M/S Vishal Infrastructure Ltd vs M/S Sanz Constructions Pvt Ltd
2022 Latest Caselaw 9129 Kant

        IN THE HIGH COURT OF KARNATAKA AT
                    BENGALURU

        DATED THIS THE 20TH DAY OF JUNE 2022

                      BEFORE

 THE HON'BLE MR. JUSTICE B. M. SHYAM PRASAD

   CIVIL MISCELLANEOUS PETITION NO.43/2018

BETWEEN :

M/S VISHAL INFRASTRUCTURE LTD.,
A COMPANY INCORPORATED UNDER
THE COMPANIES ACT, 1956
HAVING ITS HEAD OFFICE AT NO.52
R V ROAD, BASAVANAGUDI
BENGALURU - 560 004.
REP. BY ITS SPA HOLDER
MAYIL VAGANAN A
MANAGER
                                      ... PETITIONER
(By SRI. RAMACHANDRA H., ADVOCATE)

AND :

M/S SANZ CONSTRUCTIONS PVT LTD
A COMPANY INCORPORATED UNDER THE
COMPANIES ACT 1956
HAVING ITS HEAD OFFICE AT NO.54,
1ST FLOOR, NEW DIAGONAL ROAD
3RD BLOCK, JAYANAGAR
BENGALURU - 560 011
REP. BY ITS MANAGING DIRECTOR.
                                     ... RESPONDENT
(SERVICE HELD SUFFICIENT
VIDE COURT ORDER DATED 8.11.2021)
                               2



     THIS CIVIL MISCELLANEOUS PETITION IS FILED
UNDER SEC.11 OF THE ARBITRATION AND CONCILIATION
ACT   1996,   PRAYING  FOR   A   JUDGMENT     OR
ORDER/DIRECTION ETC, DIRECTING THE PETITIONER
COMPANY AND RESPONDENT COMPANY TO APPOINT AN
ARBITRATOR FROM THEIR SIDE AND BOTH THESE
ARBITRATORS TO APPOINT SUITABLE ARBITRATOR TO
ADJUDICATE THE DISPUTE BETWEEN THE PARTIES;

     THIS PETITION COMING ON FOR ADMISSION, THIS
DAY, THE COURT MADE THE FOLLOWING:


                         ORDER

The petitioner, who relies upon a purported

agreement dated 06.08.2007 with the respondent, has

filed this petition for constitution of an Arbitral Tribunal

comprising of three Arbitrators. The petitioner's prayer

reads as follows:

"[a] Judgment or order/direction etc., directing the petitioner company and respondent company to appoint an Arbitrator from their side and both these arbitrators to appoint suitable arbitrator to adjudicate the dispute between the parties.

[b] To pass a judgment to appoint an arbitrator who is acceptable to both the parties with a direction to adjudicate the dispute following the

procedural law including the procedure laid down in the CPC."

The arbitration clause in this Agreement dated

06.08.2007 reads as under:

"29. In case of any disputes between the parties about this agreement, the disputes shall be referred to Arbitration in terms of Indian Arbitration Act 1940 as repelled by Ordinance of 1996."

2. The petitioner's case is that the Kerala

Tourism Development Corporation [KSTDC] hired the

services of another State undertaking, M/s. KITCO

Limited. This Consultant caused publication of a tender

for executing certain civil works and the petitioner was

successful in its bid. The petitioner could engage the

services of the respondent as a 'Sub-Contractor' and the

respondent has executed the tender work. One of the

former Executive Directors of the petitioner was

responsible for the contract with the respondent. The

petitioner, who had to suffer an Arbitral Award because

of certain deficiencies in the construction, has paid

certain amounts, and the petitioner would be entitled to

recover such amounts along with damages from the

respondent. The petitioner relying upon the terms of

the Agreement dated 06.08.2007 and contending that it

has issued legal Notices for commencement of arbitral

proceedings, has filed this petition. In the

correspondence relied upon by the petitioner to assert

that Notice has been issued for commencement of

arbitral proceedings, the petitioner has stated that it

has appointed a certain Mr.T.V. Prabhakaran as one of

the Arbitrators.

3. Sri. H. Ramachandra, the learned counsel

for the petitioner, taking this Court through the terms of

the Agreement dated 06.08.2007 and the Award dated

12.11.2015 in O.P. [Arb] No.850/2014 as also the

exchange of correspondence as referred to above,

submits that this Court must allow the petition and

appoint a sole Arbitrator. Admittedly, the agreement

does not bear the respondent's company seal and

nothing is placed on record to establish that the

petitioner's letters dated 17.02.2017 [addressed to the

respondent and certain other addressees] are actually

sent to the respondent/other addressees or is served on

the respondent/the other addressees.

4. Sri. H. Ramachandra was extended an

opportunity to substantiate that these letters dated

17.02.2017 are sent to the respondent or the

addressees. In response, Sri. H. Ramachandra, without

filing any additional document, submits that he could

state on instructions that the letters dated 17.02.2017

are sent to the respondent/and the other addressees by

e-mail. As regards the agreement not containing the seal

of the respondent, the learned counsel seeks to rely

upon the decision of the Hon'ble Supreme Court in 'N.N.

Global Mercantile Pvt. Ltd., v. Indo Unique Flame Ltd and

Others'1 to bolster his submissions that even if there is

any doubt about the due execution of the agreement,

which incorporates the arbitration clause, questions in

this regard must be decided in the arbitral proceedings

and this Court cannot reject the petition only because

there could be some deficiency in the document.

5. It is settled law that the designated Courts

under Section 11 of the Arbitration and Conciliation

Act, 1996 [for short, 'the Arbitration Act'] exercise

judicial power to ascertain the existence of an

arbitration agreement and that the dispute is not a

deadwood. Further, the designated Courts would

exercise jurisdiction under Section 11 of the Arbitration

Act only if notice is issued for commencement of arbitral

1 [2021] 4 SCC 379

proceedings as contemplated under Section 21 of the

Arbitration Act and if there is failure in these regards,

the petitioner under section 11 of the Arbitration Act,

would fail.

6. This Court must opine that the petitioner

has failed to establish even prima facie the existence of

a contract with the respondent because of the following

reasons. As observed earlier, the Agreement dated

06.08.2007 does not bear the respondent's company

seal and there is nothing on record to indicate that

there is any communication with the respondent based

on the same. The petitioner relies on correspondences

dated 17.02.2017. Crucially, there is nothing on record

to even establish that the correspondences are sent to

the addresses. Therefore, this Court is of the

considered view that the petitioner has failed to

establish the requirements for exercise of jurisdiction

under Section 11 of the Arbitration Act and hence, the

petition is dismissed.

Sd/-

JUDGE

AN/-