MISC. Petition No. 33 of 2025 · The High Court
Case Details
- 1 - NC: 2025:KHC:10966 CMP No. 33 of 2025 IN THE HIGH COURT OF KARNATAKA AT BENGALURU DATED THIS THE 14TH DAY OF MARCH, 2025 BEFORE THE HON'BLE MR JUSTICE ASHOK S.KINAGI CIVIL MISC. PETITION NO. 33 OF 2025 BETWEEN: MR. SAMPATLAL JAIN, S/O MR. MITHALALJI JAIN, AGED 61 YEARS, RESIDING AT NO.355, 4TH CROSS, 19TH MAIN, SADASHIVANAGAR, BANGALORE-560080. (BY SRI. VENKATESH SOMAREDDI, ADVOCATE) …PETITIONER AND: MR. B.R.S. KUMAR S/O MR. H.RAJASHEKARAIAH, AGED ABOUT 53 YEARS, RESIDING AT NO.1105, SANJIVINI, 10TH MAIN, RPC LAYOUT, VIJAYNAGAR, BANGALORE-560040 EMAIL [email protected] MOBILE PH: 9845054649 (BY SRI. KASHYAP N NAIK., ADVOCATE) …RESPONDENT THIS CIVIL MISC. PETITION UNDER SEC.11(5) OF THE ARBITRATION AND CONCILIATION ACT, 1996 PRAYING TO APPOINT AN ARBITRATOR FOR RESOLVING THE DISPUTES BETWEEN THE PETITIONER AND THE RESPONDENT IN TERMS OF CLAUSE 18 OF THE JOINT DEVELOPMENT AGREEMENT DATED 31.05.2016 VIDE ANNEXURE A IN THE INTEREST OF JUSTICE AND EQUITY. Digitally signed by SUNITHA K S Location: HIGH COURT OF KARNATAKA - 2 - NC: 2025:KHC:10966 CMP No. 33 of 2025 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(5) of the Arbitration and Conciliation Act, 1996 praying to appoint an Arbitrator to resolve the disputes between the petitioner and the respondent, in terms of clause 18 of the Joint Development Agreement dated 31.05.2016 vide Annexure-A. 2. Brief facts, leading rise to the filing of this petition are as follows: The petitioner and the respondent have jointly purchased certain property as per sale deeds dated 17.05.2016. A Joint Development Agreement was entered into, jointly by the Petitioner and Respondent with the Developer by name M/s Puravankara on 31.05.2016. Further, a supplementary agreement dated 11.01.2019 was entered into between the owners i.e., Petitioner and Respondent and the - 3 - NC: 2025:KHC:10966 CMP No. 33 of 2025 developer-M/s Puravankara. The petitioner was shocked to know that the respondent has taken out publication in the Kannada Newspaper ‘Kannada Prabha' (Bangalore Edition) on 14.09.2024, wherein the respondent has published his intention to obtain a loan, by creating a charge/encumbrance on the properties mentioned therein, which form part of the share allotted jointly to 'owners' i.e., Petitioner and Respondent in Joint Development Agreement dated 31.05.2016 and supplementary agreement dated 11.01.2019, and he also declared that, he is the owner of the said properties, which is factually incorrect. As soon as the petitioner learnt regarding the above said publication, he immediately submitted his objection dated 17.09.2024 to the Advocate of the respondent, as mentioned in the paper publication. The Petitioner learnt that the respondent is proceeding further to obtain a loan by creating charge/encumbrance on the properties mentioned in the publication. A Legal Notice dated 19.09.2024 was also issued to the respondent - 4 - NC: 2025:KHC:10966 CMP No. 33 of 2025 through Email, Whatsapp and speed post. It is submitted that, the respondent, hectically approaching the third parties and financial Institutions to obtain loan by creating charge/encumbrance on the apartments/properties, which are jointly allocated to the share of 'owners' i.e., Petitioner and Respondent as per the Joint Development Agreement and supplementary agreement. The respondent is proceeding to obtain a loan of crores of rupees. 2.1. The petitioner got issued a legal notice on 19.9.2024 calling upon the respondent to restrain from creating any charge or encumbrance on any of the properties allotted to the share of the owners i.e., Petitioner and Respondent under the Joint Development Agreement and further invoked the arbitration clause. 2.2. Thereafter, the petitioner approached the LXXXIX City Civil and Sessions Judge, Bangalore (CCH-90) in Com.AA 316/2024 under Section 9 of the
Legal Reasoning
