Research › Search › Judgment

Karnataka High Court · body

2025 DIGILAW 1729 (KAR)

Karnataka Public Works, Ports Inland Water Transport Department, Represented By Its Executive Engineer, Pw And Iwt Department v. Patil Construction & Infrastructure Limited

2025-12-09

ANANT RAMANATH HEGDE

body2025
ORDER : ANANT RAMANATH HEGDE, J. Heard Sri Gangadhar J.M., learned Additional Advocate General appearing for the petitioner and the learned counsel appearing for the respondent. 2. In all the petitions the questions involved being the same, all petitions are clubbed together and disposed of by a common order. 3. The petitions are filed assailing the order dated 03.05.2025 passed by the learned Principal District Judge, Belagavi in granting the stay of the award on a condition that the petitioner has to deposit 25% of the award amount. 4. The petitions are also filed assailing the orders rejecting the application to review the said order directing 25% of the award amount to be deposited by the petitioner. 5. Learned counsel for the respondent raised a preliminary objection relating to the maintainability of the writ petitions. Learned counsel for the respondent would submit that the petitioner has to file application under Section 115 of the Code of Civil Procedure (‘Code’) and must seek revision of the impugned order. Section 115 of the Code after the amendment in the year 2002 does not provide for revision unless the order in favour of the revision petitioner terminates the proceeding before the Trial Court. In case the petitioner was to file a revision petition and in case the revision petition is allowed the proceeding before the Trial Court will not be terminated. 6. The orders which are questioned before this Court are the orders under Section 36(3) of the Arbitration and Conciliation Act, 1996 (‘Act of 1996’). The orders are interlocutory orders. Hence, the remedy of appeal is also not available to the petitioner under Section 37, Act of 1996. Under these circumstances, the petition under Articles 226 and 227 of Constitution of India is maintainable. 7. Learned Additional Advocate General appearing for the petitioner would contend that under Section 36(3), the party can urge for blanket stay order without there being any condition to deposit the award amount, in case it is established that award is obtained by practicing fraud or agreement or contract is procured by practicing fraud. 8. To substantiate the contention that it is a case of fraud, learned Additional Advocate General would submit that on 13.05.2011 an order is passed debarring the petitioner from participating in the tender of this nature. 8. To substantiate the contention that it is a case of fraud, learned Additional Advocate General would submit that on 13.05.2011 an order is passed debarring the petitioner from participating in the tender of this nature. It is his further submission that the application invited by the petitioner clearly imposed a condition that, in case the applicant is debarred from participating in the tender, then that would be a disqualification to participate in the tender. 9. It is urged that as the petitioner suppressed the fact that he is debarred vide order dated 13.05.2011 from participating in a tender of this nature, the case is made out under Section 36(3) of Act of 1996 to seek a stay order without any condition for deposit. 10. Learned counsel appearing for the respondent would contend that the ban order referred to by the learned Additional Advocate General was set aside by the Bombay High Court in M.B. Patil Constructions Ltd. Vs. The Government of India & Others , W.P. No.8068/2012 . Learned counsel for respondent inviting the attention of the Court to paragraph No.3 of the said order would also contend that the respondent in the said proceeding has admitted that order dated 13.05.2011 is passed without issuing notice to the present respondent. In addition to that, it is also his contention that even assuming that it is a case of fraud then also the petitioner is bound to make payment and is not entitled to any benefit or relaxation under Section 36(3) of the Act, 1996. 11. The Court has considered the contentions raised at the Bar and perused the records. 12. It is noticed from the impugned orders imposing the condition on the petitioner to deposit 25% of the amount, the Court has not considered the aspect of fraud on the premise that said aspect has to be considered while considering the Section 34 application on merit. 13. Though learned counsel for respondent would submit that the order dated 13.05.2011 is set aside on the premise that this order is passed without notice to the contesting respondent, what is required to be noticed is whether on the date of awarding the tender or on the date of applying for the tender, whether the contesting respondent was aware of the order dated 13.05.2011. 14. 14. The Court has not considered this aspect while considering the application under Section 36(3) of Act of 1996. However, the Court has not made an attempt to consider this aspect and has erroneously proceeded to hold that contention relating to fraud cannot be looked into at this stage and same has to be considered only at the time of consideration of application under Section 34 on merit. 15. The finding of the Section 34 Court is wholly inappropriate. If that is the case, then Section 36(3) would become redundant. When an application is filed seeking benefit under Section 36(3) of the Act of 1996, the Section 34 Court is under obligation to consider whether a case is made out for grant of application under Section 36(3) of the Act of 1996. Under these circumstances without entering into the merits of the matter, the interim order dated 03.05.2025 is set aside and the matter is remitted to the District Court to consider the application under Section 36(3) on merits. 16. Since the second order dated 11.08.2025 passed in a review application the Court is of the view that the review application is not maintainable before the Section 34 Court and the Court does not intend to interfere with the said orders rejecting the application for review. 17. The Section 34 Court shall, in accordance with law, consider whether the order dated 13.05.2011 was communicated to the respondent while the respondent applied for the tender and when the tender was accepted. If there is no record to show that it was not communicated to the respondent, then question of considering the State's application for relaxation of condition under Section 36(3) does not arise. 18. If it is established that the present respondent was aware of the ban order dated 13.05.2011, then keeping in mind the requirement of Section 36(3) appropriate orders has to be passed by the Section 34 Court. 19. It is made clear that this Court has not expressed anything on the merits of the claim of either of the parties on the interim application. 20. The Trial Court shall consider the application as expeditiously as possible. 21. Both parties shall cooperate for early disposal of the application. 22. With the above observation, the petitions are disposed of. 23. In view of disposal of the petitions, interlocutory applications, if any, do not survive for consideration. Accordingly, disposed of.