VIJAY REDDY v. SRI D RAMASWAMY REDD

Judgment

1. SRI D RAMASWAMY REDDY SINCE DEAD BY LEGAL REPRESENTATIVES 1(A) SMT. SARASAMMA @ SARASU W/O. LATE D. RAMASWAMY REDDY AGED ABOUT 75 YEARS, Digitally signed by KIRAN KUMAR R Location: HIGH COURT OF KARNATAKA - 2 - NC: 2026:KHC:5081 CMP No. 412 of 2024 HC-KAR R/A. BALAGERE, NEXT TO LATE HANUMA REDDY'S HOUSE, VARTHUR HOBLI, BANGALORE EAST TALUK, BANGALORE - 560 087.

8. SRI MANJUNATH REDDY S/O RAMASWAMY REDDY AGED ABOUT 56 YEARS SRI SRINIVAS REDDY S/O RAMASWAMY REDDY AGED ABOUT 49 YEARS SRI SAMPANGI REDDY S/O RAMASWAMY REDDY AGED ABOUT 57 YEARS SMT. GIRIJAMMA D/O RAMASWAMY REDDY AGED ABOUT 62 YEARS SMT. BHAGYAMMA D/O RAMASWAMY REDDY AGED ABOUT 57 YEARS SMT. KANTHAMMA D/O RAMASWAMY REDDY AGED ABOUT 56 YEARS ALL ARE R/AT BALAGERE, NEXT TO LATE HANUMA REDDY’S HOUSE VARTHUR HOBLI, BANGALORE EAST TALUK BANGALORE 560 087 M/S UDBHAV BUILDERS AND DEVELOPERS A PARTNERSHIP FIRM HAVING ITS OFFICE AWT NO.34, RENUKA NILAYA RAMAPURA MAIN ROAD VIRGONAGAR POST - 3 - NC: 2026:KHC:5081 CMP No. 412 of 2024 HC-KAR BANGALORE 560 049 REPRESENTED BY ITS MANAGING PARTNERS

SRI SHEKAR G S/O GURAPPA AGED ABOUT 46 YEARS RESIDING AT NO.34, RENUKA NILAYA RAMAPURA MAIN ROAD VIRGONAGAR POST BANGALORE 560 049

10. SRI R M KANTHA KUMAR S/O JMUNIKRISHNAPPA AGED ABOUT 43 YEARS RESIDING AT NO.34, RENUKA NILAYA RAMAPURA MAIN ROAD VIRGONAGAR POST BANGALORE 560 049 (BY SRI. JAYKUMAR S . PATIL, SR. COUNSEL FOR SRI. SRIHARI A V, ADVOCATE FOR R1(A), R2 TO R4 SRI. RAJENDRA M.S., ADVOCATE FOR R5 TO R7 SRI. D P MAHESH, ADVOCATE FOR R8 R9 & R10 ARE SERVED) …RESPONDENTS THIS CIVIL MISC. PETITION IS FILED UNDER SEC.11 (6) OF THE ARBITRATION AND CONCILIATION ACT, 1996. PRAYING TO PASS ORDERS A) APPOINTING AN ARBITRATOR AS PER THE ARBITRATION PARA PROVIDED IN 5TH AND 6TH PAGE OF AGREEMENTS OF SALE DATED 27.10.2005 EXECUTED BETWEEN PETITIONERS AND RESPONDENTS IN RESPECT OF LAND BEARING SY. NO.73/5 MEASURING 4 ACRES 7 GUNTAS AND SY.NO.73/6 MEASURING 1 ACRE 33 GUNTAS OF BALEGERE VILLAGE, VARTHUR HOBLI, BANGLORE SOUTH TALUK VIDE ANNEXURE A AND B AND ETC. THIS PETITION, COMING ON FOR ADMISSION, THIS DAY, ORDER WAS MADE THEREIN AS UNDER: - 4 - NC: 2026:KHC:5081 CMP No. 412 of 2024 HC-KAR CORAM: HON'BLE MR. JUSTICE ASHOK S.KINAGI ORAL ORDER

1. This Civil Miscellaneous petition is filed under Section

3. 11(6) of the Arbitration and Conciliation Act, 1996 (for short, ‘the Act’) for the appointment of an arbitrator to resolve the dispute between the parties to the petition as per Agreement of Sale dated

