The Executive Engineer vs. Stes Consultants INDIA PVT

Facts

The Executive Engineer (RDPRD), Bagalkot (Appellant) filed a Commercial Appeal against a judgment and decree dated 19.09.2019 passed by the IV Additional District and Sessions Judge (Commercial Court), Ballari in Com OS No. 158/2019. The appeal was filed under Section 13(1A) of the Commercial Courts Act, 2015. The High Court referred the matter for mediation. A memorandum of agreement was filed under Section 89 of the Code of Civil Procedure read with Rules 24 and 25 of the Karnataka Civil Procedure (Mediation) Rules, 2007. The parties, the Appellant and the 1st Respondent (STES Consultants India Pvt Ltd.), settled their dispute for a sum of Rs. 7,36,657.04. The 1st Respondent was to submit tax invoice bills with GST Number by 15/03/2022. The 3rd Respondent (Chief Operating Officer, Karnataka Rural Road Development Agency) agreed to clear the bills and issue a cheque for the settled amount. The Appellant handed over a cheque for Rs. 6,59,001/- after deducting TDS, which was accepted by the 1st Respondent.

Held

The Court held that the dispute between the Appellant and the 1st Respondent had been settled through mediation. The terms of the Memorandum of Agreement, which included a settlement amount of Rs. 7,36,657.04, were accepted by both parties. The Appellant had already paid a sum of Rs. 6,59,001/- after TDS deduction, which was accepted by the 1st Respondent. The Court found that the settlement was in the interest of all parties, including the State, which benefited from TDS deduction, court fee refund, and a reduction in interest rates. Consequently, the Commercial Appeal was disposed of in terms of the Memorandum of Agreement. The judgment and decree dated 19.09.2019 passed in Com OS No.158/2019 was modified accordingly. The Court directed the office to draw a modified decree and also ordered a refund of court fee to the 3rd Respondent.

Key Issues

1. Whether the dispute between the Appellant and the 1st Respondent could be settled through mediation and compromise, and if so, what would be the terms of settlement? Arguments for the Appellant: The Appellant sought to set aside the judgment and decree dated 19.09.2019 passed by the Commercial Court. The Appellant participated in mediation and agreed to a settlement. Arguments for the 1st Respondent: The 1st Respondent, as the party against whom the original decree was passed, participated in mediation and agreed to settle the dispute for a specified sum. Arguments for the State/Respondents 2-4: The judgment does not record specific arguments from Respondents 2, 3, and 4. However, their presence is noted, and the settlement terms involve the 3rd Respondent in clearing the bills and issuing payment. The State is also noted to benefit from the settlement due to TDS deduction, court fee refund, and reduced interest.