Allowed

M/S Pg Setty Construction Technology Private Limited v. the State of Karnataka

Karnataka HC17 Jun 2021CMP/259/2020

Case brief

AI extract

What is this about?

Civil Miscellaneous Petition filed under Section 11 of the Arbitration and Conciliation Act, 1996 for appointment of a sole arbitrator. The High Court of Karnataka allowed the petition and appointed Justice V. Jagannathan as the sole arbitrator to resolve the construction dispute.

What did the court decide?

Petition allowed appointing Justice V. Jagannathan as sole arbitrator to enter reference of the dispute between the petitioner and respondents.

M/S Pg Setty Construction Technology Private Limited Vs the… — Arbitration | Karnataka HC (2021)

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IN THE HIGH COURT OF KARNATAKA AT BENGALURU

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DATED THIS THE 17^TH DAY OF JUNE 2021

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BEFORE

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THE HON’BLE MR. JUSTICE B. M. SHYAM PRASAD

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CIVIL MISCELLANEOUS PETITION NO. 259/2020

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BETWEEN :

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M/S PG SETTY CONSTRUCTION

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TECHNOLOGY PRIVATE LIMITED HAVING OFFICE AT NO.74 SANDESH ARCADE, 3^RD FLOOR,

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SAHUKAR CHENNAIAH ROAD 17^TH MAIN ROAD, KUVEMPUNAGAR NORTH SARASWATHIPURAM

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MYSORE - 570 009 REPRESENTED BY ITS MANAGING DIRECTOR SRI M. G. SOMASHEKAR.

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... PETITIONER

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(By SRI. T SESHAGIRI RAO., ADVOCATE)

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AND :

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THE STATE OF KARNATAKA DEPARTMENT OF KARNATAKA HEALTH SYSTEM DEVELOPMENT AND REFORM PROJECT, VIDHANA SOUDHA BENGALURU - 560 001 REPRESENTED BY ITS PRINCIPAL SECRETARY.

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THE CHIEF ENGINEER KARNATAKA HEALTH SYSTEM DEVELOPMENT AND REFORM PROJECT 1^ST FLOOR, PHI BUILDING SESHADRI ROAD BENGALURU - 560 001.

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... RESPONDENTS

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(By SRI.R. SRINIVASA GOWDA., AGA)

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THIS CIVIL MISCELLANEOUS PETITION IS FILED UNDER SEC.11(5) AND 11(6) OF THE ARBITRATION AND CONCILIATION ACT, 1996 PRAYING TO APPOINT AN ARBITRATOR IN RELATION TO THE CONTRACT DATED 03.03.2017 FOUND AT ANNEXURE-C TO THE PETITIONER IN PURSUANCE OF CLAUSE NO.23 OF THE SAID CONTRACT DATED 03.03.2017 FOR RESOLUTION OF THE DISPUTE.

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THIS PETITION COMING ON FOR ADMISSION, THIS DAY, THE COURT MADE THE FOLLOWING:

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O R D E R

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The learned counsel for the petitioner and the learned Additional Government Advocate are heard with their consent for final disposal. The petitioner has filed this petition under Section 11[5] of the Arbitration and Conciliation Act, 1996 [for short 'the Act'] invoking the arbitration clause in "Conditions of Contract" relying

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upon the Agreement and Work Order both of which are dated 3.3.2017.

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The petitioner contends that the Work Order

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dated 3.3.2017 is issued to the petitioner after necessary invitation for bids for construction of Civic Amenities Block Building consisting of canteen with kitchen, fruit stall, dairy product stall and public toilets in certain District and Taluk Hospitals on 'Package lumpsum Turn Key Basis' . The respondents have reduced the contract value by over 32% causing losses to the petitioner under different heads, and the petitioner also could not execute the contractual work in time because of certain failures by the respondents.

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The petitioner, amongst others, asserts that there was failure in handing over the site to commence the contract work and the petitioner has not been paid for certain additional works which includes execution of lobbies, corridor and utility areas which were not part of

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the contract. The petitioner is entitled to receive Rs. 5,80,89,628/- from the respondents.

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It is undisputed that the petitioner has caused legal notice dated 10.01.2020 invoking the arbitration clause nominating Hon'ble Justice Sri. V. Jagannathan, a former Judge of this Court as the sole Arbitrator. The arbitration clause reads as under:

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"4. Arbitration

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4.1 The procedure for arbitration shall be as follows

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a) In case of dispute or difference arising between the employer and the contractor relating to any matter arising out of or connected with the agreement it shall be referred and settled under arbitration center, Karnataka [Domestic & International] Rules 2012 by one or more arbitrators appointed in accordance with its rules.

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b) Arbitration proceedings shall be held at Arbitration Center, Karnataka, Bengaluru.

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c) The cost and expenses of arbitration proceedings shall be as per circular of Government of Karnataka No.LAW 273 LAC 2012 [P] dated 10.01.2014 issued by the Law, Justice and Human Rights Department, Government of Karnataka.

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d) Performance under the contract shall continue during the arbitration proceedings and payments due the Contractor by the Employer shall not be withheld, unless they are the subject matter of the arbitration proceedings.

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Additional clause: In case of the death of a Contractor after the executing the Agreement/commencement of the work, his legal heir, if an eligible registered contractor and wiling, can execute and complete the work at the accepted tender rate irrespective of the cost of the work."

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The respondents have replied to the legal notice dated 10.01.2020 denying their liabilities and disputing the claims made by the petitioner. However, there is no comment on the appointment of the sole Arbitrator as suggested by the petitioner.

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The learned Additional Government

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Advocate, on instructions, today submits that Hon'ble Mr. Justice V. Jagannathan, a former Judge of this Court be appointed as sole Arbitrator to enter reference of the dispute. The learned counsel for the petitioner and the learned Additional Government Advocate also submit that in terms of the arbitration clause, arbitration will have to be held at the Arbitration and Conciliation Centre, Bengaluru. In the light of the circumstances stated above, and ad idem submissions, the following:

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ORDER

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[a] The petition is allowed appointing Justice V. Jagannathan, former Judge, Pride Enchanta, No.003, Ground Floor, 4^th Block, Opposite BHEL Main Gate, Mysuru Road, Bengaluru - 560 026 [Mobile No.9448288640], as the sole arbitrator to enter reference of the dispute between the petitioner and the respondents and conduct

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proceeding at the Arbitration and Conciliation Centre (Domestic and

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International), Bengaluru according to the Rules governing the said Arbitration Centre.

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[b] The Office is directed to

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communicate this order to the Arbitration and Conciliation Centre and Justice Sri. V. Jagannathan, a former Judge of this Court as required under the Appointment of

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Arbitrators by the Chief Justice of India Scheme, 1996.

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[c] All the rival contentions are left

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open for adjudication by arbitration.

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SD/JUDGE

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AN/-

M/S Pg Setty Construction Technology Private Limited v. the State of Karnataka

Case brief

What is this about?

What did the court decide?

M/S Pg Setty Construction Technology Private Limited v. the State of Karnataka

Case brief

What is this about?

What did the court decide?

What the court decided

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