Allowed

Sri B Srinivas v. Sri Munishamappa

Karnataka HC4 Sept 2024CMP/220/2023

Case brief

AI extract

What is this about?

A petitioner sought appointment of an arbitrator under Section 11(6) of the Arbitration and Conciliation Act, alleging breach and sale of schedule properties despite a registered joint development agreement containing clause 19. The court confirmed existence of the arbitration agreement, left limitation to the arbitrator, allowed the petition and appointed a former judge as arbitrator.

What did the court decide?

Justice A.N.Venugopala Gowda, Former Judge, High Court of Karnataka, appointed sole arbitrator to resolve the dispute.

Sri B Srinivas Vs Sri Munishamappa — Arbitration | Karnataka HC (2024)

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NC: 2024:KHC:36397 CMP No. 220 of 2023

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IN THE HIGH COURT OF KARNATAKA AT BENGALURU

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DATED THIS THE 4^TH DAY OF SEPTEMBER, 2024

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BEFORE

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THE HON'BLE MR JUSTICE ASHOK S.KINAGI

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CIVIL MISC. PETITION NO. 220 OF 2023

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BETWEEN:

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SRI B SRINIVAS S/O B BRAHAM AGED ABOUT 51 YEARS, HAVING OFFICE AT NO.79, BHAGYASHREE COMPLEX, 2^ND FLOOR, OPP: MARUTHI SUZUKI SERVICE STATION, RMV 2^ND STAGE, DEVASANDRA, SANJAYNAGAR BENGALURU-560094

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…PETITIONER

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(BY SRI. NARENDRA S. MAHESH CHOWDHARY & SHAHBAAZ HUSSAIN, ADVOCATES)

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Digitally signed by R DEEPA Location: HIGH COURT OF KARNATAKA

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AND:

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SRI MUNISHAMAPPA S/O LATE SONAPPA AGED ABOUT 73 YEARS, R/AT KEMPALINGANAPURA VILLAGE KASABA HOBLI, DEVANAHALLI TALUK BENGALURU RURAL DISTRICT-562123

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…RESPONDENT

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(BY SRI. PRAVEEN KUMAR K N., ADVOCATE)

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THIS CIVIL MISC. PETITION IS FILED UNDER SEC.11(6) OF THE ARBITRATION AND CONCILIATION ACT 1996, PRAYING TO 1. REFER THE PARTIES TO ARBITRATION., 2. APPOINT A RETIRED DISTRICT JUDGE/HIGH COURT JUDGE OR ANY OTHER COMPETENT PERSON AS SOLE ARBITRATOR TO ADJUDICATE

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THE DISPUTES BETWEEN THE RESPONDENT AND THE PETITIONER IN TERMS OF CLAUSE- 19 OF THE JOINT DEVELOPMENT AGREEMENT DATED 13.03.2015 AS PER ANNEXURE 'A'.

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THIS PETITION, COMING ON FOR ADMISSION, THIS DAY, ORDER WAS MADE THEREIN AS UNDER:

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CORAM: HON'BLE MR JUSTICE ASHOK S.KINAGI

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ORAL ORDER

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This civil miscellaneous petition is filed under section 11(6) of the Arbitration and Conciliation Act, 1996, seeking the appointment of an Arbitrator as per clause 19 of the Joint Development Agreement (for short 'JDA') dated 13.03.2015 vide Annexure-A to resolve the dispute between the parties.

