Karnataka High Court
Mphasis Limited vs M/S Strategic Outsourcing Services on 19 October, 2022
Author: B M Shyam Prasad
Bench: B M Shyam Prasad
-1-
IN THE HIGH COURT OF KARNATAKA AT BENGALURU
DATED THIS THE 19TH DAY OF OCTOBER, 2022
BEFORE
THE HON'BLE MR JUSTICE B M SHYAM PRASAD
WRIT PETITION NO. 2522 OF 2022 (GM-CPC)
C/W
WRIT PETITION NO. 4281 OF 2021 (GM-CPC)
BETWEEN:
1. MPHASIS LIMITED
BAGMANE WORLD TECHONOLOGY CENTER
MARATHALLI OUTER RING ROAD
MAHADEVAPURA
DODDANKUNDI VILLAGE
BANGALORE 560048
REP BY ITS AUTHORISED SIGNATORY
MS SILVI JOSEPH
...PETITIONER
(COMMON)
(BY SRI. KAVITHA D.,ADVOCATE)
AND:
1. M/S STRATEGIC OUTSOURCING SERVICES PRIVATE
LIMITED
HAVING ITS OFFICE AT NO 70/25
80 FEET CIRCULRA ROAD
KORAMANGALA 4TH BLOCK
BANGALORE 560034
REP BY ITS CHIEF OPERATING OFFICER
MR PRADEEP PATIL
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2. NR DAVUBDER SINGH BRAR
CHAIRMAN
MPHASIS LTD
A COMPANY REGISTETRED UNDER THE COMPANIES
ACT 1956
BAGMANE WORLD TECHONOLOGY CENTRE
MARATHAHALLI OUTER RING ROAD
DODDANEKKUNDI VILLGE
MAHADEVAPURA
BENGALURU 560048
3. NITIN RAKESH
CEO AND WHOLETIME DIRECTOR
MPHASIS LTD
BAGMANE TECHONOLOGY PARK
BYRASANDRA VILLAGE
C V RAMAN NAGAR
BENGALURU 560093
4. MR NARAYANA KUMAR
DIRECTOR
MPHASIS LIMITED
DLF SEZ IT PARK
TOWER 1B, LEVEL 1-5,1/124
SHIVAJI GARDEN, MANAPAKKAM
MOUNT POONAMALLE ROAD
CHENNAI 600089
TAMIL NADU
5. JAN KATHLEEN HIER
DIRECTOR
MPHASIS LTD
SEAR STREET, UNIT 35 B
SAN FRANCISCO, CA 94105
6. DAVID LAWRENCE JOHNSON
DIRECTOR MPHASIS LTD
10520 AVERY CLUB DRIVE
AUSTIN TX 78717
7. PAUL JAMES UPCHURCH
DIRECTOR
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M/S MPHASIS LITD
NORTH LAKE SHORE DRIVE
UNIT 3014, CHICAGO, IL 60611
8. AMIT DIXIT
DIRECTOR
MPHASIS LIMITED
IMPERIL, FLAT NO 2102
SOUTH TOWER
B B NAKAHSE MARG
TARDEO, MUMBAI 400034
MAHARASTRA
9. AMIT DALMIA
DIRECTOR
MPHSIS LITD
C-1306, OBEROI SPLENDOR
JOGESWHARI VIHROLI LINK ROAD
OPP MAJAS DEPOT
JOGESHWARI EAST
MUMBAI 400060
MAHARASHTRA
10. SIVARAMAKRISNAN P
VICE PRESIDENT (BUSINESS FINANCE DIVISION)
MPHASIS LTD
BAGMANE TECHONOLOGY PARK
BYRASADNRA VILLAGE
C V RAMAN NAGAR
BENGALURU 560093
11. HEMANTH ANANTH RAM
VICE PRESIDENT (LEGAL)
MPHASIS LTD
BAGMANE WORLD TECHONOLOGY CENTRE
MARATHAHALLI OUTER RING ROAD
DODDANEKUNDI VILLGE
MAHADEVAURA
BENGALURU 560048
12. MR P VELAYUDHAN
MPHASIS LTD
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BAGMANME TECHONOLOGY PARK
BYRASANDRA VILLAGE
C V RAMAN NAGAR
BENGALURU 560093
13. VINOD KUMAR
ASSOCIATE VICE PRESIDENT
LEAD CORPORATE SECURITY AND INVESTIGATION
CHIEF RISK OFFICE
MPHASIS LTD
BAGMANE WORLD TECHONOLOGY CENTRE
MARATHALALLI OUTER RING ROAD
DODDANECKUNDI VILLAGE
MAHADEVAPURA
BENGALURU 560048
14. SETHU S RAMAN
SUPERINTENDENT AND CHIEF RISK OFFICER
MPHASIS LTD
BAGMANE WORLD TECHONOLOGY CENTRE
MAHARATHAHALLI OUTER RING ROAD
DODDANEKUNDI VILLGE
MAHADEVAPURA
BANGALORE 560048
...RESPONDENTS
(COMMON)
(BY SRI. SANJAY KRISHNA V., AND SRI. E.SUSHAIL
AHMED, ADVOCATES FOR R1;
V/O. DATED 26.03.2021, NOTICE TO R2 TO R14 IS D/W)
THE W.P.No.2522/2022 IS FILED UNDER ARTICLE 227 OF
THE CONSTITUTION OF INDIA PRAYING TO SET ASIDE THE
IMPUGNED ORDER, DATED 23.12.2021 (ANNEXURE-A) PASSED
BY THE HONBLE LXXXII ADDL.CITY CIVIL AND SESSIONS
JUDGE (CCH-83),BANGALORE, IN COM.O.S.NO.215/2019.
