Karnataka High Court
The State Project Director vs Kbr Infratech Limited on 12 September, 2025
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COMAP No. 538 of 2024
HC-KAR
IN THE HIGH COURT OF KARNATAKA AT BENGALURU
DATED THIS THE 12TH DAY OF SEPTEMBER, 2025
PRESENT
THE HON'BLE MRS. JUSTICE ANU SIVARAMAN
AND
THE HON'BLE MR. JUSTICE RAJESH RAI K
COMMERCIAL APPEAL NO. 538 OF 2024
BETWEEN:
THE STATE PROJECT DIRECTOR
RASHTRIYA MADHYAMIKA SHIKSHANA ABHIYANA
NEW ANNEX BUILDING
K.R. CIRCLE, BENGALURU-560 001.
...APPELLANT
(BY SMT. SHWETHA KRISHNAPPA, AGA)
AND:
KBR INFRATECH LIMITED
A REGISTERED COMPANY
HAVING ITS REGISTERED OFFICE AT:
No.1, 1ST FLOOR, 8TH CROSS
TATA NAGAR, BALAJI LAYOUT
Digitally signed RMV EXTENSION, 2ND STAGE POST
by
CHANNEGOWDA BENGALURU-560 094
PREMA REPRESENTED BY ITS
Location: High
Court of MANAGING DIRECTOR
Karnataka SRI. K. BABU RAJU
S/O SRI. K. RAMAKRISHNAMA RAJU
AGED ABOUT 56 YEARS.
...RESPONDENT
(BY SMT. VANI H, ADVOCATE)
THIS COMAP IS FILED UNDER SECTION 13(1-A) OF THE
COMMERCIAL COURTS ACT, 2015 READ WITH SECTION
37(1)(c) OF THE ARBITRATION AND CONCILIATION ACT, 1996,
PRAYING TO CALL FOR RECORDS IN COM.A.P. 26/2024, FROM
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COMAP No. 538 of 2024
HC-KAR
THE HONBLE LXXXV ADDITIONAL CITY CIVIL AND SESSIONS
JUDGE AT BENGALURU AND ETC.
THIS APPEAL, COMING ON FOR HEARING ON
INTERLOCUTORY APPLICATION THIS DAY, JUDGMENT WAS
DELIVERED THEREIN AS UNDER:
CORAM: HON'BLE MRS. JUSTICE ANU SIVARAMAN
and
HON'BLE MR. JUSTICE RAJESH RAI K
ORAL JUDGMENT
(PER: HON'BLE MRS. JUSTICE ANU SIVARAMAN)
This appeal is filed being aggrieved by the judgment
dated 12.09.2024 passed by the LXXXV Additional City
Civil and Sessions Judge, Bengaluru (Commercial Court) in
Com.A.P.No.26/2024.
2. We have heard Smt. Shwetha Krishnappa,
learned Additional Government Advocate appearing for the
appellant and Smt. Vani. H, learned counsel appearing for
the respondent.
3. When the matter was taken up for hearing
today, the learned counsel appearing for the respondent
submits that the issues raised in this Commercial Appeal
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have already been considered by a co-ordinate Bench of
this Court in Commercial Appeal No.133/2025 and the
appeal has been dismissed by judgment dated
30.07.2025. The copy of the judgment is placed before us.
4. The learned Additional Government Advocate
appearing for the appellant however contended that the
additional grounds have been raised in this appeal and
that the grant of interest by the Arbitral Tribunal at the
rate of 12% per annum is completely excessive and is not
informed by any reasons. It is further contended that the
Price Adjustment Clause had been specifically deleted from
the notified contract and the e-portal had also specifically
contained a note that the said clause stands deleted. It is
therefore contended that the finding of the Arbitral
Tribunal that the claimant was entitled to pay Price
Adjustment was untenable.
5. We have considered the contentions advanced.
We have also perused the appeal and the grounds raised
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therein. We notice that the specific contention raised in
the appeal is to the effect that the provision for price
escalation had been omitted from the award and that the
Arbitral Tribunal erred in awarding the claim as sought for.
It is further contended that though this aspect had been
specifically raised before the Commercial Court, the
contentions of the appellant were not properly considered.
Further, this appeal raises the question of award of
interest. It is contended that the award of interest at 12%
per annum by the learned Arbitrator was without any
discussion on the point and was therefore patently illegal.
It is submitted that though this aspect was specifically
raised before the Court, the said aspect has not been
considered at all.
6. Having considered the contentions advanced on
either side, we notice that the question with regard to
existence or otherwise of the Price Adjustment Clause and
the effect of a note in the e-portal regarding its deletion
has been considered by this Court in Commercial Appeal
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No.133/2025. This Court found that the finding of fact by
the Tribunal that the contract entered into between the
parties contained the price variation clause at clause
No.39 is, undisputed. It was therefore found that the
finding of the Arbitral Tribunal that the respondent was
entitled to the amount claimed on the basis of the price
variation clause, could not have been interfered with by
the Commercial Court exercising its limited powers under
Section 34 of the Arbitration and Conciliation Act, 1996.
7. In the instant case also, it is an admitted fact
that the contract signed between the parties contained the
price variation clause. This aspect has been specifically
considered by the learned Arbitrator. Further, with regard
to payment of interest, the learned Arbitrator found that
the contract in question provided for interest on delayed
payments. Having found that the claimant was entitled to
an amount of Rs.1,36,57,304/- towards price variation,
the learned Arbitrator also found that there was a delay of
1350 days in making the payment deducting 60 days as
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the period for processing and releasing payments, interest
at 12% per annum was awarded for the amount found to
be payable.
8. Having considered the contentions advanced,
we find that the learned Arbitrator had considered the
provisions of the contract and had found it fit to award
interest at the rate of 12% per annum. The award of
interest was a specific ground of challenge raised by the
appellant before the Commercial Court. The said aspect
was considered as point No.1 in the judgment under
appeal and the Court has come to the conclusion that the
award of interest by the sole Arbitrator cannot be
interfered with. Further, all other contentions raised stand
covered by the judgment in Commercial Appeal
No.133/2025. We find no reason to interfere in the
judgment of the Commercial Court upholding the award of
the Arbitrator in these proceedings. The appeal therefore
fails and is accordingly dismissed.
The parties shall suffer their respective costs.
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All pending interlocutory applications shall stand
dismissed.
Sd/-
(ANU SIVARAMAN)
JUDGE
Sd/-
(RAJESH RAI K)
JUDGE
CP