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

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The respondent owns the land bearing Sy. No.6/1 measuring 2.00 acres and land bearing Sy. No.7/P-2 measuring 1.00 acre and land bearing Sy. No.8/2 measuring 25 guntas. All the lands are at Kempalinganapura village, Kasaba Hobli, Devanahalli

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Taluk, Bengaluru district. The respondent offered and requested the petitioner to develop the petition schedule properties, and accordingly, the petitioner and respondent entered into a registered JDA dated 13.03.2015. The petitioner paid a refundable security deposit of Rs.36,20,000/- to the respondent, and the respondent received the said amount on various dates. When such was the situation, the petitioner noticed something fishy in the attitude of the respondent and came to know that the respondent had sold items No.1 and 3 of the petition schedule properties in favour of one Anil Shivashankaran by way of a registered sale deed dated 02.07.2012 and the said document was kept pending for the registration. Later, on 02.02.2016, the respondent registered the sale deed after entering into JDA with the petitioner. The petitioner learnt about the fact in June 2022 and immediately issued a notice to the respondent invoking the arbitration clause. The respondent replied to the legal notice declining the name of the proposed arbitrator.

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Hence, a cause of action arose for the petitioner to file this petition.

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The respondent filed the statement of objections

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denying the averments made in the petition. It is contended that the respondent never executed any joint development agreement nor received any consideration as alleged in the petition. It is contended that the petitioner’s claim is based on non-existing rights, and prima facie, the claim is hopelessly barred by limitation. Nothing exists to be performed explicitly by the respondent or by the petitioner. It is contended that the petitioner colluded with the respondent’s earlier counsel, created the documents, and further, the respondent lodged a criminal case against the petitioner. A criminal case was registered in Vishwanathapura police station in crime No.146/2023, and the petitioner is a total stranger to the respondent and his family. It is further contended that one Anil Shivashankar has also defrauded the respondent. It is submitted that certain original suits

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seeking cancellation of papers and a couple of criminal proceedings are pending consideration. Hence, on these grounds, prays to dismiss the petition.

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Heard the learned counsel for the petitioner and

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learned counsel for the respondent.

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Learned counsel for the petitioner submits that the petitioner and the respondent had entered into JDA to develop the property mentioned in the JDA. Further, the petitioner has paid Rs.36,20,000/- as a security deposit. During the existence of JDA, the respondent has sold the petition schedule properties items No.1 and 3 in favour of one Anil Shivashankaran under the registered sale deed dated 02.07.2012. He submits that the respondent did not perform his part of the contract/obligation in terms of the JDA. Hence, a dispute has arisen between the petitioner and respondent in terms of the JDA. The petitioner, by issuing the notice, invoked the Arbitration clause in terms of JDA dated 13.03.2015. He submits that the respondent has lodged a criminal case against the

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petitioner, and the petitioner, aggrieved by the same, approached this Court. This Court has granted an interim order, staying the further proceedings pursuant to the registration of FIR. Hence, on these grounds, he prays to allow the petition.

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Per contra, learned counsel for the respondent submits that a claim made by the petitioner is barred by limitation and further submits that the respondent has denied the execution of JDA. He submits that the petitioner colluded with the respondent's earlier counsel and created JDA, and the respondent has not received any amount from the petitioner. Hence, the petitioner has no locus standi to file this petition. Hence, on these grounds, he prays to dismiss the petition.

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Heard and perused the records and considered

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the submissions of the learned counsel for the parties.

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The point that arises for my consideration is as follows:

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"1. Whether the petitioner has made out the ground to refer the matter to the Arbitrator to resolve the dispute between the parties in terms of clause 19 of the JDA dated 13.03.2015 as per the Arbitration and Conciliation Act, 1996?"

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Point No.1 : It is the case of the petitioner

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that petitioner and respondent have entered into JDA dated 13.03.2015 and pursuant to the execution of JDA, the petitioner has paid a sum of Rs.36,20,000/- as a refundable security deposit and further produced the copy of the Bank statement of the petitioner to establish that the petitioner has paid refundable security deposit of Rs.36,20,000/-. It is stated that a civil suit is pending in O.S.No.299/2011 on the file of Senior Civil Judge, Devanahalli and requested the plaintiff to clear the said case, but the respondent did not resolve the dispute with the plaintiff in O.S.No.299/2011. Further, the respondent has sold items Nos.1 and 3 in favour of one Anil Shivashankaran under the registered sale deeds dated 02.07.2012 and 02.02.2016. The respondent, to play

