Bangalore Water Supply And ... vs Larsen & Turbo Limited ...
2021 Latest Caselaw 258 Kant

      IN THE HIGH COURT OF KARNATAKA AT BENGALURU

        DATED THIS THE 06TH DAY OF JANUARY, 2021

                         BEFORE

           THE HON' BLE MR.JUSTICE R. DEVDAS

      WRIT PETITION NO.45918 OF 2015 (GM-RES)


BETWEEN

BANGALORE WATER SUPPLY AND
SEWERAGE BOARD,
CAUVERY DIVISION
5TH FLOOR, CAUVERY BHAVAN,
K.G.ROAD, BANGALORE - 560 009.
REPRESENTED BY ITS
CHIEF ENGINEER (K)
SRI V MAHESH
                                           ...PETITIONER
(BY SRI VENKATESH S ARBATTI, ADVOCATE)


AND

1.    LARSEN & TURBO LIMITED ENGINEERING
      CONSTRUCTION AND CONTRACTS
      DIVISION, I AND II FLOOR, NO.19,
      KUMARA KRUPA ROAD
      BANGALORE - 560 001.
      REPRESENTED BY ITS
      REGIONAL MANAGER
      AND AUTHORIZED SIGNATORY
      SRI K.N.NAGENDRA
                             2


2.   SRI S M PANCHAGATTI
     PRESIDING ARBITRATOR
     SAMANTH CONSULTANCY
     NO. 11, 14TH CROSS,
     SAMPIGE ROAD, MALLESWARAM,
     BANGALORE - 560 003.

3.   HON'BLE MR. JUSTICE B.K.SOMASHEKARA (RETD)
     ARBITRATOR
     NO. 175, BRINDAVANA
     3RD 'E' CROSS,
     II BLOCK, III STAGE,
     BASAVESHWARANAGAR
     BANGALORE - 560 079.

4.   SRI B N RAMADAS, IAS (RED)
     ARBITRATOR
     GNG HOUSE, K-48,
     ANNA NAGAR (EAST)
     CHENNAI - 600 102.
                                           ...RESPONDENTS
(BY SRI R V S NAIK, SENIOR COUNSEL A/W
    MISS RASHMI SUBRAMANYA, ADVOCATE FOR R1
    NOTICE TO R2 TO R4 ARE DISPENSED WITH)


     THIS WRIT PETITION IS FILED UNDER ARTICLE 227 OF THE
CONSTITUTION OF INDIA PRAYING TO QUASH THE ORDER
DTD.25.11.2014 [ANNEXURE-E] ON I.A. PASSED BY THE VI
ADDITIONAL CITY CIVIL & SESSIONS JUDGE AT BANGALORE IN
A.S.NO.125/2006 AND ETC.

     THIS WRIT PETITION IS COMING ON FOR PRELIMINARY
HEARING IN 'B' GROUP THIS DAY, THE COURT MADE THE
FOLLOWING:
                                   3


                               ORDER

R. DEVDAS J., (ORAL):

The petitioner which is a statutory body had engaged the

services of the respondent No.1 company as a contractor to

undertake some of its works in the year 1998. After the execution

of the works since there was a dispute regarding the payment to be

made to the respondent No.1 company, the respondent No.1

company raised a dispute before the Arbitral Tribunal. The Arbitral

Tribunal passed an award partly allowing the claims of respondent

No.1 company directing the petitioner to pay Rs.3,66,97,641/-.

Aggrieved by the same, the petitioner challenged the Award under

Section 34 of the Arbitration and Conciliation Act 1996 in

A.S.No.125/2006, before the City Civil Judge at Bangalore.

2. The petitioner filed I.A.No.3 seeking permission to lead

evidence under Rule 4(b) of the High Court of Karnataka Arbitration

(Proceedings Before the Courts) Rules, 2001 r/w Section 151 of

Code of Civil Procedure, 1908. The said interlocutory application

was dismissed by order dated 25.11.2014. It is the contention of

the petitioner that in view of the observations made in the order

dated 25.11.2014, the petitioner was led to believe that it was

permissible for the petitioner to file an affidavit in support of the

grounds raised by the petitioner in the plaint. Consequently, the

petitioner filed a memo dated 07.01.2015 along with an affidavit of

its representative in support of the grounds raised in the plaint. By

order dated 29.08.2015 the learned City Civil Judge dismissed the

memo and rejected the affidavit filed along with the memo.

Consequently, this writ petition is filed calling in question the order

dated 25.11.2014 passed by the learned City Civil Judge on

I.A.No.3 and order dated 29.08.2015 on the memo dated

07.01.2015.

3. Learned Senior Counsel representing the respondent

No.1 has taken this Court through the decisions of the Hon'ble

Supreme Court in the case of FIZA DEVELOPERS AND INTER-

TRADE PRIVATE LIMITED. /vs./ AMCI (INDIA)PRVATE

LIMITED & ANOTHER, reported in (2009) 17 SCC 796, EMKAY

GLOBAL FINANCIAL SERVICES LIMITED /VS./ GIRDHAR

SONDHI reported in (2018) 9 SCC 49 AND CANARA NIDHI

LIMITED /VS./ M.SHASHIKALA AND OTHERS REPORTED IN

(2019) 9 SCC 462 to contend that Section 34 of the Act has fallen

into consideration at the hands of the Apex Court and in the case of

Fiza Developers, the Hon'ble Supreme Court has clearly held that

application under Section 34 of the Act are summary proceedings

with provision for objections by the respondent-defendant, followed

by an opportunity to the applicant to "prove" the existence of any

ground under Section 34(2). It has been held that the applicant is

permitted to file an affidavit of his witnesses in proof. A

corresponding opportunity is given to the petitioner-defendant to

place his evidence by affidavit. Where the case so warrants, the

court permits cross-examination of the persons swearing to the

affidavit. Thereafter, the court hears the arguments and/or receives

written submissions and shall decide the matter. It has been made

clear that framing of issues as contemplated under Rule 1 Order 14

of the Code is not an integral part of the process of a proceedings

under Section 34 of the Act.

