MISC. Petition No. 17 of 2024 · The High Court
Case Details
- 1 - NC: 2025:KHC:15227 CMP No. 17 of 2024 IN THE HIGH COURT OF KARNATAKA AT BENGALURU DATED THIS THE 9TH DAY OF APRIL, 2025 BEFORE THE HON'BLE MR JUSTICE ASHOK S.KINAGI CIVIL MISC. PETITION NO. 17 OF 2024 BETWEEN: MR BLANNY CLARY D SOUZA AGED ABOUT 53 YEARS, PROPRIETOR, M/S IMAGE PRINTERS, NO 168, PARENKY, MADANTHYAR, BELTHANGADY, DAKSHINA KANNADA -574 224 (BY SRI AKSHAY KUMAR JAIN, ADVOCATE) AND: M/S INDIA 1 PAYMENTS LTD PREVIOUSLY KNOWN AS M/S BTI PAYMENTS PVT. LTD., CORPORATE TOWER, B-8TH FLOOR, DIAMOND DISTRICT, 150, OLD AIRPORT ROAD, BANGALORE – 560 008 REPRESENTED BY ITS ASSISTANT MANAGER LEGAL AND COMPLIANCE AND AUTHORIZED SIGNATORY, NAMRATHA S PATIL, [COMPANY INCORPORATED UNDER COMPANIES ACT, 1956] (BY SRI NISCHAY S.P FOR SRI R.NAGENDRA NAIK, ADVOCATES) …PETITIONER …RESPONDENT
Legal Reasoning
Digitally signed by SUNITHA K S Location: HIGH COURT OF KARNATAKA - 2 - NC: 2025:KHC:15227 CMP No. 17 of 2024 THIS CIVIL MISC. PETITION UNDER SECTION 11(5) AND 11(6) OF THE ARBITRATION AND CONCILIATION ACT 1996, PRAYING TO APPOINT AN ARBITRATOR IN TERMS OF CLAUSE 12.4 OF THE AGREEMENT DATED 17/02/2020 VIDE ANNEXURE ’B’ FOR RESOLVING THE DISPUTES BETWEEN THE PETITIONER AND THE RESPONDENT IN THE INTEREST OF JUSTICE AND EQUITY. THIS PETITION, COMING ON FOR ADMISSION, THIS DAY, ORDER WAS MADE THEREIN AS UNDER: CORAM: HON'BLE MR JUSTICE ASHOK S.KINAGI ORAL ORDER This Civil Miscellaneous petition is filed under Section 11 (6) of the Arbitration and Conciliation Act, 1996 for the appointment of an Arbitrator to resolve the dispute between the parties in terms of Clause 12.4 of the service agreement dated 17.02.2020 vide Annexure-B. 2. Brief facts leading rise to the filing of the present petition are as follows: The petitioner and the respondent entered into a service agreement for rendering ATM or related services, whereby the petitioner agreed to render ATM services to the respondent. The agreement was executed on 17.02.2020. As per the terms of the agreement, the petitioner agreed to pick up the fit currency from the bank and load the same in India1 ATMs, - 3 - NC: 2025:KHC:15227 CMP No. 17 of 2024 installed by the respondent. At the time of the execution of the agreement, the respondent received blank cheques as security, even though such terms were not stipulated in the agreement. 3. The petitioner initially agreed to render his services regarding two ATMs installed by the respondent at Madanthyar and Kalleri in Belthangadi Taluk, Dakshin Kannada District and paid the security deposit of Rs.10,00,000/- 4. Since there was an agreement between both parties, the petitioner, on further oral agreement in good faith obtained permission from the respondent to have more ATMs in Dakshin Kannada District and also paid an Additional Security Deposit of Rs.65,00,000/- regarding nine ATMs, at various intervals of time. In total, the petitioner has paid Rs.75,00,000/- towards the security deposits. 5. Since there was less business, on the respondent’s, advice, the petitioner has stopped his services to few ATMs between October 2020 to November 2022. The respondent asked the petitioner to not to serve the ATMs in Dakshina Kannada except in Laila in Belthangady Taluk and to render his service to ATMs in Mudigere Taluk. - 4 - NC: 2025:KHC:15227 CMP No. 17 of 2024 6. Petitioner continued to render his service to the respondent sincerely. In January 2023, the petitioner suffered a lung infection and increased in back pain due to travel. He communicated the same to the respondent through a letter dated 31.01.2023 informing the respondent of his intention to discontinue the service of uploading cash at ATMs installed by the respondent. The petitioner issued a letter dated 16.01.2023 requesting to issue the statement of accounts showing the security deposits paid by the petitioner to the respondent and refund for the period from 01.02.2020 to 31.12.2022. The respondent had sent a security deposit receipt confirmation letter dated 17.01.2023. As per the said statement, the respondent has confirmed the balance of the security deposit of Rs.41,17,200/- out of Rs.75,05,000/-. 7. The respondent filed the complaint on 16.05.2023 under Section 200 of Cr.P.C. for the offence punishable under Section 138 of the Negotiable Instruments Act, 1881. Hence, the dispute arose between the petitioner and the respondent and the petitioner issued an arbitration notice dated 27.10.2023 invoking arbitration clause. The respondent replied - 5 - NC: 2025:KHC:15227 CMP No. 17 of 2024 to the arbitration notice vide reply dated 15.11.2023 and proposed the name of the Bengaluru Mediation Centre. However, no Arbitrator is appointed till date. Hence, the petitioner is constrained to file this petition. 8. The respondent did not file the statement of objections. 9.
