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2022 DIGILAW 1385 (KAR)

Mphasis Limited v. Strategic Outsourcing Services Private Limited

2022-10-19

B.M.SHYAM PRASAD

body2022
JUDGMENT 1. These petitions are by the first defendant in Com O.S.No.215/2019 on the file of the LXXXII Additional City Civil and Sessions Judge, Bengaluru (for short, 'the commercial Court'). The petitioner has impugned the commercial Court's orders dtd. 23/12/2021 and 02 02.2021. The commercial Court by the first order dtd. 23/12/2021, while marking the documents produced by the first respondent, has observed that the first respondent has not admitted a copy of the arbitral award dtd. 26/11/2019 in the arbitral proceedings between the petitioner and the first respondent and as such, one of the writ petitions. The commercial Court's observation is thus: "Though the Plaintiff has filed Statement of Admissions and Denials on 11/2/2020, he has not admitted any of the documents filed by the Defendants". The commercial Court by the next impugned order dtd. 2/2/2021 has allowed the first respondent's application (I.A.No.IV) under Sec. 16(2) of the Commercial Courts Act, 2015 (for short, 'the Act 2015') read with Sec. 151 of the Code of Civil Procedure, 1908 to club this suit in Com O.S.No.215/2019 for consideration along with Com.A.P.No.37/2020. 2. Sri. Dhananjay Joshi, the learned Senior counsel for the petitioner and Sri. Sanjay Krishna V, the learned counsel, are heard for final disposal of the petitions, and they submit that if the arbitration award dtd. 26/11/2019 relates to the dispute inter se the petitioner and the first respondent over a settlement agreement, the first respondent's present suit is for damages. They submit that the copy of the arbitral award dtd. 26/11/2019 is not marked only because the first respondent has filed its Statement of Admission/Denial contending that this document is unstamped 3. Sri. Dhananjay Joshi submits that commercial Court, given the provisions of Order XI Rule 4 Sub Rule 6 of the Act, 2015 as applicable to the commercial Courts, should have seen whether the petitioner has unduly refused to admit an indisputable document. He canvasses that it is incumbent, given the provisions of Order XI Rule 4 Sub Rule 6, that the commercial Courts must examine whether the refusal to admit a document is proper and if it could be persuaded to opine that it is improper, costs may have to be imposed. He canvasses that it is incumbent, given the provisions of Order XI Rule 4 Sub Rule 6, that the commercial Courts must examine whether the refusal to admit a document is proper and if it could be persuaded to opine that it is improper, costs may have to be imposed. These provisions are to ensure that the dispute is identified in its core for a decision on whether there must be a summary trial under Order XIIIA of the Act, 2015 or a trial after Case Management Hearing under Order XVA of CPC. 4. It is obvious that the commercial Court has lost track of the provisions of Order XI Rule 4 Sub Rule 6 of the Act, 2015[In the event that the Court holds that any party has unduly refused to admit a document under any of the above criteria,-costs (including exemplary costs) for deciding on admissibility of a document may be imposed by the Court on such party] in recording the first respondent's refusal to admit the award dated 26.11. 2019. When this is put to Sri. Sanjay Krishna V, the learned counsel for the first respondent, submits that if there can be a statement at the Bar even today that the award dtd. 26/11/2019 is duly stamped, the first respondent would waive the objection and the document could be marked. On instructions, Sri. Dhananjay Joshi submits that this award dtd. 26/11/2019 is duly stamped and the certificate of stamp is also filed before the commercial Court. In these circumstances, it would be necessary for this Court to interfere with the commercial Court's order dtd. 23/12/2021 and call upon the commercial Court to mark the copy of the award dtd. 26/11/2019 as the petitioner's document. 5. The commercial Court by the next impugned order dtd. 2/2/2021, on the first respondent's application, has directed the commercial suit, which is essentially for the first respondent's vindication for damages not just from the petitioner but also from its directors, to be clubbed with the proceedings under Sec. 34 of the Arbitration and Conciliation Act, 1996 (for short, 'the Act 1996') as against the arbitral award dtd. 26/11/2019. Sri. Sanjay Krishna V draws the attention of this Court to the petitioner's pleading in the commercial suit to justify the application. 26/11/2019. Sri. Sanjay Krishna V draws the attention of this Court to the petitioner's pleading in the commercial suit to justify the application. He submits that one of the defenses is that the first respondent's cause for damages is substantially and directly an issue in the arbitral proceedings and if this be so, the commercial Court is justified in clubbing the both the suits. 6. However, it remains salient that the scope of the jurisdiction under Sec. 34 of the Act 1996 is confined to the grounds available there under and the merits of the petitioner's grievance with the arbitral award dtd. 26/11/2009 must necessarily be examined, given the limited contours of such jurisdiction. Therefore, the causes for proceedings under Sec. 34 of the Act, 1996 and for damages in Com O.S.No.215/2019 cannot be called the same inviting different opinions on similar cause. This material aspect has been overlooked by the commercial Court and therefore, this Court must intervene with the impugned order dtd. 2/2/2021. For the afore reasons, the following: ORDER [a] The writ petition in W.P.No.2522/2022 is allowed in part and the commercial Court's order dtd. 23/12/2021 is modified calling upon the commercial Court to mark a copy of the award dtd. 26/11/2019 filed by the petitioner as the petitioner's document. [b] The writ petition in W.P.No.4281/2021 is allowed quashing the commercial Court's order dtd. 2/2/2021.