- 1 - HC-KAR NC: 2025:KHC-D:9981 CMP No. 100017 of 2024 C/W CMP No. 100016 of 2024 IN THE HIGH COURT OF KARNATAKA, DHARWAD BENCH DATED THIS THE 7TH DAY OF AUGUST, 2025 BEFORE THE HON'BLE MR. JUSTICE G BASAVARAJA CIVIL MISC PETITION NO. 100017 OF 2024 C/W CIVIL MISC PETITION NO. 100016 OF 2024 IN CMP NO.100017/2024 BETWEEN: M/S. PRADEEPA CONSTRUCTION COMPANY REPRESENTED BY ITS PARTNER SRI. JAGANNATH SHETTY ENGINEERING'S AND CONTRACTORS, ADMN. OFFICE.4, VRINDAVAN APARTMENT, OPP. BUB COLLEGE, VIDYANAGAR, HUBLI-580021. …PETITIONER (BY SRI. C.S. SHETTAR, ADVOCATE) AND: 1. URBAN DEVELOPMENT DEPARTMENT (UDD) GOVT. OF KARNATAKA (GOK) REPRESENTED BY ITS THE MANAGING DIRECTOR BELAGAVI SMART CITY LTD., 1ST FLOOR, BUDA OFFICE, BELAGAVI-590006. 2. THE SECRETARY URBAN DEVELOPMENT DEPARTMENT GOVERNMENT OF KARNATAKA VIKAS SOUDHA, BANGALORE-560001. 3. THE EXECUTIVE ENGINEER BELAGAVI SMART CITY LTD., Digitally signed by MALLIKARJUN RUDRAYYA KALMATH Location: HIGH COURT OF KARNATAKA DHARWAD BENCH Date: 2025.08.16 10:26:09 +0530 - 2 - HC-KAR NC: 2025:KHC-D:9981 CMP No. 100017 of 2024 C/W CMP No. 100016 of 2024 1ST FLOOR, BUDA OFFICE, BELAGAVI -590006 …RESPONDENTS (BY SRI. PRAVEENA Y. DEVARADDIYAVARA, HCGP FOR R2; SRI. K.M. WALVEKAR AND SRI. PRASAD SIDHANK, ADVOCATES FOR R1 AND R3) THIS CIVIL MISCELLANEOUS PETITION FILED UNDER SECTION 11 SUB SECTIONS (5), (6) AND (8) R/W. SECTION 12 OF THE ARBITRATION AND CONCILIATION ACT, 1996 R/W. THE RULES FRAMED BY THE HON’BLE HIGH COURT OF KARNATAKA IN NOTIFICATION NO.LCA/1/402/1996 DATED 13.11.1996, PRAYING TO, PASS AN APPROPRIATE ORDER FOR APPOINTMENT OF INDEPENDENT AND IMPARTIAL SOLE ARBITRATOR AS PER THE PETITIONER REQUESTS UNDER THE PROVISIONS OF SECTION 11(6) SUB-SECTION (A) AND (C) OF THE ARBITRATION AND CONCILIATION (AMENDMENT) ACT, 2019 TO ADJUDICATE THE DISPUTES/CLAIMS BETWEEN THE PARTIES FOR THE WORK OF DEVELOPMENT OF MAHATMA PHULE GARDEN AT TILAKWADI IN BELAGAVI CITY AGREEMENT DATED 12.7.2019 AND TO PASS AN APPROPRIATE ORDER AS PER THE CLAUSE 4.1 OF SCC AND ALSO (AMENDMENT) ACT, 2019 BY APPOINTING INDEPENDENT AND IMPARTIAL SOLE ARBITRATOR UNDER SECTION 11(8) OF THE ACT FOR SETTLEMENT OF DISPUTES/CLAIMS BETWEEN THE PARTIES AS PER THE SPECIAL CONDITIONS OF CONTRACT. PASS SUCH OTHER ORDERS AS THE HONBLE COURT DEEMS FIT IN THE INTEREST OF JUSTICE AND EQUITY AND MAKE ANY FURTHER SCHEME FOR DEALING WITH THE MATTER AS CONTEMPLATED UNDER SECTION 11 OF THE ARBITRATION AND CONCILIATION (AMENDMENT) ACT 2019. IN CMP NO.100016/2024 BETWEEN: M/S. PRADEEP CONSTRUCTION COMPANY REPRESENTED BY ITS PARTNER SRI. JAGANNATH SHETTY, ENGINEERING'S AND CONTRACTORS, ADMN. OFFICE.4, VRINDAVAN APARTMENT OPP. BUB COLLEGE, VIDYANAGAR, HUBLI-580021. …PETITIONER (BY SRI. C.S SHETTAR, ADVOCATE) - 3 - HC-KAR NC: 2025:KHC-D:9981 CMP No. 100017 of 2024 C/W CMP No. 100016 of 2024 AND: 1. URBAN DEVELOPMENT DEPARTMENT (UDD) GOVT. OF KARNATAKA (GOK) REPRESENTED BY ITS THE MANAGING DIRECTOR BELAGAVI SMART CITY LTD., 1ST FLOOR, BUDA OFFICE, BELAGAVI-590006. 2. THE SECRETARY URBAN DEVELOPMENT DEPARTMENT GOVERNMENT OF KARNATAKA VIKAS SOUDHA, BANGALORE-560001. 