Legal Reasoning
Heard the arguments of the learned counsel for the petitioner and the respondent. 10. Learned counsel for the respondent submits that he has no objection to allow the petition for appointment an Arbitrator in terms of clause 12.4 of the service agreement dated 17.02.2020. 11. Perused the records and considered the submissions of the learned counsel for the parties. 12. The point that arises for consideration is: "Whether the petitioner made out a ground to refer the dispute to the Arbitrator in terms of Clause 12.4 of the agreement dated 17.02.2020 as per the provisions of the Arbitration and Conciliation Act?" - 6 - NC: 2025:KHC:15227 CMP No. 17 of 2024 13. There is no dispute that the petitioner and the respondent had entered into a Service Agreement for rendering ATM related services, whereby the petitioner had been rendering ATM services to the respondent. It is the case of the petitioner, that the petitioner has paid Rs.75,05,000/- towards the security deposit. The petitioner could not continue the services due to his ill health and informed the respondent that he intends to discontinue the services due to his ill-health and further, the petitioner has sought for confirmation regarding the balance of the security deposit. The respondent confirmed the balance of the security deposit of Rs.41,17,200/- out of Rs.75,05,000/- as of the date, after deducting the refunds. The petitioner issued a legal notice on 23.03.2023 and an E- mail requesting the respondent to return all the blank cheques of the petitioner and also sought for a refund of the balance amount of Rs.75,05,000/-. The respondent presented the said cheques for encashment. The said cheques were dishonoured. Hence, the respondent filed a complaint under Section 200 of Cr.P.C., for the offence punishable under Section 138 of the Negotiable Instruments Act. Meanwhile, the petitioner issued a notice dated 27.10.2023, invoking the Arbitration clause under - 7 - NC: 2025:KHC:15227 CMP No. 17 of 2024 Section 21 of the Arbitration and Conciliation Act. The respondent replied to the said Arbitration notice vide reply dated 15.11.2023 and proposed the name of the Bengaluru Mediation Centre for deciding the dispute through Arbitration. 14. Perused the agreement which discloses that there is an Arbitration clause. Clause Nos.12.3 and 12.4 reads as follows: "12.3.In the event that any provision of this Agreement shall be determined to be illegal or unenforceable, that provision will be limited or eliminated to the minimum extent necessary so that this Agreement shall otherwise remain in full force and effect and enforceable. Provided that in the event of any change prescribed by the RBI affecting the operation of this Agreement or the performance by any Party of obligations hereunder, the provisions of this Agreement shall be deemed to have been automatically amended such that such change prescribed by the RBI Is incorporated into the provisions hereof. Without prejudice to the generality of the foregoing, in the event of any conflict between the provisions of this Agreement and any regulations, directions or notifications issued by the RBI in relation to the subject matter hereof, the provisions of such RBI regulations, directions or notifications shall prevail. 12.4.This Agreement will be governed by and construed in accordance with laws of India, and subject to the following provisions on arbitration, any disputes relating this Agreement will be subject to the exclusive jurisdiction of the courts in Bangalore, Karnataka. Any dispute, claim, difference or controversy arising out of or in connection with this Agreement, including any question regarding its existence, operation, termination, validity or breach thereof shall be referred to and finally resolved by arbitration in accordance with the provisions of the Arbitration & Conciliation Act, 1996, and such arbitration - 8 - NC: 2025:KHC:15227 CMP No. 17 of 2024 shall be conducted by the Indian Institute of Arbitration & Mediation, in accordance with its Arbitration Rules (i.e., the IIAM Arbitration Rules) for the time being in force. The number of arbitrators shall be one. The place of arbitration shall be Bangalore, and the language of the arbitration shall be English." 15. If any dispute relating to the agreement or controversy arising out of or in connection with the agreement including question regarding its existence, operation, termination etc., the same shall be referred to the Artibrator. Admittedly, there exists an Arbitration clause in the agreement, and further, the dispute has arisen between the petitioner and the respondent, and the dispute has to be resolved by the Arbitrator. 16. Learned counsel for the respondent submits that he has no objection to allow the petition. 17.
Decision
In view of the above discussion, I answer the point for consideration in the affirmative. Accordingly, I proceed to pass the following: ORDER (i) The Civil Miscellaneous Petition is allowed. (ii) Hon'ble Mr.Justice A.N.Venugopala Gowda, former Judge of the High Court of Karnataka, as an - 9 - NC: 2025:KHC:15227 CMP No. 17 of 2024 Arbitrator is nominated to resolve the dispute between the parties as per the provisions of the Arbitration and Conciliation Act, 1996 and Arbitration and Conciliation (Centre) Rules, 2012. (iii) The Office is directed to communicate this order to the learned Arbitrator and the Arbitration and Conciliation Centre, Bengaluru. Sd/- (ASHOK S.KINAGI) JUDGE MR, BNV List No.: 1 Sl No.: 11