Allowed

Sri Malaprabha Sahakari v. the Commissioner of Cane Development

Karnataka HC5 Apr 2023WP/19063/2018

Case brief

AI extract

What is this about?

In a writ petition under Articles 226 and 227, the Karnataka High Court quashed orders dismissing a counter claim in an arbitration dispute. The Court held that an arbitration clause covering disputes inherently allows counter claims and remitted the matter to the arbitrator.

What did the court decide?

The order dated 02.03.2013 and 31.07.2017 set aside and the matter remitted to the 1st respondent arbitrator to consider the counter claim.

Sri Malaprabha Sahakari Vs the Commissioner of Cane Development — Arbitration | Karnataka HC (2023)

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1 - WP No. 19063 of 2018

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IN THE HIGH COURT OF KARNATAKA AT BENGALURU

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DATED THIS THE 5^TH DAY OF APRIL, 2023

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BEFORE

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THE HON'BLE MR JUSTICE SURAJ GOVINDARAJ WRIT PETITION NO.19063 OF 2018 (CS-RES)

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BETWEEN:

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SRI MALAPRABHA SAHAKARI SAKKARE KARKHANE LTD REPRESENTED BY ITS MANAGING DIRECTOR MUGUTKHAN HUBLI, BELGAUM - 591153

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…PETITIONER

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(BY SRI. DAYANAND S PATIL., ADVOCATE)

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AND:

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THE COMMISSIONER OF CANE DEVELOPMENT AND DIRECTOR OF SUGAR 5^TH FLOOR, KAVERI BHAVAN BANGALORE – 09

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Digitally signed by NARAYANAPPA LAKSHMAMMA Location: HIGH COURT OF KARNATAKA

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KARNATAKA STATE COOPERATIVE MARKETING FEDERATION REPRESENTED BY ITS GENERAL MANAGER NO 6, CUNNINGHAM ROAD, BANGALORE - 560052

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(BY SMT. A.R. SHARADAMBA, AGA FOR R1; SRI. P. ANAND, ADVOCATE FOR R2)

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…RESPONDENTS

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THIS WRIT PETITION IS FILED UNDER ARTICLES 226 AND 227 OF THE CONSTITUTION OF INDIA PRAYING TO ISSUE A WRIT IN THE NATURE OF CERTIORARI OR ANY OTHER WRIT OR ORDER QUASHING THE ORDER DATED 02-03-2013 IN DISPUTE NO. DSK/DIS/89/2005-06 PASSED BY RESPONDENT NO.1 IN SO FAR AS IT RELATES TO DISMISSING THE COUNTER CLAIM OF THE PETITIONER IN THE SAID DISPUTE AS PER ANNEXURE-C, AND THE ORDER DATED 31-07-2017 IN APPEAL NO.234/2013 VIDE ANNEXURE-D PASSED BY KARNATAKA APPELLATE TRIBUNAL, BANGALORE CONFIRMING THE ORDER ANNEXURE-C PASSED BY THE RESPONDENT NO.1 AND ETC.

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WP No. 19063 of 2018

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THIS WRIT PETITION, COMING ON FOR PRELIMINARY HEARING IN ‘B’ GROUP, THIS DAY, THE COURT MADE THE FOLLOWING:

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ORDER

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The petitioner is before this Court seeking for the

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following reliefs:

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a. Issue a Writ in the nature of Certiorari or any other writ or order quashing the order dated 02-03-2013 in Dispute No. DSK/DIS/89/2005-06 passed by Respondent No.1 in so far as it relates to dismissing the counter claim of the petitioner in the said dispute as per Annexure-C, and the order dated 31-07-2017 in Appeal No.234/2013 vide Annexure-D passed by Karnataka Appellate Tribunal, Bangalore confirming the Order Annexure-C passed by the Respondent No.1.

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b. Pass such other writ, order or direction that this Hon’ble Court deems fit to pass in the circumstances of the case.

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The grievance of the petitioner is that, on respondent No.2 raising a dispute claiming for certain amounts of money from the petitioner, the petitioner had raised a counter claim. The said counter claim came to be dismissed by the Arbitrator appointed on the ground that the Memorandum of Settlement containing the arbitration clause did not provide for raising a counter claim. On an appeal being filed

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WP No. 19063 of 2018

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before the Karnataka Appellate Tribunal, the Appellate Tribunal confirmed the order on the very same ground. It is aggrieved by the same, the petitioner is before this Court.

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Whenever a claim is raised before an arbitrator, the counter claim inheres in the respondent to raise, if there is a claim filed against the respondent, the respondent could also seek for a relief of set off or the like. When the arbitration clause speaks of disputes to be settled by way of arbitration that includes claim, counter claim, set off, etc. and it is not required that the arbitration clause speaks specifically about a counter claim.

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At this stage, the learned counsel for the respondent No.2 submits that the claim filed by the claimant has been dismissed. Therefore, the counter claim cannot be considered.

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WP No. 19063 of 2018

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Whether a claim has been dismissed or not, a

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counter claim stands on a separate footing and the same would have to be considered by the arbitrator even though the claim may be dismissed.

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In that view of the matter, I am of the considered opinion that the order passed by the arbitrator is not sustainable and therefore, the confirmation of the said order by the Appellate Tribunal is also not sustainable. As such, I pass the following:

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ORDER

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i. The Writ Petition is allowed.

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ii. A writ of certiorari is issued, the order dated 02.03.2013 in Dispute No.DSK/DIS-89/2005-06 passed by 1^st respondent is set aside. The order dated 31.07.2017 in Appeal No.234/2013 at Annexure-D passed by the Karnataka Appellate Tribunal is set aside.

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WP No. 19063 of 2018

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iii. The matter is remitted to the 1^st respondent

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arbitrator to consider the counter claim in

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accordance with law.

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Sd/JUDGE

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PRS List No.: 1 Sl No.: 47

Sri Malaprabha Sahakari v. the Commissioner of Cane Development

Case brief

What is this about?

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Sri Malaprabha Sahakari v. the Commissioner of Cane Development

Case brief

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