the Supplier".
20. 18. TERMINATION:
i. Notwithstanding anything contained in Clause 4, this Agreement may be terminated by Wipro at any time during the intended term by giving the Service Provider 30 day's written notice.
ii. Wipro may immediately terminate this Agreement in case the Service Provider has committed breach of any of the terms and conditions of this Agreement and has not cured such breach within a period of thirty (30) days from the receipt of written notice form Wipro requesting it to do so. In case the Service Provider does not provide services during the notice period determined hereunder Wipro reserves the right to charge penalties in lieu of the notice period, which shall be the average service fee for 3 months paid by Wipro under this Agreement".
21. In view of MSA, the evidence led before the tribunal, it is held that the learned Arbitrator has rightly observed that Sub-Clause (i) of Clause 18 provides that A.S.No.26/2017 22 the Respondent Company may terminate the contract at any time during the term of the contract by giving the Claimant who is the Service Provider 30 days' written notice. It has been rightly held that Nowhere in the Ex.C-1 it is provided that either the termination can be done giving effect to the same to any date earlier to the date on which the notice was issued or to make it effective earlier to 30 days from the date of notice. The termination should have the effect at least 30 days after the notice is served on the Claimant. Therefore it would not terminate the service agreement legally. The Sub-Clause (ii) of Clause 18 entitles the Respondent to terminate the agreement immediately in case of breach of any terms and conditions of the agreement by the Claimant and it also provides specifically that such termination can be effective only when the Respondent issued a written notice to the Claimant therein giving an opportunity to them to cure the breach within a period of 30 days from the date of the service of the notice in writing. That means, it was the duty of the Respondent to issue a notice in writing to the Claimant specifically pointing out what was the breach that is alleged to have been committed by the Claimant in respect of the terms and conditions of the contract and requesting them to cure the said breach within a period of 30 days of the receipt of the notice by the Claimant. An opportunity to cure the alleged breach is mandatory if they wanted to terminate the Master Services A.S.No.26/2017 23 Agreement with the Claimant immediately. As already noted above, the notice at Ex.R-4 terminating the contract does not comply with this requirement under Clause 18 (ii) of the contract. The Arbitrator on appreciating the oral and documentary evidence before has rightly observed that the termination is not only illegal, wrongful, not supported by facts alleged, wholly unilateral premature, contrary to the terms of the agreement at Ex.C.1 but also is ill-motivated and is done with some kind of prejudice against the Claimant best known to a few of the officials in the Talent Transformation Team and Business Support Services Section of the Respondent, though may not be known to the higher authorities of the organization which is admittedly a large one. The Claimant in this way succeeded in proving that the termination of the Master Service Agreement by the Respondent is not legal and valid and is bad in law as well as on the facts of the case.
22. It is further contended that the Arbitrator ought have held on merits that there was no reason to disbelieve the finding security agencies of Plaintiff company and RW1 giving evidence based record, registers, admission letters of imposter, police complaint, fraud/impersonation; thus Hon'ble Arbitrator exceeded his jurisdiction to prow ought to have been held as sufficient evidence ought to have restricted his A.S.No.26/2017 24 finding on principles of civil procedure and rules of evidence for determining civil cases. Wrongy held that case is to be decided on 'preponderance of probabilities' but on the other hand is expecting the level of evidence to be produced by the Plaintiff on the ground of fraud/impersonation as if it were a criminal case Furthermore, the Hon'ble Arbitrator committed patent illegality in holding that evidence produced by Plaintiff is 'hearsay. In this regard it is pertinent to note that on reading the reasons given while passing the Arbitral award the Honb'le Arbitrator has properly appreciated the oral and documentary evidence in precision. The Hon'ble Arbitrator has not exceeded his jurisdiction.
23. It is further contended that the Hon'ble Arbitrator has exceeded his jurisdiction and committed illegality in awarding damages of Rs.10,00,000/- even though there was no wrongful and illegal termination and the Hon'ble Arbitrator has failed to appreciate that the Defendant No.1 is bound by terms of MSA, particularly Clause 11 of MSA; also in purchase order dated 11.7.2013 it is provided that Plaintiff is not liable to pay any indirect, speculative or consequential damages, thus Defendant No.1 ought to have taken responsibility of the said impersonation. Also committed patent illegality in awarding Rs.33,66,411.09 as due towards pending invoices payable by the Plaintiff to the Defendant No.1 A.S.No.26/2017 25 and completely ignored the finding and evidence that complete reconciliation was done between parties and all dues were settled.
24. In this regard, it is necessary to refer to Issue Nos.2, 3 and 4 framed by the learned Arbitrator which is as under:
2. Whether the claimant proves that the respondent is liable to pay Rs.15,00,000/- towards damages as unilateral claimed on account of wrongful and termination of the Master Services Agreement?
3.Whether the claimant proves that the respondent is liable to pay Rs.33,66,411/- towards the amounts due under various invoices, debit notes and expenses with interest thereon?