Arbitration and Conciliation Act, 1996. The trial Court - 5 - NC: 2025:KHC:10966 CMP No. 33 of 2025 vide order dated 21.09.2024 granted an ad-interim temporary injunction against the respondent, as prayed in I.A.1. 2.3. The respondent issued a reply on 16.10.2024 to the legal notice dated 19.9.2024 issued by the petitioner, wherein the respondent has stated that, since the dispute has arisen between the petitioner and the respondent under the Joint Development Agreement, and accordingly, in terms of Clause 18 of the Joint Development Agreement, the respondent
Legal Reasoning
nominates Hon’ble Justice Sri Subash B Adi, former Judge, High Court of Karnataka, to act as the Sole Arbitrator to adjudicate all the disputes between the petitioner and the respondent under the Joint Development Agreement, and called upon the petitioner to confirm the said nomination so as to resolve the dispute and complete the entire transactions speedily. 2.4. The petitioner did not confirm the nomination of Hon’ble Justice Sri. Subash B Adi, Former Judge, - 6 - NC: 2025:KHC:10966 CMP No. 33 of 2025 High Court of Karnataka, as the sole Arbitrator. Hence, the petitioner filed this petition. 3. Heard the learned counsel for the petitioner, and the respondent. 4. Learned counsel for the petitioner submits that, the petitioner and the respondent have entered into a Joint Development Agreement with the Developer by name M/s.Puravankara on 31.05.2016 and the supplementary agreement dated 11.01.2019. The respondent has issued a public notice stating that, he intends to obtain a loan by creating a charge/encumbrance on the properties mentioned in the Joint Development Agreement. He submits that the petitioner issued a legal notice on 19.9.2024. Despite the service of a notice, the respondent is attempting to obtain a loan by creating a charge over the apartments/properties allotted to the petitioner’s and Respondent’s share jointly in terms of the Joint Development Agreement. He submits that the dispute has arisen between the petitioner and the respondent, - 7 - NC: 2025:KHC:10966 CMP No. 33 of 2025 and there is an arbitration clause in the Joint Development Agreement. Accordingly, he prays to allow the petition. 5. Per contra, the learned counsel for the respondent submits no objection to allow the petition. 6. Perused the records, and considered the submissions of the learned counsel for the parties. 7. The point that arises for consideration is, ‘Whether the petitioner has made out grounds to refer the matter to the Arbitrator for resolving the dispute between the petitioner and the respondent in terms of Clause 18 of the Joint Development Agreement dated 31.5.2016 ?’ 8. It is not in dispute that the petitioner and the respondent have jointly purchased certain property as per the registered sale deeds dated 17.05.2016. Thereafter, the petitioner and respondent jointly entered into a Joint Development Agreement with the Developer by name M/s Puravankara on 31.05.2016 wherein, the petitioner and the respondent agreed to - 8 - NC: 2025:KHC:10966 CMP No. 33 of 2025 jointly develop the schedule ‘A’ property, and share the constructed area on the conditions and terms that are mutually agreed between the parties and outlined in the Joint Development Agreement. Further, a supplementary agreement dated 11.01.2019 was entered into, between the owners i.e., Petitioner and Respondent and the developer, namely M/s Puravankara, incorporating the terms and conditions. 8.1. The respondent has taken out a publication in the Kannada Newspaper ‘Kannada Prabha' (Bangalore Edition) on 14.09.2024, wherein he has published his intention to obtain a loan, by creating a charge/encumbrance on the properties mentioned in the Joint Development Agreement and supplementary agreement. The petitioner requested the respondent not to create any charge unless and until the properties allotted to the share of the owners i.e., Petitioner and Respondent is divided between the petitioner and the respondent. Despite the request made by the petitioner, the respondent proceeded to - 9 - NC: 2025:KHC:10966 CMP No. 33 of 2025 obtain a loan by creating a charge on the properties. The petitioner got issued a legal notice on 19.9.2024 calling upon the respondent to restrain himself from creating any charge or encumbrance on any of the properties allotted, jointly to the share of the owners i.e., Petitioner and Respondent under the Joint Development Agreement, including the property mentioned in the public notice mentioned in the newspaper. The respondent has no right to deal with any of the properties allocated to the share of the owners i.e., Petitioner and Respondent under the Joint Development Agreement unless and until all the disputes are resolved. 