27.10.2005. Brief facts leading rise to the filing of this Civil Miscellaneous Petition are as follows: The land bearing Survey No.73/5 measuring 4 acres 7 guntas and Survey No.73/6 measuring 1 acre 33 guntas of Balegere Village, Varthur Hobli, Bangalore South Taluk, belongs to the respondent and his brothers Lakshmaiah Reddy and Venkataswamy Reddy and they have entered into an agreement of sale with the petitioners on 27.10.2005 for the purpose of joint development of the said properties. - 5 - NC: 2026:KHC:5081 CMP No. 412 of 2024 HC-KAR

4. The petitioners filed Com.A.P. No.260 of 2022 on the file of this Court against the order passed in A.A. No.120 of 2020 seeking interim measures, for not to alienate against respondent Nos.1 to 7.

5. On 04.07.2022, respondent Nos.1 to 7 entered into Joint Development Agreement with M/s.Udhbav Builders and Developers by virtue of registered Joint Development Agreement regarding the property bearing Survey Nos.73/5 measuring 23 guntas and Survey No.73/6 measuring 1 acre 15 guntas and the same is against the interest of the petitioners.

6. One Girijamma filed a suit in O.S. No.472 of 2006 seeking partition of the properties of D.Ramaswamy Reddy, respondent No.1 herein and the said suit came to be decreed; thereafter, R.A. No.13 of 2019 came to be filed before the learned District Judge and the said appeal came to be withdrawn on

05.09.2022; thereby, though there is an agreement - 6 - NC: 2026:KHC:5081 CMP No. 412 of 2024 HC-KAR entered into by the petitioners with respondent Nos.1 to 7, the transaction was not finalized because of the litigation.

7. The petitioners invoked an arbitration clause by issuing a arbitration notice on 09.10.2023. The respondents did not come forward for appointment of an arbitrator. The petitioners filed CMP No.6 of 2024 for the appointment of an arbitrator to resolve the dispute in question, and the respondents took a technical objection of not notifying the name of the arbitrator in the legal notice and thereby, there is no compliance of requirement of law in terms of Section 11(5) of the Act. The said petition was withdrawn with a liberty to issue a fresh arbitration notice.

8. The petitioner issued an arbitration notice on

03.07.2024, notifying the name of the arbitrator and calling upon the respondents to give consent for the appointment of an arbitrator to resolve the dispute in - 7 - NC: 2026:KHC:5081 CMP No. 412 of 2024 HC-KAR question. The respondents have replied to the arbitration notice raising untenable plea, and the respondents have not come forward appointment of an arbitrator. Hence, this petition.

9. Respondent Nos.1(a) to 4 filed a statement of objections contending the claim of petitioners is barred by limitation. It is also contended that the petitioners arrayed the persons who are not parties to the agreement. Accordingly, prays to dismiss the petition against respondent No.1(a) to 4.

10. Respondent Nos.5 to 7 filed a statement of objections contending that respondent Nos.5 to 7 are not parties to the agreement executed between the petitioners and respondent Nos.1 to 4. There is no dispute between the petitioners and respondent Nos.5 to 7. Hence, the petition filed by the petitioners is not maintainable, and the same - 8 - NC: 2026:KHC:5081 CMP No. 412 of 2024 HC-KAR deserves to be dismissed as against respondent Nos.5 to 7.

11. Respondent No.8 filed a statement of objections contending that respondent Nos.1 to 7 are the joint owners of the properties in question and they have entered into a Joint Development Agreement with respondent No.8 on 04.07.2022 regarding Survey Nos.73/9 and 73/6. It is contended that as per the judgment and decree dated 16.03.2016 passed in O.S. No.472 of 2006. Respondent Nos.1 to 7 were allotted their respective legitimate shares in the above said lands, and respondent No.8 has applied for the approval of sanctioned plan and other approvals as per law and respondent No.8 has commenced the construction work as per the sanctioned plan and the construction on the lands in question has reached the completion stage. - 9 - NC: 2026:KHC:5081 CMP No. 412 of 2024 HC-KAR

12. It is contended that the initiation of the arbitration proceedings regarding the lands in question after 20 the date of alleged unregistered agreement of sale is barred by limitation. Hence, prays to dismiss the petition.

