Back
IN THE HIGH COURT OF KARNATAKA AT BENGALURU
K.Somashekar, Chillakur Sumalatha, JJ.
U B Shetty, S/O Madayya Shetty - Appellant
Versus
State Of Karnataka Represented By Its Principal Secretary Department Of Health And Family Welfare And Ors. – Respondents
Commercial Appeal No.359 of 2022, Commercial Appeal No.360 of 2022, Commercial Appeal No.361 of 2022, Commercial Appeal No.362 of 2022, Commercial Appeal No.363 of 2022
Decided On : 19-09-2024
| Table of Content |
|---|
| 1. basic facts of the case. (Para 1 , 2 , 3 , 4) |
| 2. arguments against the arbitral award. (Para 5 , 8 , 9 , 10 , 11 , 12 , 13 , 14 , 15 , 16) |
| 3. claims of damages must be substantiated by evidence. (Para 6) |
| 4. arguments against the arbitral award's reasoning. (Para 7 , 18) |
| 5. court identifies flaws in arbitrator's evaluation. (Para 27 , 31 , 32 , 33) |
| 6. remand of cases for re-evaluation ensures justice is served. (Para 30 , 36) |
| 7. criteria for public policy violation in awards. (Para 34 , 37 , 40) |
| 8. remand for reassessment of claims. (Para 49 , 51 , 52) |
JUDGMENT :
K.SOMASHEKAR, J.
These Commercial Appeals are filed by the common appellant namely, Shri U.B. Shetty, under Section 13(1)(A) of the Commercial Courts Act , 2015 read with Section 37 (1)(c) of the Arbitration and Conciliation Act, 1996. The Appellant is aggrieved by the individual Judgments, all dated 30th June 2022 passed in Comm. A.S. No.113/2019, Comm. A.S. No.114/2019, Comm. A.S. No.115/2019, Comm. A.S. No.116/2019 and Comm. A.S. No.117/2019 respectively, by the Learned LXXXV Addl. City Civil and Sessions Judge (Commercial Court) at Bengaluru, dismissing each of the said Arbitration Suits filed by the Appellant/Contractor, under Section 34 of the Arbitration and Conciliation Act, 1996.
2. The brief facts of the cases necessary for adjudication, are as under:
The Appellant / contractor was a successful bidder for 14 projects pertaining to the renovation/expansion of Primary Health Centres (PHC); Maternity and Children Hospitals (MCH); Hospitals attached to the Medical Institutions, Taluka Level Hospitals (TLH) and District Hospitals (DH). Out of the aforementioned 14 works, the Appellant is said to have executed and successfully completed nine (9) works, within the prescribed period. With respect to the remaining five (5) projects, the Appellant was prevented from executing the works within time, due to inordinate delay attributable solely to the Respondents / Government and breach of contract by the Respondents. The said 5 projects are depicted in the table below:
| Name of the Project for renovation & Expansion | Comm. A.S. No. | COMAP No. | Extra time taken for completion of the project. (in months) | Estimated cost (in akhs) | Tender amount (In Lakhs) | Date of work order | Agreed date of completion | Final cost of works (in lakhs) | Actual date of completion |
| District hospital, Madikeri | 117/2019 | 361/2022 | 31 | 580 | 520.74 | 27.03.1999 | 26.03.2001 | 696.04 | 27.10.2003 |
| MCH, Madikeri | 115/2019 | 360/2022 | 27 | 205 | 191.6 | 27.03.1999 | 26.09.2000 | 229.94 | 31.12.2002 |
| TLH, Virajpet | 116/2019 | 362/2022 | 22 | 398 | 395.26 | 08.09.2000 | 07.03.2002 | 454.15 | 30.01.2004 |
| District Hospital, Dharwad | 114/2019 | 363/2022 | 30 | 298 | 267.73 | 23.03.1999 | 22.09.2000 | 260.11 | 31.03.2003 |
| District Hospital (KIMS), Hubli | 113/2019 | 359/2022 | 37 | 330 | 263.91 | 03.09.1999 | 15.03.2001 | 220.29 | 30.03.2004 |
| TOTAL | 1811 | 1639.24 |
|
| 1860.53 |
| |||
3. The Appellant / Contractor, was said to have prevented from performing the Contract and completing the works assigned on time due to the failure on that part of the Respondents / Government in handing over the project site to the Appellant / contractor. The Appellant/contractor made several representations to the Respondents/Government, pursuant to which the matter pertaining to the escalation of amounts claimed by the Appellant was placed before the Project Governing Board during its 25th Meeting on 17.08.2002. In the said meeting, a decision was taken in favour of the Appellant that instead of terminating the contract and entrusting the works to some other contractor, the Appellant could be permitted to continue with the work and to try and complete the works by 31.03.2003, after negotiating the rates with the Appellant/contractor.
4. Accordingly, the above five works were completed through the same Appellant / Contractor, between 31.12.2002 and 30.03.2004. Thereafter, the Appellant/contractor submitted h
The court emphasized the necessity of thorough evidence evaluation in arbitration, allowing for remand due to prior oversights, reaffirming principles against unjust outcomes in legal proceedings.
The court emphasized that arbitral awards should not be interfered with solely based on disagreements with findings, affirming the limited grounds for appeal under Section 34 of the Arbitration Act.
The appeal was allowed, reinstating the arbitrator's award which concluded that the termination of the contract was illegal due to failure in fulfilling mutual obligations concerning site availabilit....
(1) Appeal against modified arbitral award – Merits of award are only to be gone into, if award is demonstrated to be contrary to public policy of India.(2) Arbitral proceedings are per se not compar....
Judicial intervention in arbitration is limited, focusing on procedural irregularities rather than merit assessments.
The court affirmed that arbitral awards challenging under Sections 34 and 37 are limited in scope, requiring clear evidence of illegality or perversion; otherwise, the Arbitrator's decision stands.
The judgment emphasizes the limited grounds for interference with arbitral awards under Section 34 of the Arbitration and Conciliation Act, highlighting the need for restraint by courts while examini....
The main legal point established in the judgment is the interpretation of contract terms, breach of contract, and the limited scope of interference with the arbitrator's award based on the violation ....
The appellate jurisdiction under section 37 is limited to the grounds prescribed under section 34. Courts cannot re-appreciate evidence or substitute their views for that of the arbitrator, provided ....
An indispensable Tool for Legal Professionals, Endorsed by Various High Court and Judicial Officers
Please visit our Training & Support
Center or Contact Us for assistance
Scan Me!
India’s Legal research and Law Firm App, Download now!
For Daily Legal Updates, Join us on :
Back to top