4. Whether the claimant proves that the respondent is liable to pay Rs.
1000,000/- for loss of opportunity on account of the late payments and prevention of the claimant from expansion of the business?
25. The Arbitrator i.e., defendant No.2 has considered the evidence of Mr Sudhindra Rudrapatna and held that "he would not be personally aware as to what has transpired between the Claimant and the previous employees of the Respondent who were transacting with PW-1 on earlier occasions. Therefore, he is A.S.No.26/2017 26 practically not in position to deny the allegation of the enimical/ prejudicial behaviour of certain employees of the Respondent at an earlier occasion. From the evidence on record and the circumstances, by preponderance of probabilities I can certainly arrive at a conclusion that the termination of this contract by the Respondent by means of Ex.R-4 was totally premature apart from being wrongful, illegal, invalid and unilateral. This has certainly curtailed the business prospects and the business progress of the Claimant as the termination was a blue from the bolt to the Claimant who is admittedly a woman driven organisation but of any that have been suffered by the Claimant cannot be exactly quantified in a bigger way. Therefore, certainly the damages and estimated by means of calculation. The business turnover during the short period of about 10 months between the Claimant and the Respondent was not less than Rs.52,00,000/-, as can be gathered from the pleadings of the parties, which can be certainly something more than the said amount. The termination of the contract came more than 4 years earlier to the culmination of the period of the contract under Ex.C-1. Even by assessing the profit at a minimum scale I do not think that the loss of profit for the Claimant was less than about Rs.5,00,000/-. In this way the Claimant has lost the business and the resultant financial loss could have been to an extent of about Rs.20,00,000/- for the remaining period of the A.S.No.26/2017 27 contract of not of the opinion that the entire loss of Rs.20,00,000/- suffered by the Claimant has to be reimbursed by the Respondent under the circumstances because the Claimant had to do certain other things within the period of four years to achieve this profit. I am of the considered opinion that the Claimant is entitled to damages of not less than Rs. 10,00,000/- though not Rs.15,00,000/-from the Respondent. Therefore, ISSUE NO.2 is answered PARTLY IN THE AFFIRMATIVE that the Respondent is liable to pay Rs. 10,00,000/- towards wrongful, illegal and unilateral termination of the Master Service Agreement".
26. Taking into consideration the evidence placed before the arbitration tribunal Defendant no 2 has rightly awarded Rs 10,00,000/- towards unilateral termination of MSA.
27. Further it is necessary to note that the claimant had made a specific prayer for payment of amount under 105 Invoices from 15.07.2010 to 21.04.2014 which accumulate the value of Rs.25,00,755/- with interest of Rs.5,42,945/- and total rounded amount of Rs.30,43,701/- and total of Rs.33,66,411/- for payment of dues under various invoices, debit notes and expenses.
28. In this regard, the learned Arbitrator has given a detail finding in Issue No.3, wherein the learned A.S.No.26/2017 28 Arbitrator while appreciating the oral and documentary evidence placed before him has given a detailed reasoning as under :
29. It is necessary to note that it is also suggested to the P.W.1 that the claimant did not co-operate with the respondent for reconciliation with an intention to confuse the issue. This perhaps pre-supposes that what the P.W.1 has stated that the reconciliation did not conclude has to be true and that the respondent alleges that there was no co-operation for further reconciliation between the parties.
30. On the other hand, R.W.1 has not stated anything at all about the total settlement by way of reconciliation in his oral evidence except producing the Excel Sheet regarding the invoice details at Ex.R.16. Ex.R.16 touches upon two invoices of 25.10.2013 and all other invoices of February 2014. Whereas the para 15 and 16 of the claim consist of many more invoices of different dates other than mentioned in Ex.R.16. This is how the respondent contends that there was total reconciliation of accounts and full satisfaction of the dues was done by payment made by them at out of the total figure of Rs.25,98,603.15/- after deducting the sum of Rs.20,00,000/- being indemnity claimed by them. At the same time, the R.W.1 has admitted that all the calculations made in the tabulation format at A.S.No.26/2017 29 paragraphs 15 and 16 of the Claim Statement are correct and also that the total value of the invoices mentioned in paragraph 16 of the Claim Statement have not been paid by the respondent. It is also his admission that there is no reasons for delay in making payment of the invoices listed in paragraph 15 of the Claim Statement and the remarks in the last column of the list in paragraphs 15 regarding payment particularly or in excess are also correct. Therefore, it is clear that the reconciliation claimed by the respondent cannot be total or in respect of all the accounts relating to the invoices claimed by the claimant and therefore, I cannot hold that the respondent has proved that by reconciliation of the accounts the entire dues of the claimant have been fully satisfied. For all the reasons, I answer Issue No.3 in the Affirmative.
The said reasoning passed by the learned Arbitrator is not perverse and there is no illegality attributable to the reasoned award passed by the learned Arbitrator i.e., defendant No.2.
