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IN THE HIGH COURT OF KARNATAKA AT BENGALURU
K. V. ARAVIND: J
Anandamurthy S/o Late Chikkabeeranna – Appellant
Versus
South Western Railway, Bengaluru – Respondent
| Table of Content |
|---|
| 1. context of the tender process and termination. (Para 2 , 3) |
| 2. arguments for and against the withholding of deposits. (Para 4 , 5) |
| 3. court's view on arbitration as a dispute resolution mechanism. (Para 6 , 7 , 8 , 9 , 11 , 15 , 16) |
| 4. petitioner expresses concern over arbitration's effectiveness; respondent acknowledges arbitrability. (Para 10) |
| 5. respondent's obligations regarding damages and arbitration. (Para 12 , 13 , 14) |
| 6. final order regarding arbitration and refund of amounts. (Para 17) |
ORDER :
1. Heard Sri. H. Giridhar, learned counsel for the petitioner and Sri Vaibhav Ravi Malimath, learned counsel for the respondent.
2. The instant writ petition is filed challenging the termination notice dated 10.08.2023, Annexure-E, issued by the respondent.
3. The brief facts of the case are that the respondent invited tender No. TK-RDG-72 for providing skilled manpower for various services, including Professional Housekeeping, Waste Disposal, Sewerage Works, Security, Rest Houses, Offices, Field Work, Gardening, and other Engineering works, as well as providing Laundry Services in Rest Houses at South Railway Construction Offices in Bengaluru. The petitioner participated
The court ruled that disputes arising under a contract with an arbitration clause are not maintainable in writ petitions, emphasizing the arbitration process must be followed for resolution.
The court emphasized that interim relief for disputes under arbitration must be sought through the Arbitration and Conciliation Act rather than through a writ petition.
Writ under Article 226 not maintainable for contractual termination disputes involving factual questions when arbitration clause exists, natural justice not violated, and no public law issue raised.
Premature termination of a contract does not grant right to forfeit the security deposit without proof of actual loss, as it constitutes a penalty under the contract law.
Disputes arising from contract termination must be resolved through arbitration, not writ jurisdiction, especially when complicated questions of fact are present.
The court held that a contract's termination after expiration is unlawful, necessitating the return of forfeited amounts when unjustified actions take place.
The termination of a contract was deemed arbitrary due to non-consideration of the contractor's representations, violating the principles of natural justice.
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