Sri N. Jayaram Vs Sri B R Ramaswamy Gowda

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NC: 2025:KHC:50499 WP No. 9439 of 2023

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IN THE HIGH COURT OF KARNATAKA AT BENGALURU DATED THIS THE 3^RD DAY OF DECEMBER, 2025

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BEFORE

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THE HON'BLE MR. JUSTICE S VISHWAJITH SHETTY WRIT PETITION NO. 9439 OF 2023 (GM-CPC)

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BETWEEN:

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SRI N. JAYARAM S/O LATE NANJUNDAIAH AGED ABOUT 60 YEARS R/A NO.156/8, II CROSS, II MAIN, ASHTAGRAMA RASTHE KAMAKSHIPALYA BENGALURU - 560 079.

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SRI M. NAGARAJU S/O LATE T. MUNIYAPPA AGED ABOUT 54 YEARS R/AT NO.L-119 13TH CROSS ROAD LAKSHMINARAYANAUPRA BENGALURU - 560 021.

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Digitally signed by NANDINI M S Location: HIGH COURT OF KARNATAKA

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SRI SAI SUBRAMANYA D.S S/O LATE T VENKATA REDDY AGED ABOUT 57 YEARS R/A NO.1024, TULASI NILAYA II CROSS ROAD, IST MAIN SHANKAR NAGAR BENGALURU - 560 096.

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…PETITIONERS

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(BY SRI LAKANAAPURMATH CHIDANANDAYYA, ADV.)

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AND:

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SRI B R RAMASWAMY GOWDA, S/O LATE B BETTASWAMY GOWDA AGED ABOUT 69 YEARS, R/A NAMMAMANE DR RAJKUMAR NAGAR B M ROAD KUNIGAL-572130.

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…RESPONDENT

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NC: 2025:KHC:50499 WP No. 9439 of 2023

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(BY SRI SANTHOSH S. HUGI, ADV.,)

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THIS WP IS FILED UNDER ARTICLE 227 OF THE CONSTITUTION OF INDIA PRAYING TO CALL FOR THE RECORDS WHICH ULTIMATELY RESULTED IN PASSING OF TH IMPUNGNED ORDER DTD 18.04.2023 IN OS NO.169/2022 BY THE LEARNED SENIOR CIVIL JUDGE AND JMFC KUNIGAL ALLOWING IA NO.2 AND DIRECTING TO RETURN THE PLAINT WITH LIBERTY TO APPROACH COMPETENT FORUM VIDE ANNX -A.

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THIS PETITION, COMING ON FOR PRELIMINARY HEARING IN B GROUP, THIS DAY, ORDER WAS MADE THEREIN AS UNDER: CORAM: HON'BLE MR. JUSTICE S VISHWAJITH SHETTY

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ORAL ORDER

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The plaintiff is before this Court in this writ petition filed under Article 227 of the Constitution of India with a prayer to set aside the order dated 18.04.2023 passed on I.A.No.II in O.S.No.169 of 2022 by the Court of Senior Civil Judge & JMFC, Kunigal.

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Heard the learned counsel appearing for the parties.

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The suit in O.S.No.169 of 2022 is filed by the petitioner herein before the jurisdictional Civil Court at Kunigal seeking the relief of specific performance. In the said suit, I.A.No.II was filed on behalf of the sole defendant under Section 8 of the Arbitration and Conciliation Act, 1996 (for short the 'Act, 1996) and the said application was opposed by the

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plaintiffs by filing objections. The trial Court vide the order impugned has allowed the said application and has returned the plaint with liberty to the plaintiffs to appear before the competent forum. Being aggrieved by the said order, plaintiffs are before this Court.

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Learned counsel for the petitioner having reiterated

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the grounds urged in the petition submits that there is not even a prayer in the application to refer the dispute to the arbitrator in terms of the Agreement dated 28.02.2018. The defendant having disputed the very existence of the said document could not have filed an application under Section 8 of the Act, 1996. He submits that the alleged arbitration clause does not provide for arbitration of the dispute. Therefore, the trial Court was not justified in allowing I.A.No.II.

