Karnataka High Court
Rns Infrastructure Limited vs The Commissioner on 11 October, 2012
Author: Anand Byrareddy
Bench: Anand Byrareddy
1
IN THE HIGH COURT OF KARNATAKA AT
BANGALORE
DATED THIS THE 11TH DAY OF OCTOBER, 2012
BEFORE
THE HON'BLE MR. JUSTICE ANAND BYRAREDDY
WRIT PETITION No.41113 OF 2011 (LB-BMP)
BETWEEN:
RNS infrastructure Limited,
Naveen Complex,
7th Floor, No.14,
M.G.Road,
Bangalore,
Represented by Managing Director,
Naveen Shetty,
Aged about 43 years. ...PETITIONER
(By Shri. K. Shashi Kiran Shetty, Advocate)
AND:
1. The Commissioner,
Bruhat Bangalore Mahanagara Palike,
N.R.Square,
Bangalore - 560 002.
2. Project Director,
Project Implementation Unit,
Karnataka Municipal Reform Project,
Bruhat Bangalore Mahanagar Palike,
2
N.R.Square,
Bangalore - 560 002. ...RESPONDENTS
(By Shri. B.V. Shankar Narayana, Advocate for Respondent
Nos. 1 and 2 )
*****
This Writ Petition is filed under Articles 226 and 227 of
the Constitution of India praying to issue a writ in the nature of
mandamus or any other appropriate writ, order or to the
respondent to release the amount of `7,49,12,716/- as
determined by the adjudicator vide the order dated 15.9.2011
vide Annexure-A, with a interest of 14% from 14.10.2011 till
the date of payment and etc;
This Writ Petition is coming on for Orders this day, the
court made the following:
ORDER
The petition coming on for Hearing on an Interlocutory application, the petition itself is considered for final disposal having regard to the following circumstances:
That the first respondent namely the Bruhat Bangalore Mahanagara Palike had engaged the services of the petitioner to carry out certain civil works under an agreement dated 18.03.2006 after accepting the tender of the petitioner who was 3 the highest bidder when there was an invitation for tenders in respect of the said civil works. The work was to be completed within a period of 20 months from 17.11.2007, as agreed.
However, the work was delayed on account of non-supply of drawings, delay due to change in designs and delay in payment of mobilization advances and so on. However, the date was extended for completion of the works and the work was completed by the petitioner by 31.01.2009 and a Completion Certificate was also issued. It is claimed that on completion of the works, the petitioner could substitute the retention amount by bank guarantee and accordingly, the petitioner had furnished a bank guarantee dated 5.6.2009 for a sum of Rs.1,19,40,300/- for release of the retention amount which was withheld in a sum of Rs.2,48,68,742/- and had submitted a final bill for the work done dated 2.12.2009. The respondent however raised several issues as regards the non-completion of the works within the stipulated period as well as the defect liability period, pending which the final payments could not be made, etc. Therefore the 4 petitioner, after carrying on further correspondence, was forced to issue a notice demanding a compensation of Rs.10,00,00,000/- for loss of business opportunities in the amount of Rs.6,25,00,000/-, due to the petitioner being withheld which was due to the petitioner, for over a period of one year and six months.
Thereafter, in terms of the agreement, the parties had agreed that if there was to be a dispute in relation to the contract, it could be referred to a named Adjudicator, namely Shri B.L. Balakrishna. Hence, the petitioner had approached the said Adjudicator with a claim for a sum of Rs.19,23,65,606/- with interest at the rate of 24% apart from other amounts that were claimed under several heads. The same was contested. The Adjudicator, after considering the rival contentions including a counter claim raised by the respondents, awarded a sum of Rs.7,49,12,716/- with interest at 14%, pursuant to which the petitioner had claimed payment in terms of the same. 5 However, the respondent is said to have filed a civil suit questioning the finding of the Adjudicator and the amount awarded in favour of the petitioner and that is said to be pending in O.S.No.8561/2011 before the City Civil Court, Bangalore. The petitioner has entered appearance therein and has filed an application under Order VII Rule 11 of the Code of Civil Procedure, 1908 (hereinafter referred to as the 'CPC' for brevity), seeking rejection of the plaint on the ground that there was no cause of action and that the plaint was barred by time as the award of the Adjudicator was not challenged within the time prescribed under the agreement and had also filed a written statement which has been taken on record. The present petition was, however, filed much prior to the filing of the civil suit by the respondent.
2. It is noticed from the agreement between the petitioner and the respondent that there was a clause which enabled the respondent to file a suit against the finding of the Adjudicator. The reference to the Adjudicator was not under the provisions 6 of the Arbitration and Conciliation Act, 1996. There is no reference to arbitration and it is evident that the finding of the Adjudicator was also not to be final and there was a provision for the parties to file a civil suit in respect of the same, which the respondent has exercised. However, the suit which is pending before the civil court would have to be dealt with by that court.
In any event, in disposing of this petition, with a view to avoid multiplicity of proceedings, it is in the interest of justice directed that the civil court shall firstly expedite the consideration of the application under Order VII Rule 11 of the CPC and in the event that the application is dismissed for any reason, it would then be necessary to consider the fairplay that would have to be ensured in dealing with the prayer of the respondent in the said suit. And since the adjudicator has already given a finding in favour of the petitioner herein who is the defendant in the said suit, it would be necessary to consider 7 the claim of the petitioner for any interim relief by way of deposit of a reasonable amount which has been awarded by the Adjudicator for the benefit of the petitioner, to ensure the bona fides of the respondent in prosecuting the suit. The respondent
- plaintiff, shall be placed on terms insofar as the deposit of any such amount is concerned, certainly against security to be furnished by the petitioner who is the defendant therein. With that direction, the present petition stands disposed of.
The reason the court is postponing the consideration for further direction of a deposit of the amount as aforesaid is for two reasons, one if such a direction is issued in this petition, it will be necessary for this Court to deal further with this matter on merits. Secondly, in order to avoid multiplicity of proceedings, it is thought fit that such a relief can be considered by the Civil Court after disposal of the application under Order VII Rule 11 CPC. Therefore, this Court thinks it fit for the civil court to decide the quantum of deposit and the reasonableness of it, as the progress of the suit cannot be predicted. Otherwise, 8 it was open for this Court itself to consider such relief in the present petition.
Sd/-
JUDGE KS