13. Heard the arguments of the learned counsel for the petitioners, and learned counsel respondents.

14. Learned counsel for the petitioners submits that the petitioners and respondent Nos.1 to 4 have entered into a Sale Agreement on 27.10.2005 and respondent Nos.1 to 7 did not perform their part of the contract.

15. The petitioners filed a Commercial Application No.260 of 2022 before this Court against the order passed in A.A.No.120 of 2020. Meanwhile, respondents Nos.1 to 7 have executed a Joint Development Agreement in favour of respondent No.8 and he submitted that - 10 - NC: 2026:KHC:5081 CMP No. 412 of 2024 HC-KAR the dispute arose between the petitioners and respondent Nos.1 to 7, and the said dispute has to be resolved through an arbitrator.

16. He submits that as far as limitation is concerned, that issue has to be decided before the Arbitral Tribunal and to buttress his arguments, he has placed a reliance on the judgment of the Hon'ble Apex Court in the case of Hindustan Petroleum Corporation Ltd. v. BCL Secure Premises Private Ltd.1, and Managing Director, Bihar State Food and Civil Supply Corporation Ltd. v. Sanjay Kumar2.

17. He also submits that although respondent Nos.5 to 7 are not signatory to the agreement for sale, even the said aspect has to be raised before the Arbitral Tribunal. Hence, on these grounds, he prays to allow the petition. 1 2025 SCC Online SC 2746 2 2025 SCC Online SC 1604 - 11 - NC: 2026:KHC:5081 CMP No. 412 of 2024 HC-KAR

18. Per contra, Sri Jayakumar S. Patil, learned Senior Counsel for respondent Nos.1(a) to 4 submits that the application filed by the petitioners for the appointment of an arbitrator is barred by limitation. He submits that respondent Nos.5 to 7 are not the parties to the sale agreement and it does not bear the signatures of respondent Nos.5 to 7. Hence, the petition filed against respondent Nos.5 to 7 is not maintainable. Hence, on these grounds, he prays to dismiss the petition.

19. Learned counsel for respondent Nos.5 to 7 submits that respondent Nos.5 to 7 are not parties to the agreement for sale, and there is no dispute between the petitioners and respondent Nos.5 to 7. Hence, on these grounds, prays to dismiss the petition.

20. Learned counsel for respondent No.8 submits that the petition was filed after 20 years from the date of execution of an unregistered sale agreement and - 12 - NC: 2026:KHC:5081 CMP No. 412 of 2024 HC-KAR therefore, the claim made by the petitioners is barred by limitation. Hence, on this ground, he prays to dismiss the petition.

21. Perused the records, and considered the submissions of the learned counsel for the parties.

22. It is not in dispute that the petitioners and respondent Nos.1 to 4 have entered into a sale agreement dated 27.10.2005 regarding the lands bearing Survey Nos.73/5 and 73/6 and the dispute arose between the petitioners and the respondents. The petitioners approached the Commercial Court seeking for an interim measure in A.A. No.120 of 2020 restraining respondent Nos.1 to 7 alienating the said properties. The said application was rejected.

23. The petitioners filed a commercial A.P. No.260 of 2022 before this Court. Meanwhile, respondent Nos.1 to 7 entered into a Joint Development Agreement - 13 - NC: 2026:KHC:5081 CMP No. 412 of 2024 HC-KAR with respondent No.8 by executing a registered Joint Development Agreement dated 04.07.2022 regarding the land bearing Survey Nos.73/5 and 73/6.

24. The petitioners filed Civil Miscellaneous Petition No.6 of 2024 and the co-ordinate Bench of this Court vide order dated 27.06.2024 dismissed the petition as withdrawn, reserving a liberty to the petitioners to issue arbitration notice in terms of the Clause mentioned in the agreement, and to proceed in accordance with law.

25. After the disposal of the said Civil Miscellaneous Petition No.6 of 2024, the petitioners issued an arbitration notice on 03.07.2024, proposing the name of an arbitrator. Respondent Nos.1 to 4 replied legal notice vide reply dated

06.08.2024, and other respondents also replied to the legal notice vide reply notice dated 06.08.2024 - 14 - NC: 2026:KHC:5081 CMP No. 412 of 2024 HC-KAR and 05.08.2024 and contended that the initiating arbitration proceedings is barred by time.

