Sri Dadu Lurappa vs Bruhat Bengaluru Maha Nagara Palike

A.S. Bopanna, J.—The petitioner is before this Court assailing the order dated 03.08.2013 impugned at Annexure-A to the petition. Further, direction is also sought for issue of mandamus to release the amount. The respondents have filed their objection statement.

Though Sri K.M. Nataraj, learned Senior Counsel representing the petitioner would refer to the contentions to point out that the order impugned is without basis, at the outset it is seen from the agreement entered into between the petitioner and the respondent as at Annexure-R1, that it provides for dispute resolution vide Article 8 to the said agreement. The learned Senior Counsel would however refer to the order impugned at Annexure-A, wherein reference is made to the approval having been granted by the Office of the Commissioner before the action against the petitioner to terminate the contract and forfeit the security has been passed, though the ultimate order was passed by the Executive Engineer. It is therefore pointed out that in such circumstance, when the Commissioner himself is appointed as the sole Arbitrator, at least there should be sufficient protection to the petitioner to ensure that the Commissioner does not refer to the earlier proceedings, but would only consider the materials placed before him in the arbitration proceedings.

Sri Subramanya, learned counsel for the respondents would submit that the Commissioner being the Head of the institution, no doubt all files would have to be rooted through the Commissioner and it is in that circumstance while passing the order at Annexure-A, the file has been rooted and the Executive Engineer has referred to the same in the order. It is pointed out that when he acts as an Arbitrator under the agreement, the proceedings would be conducted based on the materials that would be available in the proceedings and in terms of the provisions of the Arbitration and Conciliation Act.

Keeping these aspects in view and also taking note of the fact that the documents and the evidence to be produced would have to be appreciated in the present facts since allegations and counter allegations are made with regard to the performance as well as non-performance under the contract raising several disputed question of fact, certainly it would not be possible for this Court to decide the issue in a writ petition. Therefore, since the ''Alternate Dispute Resolution Mechanism'' has been agreed between the parties by way of arbitration, the petitioner is relegated to raise his claim before the Commissioner, Bruhat Bangalore Mahanagara Palike who is agreed as the sole Arbitrator under the said Clause. However, it is made clear that the Commissioner would not refer to any of his earlier decisions relating to the contract awarded to the petitioner and the subsequent performance thereof as the basis, except to refer to the documents and the oral evidence if any placed before him in justification of the order passed and only on that basis come to his conclusion in accordance with law.

Having arrived at the said conclusion, the next aspect which also requires to be noticed is, the learned Senior Counsel for the petitioner would refer to Article 8.2 of the agreement in its entirety and would submit, when the matter is referred to arbitration and pending consideration, the parties would have to perform their respective obligation under the agreement. In that context, it is pointed out that till the arbitration proceedings are completed, the petitioner should be permitted to perform his obligation under the agreement and the respondents should not prevent him.

On this aspect, what is necessary to be noticed is that this Court while considering the application for vacating stay had allowed the respondents to proceed further in the matter as indicated therein except limiting scope of consideration relating to termination, blacklisting and forfeiture. That apart, in a circumstance when the contract itself has been terminated on the ground of non-performance and more particularly when it relates to the Solid Waste Disposal and Management, I am of the opinion that permitting continuation in that circumstance would not arise, but in any event to protect the interest of the petitioner, the Commissioner who has to act as the Arbitrator would have to be directed to complete the proceedings in a time frame so that the rights of the parties would be determined. Hence, the Arbitrator is directed to complete the proceedings as expeditiously as possible, but not later than two months from the date of its commencement. Since, Article 8.1 of the said agreement also provides for amicable resolution prior to Arbitration, before the Commissioner commences the arbitration in the manner as indicated above, the respondents shall also have a meeting as contemplated under Article 8.1 of the agreement. The meeting to be convened shall be notified to the petitioner. The period spent on such meeting shall not be construed as the period granted for arbitration. Insofar as the forfeiture of security deposit and blacklisting, it shall not be effect now but the same shall remain subject to the arbitration proceedings since that has already been protected by this Court by the interim order. All contentions with regard to the validity or otherwise of Annexure-4 are left open to be urged in the arbitration proceedings.

In terms of the above, the petition stands disposed of.