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IN THE HIGH COURT OF KARNATAKA AT BENGALURU
N.V. ANJARIA, C.J., KRISHNA S DIXIT, J.
M/s. BBP Studio Virtual Bharat Pvt. Ltd. – Appellant
Versus
Dr. Selvakumar. S - Respondent
C.C.C NO.495 OF 2023 (CIVIL) C/W WRIT APPEAL NO.1095 OF 2023 (GM-RES) AND WRIT APPEAL NO.1266 OF 2023 (GM-RES)
Decided on : 14-06-2024
Contract - Writ Jurisdiction - Karnataka High Court Act, 1961 - Sections 4 - The court emphasized that disputes arising from contractual obligations, especially involving state authorities, should be resolved through arbitration rather than writ jurisdiction, highlighting the limited scope of judicial review in such matters.
Fact of the Case:
The petitioner, a film production house, was contracted to create a 3D film for a government event. After completing the film, the contract was abruptly canceled by the respondents, leading to a writ petition for relief and payment.
Finding of the Court:
The court found that the dispute was purely contractual and that the learned Single Judge erred in exercising writ jurisdiction instead of directing the parties to arbitration as per the contract's arbitration clause.
Issues: Whether the learned Single Judge was correct in issuing a writ of mandamus for payment and reinstating the contract, given the contractual nature of the dispute.
Ratio Decidendi: The court held that disputes involving contractual obligations, especially with state entities, should be adjudicated through civil proceedings or arbitration, not through writ jurisdiction.
Result: The appeals were allowed, and the judgment of the learned Single Judge was set aside.
JUDGMENT :
Preferred under Section 4 of the Karnataka High Court Act, 1961, the two appeals arise from the judgment and order dated 25.01.2023 passed by learned Single Judge in Writ Petition No.21308 of 2022. Writ Appeal No.1095 of 2023 is filed by the Invest Karnataka Forum who was original respondent No.2, whereas in the other writ appeal, original respondent No.1-State of Karnataka is the appellant.
2. Both the appellants are aggrieved by the judgment and order which contained the following operative directions,
(ii) The impugned communication dated 25-10-2022 issued by the 3rd respondent stands quashed.
(iii) A mandamus issues to the 1st respondent/ State to release balance payments due to the petitioner in terms of its invoice dated 27.10.2022.
(iv) The petitioner is at liberty to seek arbitration of any other dispute that remains unresolved, apart from what is considered in the case at hand.”
2.1 In the writ petition, following prayers are made,
(ii) to declare that the action of the respondents of withdrawing the work order dated 11.08.2022 by email communication dated 25.10.2022 to be arbitrary and illegal.
(iii) to consider the email dated 27.10.2022 issued by the petitioner requesting them to take hand over of the 3D film created by the petitioner in terms with the work order dated 11.08.2022.
(iv) to take hand over the 3D film created by the petitioner and sent to them by email communication dated 28.10.2022 in terms with work order dated 11.08.2022.
(v) to direct the respondent to show the final version of the 3D film created by the petitioner and sent to the respondent by email dated 28.10.2022, in the upcoming Global Investors meet 2022 organised by the respondent.
(vi) to direct the respondents to release the balance payments due to the petitioner as per invoice dated 28.10.2022 in terms with the work order dated 11.08.2022.”
2.2 After the aforesaid judgment and order of learned Single Judge, the respondents filed Review Petition No.104 of 2023 which was rejected by the learned Single Judge as per his order dated 7th August 2023. Thereafter, the challenge in the present writ appeal was lodged.
3. Noticing the facts, M/s.BBP Studio Virtual Bharat Private Limited-the petitioner stated that it was a renowned film production house engaged in the business of producing feature films, documentaries, commercials and music videos, and that it produced acclaimed albums such as Vande Mataram and Jana Gana Mana. It was stated that it directed music video of official song in 2010 Commonwealth Games and also for the opening ceremony. It was stated that respondent No.2–Invest Karnataka Forum was a non-profit company established under the Companies Act, 2013 to promote investments and to attract the investments globally by the Government of Karnataka. The Chairman of the forum happens to be the Minister for Large and Medium Industries and the Directors of the company comprise of government and industry leaders.
3.1 It was the case of the petitioner that the Government of Karnataka held Global Investors Meet titled “Invest Karnataka 2022” at Bengaluru during November 2-4, 2022 which aimed at attracting investments from around the world. On 16.06.2022, it was averred, respondent No.3-Marketing Communication and Advertising Limited issued an invitation for Expression of Interest for appointment of business associates for the said event of Global Investors Meet and other media services by issuing tender. The empanelment of business associates was called in four categories based on valuation of the work ranging from Rs.25 lakhs to over Rs.1 crore.
3.1.1 The petitioner
Writ jurisdiction is not appropriate for resolving contractual disputes, especially when an arbitration clause exists in the agreement.
An assignment agreement is valid and enforceable where parties have acted under the agreement, and lack of counterclaims against payment liability affirms this position.
A State entity must act in accordance with principles of fairness and justice in contractual obligations, and cannot withhold payments without a clear determination of dues, as this constitutes arbit....
The extraordinary jurisdiction of this Court can be exercised in view of the admission made by the 3rd respondent regarding payments to be payable to the petitioner.
Contractual agreement - Whether existence of arbitral agreement between parties that High Court of Delhi alone will have jurisdiction to try dispute arising out of contract is enforceable in law - Un....
Breach of contract established as defendants failed to commence movie production, entitling plaintiff to recover funds advanced with interest.
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