Karnataka High Court
Bruhath Bangalore vs The Institution Of Engineers (India) on 17 February, 2025
Author: R Devdas
Bench: R Devdas
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NC: 2025:KHC:6979
WP No. 19317 of 2024
C/W WP No. 2015 of 2025
IN THE HIGH COURT OF KARNATAKA AT BENGALURU
DATED THIS THE 17TH DAY OF FEBRUARY, 2025
BEFORE
THE HON'BLE MR JUSTICE R DEVDAS
WRIT PETITION NO. 19317 OF 2024 (GM-RES)
C/W
WRIT PETITION NO. 2015 OF 2025 (LB-BMP)
IN WP No. 19317/2024
BETWEEN:
1. BRUHATH BANGALORE
MAHANAGARA PALIKE,
CORPORATION BUILDINGS,
HUDSON CIRCLE,
N.R. SQUARE,
BANGALORE - 560 002,
REPRESENTED BY ITS
CHIEF COMMISSIONER.
Digitally signed by
JUANITA 2. THE CHIEF ENGINEER,
THEJESWINI
Location: HIGH SWD, BRUHATH BANGALORE
COURT OF
KARNATAKA MAHANAGARA PALIKE,
9TH FLOOR, JAYANAGARA
SHOPPING COMPLEX, 4TH FLOOR,
JAYANAGARA,
BANGALORE - 560 011.
...PETITIONERS
(BY SRI. SATYANAND B.S., ADVOCATE)
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WP No. 19317 of 2024
C/W WP No. 2015 of 2025
AND:
1. THE INSTITUTION OF ENGINEERS (INDIA),
AN ISO 9001:2015 CERTIFIED ORGANISATION,
(ESTABLISHED 1920,
INCORPORATED BY ROYAL CHARTER 1936),
NO.8, GOKHALE ROAD,
KOLKATA - 700 020.
2. DR. I. SATYANARAYANA RAJU,
FIE ARBITRATOR,
H NO.6-3-903/A/1 FLAT-201,
CHINMAYI RESIDENCY SOMAJIGUDA,
HYDERABAD - 500 082.
3. M/S. VDB PROJECTS (P) LTD.,
HAVING ITS REGISTERED OFFICE
AT NO.842/A, 3RD FLOOR, 100 FT. ROAD,
INDIRANAGAR,
BANGALORE - 560 038.
BY ITS EXECUTIVE DIRECTOR
MR. ABHISHEK REDDY.
...RESPONDENTS
(BY SRI.ROHAN TIGADI, ADVOCATE FOR R3;
R2 SERVED - UNREPRESENTED)
THIS W.P. IS FILED UNDER ARTICLES 226 AND 227 OF
THE CONSTITUTION OF INDIA PRAYING TO CALL FOR THE
ENTIRE RECORDS FROM THE R-1 PERTAINING TO THE
APPOINTMENT OF THE R-2 AS AN ARBITRATOR AS PER
ANNEXURE - A; QUASH THE UNILATERAL APPOINTMENT OF AN
ARBITRATOR BY THE R-1 VIDE LETTER BEARING NO.
SDG/SFCIT/631/402 DATED 04.04.2024 BANGALORE
ANNEXURE - A CONSEQUENTLY ALLOW THIS WRIT PETITION
AND ETC.,
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WP No. 19317 of 2024
C/W WP No. 2015 of 2025
IN WP NO. 2015/2025
BETWEEN:
VDB PROJECTS PRIVATE LIMITED,
A COMPANY INCORPORATED UNDER
THE COMPANIES ACT, 1956,
HAVING OFFICE AT. 842/A,
3RD FLOOR, 100 FEET ROAD,
INDIRANAGAR,
BENGALURU - 560 038.
(REPRESENTED BY AUTHORIZED
REPRESENTATIVE VASANTHA P. RAI).
...PETITIONER
(BY SRI. ROHAN VEERANNA TIGADI.,ADVOCATE)
AND:
1. COMMISSIONER,
BRUHAT BENGALURU MAHANAGARA PALIKE,
N.R SQUARE,
BENGALURU - 560 002.
2. EXECUTIVE ENGINEER,
MAHADEVAPURA ZONE,
BRUHUT BENGALURU
MAHANAGARA PALIKE,
9TH FLOOR, JAYANAGARA,
SHOPPING COMPLEX, 4TH BLOCK,
JAYANAGARA,
BANGALORE - 560 011.
3. THE CHIEF ENGINEER,
STORM WATER DRAIN,
BRUHUT BENGALURU MAHANAGARA PALIKE,
9TH FLOOR, JAYANAGARA,
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WP No. 19317 of 2024
C/W WP No. 2015 of 2025
SHOPPING COMPLEX, 4TH BLOCK,
JAYANAGARA,
BANGALORE - 560 011.
