P. Seshareddy (D) Rep. By His Lr Cum Irrevocable Gpa Holder and Assignee Kotamreddy Kodandarami Reddy vs State of Karnataka

NON-REPORTABLE

IN THE SUPREME COURT OF INDIA CIVIL APPELLATE JURISDICTION

CIVIL APPEAL NOS._________ OF 2022 (Arising out of SLP(C) Nos. 6354-6356 of 2020)

P. SESHAREDDY (D) REP. BY HIS LR. CUM IRREVOCABLE GPA HOLDER AND ASSIGNEE KOTAMREDDY KODANDARAMI Appellant(s)

VERSUS

STATE OF KARNATAKA & ORS. Respondent(s)

J U D G M E N T

1. Leave granted.

2. The appeals challenge the judgment and order

dated 12.11.2019 passed by the learned Single

Judge, High Court of Karnataka, Kalaburagi Bench in

W.P.Nos.201087-88/2018 c/w W.P. No. 201321/2016

(GM-CPC), thereby allowing the writ petition(s)

filed by the respondent-State.

3. Signature Not Verified

The facts giving rise to the present appeals Digitally signed by Deepak Singh Date: 2022.11.16 14:36:58 IST Reason: arise out of the following narrow compass:

4. One P. Seshareddy S/o P.C. Venkatreddy 2

entered into a contract with State of Karnataka

for execution of UKP project. He executed a

General Power of Attorney dated 21.10.1982 in

favour of one Kotermreddy Kodandarami Reddy

authorising him to do all the acts necessary with

regard to the execution of the said contract.

5. It appears that certain disputes arose

between P. Seshareddy and the respondent-State with

regard to the execution of the work, allotted to

said P. Seshareddy. As such, he initiated

arbitration proceedings by making an application

under Section 8 of the Arbitration Act, 1940.

6. The said petition was presented through his

General Power of Attorney holder Sri Kotemreddy

Kodandarami Reddy.

7. The original contractor, namely, P.

Seshareddy, died on 13.11.1995. After his death,

his legal heirs were brought on record. However, it

appears that the said Arbitration Case being

Arbitration Case No.03/2004 came to be dismissed

for default on 30.05.2008.

8. Thereafter, an application came to be made by

Sri Kotemreddy Kodandarami Reddy for restoration of 3

the Arbitration Application under Order IX Rule 9

read with Sections 151 read with Section 146 of

Code of Civil Procedure, 1908. The aforesaid

application came to be allowed by the learned Trial

Judge.

9. Being aggrieved thereby, the respondent-State

filed the aforesaid writ petition(s). The learned

Single Judge vide impugned judgment and order

allowed the the writ petitions and set aside the

order(s) passed by the learned Trial Judge.

10. We have heard Ms. Kiran Suri, learned senior

counsel appearing for the appellant and Ms. Soumyan

Tandon, learned counsel appearing for the

respondent-State.

11. Ms. Kiran Suri, learned senior counsel

appearing for the appellant, submits that the

learned Single Judge of the High Court while

allowing the writ petition(s) has only considered

the provision of Section 201 of the Indian Contract

Act, but has ignored the provision of Sections 202

and 209 of the said Act. She submits that since the

appellant had an interest in the said contract, he

was entitled to continue with the proceedings in 4

spite of the death of the original contractor. She

submits that the learned Single Judge of the High

Court has failed to take into consideration this

aspect of the matter.

12. Ms. Soumyan Tandon, learned counsel for the

State, on the contrary, submits that merely on the

basis of General Power of Attorney, it cannot be

construed that the appellant had an interest in the

contract. In so far as the assignment deed is

concerned, she submits that since there was no

consent of the State for the said assignment deed,

the same was not valid in law. She further submits

that the rights in the contract could not have been

transferred by way of an assignment deed.

13. Learned counsel for the respondent-State has

relied on the judgment of this Court in the case of

Indu Kakkar Vs. Haryana State Industrial

Development Corporation Ltd. & Anr.-reported in

(1999) 2 SCC 37 and also on the judgment of this

Court in C.A. Nos. 10683-10686 of 2014 titled as

“Kapilaben & Ors. Vs. Ashok Kumar Jayantilal Sheth

Through POA Gopalbhai Madhusudan Patel & Ors”.

14. We have perused the material placed on 5

record.

15. The perusal of the assignment deed dated

02.07.1990 clearly reveals that the original

contractor-P. Seshareddy had assigned all the

rights and liabilities arising out of the said

contract in favour of Sri Kotemreddy Kodandarami

Reddy.

16. The perusal of the order passed by the Trial

Court would show that, it has held that leaving

apart the nature of GPA, the appellant was entitled

to prosecute the arbitration proceedings in view of

the rights accrued to him by way of the assignment

deed.

17. We find that the view taken by the learned

Single Judge was not in consonance with of Section

202 of the Indian Contract Act, which read thus:

“202. Termination of agency, where agent has an interest in subject-matter-where the agent has himself an interest in the property which forms the subject-matter of the agency, the agency cannot, in the absence of an express contract, be terminated to the prejudice of such interest.”

18. No doubt, the learned Single Judge was right

in holding that on account of the death of the 6

original contractor, it amounted to termination of

the agency. However, learned Single Judge could

not have read Section 201 of the Indian Contract

Act in isolation by ignoring Section 202 of the

Indian Contract Act. The learned Single Judge

failed to take into consideration that on account

of the assignment deed, an interest accrued in the

said contract in favour of the appellant.

Indisputably, the said contract was the subject

matter of the agency and as such in the absence of

an express provision to the contrary, the appellant

was entitled to continue with the said agency.

19. The learned trial Judge rightly construing

this position, allowed the application of the

appellant. In a jurisdiction under Article 227 of

the Constitution of India, the learned Single Judge

could not have interfered with the order of the

trial Court , unless he found the view taken by the

learned trial Judge was perverse or impossible.

20. In so far as the judgments relied upon by Ms.

Soumyan Tandon are concerned, the same are related

to an issue where the contract is contingent upon

certain rights and liabilities. One party cannot 7

not be compelled to do something unless the other

party which was required to perform its obligation

has performed it. As such, the said judgments would

not be applicable in the facts of the present case.

21. In so far as the contention of Ms. Soumyan

Tandon with regard to the question as to whether

the contract could be assigned or not is concerned,

the said question is touching the merits of the

matter and cannot be gone into at this stage. These

questions can be raised by the respondent(s) in the

appropriate proceedings, if entitled in law.

22. In the result, the impugned judgment and

order is not sustainable and thus the same is

quashed and set aside. The order of the learned

trial judge is restored.

23. Since the proceedings are pending from 1992,

i.e. almost a period of more than 30 years, we

expedite the proceedings before the Trial Judge and

direct the same to be disposed of within a period

of six months from today.

8

24. The appeals are disposed of in the above

terms.

25. Pending applications, if any, stand disposed

of.

….........................J (B.R. GAVAI)

...........................J (B.V. NAGARATHNA)

New Delhi November 09, 2022 9