26. Admittedly, the petitioners and respondent Nos.1 to 4 are parties to the arbitration agreement. As far as the claim of the petitioners is concerned, as to whether the claim was dead one or time barred claim is to be decided by the arbitrator. The scope of judicial intervention under Section 11 of the Act is restricted to the situation that the judicial authorities to find that arbitration agreement does exist or is null and void. The scope of examination is now confined only to the existence of the arbitration agreement, as per the law laid down by the Hon'ble Apex Court in the case of Uttrakhand Purva Sainik Kalyana Nigama Ltd. v. Northern Coal Field Ltd.3; the relevant portion is extracted as follows: “7.13 In view of the provisions of Section 16, and the legislative policy to restrict 3 (2020) 2 SCC 455 - 15 - NC: 2026:KHC:5081 CMP No. 412 of 2024 HC-KAR judicial intervention at the pre-reference stage, the issue of limitation would require to be decided by the arbitrator. Sub- section (1) of Section 16 provides that the arbitral tribunal may rule on its own jurisdiction, “including any objections” with respect to the existence or validity of the arbitration agreement. Section 16 is as an inclusive provision, which would comprehend preliminary issues touching upon the jurisdiction of the arbitral tribunal. The issue of limitation is a jurisdictional issue, which would be required to be decided by the arbitrator under Section 16, and not the High Court at the pre-reference stage under Section 11 of the Act. Once the existence of the arbitration agreement is not disputed, all issues, including jurisdictional objections are to be decided by the arbitrator.”

27. The Hon'ble Apex Court held that the issue of limitation is a jurisdictional issue, which would be required to be decided by the arbitrator under Section 16 of the Act, and not the High Court at the pre-reference stage under Section 11 of the Act. - 16 - NC: 2026:KHC:5081 CMP No. 412 of 2024 HC-KAR Once the existence of the Arbitration Agreement is not disputed, all issues, including the jurisdictional objections, are to be decided by the Arbitrator.

28. The Hon'ble Apex Court in the case of Hindustan Petroleum Corporation Ltd. (supra) has held that the scope of jurisdiction of referral Court, hearing a Section 11 petition, when faced with an issue of a joinder of a non-signatory the arbitration agreement, has been lucidly set out by the five Benches of the Hon'ble Apex Court in Cox and Kings Ltd. v. SAP India. Pvt. Ltd. and another4. The Hon’ble Apex Court also held that if the referral Court prima facie arrives at the satisfaction that a non- signatory is a veritable party, then only the Arbitral Tribunal is not denuded of its jurisdiction to decide whether non-signatory is indeed a party to the Arbitration Agreement on the basis of factual evidence and application of legal doctrine. 4 (2024) 4 SCC 1 - 17 - NC: 2026:KHC:5081 CMP No. 412 of 2024 HC-KAR

29. Further, the Hon'ble Apex Court in case of Aslam Ismail Khan Deshmuk v. ASAP Fluids Private Limited and another5 has held in paragraph 43 as follows: “43. Therefore, while determining the issue of limitation in the exercise of powers under Section 11(6) of the Act, 1996, the referral court must only conduct a limited enquiry for the purpose of examining whether the Section 11(6) application has been filed within the limitation period of three years or not. At this stage, it would not be proper for the referral indulge in an intricate evidentiary enquiry into the question of whether the claims raised by the petitioner are time barred. Such a determination must be left to the decision of the arbitrator.”

30. From the perusal of paragraph 43 of the aforesaid judgment, it discloses that the Referral Court must 5 (2025) 1 SCC 502 - 18 - NC: 2026:KHC:5081 CMP No. 412 of 2024 HC-KAR only conduct a limited enquiry for the purpose of examining whether Section 11(6) application has been filed within limitation of 3 years or not. At that stage, it would not be proper for the Referral Court to indulge in an intricate evidentiary enquiry into the question of whether the claim raised by the petitioners are time-barred. Such a determination must be left to the decision of the Arbitrator.