...RESPONDENTS
(BY SRI. SATYANAND B S., ADVOCATE)
THIS W.P. IS FILED UNDER ARTICLE 226 OF THE
CONSTITUTION OF INDIA PRAYING TO QUASH THE LETTER
BEARING NO.MU.A/BRU.NI.GA/PR/01/2024-25 DATED
11.09.2024 (ANNEXURE - A) ISSUED BY R-2 LETTER BEARING
NO.MU.A/BRU.NI.GA/PR/01/2024-25 DATED 05.10.2024
(ANNEXURE - B1) LETTER BEARING NO.
MU.A/BRU.NI.GA/PR/891/2024-25 DATED 11.11.2024
(ANNEXURE - B2) ISSUED BY R-2 AND LETTER BEARING NO.
MU.A/BRU.NI.GA/PR/894/2024-25 DATED 01.01.2025
(ANNEXURE - C) ISSUED BY R-3 AND ETC.,
THESE PETITIONS, COMING ON FOR PRELIMINARY
HEARING, THIS DAY, ORDER WAS MADE THEREIN AS UNDER:
CORAM: HON'BLE MR JUSTICE R DEVDAS
ORAL ORDER
Writ Petition No.19317/2024 is filed at the hands of the
Bruhat Bengaluru Mahanagara Palike (for short 'the BBMP')
against M/s. VDB Projects (P) Ltd., and also against the
Institute of Engineers (India) and the Arbitrator questioning the
impugned order at Annexure-A passed by the Institute of
Engineers (India), on the application filed by the M/s. VDB
Projects (P) Ltd., for appointment of an Arbitrator to resolve
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the dispute between M/s. VDB Projects (P) Ltd and the BBMP
arising out of an agreement dated 03.04.2017.
2. The other, writ petition is filed by M/s. VDB Projects
(P) Ltd., aggrieved by the subsequent action on the part of the
BBMP where four notices have been issued for recovering
Rs.3,51,76,894/- under a previous contract namely
Mahadevpura contract and the existing contract namely
Challaghatta contract. Since both the writ petitions arise
between the common parties, the petitions are clubbed, heard
together and are been disposed of by this common order.
3. The writ petition filed at the hands of the BBMP is
directed against the impugned order at Annexure-A where the
Institute of Engineers (India), at the instance of M/s. VDB
Projects (P) Ltd., has appointed an Arbitrator to resolve the
dispute arising out of agreement dated 03.4.2017 (Challaghatta
contract). Respondent No.2-Dr.I.Satyanarayana Raju has been
appointed as the Sole Arbitrator to resolve the dispute. Learned
counsel for the BBMP submits that under the general conditions
of contract clause-56 which pertains to arbitration, it provides a
list of organizations who may be approached for appointing an
Arbitrator. The list contains 7 organizations and the Institute of
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Engineers (India) does not find place in the said list and
therefore, the respondent could not have approached the said
organization for appointment of Arbitrator. Moreover, no notice
was issued to the BBMP before appointing the Sole Arbitrator.
4. Learned counsel for the respondents has placed
reliance on two decisions of the Apex Court in the case of
NARAYAN PRASAD LOHIA Vs. NIKUNJ KUMAR LOHIA
AND OTHERS reported in (2002) 3 SCC 572 and BHAVEN
CONSTRUCTION Vs. EXECUTIVE ENGINEER, SARDAR
SAROVAR NARMADA NIGAM LIMITED AND ANOTHER
reported in (2022) 1 SCC 75 to contend that in both the
judgments the Hon'ble Supreme Court has considered Section
16 (2) of the Arbitration And Conciliation Act, 1996 and held
that the avenue open for a person regarding the jurisdiction of
the Arbitral Tribunal/Arbitrator would vest with the Arbitral
Tribunal itself and the Arbitral Tribunal is mandated to consider
such objections which goes to the root of its jurisdiction. In that
view of the matter, learned counsel respondent-VDB Projects
(P) Ltd submits that the writ petition filed by BBMP is not
maintainable and the same should be dismissed while
relegating the petitioner to the Arbitral Tribunal which passed
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the order of appointment of Arbitrator for consideration of the
question as to whether the Institute of Engineers (India) has
jurisdiction to constitute the Arbitral Tribunal/Arbitrator.
5. Insofar as the other writ petition is concerned
learned counsel for the respondent submits that subsequent to
the initiation of the proceedings at the hands of the
respondents seeking arbitration of the dispute arising under the
agreement dated 03.04.2017, the BBMP issued 4 notices to the
respondents seeking to recover certain amounts already paid
under the previous contract. Heretoo, it is the contention of the
learned counsel for the respondents that BBMP cannot proceed
unilaterally to recover any amount from the respondents and it
is bound to proceed only in terms of the contract which
provides for settlement of disputes by arbitration.
