M/S Pradeep Construction Company Vs the Managing Director — Arbitration | Karnataka HC (2026)

M/S Pradeep Construction Company Vs the Managing Director — Arbitration | Karnataka HC (2026)

What the court decided

AI extract

Outcome

Review allowed; Sri Virupakshaiah H.M., Former District Judge, appointed as Arbitrator (replacing respondent No.2) in terms of the agreements dated 30.07.2019 and 12.07.2019; copy of the order with the agreements to be sent to the Arbitration Center, Bengaluru for necessary action.

Issue for consideration

Whether the order dated 07.08.2025 in CMP No.100016/2024 (and the connected CMP No.100017/2024), appointing respondent No.2 as Arbitrator, should be reviewed and the CMPs allowed as prayed for. +1 more

Court's answer

The review petition filed under Order XLVII Rule 1 r/w Section 114 of CPC seeking review of the order dated 07.08.2025 is allowed.

Ratio / Principle

Sri Virupakshaiah H.M., Former District Judge, is appointed as Arbitrator to resolve the dispute between the parties in terms of the agreements dated 30.07.2019 and 12.07.2019, in accordance with relevant Act and Rules; a copy of the order with the agreements is to be sent to the Arbitration Centre, Bengaluru.

Key takeaways

Considering the petitioner's apprehension that the Secretary, UDD may not act as an impartial Arbitrator, and keeping in mind Section 12(5) of the Arbitration and Conciliation Act, 1996 and the Apex Court decision cited by counsel, it is just and proper to review the appointment of the Secretary, UDD, Government of Karnataka as Arbitrator.ratio¶72

Detailed headnote1 paragraphs

Review Petitions (RP No.100101/2025 c/w RP No.100103/2025) under Order XLVII Rule 1 r/w Section 114 CPC before the High Court of Karnataka, Dharwad (Justice G Basavaraja, 09.02.2026), seeking review of the orders dated 07.08.2025 in CMP Nos.100016/2024 and 100017/2024 whereby respondent No.2, the Secretary, Urban Development Department, Government of Karnataka, had been appointed Arbitrator in terms of agreements dated 30.07.2019 and 12.07.2019. The petitioner contended that a party interested in the lis cannot adjudicate it, that respondent No.2 is not independent, and that the appointment violated Section 12(5) of the Arbitration and Conciliation Act, 1996, relying on Central Organization for Railway Electrification vs. M/s ECI SPIC SMO MCML (JV) (2024 INSC 857). Considering the petitioner's apprehension of non-impartial adjudication, Section 12(5) ACA 1996 and the Apex Court decision cited, the Court held it just and proper to review the appointment of the Secretary, UDD, allowed the review petition, and appointed Sri Virupakshaiah H.M., Former District Judge, as Arbitrator in terms of the said agreements, directing that the order and agreements be sent to the Arbitration Center, Bengaluru.

NC: 2026:KHC-D:2112 RP No. 100101 of 2025 C/W RP No.100103 of 2025

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HC-KAR

IN THE HIGH COURT OF KARNATAKA, AT DHARWAD

DATED THIS THE 9^TH DAY OF FEBRUARY, 2026

BEFORE

THE HON'BLE MR. JUSTICE G BASAVARAJA

REVIEW PETITION NO. 100101 OF 2025 CONNECTED WITH

REVIEW PETITION NO. 100103 OF 2025

IN REVIEW PETITION NO. 100101 OF 2025

BETWEEN:

M/S PRADEEP CONSTRUCTION COMPANY REPRESENTED BY ITS PARTNER SRI JAGANNATH SHETTY ENGINEERING'S AND CONSTRUCTORS ADMIN OFFICE: NO.4, VRINDAVAN APARTMENT OPP BVB COLLEGE VIDYANAGAR HUBBALLI - 580 021

…PETITIONER

Digitally signed by LAKSHMINARAYAN N Location: High Court of Karnataka

(BY SRI. CHANNABASAVARAJ S. SHETTAR, SMT. KAVYA C. SHETTAR AND SRI. P. HARISCHANDRA REDDY, ADVOCATES)

AND:

URBAN DEVELOPMENT DEPARTMENT (UDD) GOVERNMENT OF KARNATAKA (GOK) REPRESENTED BY ITS

THE MANAGING DIRECTOR BELAGAVI SMART CITY LTD 1^ST FLOOR BUDA OFFICE ASHOK NAGAR BELAGAVI - 590 006

2 - NC: 2026:KHC-D:2112 RP No. 100101 of 2025 C/W RP No.100103 of 2025

HC-KAR

THE SECRETARY URBAN DEVELOPMENT DEPARTMENT GOVERNMENT OF KARNATAKA VIKAS SOUDHA BENGALURU - 01

THE EXECUTIVE ENGINEER BELAGAVI SMART CITY LTD. 1ST FLOOR BUDA OFFICE ASHOK NAGAR BELAGAVI - 590 006

…RESPONDENTS

(BY SRI. ASHOK HALAGI, ADVOCATE FOR R1 & R3 SRI. PRAVEENA Y. DEVARADDIYAVARA, HCGP FOR R2)

THIS REVIEW PETITION IS FILED UNDER SECTION 114 R/W ORDER 47 RULE (1) OF CPC, PRAYING TO 1. CALL FOR RECORDS PERTAINING TO ORDER DATED 07.08.2025 IN CMP NO.100016/2024 2. REVIEW THE ORDER DATED 07.08.2025 IN CMP NO 100016/2024 PASSED BY THIS HONBLE COURT AND CONSEQUENTLY ALLOW THE CMP NO.100016/2024 AS PRAYED FOR BY THE PETITIONER, IN THE INTEREST OF JUSTICE AND EQUITY.

