Dismissed¶55

The State Project Director v. Kbr Infratech Limited

Karnataka HC12 Sept 2025COMAP/535/2024

Case brief

AI extract

What is this about?

Commercial appeal dismissed; arbitration award upheld; price variation clause / price adjustment clause No.39; e-portal deletion note; interest at 12% per annum on delayed payments; delay of 1350 days less 60 days processing; Rs.2,74,93,372/- price variation award; Section 34 and Section 37 Arbitration and Conciliation Act 1996; Section 13(1-A) Commercial Courts Act 2015; covered by Commercial Appeal No.133/2025; KBR Infratech Limited; State Project Director RMSA Karnataka; High Court of Karnataka; Anu Sivaraman; Rajesh Rai K.

What did the court decide?

None to the appellant; the Commercial Court's judgment upholding the arbitral award stands, parties to bear their respective costs, and pending interlocutory applications stand dismissed. ¶55

The State Project Director Vs Kbr Infratech Limited — Arbitration | Karnataka HC (2025)

What the court decided

AI extract

Outcome

None to the appellant; the Commercial Court's judgment upholding the arbitral award stands, parties to bear their respective costs, and pending interlocutory applications stand dismissed.

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Issue for consideration

Whether the award of interest at 12% per annum by the Arbitral Tribunal was excessive, uninformed by reasons and therefore patently illegal. +2 more

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Court's answer

The learned Arbitrator had considered the provisions of the contract, which provided for interest on delayed payments, and was justified in awarding interest at 12% per annum for the delay of 1350 days (after deducting 60 days for processing and releasing payments); the award of interest cannot be faulted.

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Ratio / Principle

The contentions regarding the Price Adjustment Clause and the e-portal deletion note stand covered by the judgment in Commercial Appeal No.133/2025, where the finding of fact that the contract contained the price variation clause at clause No.39 was held undisputed and the award based on that clause could not be interfered with under Section 34; in the instant case also the contract signed between the parties admittedly contained the price variation clause.

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Key takeaways

The challenge to the award of interest was a specific ground raised before the Commercial Court and was considered as point No.1 in the judgment under appeal, which concluded that the award of interest by the sole Arbitrator could not be interfered with; the contention that the point went unconsidered therefore fails.ratio¶50
All other contentions raised stand covered by the judgment in Commercial Appeal No.133/2025, and no reason exists to interfere with the Commercial Court's judgment upholding the arbitrator's award.ratio¶50

Detailed headnote1 paragraphs

High Court of Karnataka, Bengaluru (Anu Sivaraman and Rajesh Rai K, JJ.; oral judgment per Anu Sivaraman J.), 12.09.2025 - COMAP No. 535 of 2024 (State Project Director, Rashtriya Madhyamika Shikshana Abhiyana v. KBR Infratech Ltd.): Commercial appeal under S.13(1-A) of the Commercial Courts Act, 2015 r/w S.37 of the Arbitration and Conciliation Act, 1996 against the judgment dated 12.09.2024 of the LXXXV Additional City Civil and Sessions Judge, Bengaluru (Commercial Court) in Com.A.P.No.20/2024 upholding the sole Arbitrator's award of Rs.2,74,93,372/- towards price variation with interest at 12% per annum (delay of 1350 days less 60 days processing period), dismissed. Contentions on the price variation clause (clause No.39) and the e-portal deletion note stand covered by the co-ordinate Bench judgment in Commercial Appeal No.133/2025 (30.07.2025), where the Tribunal's finding that the contract contained the clause was held undisputed and beyond interference under S.34; the interest challenge was considered as point No.1 by the Commercial Court and the 12% rate upheld as the contract provided interest on delayed payments. Parties to bear respective costs; pending interlocutory applications dismissed.

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NC: 2025:KHC:36368-DB COMAP No. 535 of 2024

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HC-KAR

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IN THE HIGH COURT OF KARNATAKA AT BENGALURU

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DATED THIS THE 12^TH DAY OF SEPTEMBER, 2025

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PRESENT

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THE HON'BLE MRS. JUSTICE ANU SIVARAMAN

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AND

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THE HON'BLE MR. JUSTICE RAJESH RAI K

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COMMERCIAL APPEAL NO.535 OF 2024

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BETWEEN:

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THE STATE PROJECT DIRECTOR RASHTRIYA MADHYAMIKA SHIKSHANA ABHIYANA NEW ANNEX BUILDING K.R. CIRCLE, BENGALURU-560 001

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…APPELLANT

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(BY SMT. SHWETHA KRISHNAPPA, AGA)

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AND:

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Digitally signed by CHANNEGOWDA PREMA Location: High Court of Karnataka

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KBR INFRATECH LIMITED A REGISTERED COMPANY HAVING ITS REGISTERED OFFICE AT: No.1, 1^ST FLOOR, 8^TH CROSS TATA NAGAR, BALAJI LAYOUT RMV EXTENSION, 2^ND STAGE POST BENGALURU-560 094 REPRESENTED BY ITS MANAGING DIRECTOR SRI. K. BABU RAJU S/O SRI. K. RAMAKRISHNAMA RAJU AGED ABOUT 56 YEARS