3. THE EXECUTIVE ENGINEER BELAGAVI SMART CITY LTD., 1ST FLOOR, BUDA OFFICE, BELAGAVI -590006 …RESPONDENTS (BY SRI. PRAVEENA Y. DEVARADDIYAVARA, HCGP FOR R2; SRI. K.M. WALVEKAR AND SRI. PRASAD SIDHANK, ADVOCATES FOR R1 AND R3) THIS CIVIL MISCELLANEOUS PETITION FILED UNDER SECTION 11 SUB SECTIONS (5), (6) AND (8) R/W. SECTION 12 OF THE ARBITRATION AND CONCILIATION ACT, 1996 R/W. THE RULES FRAMED BY THE HON’BLE HIGH COURT OF KARNATAKA IN NOTIFICATION NO.LCA/1/402/1996 DATED 13.11.1996, PRAYING TO, PASS AN APPROPRIATE ORDER FOR APPOINTMENT OF INDEPENDENT AND IMPARTIAL SOLE ARBITRATOR AS PER THE PETITIONER REQUESTS UNDER THE PROVISIONS OF SECTION 11(6) SUB-SECTION (A) AND (C) OF THE ARBITRATION AND CONCILIATION (AMENDMENT) ACT, 2019 TO ADJUDICATE THE DISPUTES/CLAIMS BETWEEN THE PARTIES FOR THE WORK OF “DEVELOPMENT OF MAHATMA PHULE GARDEN AT TILAKWADI IN BELAGAVI CITY” AGREEMENT DATED 12.7.2019. AND TO PASS AN APPROPRIATE ORDER AS PER THE CLAUSE 4.1 OF SCC AND ALSO (AMENDMENT) ACT, 2019 BY APPOINTING INDEPENDENT AND IMPARTIAL SOLE ARBITRATOR UNDER SECTION 11(8) OF THE ACT FOR SETTLEMENT OF DISPUTES/CLAIMS BETWEEN THE PARTIES AS PER THE SPECIAL CONDITIONS OF CONTRACT. PASS SUCH OTHER ORDERS AS THE HONBLE COURT DEEMS FIT IN THE INTEREST OF JUSTICE AND EQUITY AND MAKE ANY FURTHER SCHEME FOR - 4 - HC-KAR NC: 2025:KHC-D:9981 CMP No. 100017 of 2024 C/W CMP No. 100016 of 2024 DEALING WITH THE MATTER AS CONTEMPLATED UNDER SECTION 11 OF THE ARBITRATION AND CONCILIATION (AMENDMENT) ACT 2019. THESE PETITIONS, COMING ON FOR ADMISSION, THIS DAY, ORDER WAS MADE THEREIN AS UNDER: COMMON ORAL ORDER (PER: THE HON'BLE MR. JUSTICE G BASAVARAJA) 1. The petitioner has filed these petitions under Sections 5, 6, 8 and 11 read with Section 12 of the Arbitration and Conciliation Act, 1996, with following prayer: i. To pass an appropriate order for appointment of independent and impartial sole arbitrator as per the petitioner requests under the provisions of section 11(6) sub-section (a) and (c) of the arbitration and conciliation (amendment) act, 2019 to adjudicate the disputes/claims between the parties for the work of “Development of Mahatma Phule Garden at Tilakwadi in Belagavi City” agreement dated 12.7.2019. ii. To pass an appropriate order as per the clause 4.1 of SCC and also (amendment) act, 2019 by appointing independent and impartial sole arbitrator under section 11(8) of the act for settlement of disputes/claims between the parties as per the special conditions of contract. - 5 - HC-KAR NC: 2025:KHC-D:9981 CMP No. 100017 of 2024 C/W CMP No. 100016 of 2024 iii. Pass such other orders as the Hon’ble court deems fit in the interest of justice and equity. iv. Make any further scheme for dealing with the matter as contemplated under section 11 of the arbitration and conciliation (amendment) act 2019. 2. Learned counsel for the petitioner submitted that the petitioner M/S Pradeep Construction Company, represented by its Partner Sri.Jagannath Shetty, Engineers & Contractors, Admn. Ofice: #4, Vrindavan Apratment, Opp: BUB College, Vidyanagar, Hubli-580021 was entrusted with executing the work of Construction of Footpath and Cycle Track (NMV) from APMC Junction to Azamnagar 'Y' Junction and Azamnagar to INMARK Showroom (Pkg-3) in Belagavi, vide agreements dated 12.07.2019 and 30.7.2019. 