31. Further the learned Arbitrator has held that the claimant/defendant herein has proved that the respondent/plaintiff is liable to pay Rs.1000,000/- for loss of opportunity on account of late payment and prevention of the defendant No.1 from expansion of the business. The learned Arbitrator/defendant No.2 on appreciating the evidence placed therein has given the A.S.No.26/2017 30 reasonings as under with respect to Issue No.4, which reads as under :
"There was much scope for the claimant to expand their business simultaneously by rendering services that would have been required to certain other companies. Admittedly, the respondent is a very big company which is operating both in national level and internationally also that requires the services for training their employees and new recruits. When such a big company terminates the services of the claimant that would have dealt a severe blow on the claimant with regard to the opportunity to render services in similar companies and thereby the expansion of their business should have been curtailed in the usual course. In view of my findings that the claimant is entitled to payment of Rs.10,00,000/- on Issue No.2, I feel that again Rs.10,00,000/- has to be awarded on this count also considering loss of opportunity. But, however symbolically in order to make the respondent to understand the consequences of such an irresponsible behaviour of their employees, I have to award Rs.1,00,000/- at least for prevention of expansion of business on account of the inaction of the respondent in payment of the bills and delayed payments in the absence of valid reason for the same. This is more so for the reason that the financial cash flow to the claimant, who is a family business concern without appointment of permanent employees, was also A.S.No.26/2017 31 naturally reduced to a greater extent by the prejudicial conduct of certain employees of the respondent because of non-payment of the bills and the delayed payments. In the result, Issue No.4 is answered Partly in the Affirmative that the respondent is liable to pay Rs.1,00,000/- to the claimant".
The said reasoning passed by the learned Arbitrator is not perverse and there is no illegality attributable to the reasoned award passed by the learned Arbitrator i.e., defendant No.2.
32. The learned Arbitrator/defendant No.2 has awarded Rs.2,00,000/- towards damages with the observation that the claimant naturally, suffered loss of productivity and profit at least for a period of four years, the remaining term of the contract after the illegal termination. I find no legality in the damages awarded by the learned Arbitrator.
33. The plaintiff had sought for forfeiture of Rs.20,00,000/- and also had contended that the claims made by the defendant No.1 is barred by limitation. In this regard, the Issue No.6 and Issue No.9 were framed as under :
6. Whether the respondent proves that the forfeiture of Rs.20,00,000/-
by them is proper and valid for the A.S.No.26/2017 32 reasons stated in Paragraph 11 and 31 of the Statement of Objections ?
9. Whether the respondent proves that the claims of the claimants are barred by limitation?
34. Both the issues are answered in the negative with the observation that under Clause 21(iii), the claimant was required to provide service in a competent professional manner etc., and was not permitted to breach the terms and conditions of this agreement including those related to security and confidentiality. In Ex.R.4, the respondent has alleged that there was a breach by the claimant of this condition contained in Clause 21(iii) of Ex.C.1. But, on the other hand, it is demonstrated by the admission of R.W.1 himself that there were no such breached at all which could have given them a right to terminate the contract, as seen during the discussion of evidence supra while answering the Issue No.1.
35. Further the learned Arbitrator/defendant No.2 has observed that the defendant No.1 is not vicariously liable on account of impersonation which is fraud, mis- representation, negligence and not entitled for forfeiture of the amount.
36. Further the learned Arbitrator/defendant No.2 has rightly observed that there is continuous cause of A.S.No.26/2017 33 action as and when the defendant No.1 sent invoices to the plaintiff for payment and after taking into account from the beginning admittedly reconciliation was attempted in 2014 though it had not concluded. Also the plaintiff had failed to respond to the defendant No.1 who had filed CMP 35/2015 before the Hon'ble High Court of Karnataka. Hence it can be said that the learned Arbitrator has rightly held that the claims made by the defendant No.1 is not barred by limitation.
37. It is observed that the Award passed by the learned Arbitrator is after due enquiry and it is not perverse or illegal. As such I am of the opinion that no grounds are made out by the plaintiff to set aside the award passed by the learned Arbitrator/defendant No.2 in A.C.No.128/2015, dated:15.09.2016. Accordingly, the Point Nos.2 and 3 are answered in the Negative.
38. POINT No.4: In view of my findings on Point Nos.1 to 3 as above, my finding on this point is as per the following :
ORDER The suit of the plaintiff/appellant filed under Section 34 of Arbitration and Conciliation Act, 1996 is hereby dismissed. Consequently, the award passed by the learned Arbitrator/defendant No.2 in A.S.No.26/2017 34 Arbitration matter AC.No.128/2015, dated:15.09.2016 stands confirmed. (Dictated to the Stenographer Grade-II directly on computer, corrected, signed and then pronounced by me in the open court on this the 6th day of January 2026) (RASHMI.M) LXVII Addl.City Civil and Sessions Judge, BENGALURU.
Digitally signed by RASHMI RASHMI M Date:
M 2026.01.07
10:53:15
+0530