M/S Kvr Sowbhagya Properties Vs Mr. B Sreedhar

MR. CHILLA PRASHANT REDDY S/O MR. SEETHARAMA REDDY AGED ABOUT 50 YEARS PARTNER AT M/S KVR SOWBHAGYA PROPERTIES R/AT VILLA 12, SECRET SOIL-LIVING WALLS HENNUR MAIN ROAD BENGALURU - 560 077

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MR. C RAMACHANDRA REDDY S/O LATE C. PRABHAKAR REDDY AGED ABOUT 58 YEARS PARTNER OF KVS SOWBHAGYA PROPERTIES R/AT BOMMAIAHGARIPALLE ROMPICHARLLA MANDALAM, CHITTOR DISTRICT ANDHRA PRADESH - 517 192

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…APPELLANTS

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(BY SRI NISHANTH A.V., ADVOCATE)

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AND:

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MR. B. SREEDHAR S/O LATE B. VENKATA SUBBA REDDY AGED ABOUT 57 YEARS PARTNER OF M/S KVR SOWBHAGYA PROPERTIES R/AT FLAT NO.904, A BLOCK SAKET CALLIPOLIS SARJAPURA ROAD DODDAKANNALLI BENGALURU - 560 035

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M/S SREE VIJAYA SOWBHAGYA PROPERTIES PRIVATE LIMITED REPRESENTED BY ITS DIRECTOR MR. CHINNAM CHANDRA REDDY S/O CHINNAM SUBBI REDDY AGED ABOUT 57 YEARS NO.291/1, RAVELAPADU MANDALAM EAST GODAVARI DISTRICT ANDHRA PRADESH - 533 238

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MR G RAMMOHAN RAJU S/O G. PRAHABALA RAJU AGED ABOUT 56 YEARS PARTNER OF M/S KVR SOWGHBYA PROPERTIES R/AT NO 40/1, S-3, VR APARTMENTS UTTARAHALLI MAIN ROAD

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CHIKKALASANDRA BENGALURU - 560 061

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…RESPONDENTS

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(BY SRI G. VENKAT SUBBA RAO, ADVOCATE FOR SRI H.V. HARISH, ADVOCATE FOR C/R-1 & SRI NAVEEN KUMAR R.C., ADVOCATE FOR R-2 & 3)

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THIS COMMERCIAL APPEAL IS FILED UNDER SECTION 13 (1-A) OF THE COMMERCIAL COURTS ACT, 2015, R/W SECTION 37(1) OF THE ARBITRATION AND CONCILIATION ACT, 1996, PRAYING TO SET ASIDE THE ORDER DATED 25.06.2025 PASSED IN COMMERCIAL A.A.NO 27/2024, ON THE FILE OF THE XI ADDITIONAL DISTRICT AND SESSIONS JUDGE, BENGALURU RURAL DISTRICT, BENGALURU & ETC.

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THIS APPEAL, COMING ON FOR ADMISSION, THIS DAY,

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JUDGMENT WAS DELIVERED THEREIN AS UNDER:

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CORAM: HON'BLE MR. VIBHU BAKHRU, CHIEF JUSTICE and HON'BLE MR. JUSTICE C.M. POONACHA

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ORAL JUDGMENT

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(PER: HON'BLE MR. VIBHU BAKHRU, CHIEF JUSTICE)

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The appellants have filed the present appeal under Section 37(1)(b) of the Arbitration and Conciliation Act, 1996 [ A&C ] impugning an order dated 25.06.2025 [ impugned order ] passed by the learned Commercial Court in COM.AA.No.27/2024,

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captioned Sri. B. Sreedhar v. M/s. KVR Sowbhagya Properties and others.

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The respondent No.1 - Sri. B. Sreedhar had filed the said application under Section 9 of the A&C Act seeking interim measures of protection against the appellants. Appellant No.1 (M/s. KVR Sowbhagya Properties) is a registered partnership firm and the respondent was a partner of the said firm. The appellant was formed for the purpose of carrying on the business of purchasing, leasing or otherwise, acquiring lands and plots. It is stated that the appellants had entered into a Joint Development Agreement [JDAs] with owners of certain lands, which are described in the schedules to the petition. It is stated that the firm developed sites in terms of the JDAs and sold the sites falling to its share.

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One joint development projects is currently being implemented and it is alleged that other constituent partners of appellant are managing the affairs of the appellant No.1 and are alienating the sites without disclosing the net profit of the firm. The respondent No.1 alleges that he had made several efforts for seeking accounts and for recovering their share of profits.

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However, the appellants have neither divulged the accounts of the appellant No.1, nor have shared the profits from the projects. It is stated that in the aforesaid context, disputes had arisen between the parties. It was also stated that on 10.01.2013, a reconstitution deed was entered into and the cause of action had arisen on the said date. In the aforesaid circumstance, the respondent No.1 had filed the application inter alia praying as under:

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“a. Direct the Respondent No.1 & 2 to provide books of accounts pertaining to the partnership firm from

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10.01.2013 till date.

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b. Grant perpetual injunction against the respondents restraining them, their agents, executors, assigns, representative and any other person claiming right under them from selling or creating any third-party rights in respect of the Schedule Properties so far as it pertain to the share of Respondent No 1 Partnership Firm till the arbitrator is appointed and accounts are

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settled;

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c. Grant perpetual injunction against the respondent No.2 or any of the partners/signatories from operating Current Bank Account held in Bank of Baroda, #325, Chinmaya Mission Hospital Road; Binnamangala stage-1, Indiranagar, Bengaluru-560038, the Bank Account No is 89240200000126, IFSC Code: BARBOVJINBA and opening any new bank accounts in the name of 1^st respondent firm, till disputes are resolved between the parties.

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d. To grant cost of this suit and such other relief/s that this Hon'ble court deems fit to pass in the facts and the circumstances of the case, in the interest of justice and equity."

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The learned Commercial Court, after briefly examining the subject matter of disputes, allowed the application and directed the appellants to provide books of accounts pertaining to appellant No.1 from 10.01.2013 till date of inspection by the respondents. Further, the appellants were also restrained from selling or creating

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any third party rights in respect of the scheduled properties belonging to the appellant firm.

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It is the appellants' case that respondent No.1’s share in the partnership firm was 5%. Therefore, at best, he could only claim 5% of the profits of the appellant firm. However, as an interim measure, the learned Commercial Court has interdicted the sale of all properties in the joint development project, which fall to the share of the firm. It is also contended that the said order would have the effect of effectively closing down the operations of the appellant firm as the part of the funds generated from booking of the sites are required to develop the subject property.

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After some arguments, the counsel appearing for the respondents have consented that the impugned order be confined to reserving 20,155 sq.ft. of space, which corresponds to 5% of the site's as available.

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In view of the above, it is directed that the interim order restraining the appellants from selling or alienating any property shall be confined only to developed space of 20,155 sq.ft. in the project in question (Signature Tulips Uptown), which is developed

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in a layout formed over 15 aces and 20 guntas of land comprising of approximately 182 sites.

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The appellants shall file an affidavit giving particulars of the space/sites, which shall be kept free from any encumbrance and should be available in the event the respondent prevails in the claims, within a period of two weeks.

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The present order is passed with the consent of the parties.

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The present appeal is disposed of in the aforesaid terms.

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Sd/(VIBHU BAKHRU) CHIEF JUSTICE

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Sd/(C.M. POONACHA) JUDGE

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SD List No.: 2 Sl No.: 29

M/S Kvr Sowbhagya Properties v. Mr. B Sreedhar

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M/S Kvr Sowbhagya Properties v. Mr. B Sreedhar

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