IN REVIEW PETITION NO. 100103 OF 2025

BETWEEN:

M/S PRADEEP CONSTRUCTION COMPANY REPRESENTED BY ITS PARTNER SRI JAGANNATH SHETTY

ENGINEERING'S AND CONSTRUCTORS ADMIN OFFICE: NO.4, VRINDAVAN APARTMENT

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HC-KAR

OPP BVB COLLEGE VIDYANAGAR

HUBBALLI - 580 021

…PETITIONER

(BY SRI. CHANNABASAVARAJ S. SHETTAR, SMT. KAVYA C. SHETTAR, AND SRI. P. HARISCHANDRA REDDY, ADVOCATES)

AND:

URBAN DEVELOPMENT DEPARTMENT (UDD)

GOVERNMENT OF KARNATAKA (GOK)

REPRESENTED BY ITS

THE MANAGING DIRECTOR BELAGAVI SMART CITY LTD 1^ST FLOOR BUDA OFFICE ASHOK NAGAR BELAGAVI - 590 006

THE SECRETARY URBAN DEVELOPMENT DEPARTMENT GOVERNMENT OF KARNATAKA VIKAS SOUDHA BENGALURU -01

THE EXECUTIVE ENGINEER BELAGAVI SMART CITY LTD 1ST FLOOR BUDA OFFICE ASHOK NAGAR

BELAGAVI - 590 006

…RESPONDENTS

(BY SRI. ASHOK HALAGI, ADVOCATE FOR R1 AND R3 SRI. PRAVEENA Y. DEVARADDIYAVARA, HCGP FOR R2)

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NC: 2026:KHC-D:2112 RP No. 100101 of 2025 C/W RP No.100103 of 2025

HC-KAR

THIS REVIEW PETITION IS FILED UNDER ORDER 47 RULE (1) OF CPC, PRAYING TO A. CALL FOR RECORDS PERTAINING TO ORDER DATED 07.08.2025 IN CMP NO.100017/2024 B. REVIEW THE ORDER DATED 07.08.2025 IN CMP NO 100017/2024 PASSED BY THIS HONBLE COURT AND CONSEQUENTLY ALLOW THE CMP NO 100017/2024 AS PRAYED FOR BY THE PETITIONER, IN THE INTEREST OF JUSTICE AND EQUITY.

THESE PETITIONS, COMING ON FOR FURTHER ORDERS,

THIS DAY, THE COURT MADE THE FOLLOWING:

CORAM: THE HON'BLE MR. JUSTICE G BASAVARAJA

ORAL ORDER

The petitioner M/s Pradeep Construction Company

has filed this review petition under Order XLVII Rule 1 r/w Section 114 of CPC seeking to review the order dated 07.08.2025 in CMP No.100016/2024 and consequently allow this CMP No.100016/2024.

Heard.

3. Learned HCGP Praveena Y. Devaraddiyavara,

appearing for respondent No.2 submits that there are no grounds to allow this review petition.

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HC-KAR

It is submitted by the Counsel for the petitioner that the impugned order has proceeded to appoint respondent No.2 herein as sole Arbitrator for settlement of disputes. It is the trite law that a party to the proceedings cannot sit as a Judge to adjudicate the lis wherein his interest is involved. This aspect of law and fact is not properly appreciated while passing the impugned order.

Respondent Nos.1 to 3 are herein seeking shelter under the respondent, Government of Karnataka. Respondent No.2 is not an independent body. In the event if respondent No.2 is appointed as Arbitrator, there are every chances that there cannot be a fair and impartial adjudication of the lis as any order to be passed in favour of this petitioner would be enforceable against all the respondents. Under such circumstances, appointment of respondent No.2 as Arbitrator would defeat the purpose with which an Arbitrator is sought to be appointed. The said appointment violates Section 12(5) of the Arbitration and Conciliation Act, 1996. To substantiate the same, reliance is placed upon the decision of Hon’ble Apex Court in the case of Central Organization for Railway

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NC: 2026:KHC-D:2112 RP No. 100101 of 2025 C/W RP No.100103 of 2025

HC-KAR

Electrification vs. M/s ECI SPIC SMO MCML (JV) (2024 INSC 857).

In the case on hand, the petitioner has filed this review petition against respondent Nos.1 to 3. This Court has appointed respondent No.2 – The Secretary, Urban Development Department (UDD), Government of Karnataka as Arbitrator to resolve the dispute between the parties, in terms of the agreements between the parties dated 30.07.2019 and 12.07.2019, in accordance with Act and Rules.

It is observed that, in the light of the submissions of learned counsel for both the parties, this Court has passed the impugned order, which is questioned in this review petition.

However, now the petitioner has expressed his apprehension that if the Secretary, Urban Development Department (UDD) is appointed as Arbitrator, he may not act as impartial Arbitrator. Considering the grievance of this petitioner and also keeping in mind the provisions of Section 12(5) of the Arbitration and Conciliation Act, 1996 and also keeping in mind the decision of Hon’ble Apex Court cited by

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HC-KAR

the learned counsel for petitioner, it is just and proper to review the order as to the appointment of the Secretary, Urban Development Department (UDD), Government of Karnataka. Accordingly, I proceed to pass the following,

ORDER

The review petition filed under Order XLVII Rule 1 r/w Section 114 of CPC is allowed.

Sri.Virupakshaiah. H.M., Former District Judge, is appointed as Arbitrator to resolve the dispute between the parties in terms of the agreements dated 30.07.2019 and 12.07.2019 in accordance with relevant Act and Rules.

Send the copy of this order with copy of agreements to

the Arbitration Center, Benagluru for taking necessary action.

Sd/(G BASAVARAJA) JUDGE

LL

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