IN THE HIGH COURT OF KARNATAKA AT BENGALURU DATED THIS THE 06TH DAY OF DECEMBER, 2019 BEFORE THE HON' BLE MR. JUSTICE B. VEERAPPA CIVIL MISCELLANEOUS PETITION No.352/2018 BETWEEN:
BRAHMI CONSTRUCTIONS PVT. LTD., NO.552, 13TH CROSS ROAD, 7TH MAIN, HIG HOUSING COLONY, DOLLARS COLONY, RMV SECOND STAGE, BENGALURU-560094.
REPRESENTED BY ITS MANAGING DIRECTOR AND AUTHORIZED SIGNATORY, MR. N. RAMAPRIYAN (BY SRI ADIT SHAH, ADVOCATE FOR SRI CHINTAN CHINNAPPA M., ADVOCATE) AND:
IE INFRA PVT. LTD., (OPC) ALSO KNOWN AS INDIAN ESTATE INFRA HAVING REGISTRED OFFICE AT #17, SATYA COMPLEX, NEW KALIDASA ROAD VANIVILAS MOHALLA MYSURU-570002.
REPRESENTED BY ITS MANAGING DIRECTOR MR. K. A. ANIL KUMAR.
...PETITIONER …RESPONDENT (RESPONDENT IS SERVED BUT UNREPRESENTED) …..
THIS CIVIL MISCELLANEOUS PETITION IS FILED UNDER SECTION11(4)(a) OF THE ARBITRATION AND CONCILIATION ACT 1996, PRAYING TO APPOINT THE SECOND ARBITRATOR IN TERMS OF THE CONSTRUCTION AGREEMENT DATED 11.02.2016 ANEXURE- D CLAUSE 18 IN ADDITION TO THE PETITIONER’S NOMINEE MR. H.M. BHARATHESH RETIRED DISTRICT AND SESSIONS JUDGE, RESIDING AT 1044, 10TH MAIN, JUDICIAL LAYOUT, YELAHANKA, BENGALURU-560065, TO RESOLVE THE DISPUTES THAT HAVE ARISEN BETWEEN THE PARTIES AND ALSO PASS SUCH OTHER DIRECTIONS OR ORDERS AS THIS HON’BLE COURT MAY SEEM FIT AND NECESSARY IN THE CIRCUMSTANCES OF THE CASE AND IN THE INTEREST OF JUSTICE.
THIS CIVIL MISCELLANEOUS PETITION COMING ON FOR ADMISSION THIS DAY, THE COURT MADE THE FOLLOWING:
ORDER The petitioner filed the present Civil Miscellaneous Petition under the provisions of Section 11(4)(a) of the Arbitration and Conciliation Act, 1996, seeking to appoint sole arbitrator in terms of clause 18 of the Contract Agreement dated 11.02.2016, entered into between the parties.
2. It is the case of the petitioner that, petitioner is primarily in the construction business. The respondent engaged the services of the petitioner for their new development project ‘Crystal City’. A letter of intent dated 04.02.2016 was entered into between the parties with regard to the same. Subsequently, the parties entered into a Contract Agreement dated 11.02.2016. The petitioner was appointed as the contractor and the scope of work included completion of civil, internal electrification and internal plumbing works. The petitioner began acting lawfully and in accordance with the contract agreement. The respondent, for the reasons unknown, assigned only nine villas, in a piece meal basis, to the petitioner for construction, across a period of six months, despite stringent time lines as per the agreement. The respondent started raising frivolous issues and objecting to trivial matters when bills with respect to completed works were raised on them and the bills remained unpaid.
3. Thereafter, the respondent removed the construction material belonging to the petitioner from the godown of the construction site and therefore, petitioner was constrained to file a complaint before the jurisdictional police. Presently, the construction material bought and paid for by the petitioner are at the construction site, in the possession of the respondent. It is contended that, it has come to the notice of the petitioner that the respondent is illegally making use of all construction materials including shuttering materials, tools, tackle, plant and machinery in the construction activities that are being taken up directly by the respondent. Therefore, the petitioner was constrained to file a suit in A.A.No.200/2018 for permanent injunction restraining the respondent from interfering with the ongoing construction work and to restrain the respondent from entrusting the work to third parties. The same is pending. Thereafter, in view of the arbitration clause in the contract agreement, petitioner issued legal notice dated 28.07.2018. The respondent, received the notice, but has not responded. Therefore, petitioner is before this Court for the relief sought for.