31. Considering the proposition laid down by the Hon'ble Apex Court in case of Aslam Ismail Khan Deshmuk, Uttrakhand Purvi Sainik Kalyan Nigam Ltd., and Hindustan Industrial Petroleum Corporation Ltd., (supra), the issue of limitation and misjoinder of necessary parties cannot be considered at the stage of considering an application under Section 11 of the Act, and the contentions of the learned Senior Counsel for respondent Nos.1(a) to 4 and the learned counsel for respondent Nos.5 to 7 cannot be accepted, for the reasons stated above. - 19 - NC: 2026:KHC:5081 CMP No. 412 of 2024 HC-KAR

32. Admittedly, there is an Arbitration Clause in both the agreements (which reads same), which is extracted as follows: “GOVERNING LAW AND ARBITRATION This Agreement shall be governed by and construed in accordance with laws of India. Disputes between the First Party and Second Party: All or any disputes, controversies and differences of opinion, between the First Party and/or any constituent of the First Party and the Second Party which is any manner - directly or indirectly arise out of, concern or relate to or are connected with this AGREEMENT including its breach or interpretation which cannot be settled amicably between the parties shall be referred to arbitration by an Arbitrator appointed by the Second Party. The Sole Arbitrator shall decide the disputes in accordance with the Arbitration and Conciliation Act. 1996 amendments, modifications, statutory - 20 - NC: 2026:KHC:5081 CMP No. 412 of 2024 HC-KAR enactments or re-enactments thereto and applicable India Laws. The seat of arbitration shall be Bangalore and the proceedings shall be conducted in English by a sole Arbitrator. The arbitrator shall as far as possible pronounce his Final Award within 30 days of entering reference and the parties shall co-operate. The Award shall be final and binding, upon the parties. Disputes between the First Party inter se. All or any disputes, controversies and differences of opinion between the first party inter-se which in any manner - directly or indirectly arise out of, concern or relate to or are connected with or impact this AGREEMENT including breach or interpretation which cannot be settled amicably between the parties shall be decided by Mr.Boopesh Reddy, S/o Mr.S.Javaram Reddy, having his office at No.49, 27th Main, BTM Layout 1st stage, Bangalore 560068. Mr.Boopesh Reddy, acting as the Sole Arbitrator shall decide the disputes in accordance with the - 21 - NC: 2026:KHC:5081 CMP No. 412 of 2024 HC-KAR Arbitration and conciliation Act. 1996 or any amendments, modifications, statutory enactments or re-enactments thereto and applicable India Laws. The seat of arbitration shall be Bangalore and the proceedings shall be conducted in English by a sole Arbitrator. The Arbitrator shall as far as possible pronounce his Final Award within 30 days of entering reference and the parties shall Co- operate. The award shall be final and binding upon the parties. Without prejudice the Arbitral Agreement, the Courts in Bangalore alone shall have jurisdiction in respect of any disputes arising out of the agreement. ”

33. The arbitral dispute arose between the petitioners and respondents, and the same has to be resolved through an arbitrator. Therefore, the petitioners have made out a ground to refer the dispute to the arbitration. Accordingly, I answer the point in the affirmative. - 22 - NC: 2026:KHC:5081 CMP No. 412 of 2024 HC-KAR

34. In view of the above discussion, I proceed to pass the following order: ORDER (I) This Civil Miscellaneous Petition is allowed. (II) Hon’ble Mr.Justice Anand Byrareddy, Retired Judge, High Court of Karnataka, is nominated as an Arbitrator to resolve the dispute(s) between the petitioners and the respondents in terms of the arbitration Clauses of agreements dated 27.10.2005, as per the provisions of Arbitration and Conciliation Act, 1996 and the Rules. (III) The Registry is directed to forward a copy of this order to the learned Arbitrator, and the Director of the Arbitration and Conciliation Centre, Bangalore. (IV) All the contentions of the parties, including the issue of limitation - 23 - NC: 2026:KHC:5081 CMP No. 412 of 2024 HC-KAR and the claim against respondent Nos.5 to 8, are kept open. (V) The Registry is directed to return the original and/or certified copies, if produced, the respective parties who have produced it/them by following due procedure. (VI) Pending application/s, if any, shall stand disposed of accordingly. Sd/- (ASHOK S.KINAGI) JUDGE RK CT:KHV List No.: 1 Sl No.: 23