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fraud upon the petitioner, executed the registered sale deeds in favour of Anil Shivashankaran. The petitioner requested the respondent to cancel the sale deed dated 02.07.2012 and perform his duties as per the JDA dated 13.03.2015. The respondent went on postponing on one pretext or other. The petitioner invoked the arbitration clause as per Arbitration Clause 19 of the JDA by issuing notice on 20.07.2022. The respondent replied, denying the execution of JDA, and contended that a criminal case was registered against the petitioner on the ground that the petitioner, by colluding with the respondent's earlier counsel, had created the document, i.e., JDA.

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Admittedly, the petitioner has produced the registered JDA, which bears the photographs of the respondent. If the said JDA was concocted, the respondent should have challenged the JDA. The respondent has not challenged the JDA. He lodged a complaint, and a criminal case was registered against the petitioner in Crime No.146/2023. The said FIR was

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registered on 05.09.2023, i.e., after filing this Civil Miscellaneous petition. Admittedly there exists a registered JDA dated 13.03.2015 and also an arbitration clause.

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In a criminal petition filed by the petitioner, the Co-ordinate bench of this court granted an interim order dated 15.07.2024 staying further investigation in Crime No.146/2023. Further, the petitioner got issued a notice on 20.07.2022, invoking an arbitration clause and suggested the name of Smt.R.Rashmi Sagar, advocate, as a sole arbitrator. The respondent replied to the legal notice vide dated 16.08.2022 denying the execution of JDA. From the perusal of Annexure-A, there exists a Joint Development Agreement executed between the petitioner and respondent and there is an arbitration clause in the said JDA.

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Learned counsel for the respondent submitted that the claim made by the petitioner is barred by limitation.

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The scope of judicial intervention under Section 11 of the Act of 1996 is restricted to find that an Arbitration Agreement does exist or is null and void, i.e., the scope of an examination as provided under Section 11 of the Act of 1996, is now confined only to the existence of an Arbitration Agreement as per the law laid down by the Hon'ble Apex Court in the case of M/s.Uttarakhand Purv Sainik Kalyan Nigam Limited Vs. Northern Coal Field Limited reported in AIR 2020 SC 979 . The Hon'ble Apex Court further examined the issue of limitation and held that the limitation is a mixed question of law and fact, and the same involves a question of jurisdiction. The said issue is to be determined based on the facts and grounds. The issue of limitation is to be decided by the arbitral Tribunal. The said decision is aptly applicable to the present case on hand, as the respondent has taken the contention, that the claim made by the petitioner is barred by limitation. The said issue cannot be considered at the stage of considering an application under Section 11 of the Act of 1996, and the contention of the learned counsel for the

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NC: 2024:KHC:36397 CMP No. 220 of 2023

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respondent regarding the issue of limitation cannot be accepted for the reasons stated above.

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Given the above discussion, the petitioner has made a ground to refer the matter to the arbitrator to resolve the dispute between the petitioner and respondent. Accordingly, I answer point No.1 in the affirmative.

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Given the above discussion, I proceed to pass the following:

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ORDER

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The civil Miscellaneous petition is allowed.

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Hon'ble Sri. Justice A.N.Venugopala Gowda, Former judge of the High Court of Karnataka, is appointed as an arbitrator to resolve the dispute between the parties as per the provisions of the Arbitration and Conciliation Act, 1996.

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The office is directed to forward a copy of this order to Hon'ble Sri. Justice A.N. Venugopal Gowda, Former justice of the High Court of

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NC: 2024:KHC:36397 CMP No. 220 of 2023

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Karnataka, and also to the Arbitration and Conciliation Centre, Bengaluru.

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Sd/(ASHOK S.KINAGI) JUDGE

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sks

Sri B Srinivas v. Sri Munishamappa

Case brief

What is this about?

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Sri B Srinivas v. Sri Munishamappa

Case brief

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