Disposed

M/S Naris Realtors Company v. Beml Employees House Building Co-Operative Society Ltd.

Karnataka HC17 Aug 2022COMAP/99/2022

Case brief

AI extract

What is this about?

The High Court dismissed the appeal, holding that the sought interim relief was spent as development works were substantially complete. The Court relegate parties to the arbitral tribunal for determining rights and compensation, statingHigh Court findings on merits would not bind the tribunal.

What did the court decide?

No interim stay granted; parties relegated to arbitral tribunal for merits and compensation.

M/S Naris Realtors Company Vs Beml Employees House Building… — Arbitration | Karnataka HC (2022)

¶1

¶2

IN THE HIGH COURT OF KARNATAKA AT BENGALURU

¶3

DATED THIS THE 17^TH DAY OF AUGUST, 2022

¶4

PRESENT

¶5

THE HON'BLE MR. JUSTICE G.NARENDAR

¶6

AND

¶7

THE HON'BLE MR. JUSTICE C M JOSHI

¶8

COMAP NO. 99/2022

¶9

BETWEEN:

¶10

M/S. NARIS REALTORS COMPANY, NO. E-1, 3^RD STAGE, KUVEMPUNAGAR, MYSURU-570023. REPRESENTED BY ITS PARTNERS MR SHYAM KUMAR S/O LATE M.S.KRISHHA, AGED ABOUT 51 YEARS, RESIDING AT E-I, 3^RD STAGE, KUVEMPUNAGAR, MYSURU-570023.

¶11

... APPELLANT

¶12

(BY SRI MANMOHAN P.N, ADV.)

¶13

AND:

¶14

BEML EMPLOYEES HOUSE BUILDING CO-OPERATIVE SOCIETY LTD., BELAVADI, MYSURU TALUK, REPRESENTED BY ITS RPESIDENT.

¶15

BEML EMPLOYEES HOUSE BUILDING CO-OPERATIVE SOCIETY LTD., BELAVADI, MYSURU TALUK, REPRESENTED BY ITS SECRETARY.

¶16

¶17

M/S SKYTOP BUILDERS PRIVATE LIMITED, HAVING BRANCH OFFICE AT #876/5, 876/5A, NEW CHS, 1^ST CROSS, LAKSHMIPURAM, CHAMRAJA MOHALLA, MYSORE – 670004.

¶18

HAVING CORPORATE OFFICE AT #175, 6^TH CROSS, GANDHINAGAR, BANGALORE – 560 009

¶19

REPRESENTED BY ITS MANAGING DIRECTOR MR. B.L.NAGENDRA PRASAD.

¶20

... RESPONDENTS

¶21

(BY SRI SANGAMESH R.B, ADV. FOR R1 AND R2, SRI K.G.SADASHIVAIAH, ADV. FOR R3.)

¶22

THIS COMAP IS FILED UNDER SECTION 37(b) READ WITH 13(1A) OF THE COMMERCIAL COURTS ACT, PRAYING TO SET ASIDE THE ORDER DATED 04/02/2022 PASSED ON A.A.NO.03/2021, PASSED BY THE COMMERCIAL COURT AND II ADDL. DIST. AND SESSIONS JUDGE, MYSORE AND CONSEQUENTLY ALLOW AA NO. 03/2021 AS PRAYED FOR AND PASS SUCH OTHER AND FURTHER ORDERS AS DEEMED FIT IN LIGHT OF THE FACTS AND CIRCUMSTANCES OF THE CASE.

¶23

THIS COMAP COMING ON FOR “ADMISSION” THIS DAY, G.NARENDAR J, DELIVERED THE FOLLOWING:

¶24

JUDGMENT

¶25

Heard the learned counsel for the appellant and the

¶26

learned counsel for the respondent Nos.1 and 2 and the learned counsel for the respondent No.3.

¶27

¶28

Though the matter is listed for admission, with

¶29

the consent of the learned counsel the appeal is taken up for disposal.

¶30

The appeal arises out of an order passed by the Commercial Court at Mysuru in case bearing AA No.3/2021 out of a petition preferred by the appellant invoking the provisions of Section 9 of the Arbitration and Conciliation Act of 1996 praying for grant of interim measures and thereby restrain the respondent from giving or executing any development agreement with respect to the schedule property to any other third party developer or contractor excepting the petitioner.

¶31

The Commercial Court after hearing the parties

¶32

has been pleased to frame the following three points for consideration –

¶33

Whether the petitioner has made out a prima facie case for grant of interim measures restraining the respondents from giving or executing development agreement with respect to the

¶34

¶35

schedule property to any other developer other than the petitioner deserves to be allowed?

¶36

In whose favour the balance of convenience and hardship lies?

¶37

Whether the petitioner is entitled to the interim measures as sought for?

¶38

What order?