4. I have heard the learned counsel for the petitioner.
5. Sri Adit Shah, learned counsel for Sri Chintan Chinnappa.M, learned counsel for the petitioner, reiterating the averments made in the memorandum of Civil Miscellaneous Petition, contended that there is no dispute with regard to the Contract Agreement entered into between the parties dated 11.02.2016 and both the parties have duly signed the agreement. Accordingly, the petitioner, in terms of the contract, has completed the construction work and raised the bill. The respondent has not paid the bill and thereby, dispute arose between the parties. Therefore, invoking the provisions of clause 18 of the agreement, petitioner issued legal notice in compliance of the provisions of Section 11(5) of the Arbitration and Conciliation Act, 1996. But, no reply was sent by the respondent. Therefore, he sought to allow the Civil Miscellaneous Petition. Learned counsel for the petitioner also brought to the notice of the Court that the petitioner has filed I.A.No.1/2018 for dispensation of production of original of Contract Agreement dated 11.02.2016. It is stated in para-2 of the affidavit accompanying the application that the original Contract Agreement dated 11.02.2016 is in the possession of the respondent. The submission is placed on record.
6. Respondent, though served, has remained unrepresented.
7. The material on record clearly depicts that the notice dated 28.07.2018 issued by the petitioner was received by the respondent. The petitioner has produced the acknowledgment to show that the notice was served on the respondent, vide Annexure-M. Even the notice of the present Civil Miscellaneous Petition has been served on the respondent, but has remained unrepresented.
8. Having heard the learned counsel for the petitioner, it is not in dispute that the petitioner and the respondent entered into Contract Agreement dated 11.02.2016, for construction of villas at Lingambudi village, kasaba Hobli, Kuvempunagar, Mysuru. According to the petitioner, he has completed the construction work and raised the bill, but the respondent has not paid the amount and thereby, dispute arose between the parties. Clause 18 of the Contract Agreement dated 11.02.2016, reads as under:
“18. All disputes arising out of or in any way connected within this Contract shall be deemed to have risen in Bangalore and only courts in Bangalore. If either the owner or the contractor or both do not agree to the decision of the engineer in charge wholly or in part relating to any dispute referred to engineer in charge the same shall be finally referred to arbitration and to be settled in accordance with the Arbitration and Conciliation Act, 1996.
(a) Each party shall be entitled to nominate one arbitrator each and the two arbitrators shall jointly nominate a third presiding arbitrator. The arbitrators shall give a reasoned award. The parties agree that any arbitration award shall be final and binding upon the parties.
(b) The place of arbitration shall be in Bangalore and the language of arbitration shall be in English.
(c) The cost of arbitration shall be shared equally between both the parties”.
9. Though, in terms of the Contract Agreement, petitioner nominated one arbitrator and issued notice to the respondent, inspite of receipt of the said notice, the respondent has not replied to the same. Though, the respondent is served in the present Civil Miscellaneous Petition, has remained unrepresented.
10. The Contract Agreement dated 11.02.2016 has been duly signed by both the petitioners and the petitioner has complied with the provisions of Section 11(5) of the Arbitration and Conciliation Act, 1996, by issuing notice to the respondent. In view of the aforesaid admitted facts and in view of non reply to the notice by the respondent and also non appearance of the respondent before this Court, inspite of service of notice issued by this Court, there is no impediment for this Court to appoint a sole arbitrator.
11. In view of the above, the Civil Miscellaneous Petition is allowed. Sri M.Nagarajan, Former-CAT Member, is appointed as sole arbitrator to adjudicate the dispute in terms of clause 18 of the Contract Agreement dated 11.02.2016 entered into between the parties.
12. Registry is directed to send copy of this Order to Sri M. Nagarajan, Former-CAT Member, the respondent and the Arbitration Centre, forthwith.
Sd/-
Judge kcm