4. Learned Senior Counsel submits that the decision in

Fiza Developers and Inter-trade Private Limited has been

followed in Emkay Global Financial Services Limited case. However,

the subsequent amendment brought to Section 34 of the Act also

fell for consideration in the case of Emkay Global Financial Services

Limited. The learned Senior Counsel submits that on consideration

of the expression "furnishes proof" in Section 34(2) and the later

amendment brought to the said expression replaced by the words

"establishes on the basis of the record of the Arbitral Tribunal" also

was considered and the Hon'ble Apex Court has clearly held that

speedy resolution of the arbitral disputes has been the reason for

enacting the 1996 Act, and continues to be the reason for adding

amendments to the said Act to strengthen the aforesaid object. It

was therefore held that if issues are to be framed and oral evidence

taken in a summary proceeding under Section 34, this object will

be defeated. It was also noticed that if Bill No.100 of 2018 is

passed, then evidence at the stage of a Section 34 application will

be dispensed with altogether. The Apex Court has given its seal of

approval to the two early judgments of the Delhi High Court in the

case of Sandeep Kumar /vs./ Ashok Hans reported in 2004 SCC

Online Del 106 and Sial Bioenergic /vs./ SBEC Systems reported in

(2004) SCC Online Del 863; AIR 2004 Delhi 1995 by holding that

two judgments correctly reflect the position in law as to furnishing

proof under Section 34(2)(a). The Apex Court went on to observe

that Fiza Developers was a step in the right direction as its ultimate

ratio is that issues need not be struck at the stage of hearing a

Section 34 application, which is a summary procedure. Ultimately

on considering Section 34(5) and 34(6), it was clarified that the

legal position would be that application for setting aside an arbitral

award will not ordinarily require anything beyond the record that

was before the arbitrator. However, if there are matters not

contained in such record, and are relevant to the determination of

issues arising under Section 34(2)(a), they may be brought to the

notice of the Court by way of affidavits filed by both parties. It was

also clarified that cross-examination of persons swearing to the

affidavits should not be allowed unless absolutely necessary, as the

truth will emerge on a reading of the affidavits filed by both the

parties.

5. Learned counsel for the petitioner submits that going by

the decision cited by the learned Senior Counsel, it is clear that

there is provision for filing of an affidavit in support of the grounds

raised in the application. Therefore, the learned counsel for the

petitioner submits that it would suffice if this Court were to direct

the learned City Civil Judge that affidavit filed along with the memo

dated 07.01.2015 may be considered as an affidavit as permitted

by the Hon'ble supreme Court in terms of Section 34(2) of the Act.

The learned counsel hastens to add that the petitioner will not press

for leading of evidence in support of the affidavit.

6. Learned Senior Counsel appearing for the respondent

No.1 would submit that the affidavit contains nothing but the very

same averments made in the application/plaint by the petitioners

herein. It is therefore submitted that there is no reason for the

petitioner to harp upon filing an affidavit which is nothing but

reiteration of the contents of the plaint.

7. Having heard the learned counsels and on perusing the

petition papers, this Court finds that the submission made by the

learned counsel for the petitioner is reasonable. Even according to

the learned Senior Counsel the affidavit filed along with memo

dated 07.01.2015 which is nothing but reiteration of the contents of

the plaint filed by the petitioner herein. Therefore, there is no harm

in taking the affidavit on record. The City Civil Judge may consider

the affidavit along with the plaint and the available records which

has been secured from the Arbitral Tribunal. Needless to observe

that if the respondent No.1 herein intends to file a counter affidavit

as permissible in terms of the decision of the Hon'ble Apex Court,

the respondent No.1 may do so. The counter affidavit may be filed

within a period of four weeks from today.

8. In view of the above, the writ petition is partly

allowed. The memo dated 07.01.2015 filed along with affidavit

dated 03.01.2015 may be taken on record by the learned City Civil

Judge while considering the application made by the petitioner

under Section 34 of the Act in A.S.No.125/2006. It is informed that

consequent to the case being transferred to the Commercial Court a

different number has been assigned to A.S.No.125/2006 and

therefore the direction issued herein shall apply to the case which is

now pending before the Commercial Court.

9. The application under Section 34 was filed in the year

2006. Therefore, it would be necessary to give directions to the

Commercial Court which is now seized of the matter to hear and

dispose of the application as expeditiously as possible. Since this

Court has permitted the respondent No.1 to file a counter affidavit

to the affidavit filed by the petitioner herein within a period of four

weeks from today, an endeavour should be made by the

Commercial Court to dispose of the matter within a period of three

months from the date on which the counter affidavit would be filed

by the respondent No.1 herein.

Ordered accordingly.

Sd/-

JUDGE KLY/