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…RESPONDENT

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(BY SMT. VANI H, ADVOCATE)

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HC-KAR

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THIS COMAP IS FILED UNDER SECTION 13(1-A) OF THE COMMERCIAL COURTS ACT, 2015 READ WITH SECTION 37 OF THE ARBITRATION AND CONCILIATION ACT, 1996, PRAYING TO CALL FOR RECORDS AND SET ASIDE THE JUDGMENT DATED 12.09.2024, PASSED IN COM.A.P. No.20/2024 ON THE FILE OF LXXXV ADDITIONAL CITY CIVIL AND SESSIONS JUDGE AT BENGALURU AND ETC.

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THIS APPEAL, COMING ON FOR HEARING ON INTERLOCUTORY APPLICATION, THIS DAY, JUDGMENT WAS DELIVERED THEREIN AS UNDER:

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CORAM: HON'BLE MRS. JUSTICE ANU SIVARAMAN and HON'BLE MR. JUSTICE RAJESH RAI K

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ORAL JUDGMENT

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(PER: HON'BLE MRS. JUSTICE ANU SIVARAMAN)

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This appeal is filed being aggrieved by the judgment

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dated 12.09.2024 passed by the LXXXV Additional City Civil and Sessions Judge, Bengaluru (Commercial Court) in Com.A.P.No.20/2024.

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We have heard Smt. Shwetha Krishnappa, learned Additional Government Advocate appearing for the appellant and Smt. Vani. H, learned counsel appearing for the respondent.

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HC-KAR

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When the matter was taken up for hearing

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today, the learned counsel appearing for the respondent submits that the issues raised in this Commercial Appeal have already been considered by a co-ordinate Bench of this Court in Commercial Appeal No.133/2025 and the appeal has been dismissed by judgment dated 30.07.2025. The copy of the judgment is placed before us.

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The learned Additional Government Advocate appearing for the appellant however contended that the additional grounds have been raised in this appeal and that the grant of interest by the Arbitral Tribunal at the rate of 12% per annum is completely excessive and is not informed by any reasons. It is further contended that the Price Adjustment Clause had been specifically deleted from the notified contract and the e-portal had also specifically contained a note that the said clause stands deleted. It is therefore contended that the finding of the Arbitral Tribunal that the claimant was entitled to pay Price Adjustment was untenable.

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HC-KAR

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We have considered the contentions advanced.

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We have also perused the appeal and the grounds raised therein. We notice that the specific contention raised in the appeal is to the effect that the provision for price escalation had been omitted from the award and that the Arbitral Tribunal erred in awarding the claim as sought for. It is further contended that though this aspect had been specifically raised before the Commercial Court, the contentions of the appellant were not properly considered. Further, this appeal raises the question of award of interest. It is contended that the award of interest at 12% per annum by the learned Arbitrator was without any discussion on the point and was therefore patently illegal. It is submitted that though this aspect was specifically raised before the Court, the said aspect has not been considered at all.

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6. Having considered the contentions advanced on

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either side, we notice that the question with regard to existence or otherwise of the Price Adjustment Clause and

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HC-KAR

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the effect of a note in the e-portal regarding its deletion

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has been considered by this Court in Commercial Appeal No.133/2025. This Court found that the finding of fact by the Tribunal that the contract entered into between the parties contained the price variation clause at clause No.39 is, undisputed. It was therefore found that the finding of the Arbitral Tribunal that the respondent was entitled to the amount claimed on the basis of the price variation clause, could not have been interfered with by the Commercial Court exercising its limited powers under Section 34 of the Arbitration and Conciliation Act, 1996.

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In the instant case also, it is an admitted fact

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that the contract signed between the parties contained the price variation clause. This aspect has been specifically considered by the learned Arbitrator. Further, with regard to payment of interest, the learned Arbitrator found that the contract in question provided for interest on delayed payments. Having found that the claimant was entitled to an amount of Rs.2,74,93,372/- towards price variation,

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HC-KAR

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the learned Arbitrator also found that there was a delay of 1350 days in making the payment deducting 60 days as the period for processing and releasing payments, interest at 12% per annum was awarded for the amount found to be payable.

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Having considered the contentions advanced, we find that the learned Arbitrator had considered the provisions of the contract and had found it fit to award interest at the rate of 12% per annum. The award of interest was a specific ground of challenge raised by the appellant before the Commercial Court. The said aspect was considered as point No.1 in the judgment under appeal and the Court has come to the conclusion that the award of interest by the sole Arbitrator cannot be interfered with. Further, all other contentions raised stand covered by the judgment in Commercial Appeal No.133/2025. We find no reason to interfere in the judgment of the Commercial Court upholding the award of

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NC: 2025:KHC:36368-DB COMAP No. 535 of 2024

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HC-KAR

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the Arbitrator in these proceedings. The appeal therefore

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fails and is accordingly dismissed .

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The parties shall suffer their respective costs.

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