Karnataka High Court
Shivaraj Kamshetty S/O Vishwanathappa vs The Managing Director And Ors on 19 April, 2024
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NC: 2024:KHC-K:3088
CMP No. 200003 of 2022
IN THE HIGH COURT OF KARNATAKA,
KALABURAGI BENCH
DATED THIS THE 19TH DAY OF APRIL, 2024
BEFORE
THE HON'BLE MR. JUSTICE C M JOSHI
CIVIL MISC PETITION NO.200003 OF 2022
BETWEEN:
SHIVARAJ KAMSHETTY S/O VISHWANATHAPPA
AGE: 65 YEARS, OCC: CLASS-I CONTRACTOR,
R/O. HOSPET GALLI,
BASAVAKALYAN,
DIST. BIDAR-585327.
...PETITIONER
(BY SRI AMEET KUMAR DESHPANDE SENIOR COUNSEL
APPEARED FOR SRI DESHPANDE G. V., ADVOCATE)
Digitally signed by
AND:
KHAJAAMEEN L
MALAGHAN 1. THE MANAGING DIRECTOR
Location: HIGH KARNATAKA STATE AGRICULTURAL MARKETING
COURT OF
KARNATAKA BOARD,
HEAD OFFICE, NO.16, RAJ BHAWAN ROAD,
BENGALURU-560001.
2. THE SUPERINTENDING ENGINEER,
KARNATAKA STATE AGRICULTURAL,
MARKETING BOARD,
HEAD OFFICE NO.16, RAJ BHAWAN ROAD,
BENGALURU-560001.
3. THE GENERAL MANAGER
KARNATAKA STATE AGRICULTURAL,
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CMP No. 200003 of 2022
MARKETING BOARD, NEAR BUS STAND,
BESIDE LIC OFFICE, GDA LAYOUT,
MSK MILLS ROAD,
KALABURAGI-585103.
4. THE EXECUTIVE ENGINEER
MARKETING DEVELOPMENT PROJECT,
APMC YARD, GUNJ AREA,
KALABURAGI-585104.
...RESPONDENTS
(BY SRI GOURISH S. KHASHAMPUR, ADVOCATE FOR R1 TO R4;
SRI KRUPA SAGAR PATIL, ADVOCATE FOR R3 AND R4 )
THIS CIVIL MISC. PETITION IS FILED U/S. 11(6) OF THE
ARBITRATION AND CONCILIATION ACT, PRAYING TO APPOINT
A SOLE ARBITRATOR AS PER THE PROPOSAL SHOWN ABOVE,
TO ADJUDICATE THE DISPUTE BETWEEN THE PETITIONER AND
RESPONDENT HEREIN, IN RELATION TO THE CLAIM OF THE
PETITIONER TOWARDS THE AMOUNT FOR HAVING COMPLETED
THE WORK OF CONSTRUCTION OF DIVISIONAL
ADMINISTRATIVE OFFICE NEAR CENTRAL BUST STAND
KALABURAGI FOR KARNATAKA AGRICULTURAL MARKETING
BOARD AND TO PASS ANY OTHER APPROPRIATE ORDERS AS
DEEMED NECESSARY.
THIS PETITION, COMING ON FOR FURTHER ARGUMENTS,
THIS DAY, THE COURT MADE THE FOLLOWING:
ORDER
Heard the learned counsel appearing for the
petitioner and the learned counsel appearing for the
respondents.
2. This petition is filed under Section 11 of the
Arbitration and Conciliation Act, 1966 seeking to
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appointment of an arbitrator to arbitrate the dispute
arising between the petitioner and the respondents. The
petitioner contends he is a reputed Class-I Contractor
having experience of more than 35 years and the
respondents had called for tenders for the work of
construction of Building at Kalaburagi. The bid of the
petitioner was accepted by the respondents and an
agreement came to be entered between the petitioner and
the respondents on 22.08.2011. the work was agreed to
be executed by a total amount of Rs.109.00 Lakhs. The
petitioner successfully completed the contracted work as
per the drawings and specifications mentioned in the
agreement. The excess work entrusted to the petitioner,
which he agreed to complete, was approved by the
respondents on 25.03.2014. Additional work were also
approved by the respondents on 07.05.2015 and as such
the total extent of the work executed was
Rs.1,22,16,239/-. Thereafter, the final bill was submitted
to the respondents on 28.09.2015 and there was delay on
the part of the respondents due to the approval of the
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extra works. There was dispute between the petitioner
and the respondents in respect of the calculation of the
dues and the 10% margin of profit etc., and the petitioner
had made several correspondence in this regard between
2011 to 2017. Ultimately the petitioner issued a legal
notice to the respondents on 16.05.2020 claiming a sum
of Rs.2,53,22,934/- and the respondents issued reply
notice on 16.06.2020. The petitioner had called upon the
respondents to appoint the sole arbitrator as per Clause-4
of the Special Conditions of Contract Read With Clause 24
of the General Conditions of Contract and the respondents
did not agreed for the appointment of the arbitrator and
therefore the petitioner was constrained to approach this
Court under Section 11 of the Arbitration and Conciliation
Act.