3. The plaintiff is a Class I contractor having experience in Civil Contract Works in the State of Karnataka and successfully completed number of Government works in PWD department, National Highways, and Urban Development Department and - 6 - HC-KAR NC: 2025:KHC-D:9981 CMP No. 100017 of 2024 C/W CMP No. 100016 of 2024 Karnataka Power Corporation Ltd etc., to the best satisfaction of the concerned departments. The address for service of notices, summons etc., as shown in the above cause title and that of his Advocate Sri.P.Harischandra Reddy and Sri.C.S. Shettar Advocates, 'Tapomay' #12, Lake City, 4th Right from Sai Temple, Kelageri Road, Dharwad-580 008. 4. The Respondent No.1 is The Managing Director, Belagavi Smart City Ltd, Belagavi, Respondent No.2-the Secretary, Urban Development Department, Government of Karnataka, Vikas Soudha, Bangalore- 560 001 and respondent No.3-the Executive Engineer, Belagavi Smart City Ltd, Belagavi. The addresses for service of all notices on the respondents are as shown in the above cause title. 5. The first Respondent herein awarded the above work to the petitioner on tender basis at a cost of Rs.6.07 Crore being the lowest tender. The work order was issued 30.07.2019. The agreement was entered between the parties dated 30.07.2019 (Annexure-P1). The work to be - 7 - HC-KAR NC: 2025:KHC-D:9981 CMP No. 100017 of 2024 C/W CMP No. 100016 of 2024 completed by 29.07.2020, stipulating the period of performance being 12 months. During the execution of the work the respondents have committed delays, defaults and breach of contract while executing the work by the petitioner. The first respondent having accepted the delays on their part extended the period 4 times from 29.7.2020 to 30.6.2022 without penalty, and the petitioner has completed the project within the extended date to the best satisfaction of the Respondents. 6. Further it is submits that the petitioner has suffered huge losses due to delays, defaults and breach of contract committed by the respondents during the execution of the work. As the delays were attributable to the respondents, claiming compensation as per Clause 38 of the conditions of the contract of the tender document (Annexure P.2), the petitioner submitted the final bill on 30.03.2023 for a sum of Rs.6,49,61,853/- along with the interest @18% per annum from the date of due to the date of payment. But the first respondent has not settled - 8 - HC-KAR NC: 2025:KHC-D:9981 CMP No. 100017 of 2024 C/W CMP No. 100016 of 2024 the final accounts along with pending claims as per clause 47.1 of GCC as per the request of the petitioner dated 12.09.2023. Hence, disputes have arisen between the parties for settlement of pending claims along with final bill. Since the first respondent has not acted for amicable settlement as per clause 4.1 of the special conditions of contract, the petitioner approached the Deputy Commissioner through its letter dated 7.12.2023 (Annexure-P.5) for amicable settlement. The Deputy