Karnataka High Court
Mr Bruno D Costa vs Mr Fr James Charlie on 2 April, 2024
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MFA No. 802 of 2024
IN THE HIGH COURT OF KARNATAKA AT BENGALURU
DATED THIS THE 2ND DAY OF APRIL, 2024
BEFORE
THE HON'BLE MR JUSTICE R. NATARAJ
MISCELLANEOUS FIRST APPEAL NO. 802 OF 2024 (AA)
BETWEEN:
MR. BRUNO D'COSTA
S/O JOSEPH D'COSTA
AGED ABOUT 38 YEARS
R/AT VARTHEGUNDI
TARIKERE TALUK
CHIKMAGALURU DISTRICT
PIN 577 134
...APPELLANT
(BY SRI. BALAGANGADHAR G.S., ADVOCATE)
AND:
MR. FR. JAMES CHARLIE
SR. JOSEPH'S CHURCH
AGED ABOUT 38 YEARS
BASKAL VILLAGE
CHIKKAMAGALURU DISTRICT
PIN 577 134
Digitally signed ...RESPONDENT
by
MARKONAHALLI (BY SRI. H.N.MANJUNATH PRASAD, ADVOCATE FOR CAVEATOR
RAMU PRIYA
Location: HIGH RESPONDENT)
COURT OF
KARNATAKA
THIS MFA IS FILED UNDER SECTION 37(1)(b) OF THE
ARBITRATION AND CONCILIATION ACT, 1996, AGAINST THE ORDER
DATED 04.01.2024 PASSED IN A.A.NO.05/2023 ON THE FILE OF THE
II ADDITIONAL DISTRICT AND SESSIONS JUDGE,
CHIKKAMAGALURU, REJECTING THE APPLICATION FILED UNDER
SECTION 9 OF THE ARBITRATION AND CONCILIATION ACT, 1996.
THIS APPEAL, COMING ON FOR ADMISSION, THIS DAY, THE
COURT DELIVERED THE FOLLOWING:
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MFA No. 802 of 2024
JUDGMENT
The applicant in Arbitration Application No.5/2023 on
the file of the II Additional District and Sessions Judge,
Chikkamagaluru, (henceforth referred to as 'the Trial
Court') has filed this appeal challenging the correctness of
an order dated 04.01.2024 by which an application filed by
him under Section 9 of the Arbitration and Conciliation Act,
1996 (for short, 'the Act') was rejected.
2. The parties shall henceforth be referred to as
they were arrayed before the Trial Court.
3. The applicant and the respondent had entered
into an agreement dated 10.02.2021 for demolition and
renovation of a Church building at Sy. No.96, Baskal
village, Vasthare Hobli, Chikkamagaluru Taluk, Mangalore
District. The estimated value of the contract was
Rs.1,34,18,917/-. The agreement contemplated duties and
responsibilities of both the parties and also provided for a
dispute resolution mechanism, initially through mutual and
amicable consultation and if consensus was not reached,
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to be referred to arbitration by a sole Arbitrator. The
applicant claimed that after completing the 7th stage of the
work, the Engineer appointed by the Church Mr. John P.
Marties and the Church committee measured the work and
the bill was paid. After completing 8th and 9th stage work,
the applicant had submitted a bill to the Priest on
09.08.2023. The priest called him on 12.08.2023 at about
9.30 a.m. and at such meeting, he informed the applicant
that action would be initiated to make the payment. He
claimed that the priest of the Church informed him that
they had already paid excess amount to him and they
would not pay any amount and that the construction would
be completed by the Church itself. The applicant
addressed a letter dated 09.08.2023 through email to the
respondent informing them to permit the completion of the
work as per the agreement and not to give any room for
violation. He also had made a claim for Rs.19,79,031/-.
The applicant apprehending that the respondent may
undertake the remaining construction, filed an application
under Section 9 of the Act of 1996 for an order of
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temporary injunction restraining the respondent from
continuing the remaining construction work in the
application schedule property till the disposal of the case.
The Trial Court after hearing the applicant, had granted an
ex parte order of injunction.
4. This application was opposed by the respondent
who claimed that a sum of Rs.1,22,08,796/- was already
paid to the applicant and he had only achieved 40% of the
work. He claimed that a message was sent through
whatsapp on 30.08.2023 and the applicant was called for a
meeting on 05.09.2023. However, on 01.09.2023, the
applicant sent a message that he would not be available
for the next 15 days as he had to go to Bengaluru for
some other work. Thereafter, on 11.09.2023 a letter was
addressed to the applicant to attend for a meeting on
21.09.2023 to discuss regarding the work turned out by
the applicant and the payment he received. However, the
applicant replied through his Advocate on 18.09.2023
demanding a further sum of Rs.19,00,000/-. The
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respondent contended that again on 20.09.2023, a
message was sent by whatsapp and email calling upon the
applicant to attend a meeting on 21.09.2023. He
contended that even before the meeting dated 21.09.2023
was arranged, the applicant had filed the present
application seeking for interim reliefs. He further
contended that he never denied to make any payment, if
the same was payable to the applicant after getting
measurement of the work done by the applicant in his
presence and the presence of the Building Committee and
the Engineer. He, therefore, contended that it was the
applicant who was irresponsible and did not take any steps
for an amicable settlement. On the contrary, he
abandoned the work and since the balance work had to be
completed, the respondent had undertaken the
construction. After the respondent entered appearance
and filed his objection, the Trial Court in terms of the
impugned order, rejected the application filed by the
applicant on the ground that the applicant had not made
any effort to get the dispute resolved amicably though
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several attempts were made by the respondent and that
the applicant had failed to establish his bona fides in
seeking the discretionary relief of interim injunction.
