Dismissed¶54

The State Project Director v. Kbr Infratech Limited

Karnataka HC15 Sept 2025COMAP/536/2024

Case brief

AI extract

What is this about?

Karnataka HC Bengaluru COMAP 536/2024 decided 15.09.2025; Anu Sivaraman & Rajesh Rai K; State Project Director RMSA v KBR Infratech Ltd; Section 37 Arbitration and Conciliation Act 1996 with Section 13(1A) Commercial Courts Act 2015; Section 34 limited interference; price variation clause clause No.39; Price Adjustment Clause deletion e-portal note; interest 12% per annum 1350 days delay 60 days processing; award Rs.77,04,844 price variation; Commercial Court Com.A.P.No.23/2024 judgment 12.09.2024; co-ordinate bench Commercial Appeal No.133/2025 dated 30.07.2025; appeal dismissed, costs on parties.

What did the court decide?

No relief to the appellant; the appeal fails and is dismissed, the parties shall suffer their respective costs, and all pending interlocutory applications stand dismissed. ¶54

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

What the court decided

AI extract

Outcome

No relief to the appellant; the appeal fails and is dismissed, the parties shall suffer their respective costs, and all pending interlocutory applications stand dismissed.

¶54

Issue for consideration

Whether the Arbitral Tribunal erred in awarding the price escalation/price variation claim notwithstanding the appellant's contention that the Price Adjustment Clause had been deleted from the notified contract and the e-portal carried a note that the clause stood deleted. +1 more

¶37

Court's answer

It is an admitted fact that the contract signed between the parties contained the price variation clause, and this aspect was specifically considered by the learned Arbitrator; accordingly the challenge to the price variation award fails, consistent with the co-ordinate Bench decision in Commercial Appeal No.133/2025.

¶45

Ratio / Principle

All other contentions raised in the appeal stand covered by the judgment in Commercial Appeal No.133/2025, wherein this Court found the Tribunal's finding of fact on the price variation clause (clause No.39) undisputed and held it could not have been interfered with by the Commercial Court exercising its limited powers under Section 34 of the Arbitration and Conciliation Act, 1996; hence there is no reason to interfere with the Commercial Court's judgment upholding the award.

¶49

Key takeaways

The learned Arbitrator had considered the provisions of the contract (which provided for interest on delayed payments) 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.ratio¶49
The interest ground was considered as point No.1 in the judgment under appeal, and the Commercial Court concluded that the award of interest by the sole Arbitrator could not be interfered with; this Court finds no reason to interfere with that conclusion.ratio¶49

Detailed headnote1 paragraphs

Commercial Appeal — Section 37 Arbitration and Conciliation Act, 1996 r/w Section 13(1A) Commercial Courts Act, 2015 — State Project Director, RMSA v. KBR Infratech Ltd. — High Court of Karnataka (Bengaluru), COMAP No. 536 of 2024, decided 15.09.2025 (Anu Sivaraman J., author; Rajesh Rai K, J.) — Appeal against Commercial Court judgment dated 12.09.2024 in Com.A.P.No.23/2024 upholding the sole Arbitrator's award. Appellant contended that the Price Adjustment Clause stood deleted from the notified contract and e-portal, and that interest at 12% per annum was excessive and unreasoned. Held: it is an admitted fact that the contract contained the price variation clause, specifically considered by the Arbitrator, who awarded Rs.77,04,844/- towards price variation and 12% per annum interest for a 1350-day payment delay (60 days for processing deducted); the Commercial Court dealt with interest as point No.1 and declined interference; remaining contentions are covered by the co-ordinate Bench judgment in Commercial Appeal No.133/2025 dated 30.07.2025. Appeal dismissed; parties to bear their respective costs; pending interlocutory applications dismissed.

¶1

¶2

NC: 2025:KHC:36814-DB COMAP No. 536 of 2024

¶3

HC-KAR

¶4

IN THE HIGH COURT OF KARNATAKA AT BENGALURU DATED THIS THE 15^TH DAY OF SEPTEMBER, 2025

¶5

PRESENT

¶6

THE HON'BLE MRS. JUSTICE ANU SIVARAMAN AND

¶7

THE HON'BLE MR. JUSTICE RAJESH RAI K COMMERCIAL APPEAL NO. 536 OF 2024

¶8

BETWEEN:

¶9

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

¶10

…APPELLANT

¶11

(BY SRI ADITYA VIKRAM BHAT, AGA)

¶12

AND:

¶13

Digitally signed by CHANNEGOWDA PREMA Location: High Court of Karnataka

¶14

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

¶15

…RESPONDENT

¶16

(BY SMT. VANI H., ADV.)

¶17

THIS COMAP IS FILED UNDER SECTION 37 OF THE ARBITRATION AND CONCILIATION ACT, 1996 R/W SEC. 13 (1A) OF THE COMMERCIAL COURTS ACT, 2015, PRAYING TO CALL FOR RECORDS AND TO SET ASIDE THE JUDGMENT

¶18

2 - NC: 2025:KHC:36814-DB COMAP No. 536 of 2024

¶19

HC-KAR

¶20

DATED 12.09.2024, PASSED IN COM.AP. NO.23/2024 ON THE FILE OF LXXXV ADDITIONAL CITY CIVIL AND SESSIONS JUDGE, BENGALURU.

¶21

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

¶22

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

¶23

ORAL JUDGMENT

¶24

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

¶25

This appeal is filed being aggrieved by the judgment dated 12.09.2024 passed by the LXXXV Additional City Civil and Sessions Judge, Bengaluru (Commercial Court) in Com.A.P.No.23/2024.

¶26

We have heard Shri. Aditya Vikram Bhat,

¶27

learned Additional Government Advocate appearing for the appellant and Smt. Vani. H, learned counsel appearing for the respondent.

¶28

When the matter was taken up for hearing today, the learned counsel appearing for the respondent

¶29

3 - NC: 2025:KHC:36814-DB COMAP No. 536 of 2024

¶30

HC-KAR

¶31

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.

¶32

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

¶33

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.

¶34

4 - NC: 2025:KHC:36814-DB COMAP No. 536 of 2024

¶35

HC-KAR

¶36

We have considered the contentions advanced.

¶37

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.

¶38

6. Having considered the contentions advanced on

¶39

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

¶40

5 - NC: 2025:KHC:36814-DB COMAP No. 536 of 2024

¶41

HC-KAR

¶42

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

¶43

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.

¶44

In the instant case also, it is an admitted fact

¶45

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.77,04,844/- towards price variation, the

¶46

6 - NC: 2025:KHC:36814-DB COMAP No. 536 of 2024

¶47

HC-KAR

¶48

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.

¶49

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

¶50

¶51

NC: 2025:KHC:36814-DB COMAP No. 536 of 2024

¶52

HC-KAR

¶53

the Arbitrator in these proceedings. The appeal therefore

¶54

fails and is accordingly dismissed .

¶55

The parties shall suffer their respective costs.

¶56