Belagavi Corporation Deposits Rs 3 Crore in Court Amid Arbitration Dispute with Hayagreeva Company
The Belagavi City Corporation (BCC) has taken a significant step in its long-running legal battle by resolving to deposit Rs 3 crore in court. This decision comes in direct compliance with a directive from the district court, which is overseeing the ongoing arbitration dispute between the civic body and Hayagreeva Company.
Legal Pressure Forces Compliance
The corporation's move follows a briefing by council secretary Sidhu Hulloli, who informed members about the severe legal consequences of failing to deposit the amount before the March 15 deadline. With the risk of adverse legal action looming large, the BCC has now committed to depositing the sum, which represents 25% of the compensation awarded to Hayagreeva Company.
Ruling group leader advocate Hanumant Kongali confirmed the decision, stating that the corporation will deposit Rs 3 crore before the deadline to avoid further legal complications.
Background of the Dispute
The roots of this conflict trace back to 2008, when Hayagreeva Company executed development works in Belagavi city under a special grant of Rs 100 crore received by the corporation. Disputes over payments subsequently emerged, prompting the company to file a substantial claim of Rs 35 crore against the civic body.
The matter was eventually referred to arbitration by the Karnataka High Court's Dharwad bench. After nearly three years of hearings, the arbitrator ruled in favor of Hayagreeva Company, awarding them Rs 12 crore in compensation.
Legal Proceedings and Conditional Stay
Challenging this award, the Belagavi City Corporation approached the district court, which granted a conditional stay on the arbitration award. This stay was specifically subject to the deposit of 25% of the awarded amount within one month.
However, the corporation failed to meet this initial deadline and sought an extension—a move that was strongly opposed by Hayagreeva Company. This opposition created additional legal pressure on the BCC to comply with the court's original directive.
Implications and Next Steps
The decision to deposit Rs 3 crore represents a crucial development in this protracted legal dispute. By complying with the court order, the Belagavi City Corporation aims to prevent further legal escalation while the broader arbitration matter continues to be contested.
This case highlights the complex legal challenges municipal bodies can face when disputes arise over development contracts and payment obligations. The outcome of this deposit and subsequent legal proceedings will be closely watched by both municipal authorities and contracting companies across the region.