¶39

In respect of point No.1 the trial Court has

¶40

rendered a finding in the negative. In so far as point No.2, the trial Court has held that the balance of convenience lies in favour of the Society and the point No.3 is also held against the petitioner appellant herein. The trial Court after entering into the merits has by its detailed order considered and held against the appellant – petitioner on all the three counts herein above mentioned.

¶41

Today, the matter is listed for admission and the

¶42

learned counsel for the appellant would vehemently contend that the respondents have resorted to a novel method of

¶43

¶44

stating that they have revived the agreement of 2005 and that such revival of a terminated agreement is unknown to law and is perse illegal and hence the respondent society is liable to be injuncted and a positive direction should ensue holding that the petitioner/appellant alone is entitled to continue the execution of the development works in the layout.

¶45

As the bone of contention revolved around the execution work we queried the learned counsel for respondent Nos.1 and 2 as to what is the quantum of work that is left to be completed in the layout.

¶46

The appeal was called in the morning session and on the query being posed the counsel sought time to seek clarifications. Again the case is called out in the post-lunch session and the learned counsel for the respondent Nos.1 and 2 submits that all development works have been completed and that the remaining work is only metaling/asphalting of a few of the roads. If that be the factual position, in our opinion the very injunctory relief

¶47

¶48

sought by the appellant/petitioner appears to have lost steam.

¶49

It is the case of the petitioner/appellant that

¶50

though work was allotted to a third party contractor, as there was no progress, the same was terminated and the works were handed over to the appellant. That the work was entrusted to the appellant in 2018 and disputes arose in 2021. As a consequence of the dispute the work was once again snatched away from the appellant and handed over to the 4^th respondent herein.

¶51

Though this Court is inclined to take up the matter on merits we find that in view of the fact situation prevailing such an exercise would be a futile exercise or an exercise in futility and would be rendered academic as it is asserted that development works are complete except asphalting a few of the roads within the layout.

¶52

In that view of the matter, we are of the considered opinion that the relief sought in the petition has

¶53

¶54

spent itself. Be that as it may, there is no doubt that mere execution of the work by the 4^th respondent would not in any manner detract from the right of the appellant to seek for appropriate reliefs before the arbitrator. It is also not in dispute that now an arbitrator has been appointed and that too at the instance of the appellant. In that view of the matter, we are of the considered opinion that any subsequent developments cannot be the subject matter of the petition and would necessarily require to be agitated under the Arbitration Act and before the arbitral tribunal.

¶55

It is needless to say that irrespective of the omissions and commissions alleged each other, in the event of the appellant/claimant demonstrating a case in accordance with law, the claimant would be entitled to such compensation as the arbitrator may deem fit to award in the facts and circumstances of the case. It is not that the rights of the appellant-petitioner stand completely nullified or defeated. In the event the appellant is able to

¶56

¶57

demonstrate he would certainly be entitled to the compensation as may be demonstrated by him.

¶58

The reasoning with regard to hardship set out by

¶59

the trial Court also merits consideration. The litigants are the Society and the contractor engaged and whose services have been engaged by the management. But the fact remains that the real beneficiaries are the members of the Society for whose benefit the layout has been formed and the trial Court in our opinion has rightly concluded that the real hardship would be caused to the members if the development works are injuncted from being completed. In that view of the matter, we deem it appropriate to relegate the parties to have their rights adjudicated before the arbitral tribunal.

¶60

The learned counsel for the appellant would submit that the Commercial Court has rendered certain positive findings with regard to the merits of the claims. In our opinion it would be inequitable and also it would shackle the Tribunal from appreciating and rendering an award on

¶61

¶62

the merits of the claims. In that view of the matter, we deem it appropriate to observe that the findings rendered by the trial Court shall not bind the arbitrator and the claims of the parties shall be appreciated independent of the findings rendered by the trial Court while disposing of AA No.3/2020-21.

¶63

The appeal stands disposed of in the above terms.

¶64

Office to draw up the decree accordingly.

¶65

It is further clarified that the disposal of this

¶66

appeal will not come in the way of the appellant if the appellant so desires to agitate the matter before the arbitrator and seek such interim measures as it deems necessary in the facts and circumstances of the case.

¶67

Sd/JUDGE

¶68

Sd/JUDGE

¶69

ykl

M/S Naris Realtors Company v. Beml Employees House Building Co-Operative Society Ltd.

Case brief

What is this about?

What did the court decide?

M/S Naris Realtors Company v. Beml Employees House Building Co-Operative Society Ltd.

Case brief

What is this about?

What did the court decide?

What the court decided

A compact analysis

Issues for consideration

Statutes considered

Parties & counsel

Coram

Case details

Similar cases

Sri Venkatesh M Inamdar Vs the State of Karnataka

Dr T Shivananjappa Vs State of Karnataka

State of Karnataka Vs Sri P S Suresh

Mr Ashish Mittal Vs Sri K M Umesh @ K M Umeshwaraiah

The State of Karnataka Vs Smt T v Vijaya