Karnataka High Court
M/S. Pratibha Industries Limited vs M/S. Amrutha Constructions Pvt. Ltd on 9 February, 2023
Author: R Devdas
Bench: R Devdas
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CMP No. 757 of 2022
IN THE HIGH COURT OF KARNATAKA AT BENGALURU
DATED THIS THE 9TH DAY OF FEBRUARY, 2023
BEFORE
THE HON'BLE MR JUSTICE R DEVDAS
CIVIL MISC. PETITION NO. 757 OF 2022
BETWEEN:
M/S. PRATIBHA INDUSTRIES LIMITED.,
HAVING REGISTERED ADDRESS AT:
SHRIKANT CHAMBERS,
PHASE II, 5TH FLOOR,
SION-TROMBAY ROAD,
NEXT TO R.K. STUDIO,
CHEMBUR,
MUMBAI-400 071.
REP. BY ITS AUTHORISED SIGNATORY
SACHIN KADEMANI
ALSO, AT:- 1607/1608, 16TH FLOOR,
CYBER ONE,
BEHIND ODISHA BHAWAN,
PLOT NOS. 4 AND 6,
SECTOR-30A, VASHI,
NAVI MUMBAI-400 703.
Digitally ...PETITIONER
signed by
JUANITA (BY SRI. NAVDEEP DAHIYA, ADVOCATE FOR
THEJESWINI
Location:
SRI. ARNAV A BAGALWADI, ADVOCATE)
HIGH
COURT OF
KARNATAKA AND:
1. M/S. AMRUTHA CONSTRUCTIONS PVT. LTD.,
HAVING REGISTERED OFFICE AT:
NO.384/A, SINDHURA APARTMENTS,
RMV 2ND STAGE, 2ND BLOCK,
ASHWATH NAGAR, BENGALURU,
KARNATAKA-560 094.
...RESPONDENT
(BY SRI. PARASHURAM A.L, ADVOCATE)
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CMP No. 757 of 2022
THIS CIVIL MISC. PETITION IS FILED UNDER SEC.11(6)
OF THE ARBITRATION AND CONCILIATION ACT 1996, PRAYING
THAT THIS HONBLE COURT BE PLEASED TO A) APPOINT A
SOLE ARBITRATOR TO ADJUDICATE THE DISPUTES BETWEEN
THE PARTIES. B) ALTERNATIVELY, TO APPOINT A NOMINEE
ARBITRATOR ON BEHALF OF THE RESPONDENT UNDER
SECTION 11(6) OF THE ARBITRATION AND CONCILIATION ACT
UNDER CLAUSE 21 OF THE MOU DATED 06/06/2017
PRODUCED AS ANNEXURE-A TO THE PETITION. C) GRANT
COSTS OF THIS PETITION TO THE PETITIONER, AND D) GRANT
SUCH OTHER RELIEF AS THIS HONBLE COURT DEEMS FIT IN
THE CIRCUMSTANCES OF THE CASE IN THE INTERESTS OF
JUSTICE AND EQUITY.
THIS PETITION, COMING ON FOR ADMISSION, THIS DAY,
THE COURT MADE THE FOLLOWING:
ORDER
R.DEVDAS J., (ORAL):
The petitioner has filed this Civil Miscellaneous Petition under Section 11(6) of the Arbitration and Conciliation Act, 1996 seeking appointment of an arbitrator to resolve the dispute that arose between the parties under the memorandum of understanding dated 06.06.2017.
2. The respondent does not deny the fact that the parties entered into a memorandum of understanding on 06.06.2017 and the MOU contains an arbitration Clause at -3- CMP No. 757 of 2022 Clause No.21. However, learned counsel for the respondent seeks to contend that the civil miscellaneous petition filed by the petitioner is hit by the law of limitation and the MOU having been entered on 06.06.2017 and arbitration notice was first issued by the petitioner on 17.12.2018, the cause of action arose for the petitioner immediately after the completion of 90 days from the date when the arbitration notice was first issued by the petitioner. Learned counsel for the respondent would further submit that even otherwise in the memorandum of CMP it is clearly admitted by the petitioner that one more arbitration notice was issued on 02.07.2022 which was in fact preceded by a claim notice dated 24.05.2022 issued by the petitioner. Learned counsel for the respondent submits that in terms of the arbitration clause, the petitioner should have waited for a period of 90 days before filing the CMP and whereas the civil miscellaneous petition has been filed on 14.09.2022, even before the period of 90 days would expire. Learned counsel for the respondent submits that in terms of the arbitration notice -4- CMP No. 757 of 2022 earlier issued by the petitioner on 17.12.2018 the period of three years in terms of the Article 137 of the Limitation Act, would come to an end on 16.03.2022 and the civil miscellaneous petition is filed on 14.09.2022, after the lapse of three years as provided under Article 137 of the Limitation Act, 1963.
