Manjula Kashinath Vs Bhadra Landmarks Private Limited

THIS CMP IS FILED UNDER SECTION 11(6) OF ARBITRATION AND CONCILIATION ACT, 1996, PRAYING TO APPOINT A SOLE ARBITRATOR FOR ADJUDICATION OF DIFFERENCES AND DISPUTES (BEING THE CLAIMS OF PETITIONERS AGAINST RESPONDENTS) ARISING

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3 - NC: 2026:KHC:31233 CMP No. 355 of 2025

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HC-KAR

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FROM CLAUSE 15 OF THE AGREEMENT FOR SALE (ANNEXURE - C) DATED 1.01.2020 ENTERED INTO BETWEEN THE PARTIES.

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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 B M SHYAM PRASAD

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ORAL ORDER

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The petition is under Section 11 of the

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Arbitration and Conciliation Act, 1996 [for short, the ' Act '], and the petitioner, relying upon Clause-15 of the Agreement for Sale dated 01.01.2020, seeks appointment of a sole arbitrator to enter reference its actionable claim against the respondent. The question for consideration is should this Court exercise jurisdiction to appoint a sole arbitrator if the parties to the proceedings are already at issue in the suit in O.S. No. 5650 of 2023 on the file of the XXIX Additional City Civil and Sessions Judge, Bengaluru.

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NC: 2026:KHC:31233 CMP No. 355 of 2025

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HC-KAR

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Ms. Spoorthy Cotha, the learned counsel

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for the petitioner, and Sri H. S. Dwarakanath, the learned counsel for the respondents, are heard for disposal of the petition in the light of the undisputed facts and circumstances such as these and the rival contentions as recorded hereafter. The petitioners, a couple, assert that they have paid to the first respondent, a private limited company, a total sum of Rs.7,10,70,983/- prior to 01.01.2020 and that this payment is an unsecured loan. The petitioners and the respondents are signatories to the agreement for sale dated 01.01.2020 [ the Agreement ], which is relied in the present case, and a construction agreement of the even date.

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The petitioners' case is that the Agreement

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is to purchase a certain undivided interest in the immovable Property bearing No.14, Old No. 262, PID No. 1037, 4th Main Road, Mahalakshmi Layout, Bengaluru - 560 086 which gives them the right to

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NC: 2026:KHC:31233 CMP No. 355 of 2025

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HC-KAR

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purchase [ under a Construction Agreement ] apartment Nos. 301 and 302 in the third floor of the proposed residential apartment building called ' Bhadra Landmark ', Mahalakshmi Layout, Bengaluru. The petitioners' further case is that out of the amount of Rs.7,10,70,983/- as aforementioned, the respondents have apportioned a total sum of Rs.2,00,00,000/- as consideration payable by the petitioners under these two agreements. The petitioner's more specific case is that out of this amount, Rs.1,50,00,000/- is apportioned by the respondents towards the sale of the undivided share in the land, and that the first respondent, who is the only signatory to the construction agreement apart from the petitioners, has apportioned Rs.50,00,000/- towards cost of construction.

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The petitioners, apart from commencing

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proceedings under Section 9 of the Act in AA No.86 of 2023 and AA No. 81 of 2023 have filed a suit in OS

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6 - NC: 2026:KHC:31233 CMP No. 355 of 2025

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HC-KAR

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No. 5650/2023 for a sum of Rs.3,55,09,661/alleging that the cause of action for the suit, amongst others, is in that the directors of the first respondent appointed a third person as a director who has denied the liability to repay the loan. In the plaint, the petitioners have alluded to the construction agreement and the Agreement stating [ without further details ] that a sum of Rs.2,00,00,000/is appropriated towards the purchase of the apartments and cost of construction and that though the completed apartments have been handed over to others, the respondents [who are defendants therein along with another ] have refused to hand over possession to the petitioners.

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The respondents have filed their written statement denying the receipts relied upon by the petitioners as documents that support their case of appropriation of this Rs.2,00,00,000/-. In the light of the elaborate pleadings in these regards, the Civil

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HC-KAR

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Court has framed an issue 1 on whether the petitioners prove that the first respondent has apportioned a sum of Rs.2,00,00,000/- out of Rs. 7,10,70,983/- towards purchase of the apartments.

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Mr. H. S. Dwarakanath, the learned

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counsel for the respondent, apart from other grounds, submits that the question whether the petitioners have indeed paid any amount as asserted by them and whether any part of such amount has been apportioned as part of the sale consideration under the Agreement [and the Construction Agreement] is at large to be decided in the suit with a specific issue in this regard and that the petitioners who could have filed an application under Section 8 of the Act insisting upon a reference have agreed to the Civil Court's jurisdiction on this issue.

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1 Whether the Plaintiff proves that the defendant No.1 company has apportioned a sum of Rs.2 crores out of Rs.7,10,70,983/- towards purchase of flat bearing No.301 and 302 of Bhadra Landmark Mahalakshmi Layout?

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NC: 2026:KHC:31233 CMP No. 355 of 2025

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HC-KAR

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Mr. H. S. Dwarakanath argues that when

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the issue is thus central to the decision in the pending suit, this Court may not appoint a sole arbitrator. As against these assertions, M s. Spoorthi Cotha , the learned counsel for the petitioner, submits that this Court may appoint a sole arbitrator because even if there is any tenability in the objections as now canvassed, it would be within the arbitrator's jurisdiction under Section 16 to decide thereon.

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This Court must opine that the central issue at the core of the dispute are questions such as whether the petitioners have paid an unsecured loan of Rs.7,10,70,983/- to the respondents and whether they apportioned a sum of RS.1,50,00,000/- as consideration from the same. These questions are squarely covered in Issue No.2 framed by the Civil Court, and with this aspect being at large in the suit, this Court must opine that an arbitrator need not be

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HC-KAR

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appointed only because the arbitrator could decide on its own jurisdiction on this aspect. Even at this stage, it is shown that the central questions are pending in

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the suit, and the petitioners have submitted themselves to such jurisdiction without raising an objection as contemplated under Section 8 of the Act. Hence, the petition is rejected observing that all questions are left open to be contested in the suit.

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SD/(B M SHYAM PRASAD) JUDGE

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NV

Manjula Kashinath v. Bhadra Landmarks Private Limited

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Manjula Kashinath v. Bhadra Landmarks Private Limited

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