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Per contra, learned counsel appearing for the contesting respondent submits that in view of the specific clause found in the agreement for sale dated 28.02.2018, the trial Court was justified in allowing I.A.No.II. He submits that even though the defendant has not admitted the said agreement, it is the duty of the Court to refer the parties to the

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arbitrator, in the event it finds that there exists an arbitration clause in the agreement on which plaintiff has placed reliance. In support of his arguments, he has relied upon the judgment of the Hon'ble Supreme Court in the case of SUNDARAM FINANCE LIMITED AND ANOTHER V. T THANKAM - (2015) 14 SCC 444 and also in the case of BRANCH MANAGER , MAGMA LEASING AND FINANCE LTD . & ANOTHER V. POTLURI MADHAVILATA AND ANOTHER - (2009) 10 SCC 103 .

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Section 8 of the Arbitration Act reads as follows:-

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"8. Power to refer parties to arbitration where there is an arbitration agreement.—1[(1)A judicial authority, before which an action is brought in a matter which is the subject of an arbitration agreement shall, if a party to the arbitration agreement or any person claiming through or under him, so applies not later than the date of submitting his first statement on the substance of the dispute, then, notwithstanding any judgment, decree or order of the Supreme Court or any Court, refer the parties to arbitration unless it finds that prima facie no valid arbitration agreement exists.]

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(2) The application referred to in subsection (1) shall not be entertained unless it is accompanied by the original arbitration agreement or a duly certified copy thereof:

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2[Provided that where the original arbitration agreement or a certified copy thereof is not available with the party applying for reference to arbitration under sub-section (1), and the said agreement or certified copy is retained by the other party to that agreement, then, the party so applying shall file such application along with a copy of the arbitration agreement and a petition praying the Court to call upon the other party to produce the original arbitration agreement or its duly certified copy before that Court.]

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(3) Notwithstanding that an application has been made under sub-section (1) and that the issue is pending before the judicial authority, an arbitration may be commenced or continued and an arbitral award made .

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The words used in Section 8(1) is that " If a party to

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the arbitration agreement or any person claiming through or under him ". Therefore, Section 8 of the Act, 1996 can be invoked by a party to the agreement or any person claiming through or under him. In the present case, the defendant has

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disputed the very existence of the agreement and therefore he could not have maintained the application under Section 8 of the Act of Act, 1996. In addition to the same, reading of Section 8 of the Act, 1996 would also go to show that, there are certain other obligations on the party invoking Section 8 the Act, 1996 which is found in Section 8(2) of the Act, 1996.

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From a reading of the obligations found in Section 8(2) of the Act, 1996 and the proviso provided there under would also make it very clear that Section 8 of the Act, 1996 can be invoked only by a party who admits the agreement and not otherwise.

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In the present case, in the affidavit which is filed in support of the application, the defendant has disputed the existence of the very agreement on which he has placed reliance for invoking Section 8 of the Act of 1996. In addition to the same, perusal of the application would go to show that the prayer made in the application is to dismiss the suit or return the plaint for want of jurisdiction. There is no such prayer made in the application to refer the parties for arbitration having

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regard to the alleged arbitration clause found in the agreement for sale dated 28.02.2018.

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The High Court of Allahabad In the case of BAL KISHAN BANSAL V PRAMIT BANSAL & ANR - AIR 2006 ALLAHABAD 305 in almost identical circumstances where a prayer was made in the application filed under Section 8(1) of the Act of 1996 to dismiss the suit has observed in paragraph Nos.10 and 20 as follows:-

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"10. It is axiomatic that aforesaid application is short of requirements and does not fulfill the ingredients of the aforesaid section 8(1) and 8(2) of the Act. Defendant/Applicant has not expressed his desire to refer the dispute to arbitration. There should have been an expression of desire on his part to refer the matter to Arbitration. The application on the face of it cannot be termed as an application under Section 8 of the Act. The requirement of sub-section (1) of section 8 is that the party first should apply for enforcement of arbitration clause and also he should so apply with promptitude not later than when submitting his first statement. Words ‘so applies’ and ‘not later than’ do show that there should be an intention and willingness and readiness on the part of the party to invoke Arbitrationn Clause; to move in the matter quickly

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with speed and express his intention to invoke Arbitration Clause without any delay.