5. Being aggrieved by the said order, the applicant
has filed this appeal.
6. Learned counsel for the applicant submitted
that as per the agreement, if there is any dispute between
the applicant and the respondent, it was incumbent upon
them to appoint a conciliator and if the conciliation failed,
the parties were at liberty to undertake the process of
arbitration. He submits that there was no attempt on the
part of the respondent to conciliate differences between
the applicant and the respondent and the respondent
unilaterally without even terminating the agreement, had
refused to make any payment and had proposed to
complete the balance work. He submits that so long as
the agreement is in force, the applicant is entitled to
restrain the respondent from completing the balance
construction.
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7. In reply, the learned counsel for the respondent
submitted that the applicant has already initiated
proceedings for resolution of the dispute through
arbitration by issuing a notice dated 18.09.2023 and
therefore, it is deemed that the parties have terminated
the contract. He submits that the attempts made by the
respondent to consider the dispute was turned down by
the applicant and hence, the respondent had no other
option than to undertake the completion of the balance
work. He submitted that the Trial Court in the
circumstances felt that the grant of an order of injunction
would affect the interest of the respondent and therefore,
refused to grant interim relief sought for by the applicant.
He further submits that though the applicant has caused a
notice invoking arbitration clause, he has not taken any
steps under Section 11 of the Act of 1996. He submits that
it was always open for the applicant to invoke the
provisions of Section 17 of the Act of 1996 before the
Arbitrator.
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8. I have considered the submissions made by the
learned counsel for the applicant and the learned counsel
for the respondent.
9. It is now well settled that while considering an
application under Section 9 of the Act of 1996, the
principles for grant of interim injunction adumbrated under
Order XXXIX Rules 1 and 2 of CPC have to be applied,
namely, whether the plaintiff has a prima facie case for
grant of injunction and whether any hardship would be
caused to the parties, if injunction is refused and in whose
favour the balance of convenience lies in granting the
order of injunction. The Court is also bound to consider
whether the applicant can be compensated in terms of
money instead of granting an order of injunction. In the
case on hand, the applicant claims that he had constructed
a substantial portion of the construction that was
entrusted to him. He does not dispute the fact that the
total estimated value of the contract was
Rs.1,34,18,917/-. He also does not dispute the fact that
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he had received a sum of Rs.1,22,08,796/- from the
respondent. The respondent claimed that he had paid a
sum of Rs.1,22,08,796/- to the applicant. The documents
placed on record indicate that apart from the amount
allegedly paid by the respondent, the applicant had laid a
claim for a sum of Rs.19,00,000/- in respect of 8th stage of
construction. This only meant that the applicant was
claiming more than the agreement value entered into
between him and the respondent. The applicant claims
that certain works which were not initially agreed upon
between the parties were incorporated in the contract and
therefore, the value of the contract exceeded the initial
contract value. However, no document in this regard is
placed by the applicant either before the Trial Court or this
Court. Nonetheless, these are questions which have to be
considered before the Arbitrator. Having regard to the fact
that the building that is sought to be constructed was a
Church, if the applicant abandoned the work, the
respondent cannot be tied down to the contract and
cannot be restrained from completing the construction.
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Moreover, the applicant has already commenced the
arbitration proceedings by issuing a notice dated
18.09.2023 and hence, it can safely be held for the
present that the agreement between the parties stood
terminated. The grant of any order of injunction
restraining the respondent from putting up the
construction would unduly cause more hardship to the
respondent than to the applicant. After all, the applicant
is only concerned with the value of the work already
executed and nothing more, which could be worked out in
the arbitration proceedings. Since the applicant has not
taken any steps for appointment of an arbitrator to
adjudicate a dispute and has also not taken any steps for
drawing up of an inventory of the work already done,
granting an order of injunction to restrain the respondent
from putting up any construction or complete the balance
construction in the application schedule property would be
more injurious to the respondent and hence, the Trial
Court was justified in not granting an order of injunction.
There is no error committed by the Trial Court warranting
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interference by this Court. Any observation made in this
order will not come in the way of the Arbitrator to decide
the dispute on merits.
10. Hence, the appeal is dismissed.
11. I.A No.1/2024 for temporary injunction and I.A.
No.2/2024 for production of documents do not survive for
consideration and the same stand disposed off.
Sd/-
JUDGE
SMA
