Allowed

Puravankara Limited v. Lakshman

Karnataka HC26 Oct 2023CMP/414/2021

Case brief

AI extract

What is this about?

The Karnataka High Court allowed a civil miscellaneous petition filed under Section 11(4) of the Arbitration and Conciliation Act, 1996, to appoint a sole arbitrator for a dispute arising under a joint development agreement. The court held that the claim is not ex facie time barred due to lack of proof regarding the respondent's alleged property sale, thus directing an arbitrator appointment.

What did the court decide?

Appointment of Hon'ble Justice A V Chandrashekar as the Sole Arbitrator to adjudicate the dispute between the parties.

Puravankara Limited Vs Lakshman — Arbitration | Karnataka HC (2023)

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NC: 2023:KHC:37947 CMP No. 414 of 2021

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IN THE HIGH COURT OF KARNATAKA AT BENGALURU DATED THIS THE 26^TH DAY OF OCTOBER, 2023 BEFORE

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THE HON'BLE MR JUSTICE B M SHYAM PRASAD CIVIL MISC. PETITION NO. 414 OF 2021

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BETWEEN:

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PURAVANKARA LIMITED (FORMERLY PURAVANKARA PROJECTS LIMITED) A COMPANY REGISTERED UNDER THE COMPANIES ACT 1956 HAVING ITS REGISTERED OFFICE AT NO. 130/1, ULSOOR ROAD, BANGALORE 560042

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REPRESENTED BY ITS AUTHORIZED SIGNATORY MR. PRAVEEN KUMAR

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…PETITIONER

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(BY SRI. JOSEPH ANTHONY.,ADVOCATE)

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Digitally signed by NARASIMHA MURTHY VANAMALA Location: HIGH COURT OF KARNATAKA

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AND:

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MR. LAKSHMAN AGED ABOUT 63 YEARS S/O MR. CHIKKANNA 548, 4^TH MAIN ROAD, MAHALAKSHMIPURA BANGALORE 560086.

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…RESPONDENT

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(BY SRI.NIRUPAN GOWDA H.N., ADVOCATE)

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NC: 2023:KHC:37947 CMP No. 414 of 2021

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THIS CIVIL MISC. PETITION IS FILED UNDER SEC.11(4) OF THE ARBITRATION AND CONCILIATION ACT 1996, PRAYING TO APPOINT A SOLE ARBITRATOR FOR ADJUDICATION OF DISPUTES THAT HAVE ARISEN BETWEEN THE PETITIONER AND THE RESPONDENT IN TERMS CLAUSE (18) OF PARA VII OF THE JOINT DEVELOPMENT AGREEMENT DATED MARCH 17, 2006 (ANNEXURE-A).

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THIS PETITION, COMING ON FOR ADMISSION, THIS DAY, THE COURT MADE THE FOLLOWING:

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ORDER

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The petitioner has entered into a ‘ Joint Development Agreement’ [for short, ‘the JDA’ ] with the respondent on 17.03.2006, and the respondent in executing this JDA, has offered its immovable properties for development. The respondent has also executed a contemporaneous power of attorney in favour of the petitioner. The petitioner, in consideration of this agreement and attorney, has paid a total sum of Rs.1,00,00,000/- as Refundable Deposit agreeing to pay a further sum of Rs.64,00,000/- with the respondent producing all the

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NC: 2023:KHC:37947 CMP No. 414 of 2021

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documents to establish clear and marketable title to the immovable properties. The petitioner has initially exchanged the communications with the respondent calling for documents/clarification on title.

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The communications in this regard are

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between the months of January 2007 and June 2015. The respondent, on 22.06.2015 has addressed the communication to the petitioner stating inter alia that because of the gross delay in implementation of the project, the property has been transferred. The respondent has not furnished the details of the transfer in this communication dated 22.06.2015. The petitioner, after a lull for over a period of almost six years, has issued the notice to the respondent to execute the documents for ensuring compliance to commence the proposed development and to commence the arbitration proceedings.

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NC: 2023:KHC:37947 CMP No. 414 of 2021

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In the legal notice dated 15.07.2021, the

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petitioner, while invoking the arbitration clause has referred to the registered Agreement to Sell executed in the year 2014-15. Insofar as the petitioner’s nominee Arbitrator, the petitioner has indicated a former Judge of this Court. According to the petitioner, the respondent has not issued any reply.

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Sri Joseph Antony, the learned counsel for the petitioner, argues in support of the petition relying upon the aforesaid circumstances categorically stating that the petitioner, given the circumstances, would confine the dispute to the claim to recover the amount paid under the JDA and the consequential damages. Sri Nirupan Gowda H N, the learned counsel for the respondent, submits that even the claim for recovery of money and damages is hopelessly time barred and he contends that the petitioner has been informed way back in the year

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NC: 2023:KHC:37947 CMP No. 414 of 2021

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2015 that the subject properties, because of the delay in implementation of the project, has been sold.

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Sri Nirupan Gowda canvasses that it is settled that if cause of action has arisen but no action whatsoever is taken, the claim will become time barred and hence the application under Section 11 of the Arbitration and Conciliation Act, 1996 [for short, ‘the Arbitration Act’ ] must be rejected, and in this regard the learned counsel proposes to rely upon a decision of the Hon’ble Supreme Court in B and T AG v. Ministry of Defence¹ .

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The petitioner’s case is that it has a subsisting cause of action insofar as the recovery of money and damages, and that at any rate these claims are not ex facie time barred. This facet must necessarily be examined in the light of the fact that though the respondent states that the subject property is sold, the details of the same are not

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1 AIR 2023 SC 2731

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NC: 2023:KHC:37947 CMP No. 414 of 2021

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furnished in any of the correspondences and the petitioner has only adverted to an Agreement for Sale

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as against a completed sale. Further, the respondent, who is served with the notice on 27.04.2021 and the later notice dated 15.07.2021, has not responded to them. The test for a decision on an application under Section 11 of the Arbitration Act would be to see whether the claim is ex facie time barred, and in the peculiarities of this case where the details of the completed sale are not on record, this Court cannot opine that even the petitioner’s claim for recovery of money paid under the JDA and for damages is ex facie time barred. This would be a question that will have to be canvassed in the arbitral proceedings that is to be decided. Hence the following:

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ORDER

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[a] The petition is allowed.

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[b] Hon'ble Sri. Justice A V Chandrashekar, a former Judge of the

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NC: 2023:KHC:37947 CMP No. 414 of 2021

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High Court of Karnataka, is appointed as the Sole Arbitrator to enter reference of the dispute between the petitioner and the respondents and conduct the proceeding at the Arbitration and Conciliation Centre (Domestic and International), Bengaluru according to the Rules governing the Centre.

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[c] The Registry is directed to communicate this order [through E-mail] to the Arbitration and Conciliation Centre (Domestic and International), Bengaluru and Hon'ble Sri. Justice A V Chandrashekar, a former Judge, High Court of Karnataka, Address: No.406, 3^rd Floor, Ramashridhar Apartment, 2^nd Cross, 9^th Main, BTM Layout2^nd Stage, Bengaluru – 560 076 [E-mail: [email protected]] as required under the Appointment of Arbitrators by the

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NC: 2023:KHC:37947 CMP No. 414 of 2021

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Chief Justice of Karnataka High Court

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Scheme, 1996.

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Sd/JUDGE

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AN/-

Puravankara Limited v. Lakshman

Case brief

What is this about?

What did the court decide?

Puravankara Limited v. Lakshman

Case brief

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What did the court decide?

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