3. On issuance of notice, the respondents have
appeared through their counsel. The learned counsel
appearing for the respondents would submit that claim of
the petitioner is barred by time and therefore the
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arbitration proceedings are not sustainable in law. He
submits that all the claims by the petitioner were
considered by the respondents and even then the
petitioner has made false claim against the respondents
and as such the petition is devoid of merits and therefore
the same may be dismissed.
4. The provisions of Clause-24 of the General
Conditions of Contract as mentioned in the petition read as
below:
"24. Procedure for resolution of Disputes:
24.1 If the Contractor is not satisfied with the
decision taken by the Employer, the
dispute shall be referred by either party
to Arbitration within 30 days of the
notification of the Employer's decision.
24.2 If neither party refers the dispute to
Arbitration within the above 30 days, the
Employer's decision will be final and
binding.
24.3 The Arbitration shall be conducted in
accordance with the arbitration
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procedure stated in the Special
Conditions of Contract."
5. The fact that there was a condition for
arbitration is not in dispute, the only question disputed by
the respondent is that the claim is barred by time.
6. The judgment of the Apex Court in the case of
Secunderabad Cantonment Board vs.
B.Ramachandraiah and Sons1, holds as below:
"20. Applying the aforesaid judgments to
the facts of this case, so far as the applicability of
Article 137 of the Limitation Act to the
applications under Section 11 of the Arbitration
Act is concerned, it is clear that the demand for
arbitration in the present case was made by the
letter dated 07.11.2006. This demand was
reiterated by a letter dated 13.01.2007, which
letter itself informed the Appellant that
appointment of an arbitrator would have to be
made within 30 days. At the very latest,
therefore, on the facts of this case, time began to
run on and from 12.02.2007. The Appellant's
(2021)5 SCC 705
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laconic letter dated 23.01.2007, which stated that
the matter was under consideration, was within
the 30-day period. On and from 12.02.2007,
when no arbitrator was appointed, the cause of
action for appointment of an arbitrator accrued to
the Respondent and time began running from that
day. Obviously, once time has started running,
any final rejection by the Appellant by its letter
dated 10.11.2010 would not give any fresh start
to a limitation period which has already begun
running, following the mandate of Section 9 of
the Limitation Act. This being the case, the High
Court was clearly in error in stating that since the
applications under Section 11 of the Arbitration
Act were filed on 06.11.2013, they were within
the limitation period of three years starting from
10.11.2020. On this count, the applications
under Section 11 of the Arbitration Act,
themselves being hopelessly time barred, no
arbitrator could have been appointed by the High
Court."
7. Per contra, the learned counsel appearing for
the respondent submits that the judgment of the Apex
Court in the case of M/s Uttarakhand Purv Sainik
Kalyan Nigam Limited vs. Northern Coal Filed
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Limited2, as well as the judgment in the case of
Schlumberger Asia Service Ltd. Vs. Oil and Natural
Gas Corporation Ltd.3, also laid down that the question
of limitation is also to be decided by the learned Arbitrator.
8. In that view of the matter, the issue of
limitation is also part and parcel of the arbitrable point.
Such view was also taken by the Apex Court in the case of
Bharat Sanchar Nigam Ltd. And another V/s M/s.
Norte Networks India Pvt. Ltd 4.
9. Under these circumstances, the arbitrator has
to be appointed to arbiter the dispute that has arisen
between the parties, in view of the Clause-24 of the
General Conditions of Contract.
10. On a query by this Court, both the parties are
agreeable for appointment of Smt. Premavathi
M.Manogoli, District Judge (Retd.), Plot No.56, Teachers
AIR 2020 SC 979
AIR 2013 SC 3778
Civil Appeal 843-844/2021 Supreme Court
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Colony, Near Jhanayogashram, Vijayapur as a sole
arbitrator. Hence, the petition deserves to be allowed.
Hence, the following:
ORDER
The petition is allowed.
Smt. Premavathi M.Manogli is appointed as a sole
arbitrator and parties are directed to appear before the
arbitrator as soon as they receive the communication in
this regard. The petitioner is directed to intimate the
order of this Court to the learned arbitrator.
Sd/-
JUDGE
SMP
CT: PK