3. Having heard the learned counsel for the petitioner, learned counsel for the respondent and on perusing the petition papers, this Court finds that in the MOU entered between the parties, it is made clear that the parties have formed a joint venture to carry out the proposed works for which the joint venture was to apply as a tenderer seeking award of the works at the hands of 'Krishna Bhagya Jala Nigam Limited', which is a Government of Karnataka undertaking. In terms of Clause 10 of the MOU the respondent herein agreed to pay the petitioner 2% as Sub-Contractor Charges, if the bid submitted by the joint venture is successful and work is awarded by the employer to the joint venture. Learned -5- CMP No. 757 of 2022 counsel for the petitioner has rightly pointed out from the MOU that 2% was not only required to be paid to the petitioner on the award of the works, but also on the value of the entire work after deducting department statutory deductions and therefore, the claim of the petitioner would run till the works were concluded by the joint venture. Learned counsel for the petitioner has pointed out from the agreement dated 21.09.2017 entered into between the Joint Venture and KBJNL which provides that the scope of the works awarded under the contract was for a period of five years from the date of completion of Budihal-Peerapur LIS scheme on turn-key basis. The learned counsel is therefore right in his submission that the contract between the parties continues till the work is concluded in terms of the agreement entered into between the joint venture and KBJNL in terms of agreement dated 21.09.2017 which concluded somewhere in the year 2022.
4. In that view of the matter, although the petitioner had earlier issued an arbitration notice dated -6- CMP No. 757 of 2022 17.12.2018, it did not proceed and on that ground this CMP cannot be dismissed. Having noticed that the contract between the parties would conclude only after the works were completed by the joint venture as awarded by the KBJNL which concluded somewhere in the year 2022, the cause of action for the petitioner would continue till the works were concluded.
5. Insofar as the other contentions of the learned counsel for the respondent that the petitioner should have waited for a period of 90 days before presenting this CMP after arbitration notice dated 02.07.2022 was issued, also cannot be countenanced, since, it is clear from the material available on record, that after the petitioner issued the arbitration notice on 02.07.2022, the respondent gave a reply on 01.08.2022 declining to accede to the claim made by the petitioner. Thereafter, the petitioner got issued one more arbitration notice on 18.08.2022, proposing the name of an arbitrator and -7- CMP No. 757 of 2022 calling upon the respondent to come forward to appoint an arbitrator in terms of arbitration clause.
6. Having regard to the factual aspects obtained herein above, this Court is of the considered opinion that the objection sought to be raised at the hands of the respondent that CMP and the claim made by the petitioner is barred by limitation, cannot be countenanced.
7. Consequently, this Court having been convinced that there is arbitrable dispute between the parties which is required to be adjudicated at the hands of the arbitrator in terms of the arbitration clause contained in the MOU dated 06.06.2017, this Court proceeds to pass the following:
ORDER
(a) The petition is allowed appointing Hon'ble Sri. H.G.Ramesh, Former Acting Chief Justice, High Court of Karnataka, as the sole arbitrator to enter reference of the disputes between the petitioner and -8- CMP No. 757 of 2022 the respondent and conduct proceeding at the Arbitration and Conciliation Centre (Domestic and International), Bengaluru according to the Rules governing the said Arbitration Centre.
(b) All contentions inter se parties are left open for adjudication in the arbitration proceedings.
(c) The office is directed to communicate this order to the Arbitration and Conciliation Centre and to Hon'ble Sri. H.G.Ramesh, Former Acting Chief Justice, High Court of Karnataka, as required under the Arbitration and Conciliation Centre Rules, 2012.
Needless to observe that all the contentions are left open and any observation made during the process of this order shall not prejudice the case of either of the parties before the arbitrator.
Sd/-
JUDGE rv