SMT RACHANA MURTHY R v. MR SHASHIKANTH N

S/O LATE SRI. NAJAPPA, AGED ABOUT 53 YEARS.

2. SMT. KAMALAKSHI. W/O MR. SHASHIKANTH N, Digitally signed by KIRAN KUMAR R Location: HIGH COURT OF KARNATAKA - 2 - NC: 2026:KHC:2200 CMP No. 655 of 2025 HC-KAR AGED ABOUT 44 YEARS. (BOTH ARE RESIDENTS OF NO. 169/10, <GURUKRIPA=, 12TH CROSS, MAHALAKSHMI LAYOUT, BANGALORE-86) ALSO RESIDENT OF (AT FLAT NO.1002, 10TH FLOOR, GOLDEN GRAND APARTMENT, YASHWANTHPURA, BANGALORE-22) (R1 & R2 ARE SERVED) &RESPONDENTS THIS CMP IS FILED UNDER SECTION 11(5) OF ARBITRATION AND CONCILIATION ACT, 1996, PRAYING TO APPOINT AN ARBITRATION ON THE PANEL OF ARBITRATION CENTRE KARNATAKA (DOMESTIC AND INTERNATIONAL), BENGALURU TO DECIDE THE DISPUTE THAT HAS ARISEN BETWEEN THE PETITIONER AND THE RESPONDENTS PURSUANT TO THE BREACH OF THE MEMORANDUM OF UNDERSTATING DATED 09.07.2019 AS PER ANNEXURE C. THIS PETITION, COMING ON FOR ADMISSION, THIS DAY, ORDER WAS MADE THEREIN AS UNDER: ****** - 3 - NC: 2026:KHC:2200 CMP No. 655 of 2025 HC-KAR CORAM: HON'BLE MR. JUSTICE ASHOK S.KINAGI ORAL ORDER

1. This Civil Miscellaneous Petition is filed under section

3. 11(5) of the Arbitration and Conciliation Act, 1996 (for short 8the Act9) seeking for the appointment of the Arbitrator in terms of clause contained in Memorandum of Understanding dated 09.07.2019 at Annexure C as per the provisions of the Act. Brief facts, leading rise to the filing of this petition are as follows: It is the case of the petitioner that, the respondents executed a sale deed in favour of Bharthesh and Lakshmeesh on 03.06.2016 regarding the flat. Further, Shri Manjunath Hedge purchased the same for a consideration of Rs.35,00,000/- from the respondents vide sale deed dated 12.04.2017. Thereafter, Shri Manjunath Hegde came to know about the sale transaction between the respondents - 4 - NC: 2026:KHC:2200 CMP No. 655 of 2025 HC-KAR and Bharthesh and Lakshmeesh regarding the same flat. Further, the Memorandum of Understanding dated 09.07.2019 was signed by Manjunath Hedge and the Respondents, wherein the respondents agreed refund the sale consideration of Rs.35,00,000/- to Manjunath Hegde. Manjunath Hegde advanced Rs. 35,00,000/- to the respondents in addition to the sale consideration amount. Under the terms of Memorandum of Understanding, the respondents agreed not only to return the sale amount, but also the loan amount i.e., to the tune of Rs. 70,00,000/-. However, the Respondents failed to adhere to the terms of MOU. Thereafter, the late Manjunath Hegde instituted a suit in O.S.No.2031/2020. The trial court vide its order dated 17.04.2025 referred the matter to Arbitration and consequently, rejected the plaint. Further, late Manjunath Hegde invoked an Arbitration clause in MOU and issued Arbitration notice on - 5 - NC: 2026:KHC:2200 CMP No. 655 of 2025 HC-KAR

07.05.2025 proposing the name of the Arbitrator. However, Manjunath Hegde passed away on

