SMT. SUJATHA v. M/S DAIWIK HOUSING PRIVATE LIMITED

Digitally signed by KIRAN KUMAR R Location: HIGH COURT OF KARNATAKA - 2 - NC: 2026:KHC:5383 CMP No. 491 of 2024 HC-KAR KASABA HOBLI, HOSAKOTE TALUK, BANGALORE DISTRICT. (BY SRI. SUBRAMANYA S UPASANA., ADVOCATE) AND: …PETITIONERS M/S DAIWIK HOUSING PRIVATE LIMITED HAVING ITS OFFICE AT NO. 1555, DAIWIK HOUSE, 19TH MAIN, 1ST SECTOR, H.S.R. LAYOUT, BANGALORE-560 102, REPRESENTED BY ITS DIRECTORS, NANJA REDDY, AND NAGARAJA REDDY. (BY SRI. NARENDRA S., ADVOCATE) …RESPONDENT THIS CIVIL MISCELLANEOUS PETITION IS FILED UNDER SECTION 11 OF THE ARBITRATION AND CONCILIATION ACT, 1996, PRAYING TO A) ALLOW THE ABOVE PETITION. B) CONSTITUTE AN ARBITRAL TRIBUNAL OF A SOLE ARBITRATOR TO DECIDE THE MATTER IN ISSUE AS PER CLAUSE 24 OF THE JOINT DEVELOPMENT AGREEMENT DATED

01.12.2014 BETWEEN THE PETITIONERS AND RESPONDENT IN ACCORDANCE WITH LAW. C) PASS ANY SUCH OTHER ORDER OR DIRECTION THAT THIS HONBLE COURT DEEMS FIT, IN THE INTEREST OF JUSTICE AND EQUITY. - 3 - NC: 2026:KHC:5383 CMP No. 491 of 2024 HC-KAR 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 of the Arbitration and Conciliation Act, 1996 (‘Act’ for short) for the appointment of a Sole Arbitrator to resolve the dispute between the petitioners and respondent in terms of clause 24 of the joint development agreement dated 01.12.2014 vide Annexure-A.

2. Brief facts leading rise to the filing of this petition are as follows:

2.1. The petitioners and the respondent executed a joint development agreement on 01.12.2014; petitioners executed a general power of attorney in favour of the respondent on the same day. The respondent did not comply with the terms and conditions of the joint development agreement. The husband of petitioner No.1 passed away on 13.05.2021 and the respondent failed to - 4 - NC: 2026:KHC:5383 CMP No. 491 of 2024 HC-KAR perform their obligations under the joint development agreement. The petitioner issued a legal notice dated

26.12.2022 calling upon the respondent to execute registered cancellation deed of joint development agreement and general power of attorney. The respondent replied to the legal notice on untenable grounds. There is an arbitration clause in the joint development agreement. The petitioners invoked the arbitration clause by issuing a notice dated 04.04.2024 under Section 21 of the Act. The respondent again, gave an untenable reply to the notice. Hence, this petition.

3. Heard the arguments of learned counsel for the petitioners and learned counsel for the respondent.

4. Learned counsel for the petitioner submits that, the arbitral dispute arose between the parties to the petition after having entered into the joint development agreement and general power of attorney. The petitioners invoked the arbitration clause by issuing arbitration notice. Accordingly, he prays to allow the petition. - 5 - NC: 2026:KHC:5383 CMP No. 491 of 2024 HC-KAR

5. Learned counsel for the respondent submits no objection to allow the petition.

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

7. The point that arises for consideration is as follows: Whether the petitioners have made out a ground to appoint a Sole Arbitrator adjudicate the dispute between the parties to the petition in terms of clause 24 of the joint development agreement dated 01.12.2014 vide Annexure-A as per the provisions of the Act?

8. It is an undisputed fact that the petitioners and the respondent have executed a joint development agreement dated 01.12.2014 and the petitioners have executed General power of attorney in favour of the respondent on the same day. The dispute arose between the parties to the petition alleging that the respondent has - 6 - NC: 2026:KHC:5383 CMP No. 491 of 2024 HC-KAR not complied with the terms and conditions of joint development agreement. The petitioners have issued legal notice dated 26.12.2022 calling upon the respondent to execute cancellation of joint development agreement and revocation of the general power of attorney. The respondent replied on 13.01.2023 to the legal notice. The petitioner has produced the joint development agreement which provides an arbitration clause at clause 24, which reads as follows: “24. DISPUTE RESOLUTION a. Irrespective of what is stated in this agreement, any breach committed by the Second Party should be complained of by the First Party in writing and shall further call upon the Second Party to remedy the breach and on the failure of Second Party to remedy such breach within fifteen days or within such extended period as may be mutually agreed from the date of receipt of such notice to that effect, the parties shall take steps to resolve such compliance or non-compliance in terms stated below. b. In the event of any dispute of difference arising in relation to this agreement, interpretation, - 7 - NC: 2026:KHC:5383 CMP No. 491 of 2024 HC-KAR performance or any other matter, the same shall be decided by mutual discussion between the parties. Either of the parties shall be entitled to raise such question in writing in a letter addressed to the other party and the parties shall meet and use good faith efforts to resolve such dispute or difference within fifteen working days c. In the event of the parties being unable to resolve the dispute mutually, the dispute may be referred by either party to arbitration by an arbitrator who shall not be below the rank of a retired District Judge in accordance with the provisions of the Arbitration and Conciliation Act, 1996 and shall be decided by such Arbitral Tribunal. The award shall be final and binding on the parties. d. The arbitration proceedings will be held Bangalore City and the language of the arbitration proceedings will be in English. e. The disputes shall be resolved in fifteen working days of reference or within a reasonable period as may be agreed between the parties in writing. It is however clarified that the work will not stop pending the arbitration proceedings”

9. From the perusal of clause 24 of the joint development agreement, it discloses that if any dispute - 8 - NC: 2026:KHC:5383 CMP No. 491 of 2024 HC-KAR arises between the parties to the agreement, the said dispute should be resolved through an arbitration. The petitioners, invoking an arbitration clause, issued arbitration notice on 04.04.2024 proposing the name of an Arbitrator. The respondent did not agree to the name proposed by the petitioner and replied to the arbitration notice. There is an arbitration clause in the agreement and dispute arose between the parties to the petition and the same should be resolved through arbitration. Learned counsel for the respondent also submits no objection to nominate any retired District Judge as an Arbitrator.

10. In view of the above discussion, the petitioners have made out a ground to refer the dispute to arbitration. For the foregoing, I answer the point in the affirmative. Accordingly, I proceed to pass the following: ORDER i. The civil miscellaneous petition is allowed; ii. Sri. Rajmohan Srivatsava, retired District Judge is appointed as an Arbitrator to resolve - 9 - NC: 2026:KHC:5383 CMP No. 491 of 2024 HC-KAR the dispute between the petitioners and the respondent in terms of clause 24 of the joint development agreement vide Annexure-A, as per the provisions of the Act and the Rules; iii. The Registry is directed to communicate this order to the learned Arbitrator, and the Arbitration and Conciliation Centre, Bengaluru; iv. Pending IA(s), if any, shall stand disposed of accordingly. Sd/- (ASHOK S.KINAGI) JUDGE PA CT:KHV List No.: 2 Sl No.: 43