9. Hence, the petitioner filed an application under Section 9 of the Arbitration and Conciliation Act, 1996 before the LXXXIX City Civil and Sessions Judge, Bangalore (CCH-90) in Com.AA 316/2024. The Commercial Court vide order dated 21.09.2024 granted an ad-interim temporary injunction against the respondent, as prayed in I.A.1. - 10 - NC: 2025:KHC:10966 CMP No. 33 of 2025 10. The respondent replied to the legal notice dated 19.9.2024 issued by the petitioner, vide reply dated 16.10.2024 denying the averments made in the legal notice dated 19.9.2024. The respondent suggested the name of Hon’ble Justice Sri Subash B Adi, former Judge, High Court of Karnataka, to act as the Sole Arbitrator to adjudicate all the disputes between the petitioner and the respondent under the Joint Development Agreement, and called upon the petitioner to confirm the said nomination. The petitioner did not consider the said nomination, and has filed this petition. 11. Perused the Joint Development Agreement. There is an arbitration clause which reads as follows: “18 ARBITRATION: 18.1 All Disputes arising between the Parties touching, concerning or relating to any matter, question or issue under this JDA or its construction or effect or the rights, duties or liabilities of the Parties shall be referred to and finally resolved by arbitration before a sole arbitrator. 18.2 The seat of the arbitration shall be in Bangalore and shall be conducted in accordance with the rules of arbitration as per the LCIA India chapter. - 11 - NC: 2025:KHC:10966 CMP No. 33 of 2025 18.3 The language of the arbitration shall be English. 18.4 The Parties agree that the arbitration award shall be final and binding on the Parties. Judgment upon the arbitration award may be rendered in any court of competent jurisdiction or application may be made to such court for a judicial acceptance of the award and an order of enforcement, as the case may be.” 12. Admittedly, there is an arbitration clause in the Joint Development Agreement, according to which any dispute arising between the parties, touching, concerning or relating to any matter, question or issue under the Joint Development Agreement, shall be referred to and finally resolved by way of Arbitration before the sole Arbitrator, and the seat of the Arbitration shall be in Bangalore. 13. As the dispute has arisen between the petitioner and the respondent and as there is an arbitration clause in the joint development agreement entered into between the parties to the petition, the dispute has to be resolved by the Sole Arbitrator. The respondent submits no objection to allow the petition. - 12 - NC: 2025:KHC:10966 CMP No. 33 of 2025 14. In view of the above discussion, I am of the view that, the petitioner has made out a grounds to refer the dispute to the Sole Arbitrator. Accordingly, I answer the point for consideration in the affirmative, and proceed to pass the following:
Decision
ORDER i) The Civil Miscellaneous Petition is allowed. ii) Hon’ble Justice Sri. Subash B Adi, Former Judge, High Court of Karnataka is nominated as an Arbitrator to resolve the dispute between the parties in terms of Clause 18 of the Joint Development Agreement as per the provisions of the Arbitration and Conciliation Act,1996 and the Rules. The office is directed to communicate this Order to the learned Arbitrator, and the Arbitration and Conciliation Centre, Bengaluru. All the contentions of the parties are kept open. Sd/- (ASHOK S.KINAGI) JUDGE rs