Karnataka High Court
M/S. I.C. India Pvt Ltd vs The General Manager (Dsm) on 27 September, 2023
Author: B M Shyam Prasad
Bench: B M Shyam Prasad
-1-
NC: 2023:KHC:35265
CMP No. 345 of 2021
IN THE HIGH COURT OF KARNATAKA AT BENGALURU
DATED THIS THE 27TH DAY OF SEPTEMBER, 2023
BEFORE
THE HON'BLE MR JUSTICE B M SHYAM PRASAD
CIVIL MISC. PETITION NO. 345 OF 2021
BETWEEN:
M/S. I.C. INDIA PVT LTD
NO 565, 30TH MAIN ROAD
KATTRIGUPPE
BSK III STAGE
BENGLAURU 560085
REP BY ITS H A KANTHARAJAPPA
PROJECT HEAD
...PETITIONER
(BY SRI. ZULFIKIR KUMAR SHAFI.,ADVOCATE)
AND:
THE GENERAL MANAGER (DSM)
Digitally
signed by CORPORATE OFFICE
NARASIMHA BESCOM, K R CIRLCE
MURTHY
VANAMALA BENGLAURU, K R CIRCLE
Location: BENGALURU 560001
HIGH ...RESPONDENT
COURT OF
KARNATAKA
(BY SRI. SRIRANGA S., SENIOR ADVOCATE FOR
SMT. SUMANA NAGANAND., ADVOCATE)
THIS CIVIL MISC. PETITION IS FILED UNDER
SEC.11(6) OF THE ARBITRATION AND CONCILIATION
ACT 1996, PRAYING TO APPOINT JUSTICE AJITH
GUNJAL (RETIRED) HIGH COURT JUDGE, AS A SOLE
ARBITRATOR TO ADJUDICATE THE DISPUTE ARISING
-2-
NC: 2023:KHC:35265
CMP No. 345 of 2021
OUT OF THE CONDITIONS OF CONTRACT OF THE
TENDER DOCUMENT E-GOVERNANCE TENDER
NOTIFICATION DATED 02/06/2017, INDENT NO.
BESCOM/GM(DSM)/SRTPV-5/2017-2018, DATED
02/06/2017 AS PER ANNEXURE-A AND VIDE
ANNEXURE-B DATED 26/12/2017, BESCOM/GM(DSM)
2017-18/1767-71 AND TO PASS SUCH OTHER
SUITABLE ORDERS AS NECESSARY UNDER THE FACTS
AND CIRCUMSTANCES OF THE CASE AND IN THE
INTEREST OF JUSTICE AND EQUITY.
THIS PETITION, COMING ON FOR ADMISSION,
THIS DAY, THE COURT MADE THE FOLLOWING:
ORDER
This petition is filed under Section 11 of the Arbitration and Conciliation Act, 1996 [for short, 'the Arbitration Act'] for the appointment of a sole Arbitrator. The respondent has issued tender on 02.06.2017 for procuring "Design, Supply, Installation and Commissioning of Solar RTPV Grid connected power plant on the Roof-tops of Government buildings in BESCOM area under Net-metering scheme including operation and maintenance for a period of ten years". The petitioner is issued with the Letter of Intent [LOI] on 26.12.2017 [Annexure-B], and the petitioner has -3- NC: 2023:KHC:35265 CMP No. 345 of 2021 filed the Letter of Acceptance [LOA] on 03.01.2018 [Annexure-C].
2. Further, the petitioner has furnished security deposit as also the bank guarantees in the month of February 2018. According to the petitioner, while it was awaiting issuance of a detailed Work Order, the respondent has issued Letter of Termination dated 27.12.2018, and it has received this Letter on 10.01.2019. It is undisputed that with this letter dated 27.12.2018, the respondent has returned the security deposit as also the bank guarantee. The petitioner has addressed the Communication dated 17.01.2019 to the office of the General Manager (Ele), Bangalore Electricity Supply Company Ltd., raising a dispute, and thereafter, the petitioner has issued arbitration notice dated 24.10.2019 and a later reminder dated 31.12.2019. The respondent has not caused any reply. -4-
NC: 2023:KHC:35265 CMP No. 345 of 2021
3. Mr. Sriranga S., the learned Senior counsel for the respondent, submits that this Court must reject the application for the appointment of a sole Arbitrator on the following two grounds:
a) There is no concluded contract and if there is no concluded contract, the petitioner cannot rely upon the agreement for arbitration. In support of this, he submits that the Communication with the respondent is as a lead partner of a Joint Venture [JV] Consortium and for conclusion of the contract, the petitioner had to bring on record an agreement inter se the consortium partners but the same is not brought on record, and
b) Even if there could be any arbitration, it would be only after a reference to the Engineer with the respondent as -5- NC: 2023:KHC:35265 CMP No. 345 of 2021 contemplated under Clause 62.0(b) of the agreement for resolution of disputes, which is part of the tender conditions.
4. In reply, Mr. Zulfikir Kumar Shafi, the learned counsel for the petitioner, submits that the second objection may not really survive as it is not disputed that the petitioner has addressed a Communication dated 17.01.2019 and only because there is no response to this Communication, the legal notice is caused on 24.10.2019 invoking the arbitration clause. As regards the objection that there is no written contract, Mr. Zulfikir Kumar Shafi, submits that Clause 17 of the tender conditions stipulate that an agreement shall be construed as having come into force from the date of issuance of LOI/LOA, and in the present case, it cannot be disputed that LOI is issued on 26.12.2017 and LOA has been filed by the petitioner on 03.01.2018 with -6- NC: 2023:KHC:35265 CMP No. 345 of 2021 the submission of security deposit and bank guarantee.
5. It is settled that at this stage, this Court must examine whether it could ex-facie be opined that there is no agreement for arbitration at all. In the circumstances relied upon by the learned counsel for the petitioner, this Court is not persuaded to opine that there is no agreement for arbitration because the LOI and LOA have not culminated in a separate agreement when it is undisputed that the terms of tender contemplate agreement for arbitration. Further, this Court is of the considered view that given the nature of the dispute viz., that the agreement would be only after the petitioner files a written contract with the joint venture partners, the question in this regard must be left open to be considered in the arbitral proceedings apart from all other questions including the petitioner's claim for damages [the dispute]. Further, this Court is of the -7- NC: 2023:KHC:35265 CMP No. 345 of 2021 considered view that a former Judge of this Court could be appointed as the sole Arbitrator to enter reference of the dispute. Hence, the following:
ORDER a. The petition is allowed.
b. Hon'ble Sri. Justice A.V.Chandrashekar, a former Judge of this Court, is appointed as the sole Arbitrator to enter reference of the dispute between the petitioner and the respondent and conduct the proceeding at the Arbitration and Conciliation Centre (Domestic and International), Bengaluru according to the Rules governing the Centre. c. The Registry is directed to communicate this order [through email] to the Arbitration and Conciliation Centre (Domestic and International), Bengaluru and Hon'ble Sri. Justice -8- NC: 2023:KHC:35265 CMP No. 345 of 2021 A.V.Chandrashekar, a former Judge of this Court, Address: No.406, 3rd Floor, Ramashridhar Apartment, 2nd Cross, 9th Main, BTM Layout 2nd Stage, Bengaluru- 560 076 [[email protected]] as required under the Appointment of Arbitrators by the Chief Justice of Karnataka High Court Scheme, 1996.
SD/-
JUDGE RB