6. Per contra, learned counsel for the BBMP contends
that the general conditions of contract enlists 7 organizations
whom either of the aggrieved party could approach for
appointment of an Arbitrator and The Institute of Engineers
(India) is not found in the said list of 7 organizations.
Therefore, even in accordance with the judgement, in the case
of NARAYAN PRASAD LOHIA (supra) relied upon by the
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learned counsel for the respondents, under certain
circumstances, it is still permissible for a party to approach this
Court under Article 226 or 227 of the Constitution of India.
Learned counsel submits that since the name of the
organization, the Institute of Engineers (India) does not find
place in the list of 7 organisations provided in clause-56 of the
contract, the BBMP is entitled to approach this Court under
Article 226 or 227 of the Constitution of India.
7. Having heard the learned counsels for the parties
and on perusing the petition papers, this Court is of the
considered opinion that even if the submission of the learned
counsel for the is accepted that the judgement relied upon by
the learned counsel would make provision under certain
circumstances for a party to approach this Court under Article
226 or 277 of the Constitution of India, nevertheless having
regard to the fact that the name Institute of Engineers (India)
is found in one of the documents exhibited before this Court
where both the BBMP and M/s. VDB Projects (P) Ltd are parties,
this case would not fit into the category of rarest
circumstances. As rightly submitted by the learned counsel for
the petitioner Section 16 (2) of the Act clearly provides for a
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plea which could be raised before the Arbitral Tribunal that it
does not have jurisdiction and if such a contention is raised, the
Arbitral Tribunal is bound to consider the same. Further Section
16(6) of the Act also enables a party aggrieved of such an
order of the Arbitral Tribunal touching upon its own jurisdiction,
to seek to set aside such an order by filing an appeal under
Section 34 of the act. In that view of the matter, this Court is
of the considered opinion that the writ petition filed at the
hands of the respondent-BBMP cannot be maintained. The
avenue open for the BPMP will be to raise such an objection
before the Arbitral Tribunal regarding the jurisdiction of the
Tribunal to consider the dispute raised by the respondents. If
such an objection is raised, the Arbitral Tribunal is bound to
consider the objection and pass necessary orders regarding its
own jurisdiction to entertain the dispute raised at the hands of
the respondents.
8. Insofar as the other writ petition that is filed at the
hands of the M/s. VDB Projects (P) Ltd., the petitioner is
aggrieved of the notices issued by BBMP to recover certain
amounts arising out of a previous contract (Mahadevpura
contract) and the present contract (Challaghatta contract). It is
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clear that the contract would bind the parties for arbitration.
That being so, even if the impunged notices are issued by the
BBMP for recovery of certain amounts, it will have to follow the
arbitration clause provided in the contract which is binding the
two parties. Therefore, all further proceedings pursuant to the
notices issued by the BBMP shall follow the procedure of
arbitration.
9. For the reasons stated above this Court proceeds to
pass the following:
ORDER
i. Writ petition No.19317/2024 filed by the
BBMP stands dismissed while reserving liberty to the
BPMP to file an application before the Arbitral Tribunal
namely Institute of Engineers (India) in terms of
Section 16(2) of the Act, regarding the jurisdiction of
the Arbitral Tribunal to consider such a dispute raised
at the hands of BBMP.
ii. Since the arbitration proceedings were stayed
at the hands of this Court by order dated 22.07.2024
and the writ petition filed at the hands of the BBMP is
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dismissed by this order, permitting the BBMP to file an
application before the Arbitral Tribunal namely
respondent No.1-Institute of Engineers (India) raising
objection regarding the jurisdiction of the organization
to entertain such an application at the hands of the
respondent for appointment of an Arbitrator, till
consideration of the application, the arbitrator shall not
proceed any further.
iii. Needless to observe that depending on the
orders that could be passed by the respondent No.1, if
the Arbitrator is permitted to proceed, the time spent
by the parties before this Court, till the orders that
could be passed by respondent No.1 shall be taken
into consideration for the purpose of Section 29-A of
the Act.
iv. Writ petition No.2015/2025 is partly
allowed while directing the BBMP which has issued
the impugned notices that it shall proceed only in
accordance with the arbitral clauses binding the
parties whether it is the existing Challaghatta contract
or the Mahadevpura contract.
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All contentions are left open. Any observation made in
this order shall not prejudice the case of either of the parties
before the Arbitral Tribunal.
Sd/-
(R DEVDAS)
JUDGE
