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 September 19, 2019, passed by the Commercial Court, Ballari, in Com O.S. No. 159/2019. The dispute involved the Appellant and STES Consultants India Pvt Ltd. (1st Respondent). The High Court had previously referred the matter for mediation. A memorandum of agreement was filed under Section 89 of the Code of Civil Procedure, read with Karnataka Civil Procedure (Mediation) Rules, 2007, indicating that the parties had settled their dispute. The settlement involved a sum of Rs. 7,33,604.78/- as full and final settlement. The 1st Respondent was to submit tax invoice bills with GST numbers, and the 3rd Respondent (Chief Operating Officer, KRRDA) was to clear these bills. The Appellant handed over a cheque for Rs. 6,61,742/- to the 1st Respondent, after deducting TDS, which was accepted.

Held

The Court held that the parties had successfully settled their dispute through mediation, as evidenced by the Memorandum of Agreement filed under Section 89 of the Code of Civil Procedure and the relevant Mediation Rules. The terms of the agreement, which included a full and final settlement amount of Rs. 7,33,604.78/-, were accepted by both the Appellant and the 1st Respondent. The Court noted that the Appellant had already handed over a cheque for Rs. 6,61,742/- (after TDS deduction) to the 1st Respondent, which was accepted. Consequently, the Commercial Appeal was disposed of in terms of the Memorandum of Agreement. The judgment and decree dated September 19, 2019, passed by the Commercial Court, Ballari, was modified accordingly. The Court also directed the refund of Court fee to the Chief Operating Officer, KRRDA, and acknowledged the benefits accrued to the State from the settlement, including TDS deduction and a reduction in interest.

Key Issues

1. Whether the parties have reached a valid and binding settlement agreement for the dispute, as evidenced by the Memorandum of Agreement filed under Section 89 of the Code of Civil Procedure, read with Rules 24 and 25 of the Karnataka Civil Procedure (Mediation) Rules, 2007? Contentions: Petitioner/Appellant: The Appellant contended that a settlement has been reached between the parties through mediation, as reflected in the Memorandum of Agreement. They sought to have the appeal disposed of in terms of this agreement. Revenue/State: The Respondents, including the State, were present and their counsel participated in the mediation process. The Memorandum of Agreement indicates their agreement to the terms of settlement, which includes the 3rd Respondent clearing the bills and issuing a cheque. The State also benefited from the settlement through TDS deduction and reduced interest.