18.05.2025 leaving behind the petitioner as his legal representative. On 20.06.2025, the petitioner issued another arbitration notice seeking concurrence of the respondents in appointing the Arbitrator. Both the notices were returned unserved. Hence, this petition. Heard the arguments of the learned counsel for the petitioner. Learned counsel for the petitioner submits that, the Late Manjunath Hegde and the respondents entered into the MOU and pursuant thereto, the dispute arose between them regarding the refund of amount. He submits that the arbitral dispute has arisen between the parties and the same has to be resolved through Arbitration in terms of the clause contained in the Memorandum of Understanding. Accordingly, prays to allow the petition. - 6 - NC: 2026:KHC:2200 CMP No. 655 of 2025 HC-KAR

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

7. The point that would arise for consideration is as follows: "Whether the petitioner has made out a ground to refer the dispute to the Arbitration in terms of the clause contained Memorandum Understanding

09.07.2019 as per the provisions of the Act?=

8. It is undisputed that Late Manjunath Hegde and the respondents entered the Memorandum of Understanding dated 09.07.2019 regarding refund of sale consideration amount and the loan amount. Subsequently, the respondents failed to refund the sale consideration amount and the loan amount. The late Manjunath Hegde approached the civil court in O.S. No. 2031 of 2020 and the trial court referred the dispute to the arbitration and consequently rejected the plaint. The late Manjunath - 7 - NC: 2026:KHC:2200 CMP No. 655 of 2025 HC-KAR Hegde invoked an arbitration clause in the MOU and issued an Arbitration notice on 07.05.2025. He passed away on 18.05.2025 leaving behind the petitioner as his legal representative. Further, the petitioner also invoked an arbitration clause by issuing the Arbitration notice dated 20.06.2025 proposing the name of the Arbitrator.

9. I have perused the Arbitration clause contained in the Memorandum Understanding

09.07.2019, which reads as follows: <Whereas, it has been agreed to by and between the parties that any dispute arising out of this MOU shall be referred to arbitration under the provisions of the Arbitration and Conciliation Act, 1996 at Bengaluru only. The parties agree that the dispute shall be adjudicated by a single arbitrator mutually agreeable to, and appointed by, the parties. Any unresolved disputes arising from the subject matter of this MOU shall be adjudicated in an appropriate Court within the city of Bengaluru.= - 8 - NC: 2026:KHC:2200 CMP No. 655 of 2025 HC-KAR

10. From the perusal of the Arbitration clause referred above, it discloses that any dispute arising out of the Memorandum of Understanding has to be referred to Arbitration as per the provision of Act, and the dispute shall be adjudicated by the single arbitrator mutually agreeable and appointed by the parties.

11. Admittedly, the dispute arose between the petitioner respondents furtherance of Memorandum of Understanding dated 09.07.20198 regarding the refund of sale consideration amount and the loan amount. The late Manjunath Hegde and the petitioner, both invoked an arbitration clause by issuing arbitration notices dated 07.05.2025 and

20.06.2025 respectively, proposing the name of the Arbitrator. The arbitral dispute has arisen between the parties, and the same has to be resolved by the Arbitrator in terms of the clause contained in the Memorandum of Understanding. In view of the above discussion, the petitioner has made out a ground to - 9 - NC: 2026:KHC:2200 CMP No. 655 of 2025 HC-KAR refer the dispute to the Arbitrator. Accordingly, I answer the point in the affirmative.

12. In the result, the following order: ORDER i. The CMP is allowed. ii. Hon9ble Justice Smt. K.S.Mudgal, Former Judge, High Court of Karnataka, is appointed as an Arbitrator to resolve the dispute between the parties to the petition in terms of clause contained in MOU dated 09.07.2019 as per the provisions of the Act and the Rules. iii. The Office is directed ton communicate this learned Arbitrator and Arbitration and Conciliation Centre, Bengaluru. iv. Pending application(s), if any, shall stand disposed of. Sd/- (ASHOK S.KINAGI) JUDGE sks(Online)