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20. In the application, giving rise to the present revision, there was no request to refer the matter to the arbitration as per arbitration clause. A prayer “to dismiss the suit”, in view of the arbitration clause, would not satisfy the fourth requirement of Section 8(1) of the Act, as mentioned by the Apex Court in the case of P. Anand Gajapathi Raju ((2000) 4 SCC 539 : AIR 2000 SC 1886) (Supra)"

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In addition to the aforesaid, reading of the alleged clause which is said to be a clause providing for arbitration of the dispute involved between the parties, it is seen that the said clause provided that, in the event of any dispute arising between the parties, out of the agreement for sale dated 28.02.2018, the decision of the mediator Sri D Srinivasa Murthy, Advocate would be binding on the parties. Therefore, a doubt arises whether the said clause can be considered as a clause which provides for arbitration of the dispute between the parties which arise out of the agreement for sale dated 28.02.2018. Under the circumstances, I am of the opinion that trial Court was not justified in allowing I.A.No.II. The

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judgments on which reliance has been placed by the learned counsel for the respondent would not be applicable to the facts and circumstances of the present case.

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12. In the case of SUNDARAM FINANCE LIMITED

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(supra), in paragraph No.8, on which reliance has been placed by the learned counsel for the respondent, it is observed as follows:-

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"8. Once there is an agreement between the parties to refer the disputes or differences arising out of the agreement to arbitration, and in case either party, ignoring the terms of the agreement, approaches the civil court and the other party, in terms of Section 8 of the Arbitration Act, moves the court for referring the parties to arbitration before the first statement on the substance of the dispute is filed, in view of the peremptory language of Section 8 of the Arbitration Act, it is obligatory for the court to refer the parties to arbitration in terms of the agreement, as held by this Court in P. Anand Gajapathi Raju v. P.V.G. Raju ".

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From a reading of the aforesaid, it is apparent that

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there should be an admitted agreement between the parties and it is only then the disputes or differences arising out of such an agreement can be referred to the arbitrator as

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provided under the arbitration clause under the said

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agreement.

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In the case of MAGMA LEASING FINANCE

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LIMITED (supra), in paragraph No.17, the Hon'ble Supreme Court has observed as follows:-

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" 17 . Section 8 reads thus:

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“8. Power to refer parties to arbitration where there is an arbitration agreement.—(1) A judicial authority before which an action is brought in a matter which is the subject of an arbitration agreement shall, if a party so applies not later than when submitting his first statement on the substance of the dispute, refer the parties to arbitration.

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(2) The application referred to in sub-section (1) shall not be entertained unless it is accompanied by the original arbitration agreement or a duly certified copy thereof.

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(3) Notwithstanding that an application has been made under sub-section (1) and that the issue is pending before the judicial authority, an arbitration may be commenced or continued and an arbitral award made.”

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An analysis of Section 8 would show that for its applicability, the following conditions must be satisfied:

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(a) that there exists an arbitration agreement;

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(b) that action has been brought to the court by one party to the arbitration agreement against the other party;

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(c) that the subject-matter of the suit is same as

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the subject-matter of the arbitration agreement;

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(d) that the other party before he submits his first statement of the substance of the dispute, moves the court for referring the parties to arbitration; and

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(e) that along with the application the other party tenders the original arbitration agreement or duly certified copy thereof."

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From a reading of the aforesaid, it is very clear that only in the event of the party invoking Section 8 of the Act, 1996, completely complies the requirement of Section 8 of the Act, 1996, then he can invoke the said provision of law. In the case on hand, since the defendant has disputed very existence of the agreement, it cannot be said that he has complied the requirement of Section 8 of the Act, 1996. Under the circumstances, I am of the opinion, the order impugned cannot be sustained.

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16. Accordingly, the following:-

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ORDER

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(i) The writ petition is allowed.

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(ii) The impugned order 18.04.2023 passed on I.A.No.II in O.S.No.169 of 2022 by the Court of Senior Civil Judge & JMFC, Kunigal is set aside. Consequently, I.ANo.II is dismissed.

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Pending IAs' do not survive for consideration and accordingly the same are disposed of.

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Sd/(S VISHWAJITH SHETTY) JUDGE

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NMS List No.: 1 Sl No.: 60

Sri N. Jayaram v. Sri B R Ramaswamy Gowda

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Sri N. Jayaram v. Sri B R Ramaswamy Gowda

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