Commissioner has not settled the dispute between the parties. Clause 4.1 of SCC that provides that if the disputes are not settled, the first appeal shall lie with the Secretary Urban Development Department, Govt. of Karnataka who shall be the sole Arbitrator. The sole Arbitrator, as per clause 4.1 of SCC, was the first respondent department, so the petitioner approached the first respondent for appointment of independent or impartial sole arbitrator as per Section 12 of Arbitration and Conciliation Act, 1996 for settlement of dispute - 9 - HC-KAR NC: 2025:KHC-D:9981 CMP No. 100017 of 2024 C/W CMP No. 100016 of 2024 between the parties in its letter dated 22.4.2024 (Annexure-P.6) by giving notice to the first respondent and copy to sole Arbitrator Secretary Urban Development Department, Govt. of Karnataka and the same was received by the respondents on 23.04.2024 (Annexure- P.7). 7. It is alleged that the contract agreement between the parties dated 30.07.2019, entered into between the petitioner and respondents provides for Arbitration Clause for settlement of disputes/claims through Arbitration. 8. Further, he submits that as per Clause 4.1 there is a procedure prescribed for the appointment of an Arbitrator. 9. Despite the petitioner having filed an appeal before the Deputy Commissioner under Clause 4.1 of the Special Conditions of Contract dated 07.12.2023, no steps have been taken by the Deputy Commissioner to resolve the dispute between the parties. The petitioner has also - 10 - HC-KAR NC: 2025:KHC-D:9981 CMP No. 100017 of 2024 C/W CMP No. 100016 of 2024 approached the Managing Director of Belagavi Smart City. As per the requisition dated 22.04.2024, the Secretary, Urban Development Department (UDD), Government of Karnataka, has also failed to resolve the dispute. Hence, as the concerned authorities have not taken any steps to resolve the dispute between the parties, the petitioner has approached this Court seeking appointment of an Arbitrator. Further, he submits that the Secretary, Urban Development Department (UDD), Government of Karnataka, has also not taken any action in the matter. 10. Sri. K.M.Walvekar and Prasad Sidhanthi, learned counsel for the respondent Nos.1 and 3 and Sri.Praveena Y Devareddiyavara, learned HCGP for respondent No.1 have no objection to appoint the Secretary, Urban Development Department (UDD) Government of Karnataka, as Arbitrator to settle the dispute. 11. In view of the submission of the learned counsel for both parties, I proceed to pass the following: - 11 - HC-KAR NC: 2025:KHC-D:9981 CMP No. 100017 of 2024 C/W CMP No. 100016 of 2024 ORDER i. Petitions are allowed. ii. The Secretary, Urban Development Department (UDD), Government of Karnataka is appointed as Arbitrator to resolve the dispute between the parties in terms of the agreements between the parties dated 30.07.2019 and 12.07.2019 in accordance with the Acts and Rules. iii. Send copy of this order with copy of agreements to the Arbitrator-Secretary Urban Development Department (UDD) Government of Karnataka, for taking necessary action. Sd/- (G BASAVARAJA) JUDGE AC List No.: 1 Sl No.: 49