THE W.P.No.4281/2021 IS FILED UNDER ARTICLE 227 OF
THE CONSTITUTION OF INDIA PRAYING TO SET
ASIDE THE IMPUGNED ORDER, DATED 02.02.2021
ON I.A.NO.IV (ANNEXURE-A) PASSED BY THE HONBLE LXXXII
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ADDL.CITY CIVIL AND SESSIONS JUDGE (CCH-83),
BANGALORE, IN COM.O.S.NO.215/2019 AND ETC.
THESE PETITIONS, COMING ON FOR ORDERS, THIS
DAY, THE COURT MADE THE FOLLOWING:
ORDER
These petitions are by the first defendant in Com O.S.No.215/2019 on the file of the LXXXII Additional City Civil and Sessions Judge, Bengaluru (for short, 'the commercial Court'). The petitioner has impugned the commercial Court's orders dated 23.12.2021 and 02.02.2021. The commercial Court by the first order dated 23.12.2021, while marking the documents produced by the first respondent, has observed that the first respondent has not admitted a copy of the arbitral award dated 26.11.2019 in the arbitral proceedings between the petitioner and the first respondent and as such, one of the writ petitions. The commercial Court's observation is thus:
"Though the Plaintiff has filed Statement of Admissions and Denials on 11.02.2020, he has not admitted any of the documents filed by the Defendants".
The commercial Court by the next impugned order dated 02.02.2021 has allowed the first respondent's application -6- (I.A.No.IV) under Section 16(2) of the Commercial Courts Act, 2015 (for short, 'the Act 2015') read with Section 151 of the Code of Civil Procedure, 1908 to club this suit in Com O.S.No.215/2019 for consideration along with Com.A.P.No.37/2020.
2. Sri. Dhananjay Joshi, the learned Senior counsel for the petitioner and Sri. Sanjay Krishna V, the learned counsel, are heard for final disposal of the petitions, and they submit that if the arbitration award dated 26.11.2019 relates to the dispute inter se the petitioner and the first respondent over a settlement agreement, the first respondent's present suit is for damages. They submit that the copy of the arbitral award dated 26.11.2019 is not marked only because the first respondent has filed its Statement of Admission/Denial contending that this document is unstamped
3. Sri. Dhananjay Joshi submits that commercial Court, given the provisions of Order XI Rule 4 Sub Rule 6 of the Act, 2015 as applicable to the commercial Courts, should have seen whether the petitioner has unduly refused -7- to admit an indisputable document. He canvasses that it is incumbent, given the provisions of Order XI Rule 4 Sub Rule 6, that the commercial Courts must examine whether the refusal to admit a document is proper and if it could be persuaded to opine that it is improper, costs may have to be imposed. These provisions are to ensure that the dispute is identified in its core for a decision on whether there must be a summary trial under Order XIIIA of the Act, 2015 or a trial after Case Management Hearing under Order XVA of CPC.
4. It is obvious that the commercial Court has lost track of the provisions of Order XI Rule 4 Sub Rule 6 of the Act, 20151 in recording the first respondent's refusal to admit the award dated 26.11. 2019. When this is put to Sri. Sanjay Krishna V, the learned counsel for the first respondent, submits that if there can be a statement at the Bar even today that the award dated 26.11.2019 is duly stamped, the first respondent would waive the objection and the document could be marked. On instructions, 1 In the event that the Court holds that any party has unduly refused to admit a document under any of the above criteria,-costs (including exemplary costs) for deciding on admissibility of a document may be imposed by the Court on such party -8- Sri. Dhananjay Joshi submits that this award dated 26.11.2019 is duly stamped and the certificate of stamp is also filed before the commercial Court. In these circumstances, it would be necessary for this Court to interfere with the commercial Court's order dated 23.12.2021 and call upon the commercial Court to mark the copy of the award dated 26.11.2019 as the petitioner's document.
5. The commercial Court by the next impugned order dated 02.02.2021, on the first respondent's application, has directed the commercial suit, which is essentially for the first respondent's vindication for damages not just from the petitioner but also from its directors, to be clubbed with the proceedings under Section 34 of the Arbitration and Conciliation Act, 1996 (for short, 'the Act 1996') as against the arbitral award dated 26.11.2019. Sri. Sanjay Krishna V draws the attention of this Court to the petitioner's pleading in the commercial suit to justify the application. He submits that one of the defenses is that the first respondent's cause for damages is substantially and directly an issue in the arbitral proceedings and if this be so, -9- the commercial Court is justified in clubbing the both the suits.
6. However, it remains salient that the scope of the jurisdiction under Section 34 of the Act 1996 is confined to the grounds available there under and the merits of the petitioner's grievance with the arbitral award dated 26.11.2009 must necessarily be examined, given the limited contours of such jurisdiction. Therefore, the causes for proceedings under Section 34 of the Act, 1996 and for damages in Com O.S.No.215/2019 cannot be called the same inviting different opinions on similar cause. This material aspect has been overlooked by the commercial Court and therefore, this Court must intervene with the impugned order dated 02.02.2021. For the afore reasons, the following:
ORDER [a] The writ petition in W.P.No.2522/2022 is allowed in part and the commercial Court's order dated 23.12.2021 is modified calling upon the commercial Court to mark a copy
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of the award dated 26.11.2019 filed by the petitioner as the petitioner's document. [b] The writ petition in W.P.No.4281/2021 is allowed quashing the commercial Court's order dated 02.02.2021.
Sd/-
JUDGE RB