IN THE HIGH COURT OF KARNATAKA AT BENGALURU DATED THIS THE 21ST DAY OF NOVEMBER, 2019 BEFORE THE HON’BLE MR.JUSTICE B. VEERAPPA CIVIL MISCELLANEOUS PETITION NO.141/2019 BETWEEN:
1. Mr. A.L.Muthaiah S/o Late M.AL.Alagappa Chettiar Aged about 83 years R/at No.34, Rajmahal Vilas Extension Bengaluru – 560 080 2. Mr. A.L.Annamalai S/o Late M.AL.Alagappa Chettiar Aged about 69 years R/at No.221, Upper Palace Orchards Guttahalli, Bellary Road Bengaluru – 560 080 Represented by his GPA holder Petitioner Nos.1 and 2 Mr. Alagappa Annamalai Aged about 38 years (By Sri Ajesh Kumar S, Advocate) AND:
M/s Millennia Realtors Private Limited Millennia Tower, ‘B’ Level 12 to 14 No.1 and 2, Murphy Road, Ulsoor Bengaluru – 560 008 Represented by Directors/ ... Petitioners Authorized Signatories (1) Mr. Chatru M Menda (2) Mr. Raj Menda (3) Mr. Manoj Menda (4) Mr. Suresh Menda & (5) Mr. Venkat Reddy ... Respondent (By Sri Srinivas Raghavan, Senior Counsel for Sri Archisman Choudhary, Advocate) This Civil Miscellaneous Petition is filed under Section 11(6) of the Arbitration and Conciliation Act 1996, praying this Court to appoint the sole Arbitrator to adjudicate the disputes between the petitioners and the respondent with reference to the claims made by the petitioners in the legal notice dated 27.02.2019 as per Annexure-D, in pursuant to clause No.37 of Agreement dated 10.02.2011 at Annexure-A.
This Civil Miscellaneous Petition coming on for admission this day, the Court made the following:
ORDER The petitioners have filed the present Civil Miscellaneous Petition under the provisions of Section 11(6) of the Arbitration and Conciliation Act, 1996 (for short the ‘Act’) for appointment of Sole Arbitrator to adjudicate the dispute between the parties in terms of clause 37.1 of the registered Joint Development Agreement (hereinafter referred to as ‘JDA’ for short) entered into between the parties on 10.02.2011, only insofar as commercial building mentioned in Schedule-II property.
2. It is the case of the petitioners that they are the absolute owners of all that piece and parcel of the land described in the Schedule mentioned in this Civil Miscellaneous Petition. The respondent is a Company being incorporated under the Companies Act, 1956.
3. That the respondent represented to the petitioners that they are the Developers of Real Estate and with vast and varied experience in the development of lands and construction of multi storied residential and commercial complexes, condominiums and information Technology Parks and has its operation all over India and the respondent had assured the petitioners that they shall develop the Schedule-I property. It is further case of the petitioners that the respondent considering the design feasibility and permissible Floor Area Ratio (FAR) for the Schedule-I property had proposed the development of “commercial building” to be developed on a portion of the Schedule-I property which is described as Schedule-II property. Further the respondent had proposed the remaining land of schedule-I property described in Schedule-III property shall be developed as a Residential Building. After negotiations, both the parties entered into registered Joint Development Agreement dated 10.02.2011, Power of Attorney (Schedule-II property- Commercial Building) dated 11.02.2011, Joint Development Agreement (Residential) dated 10.02.2011 and Power of Attorney (Schedule-III property-in respect of the Residential Building) dated 11.02.2011. It is further contended that pursuant to the aforesaid registered JDA and Power of Attorney, the petitioners permitted the respondent to enter into the Schedule-II property for carrying out objects of the said Development Agreement and subsequently Sharing Agreement also came to be executed between the parties on 24.01.2013.
4. The petitioner further contended that the respondent committed various breaches of the Development Agreement as enumerated infra, however, constrained to force the petitioners to take delivery of the Commercial Building without prejudice to their rights. Prior to taking delivery of the commercial building, the petitioners had raised various issues with reference to non- performance of the respondent with reference to the conditions of the aforesaid Development Agreements pertaining to the Commercial Building. Therefore, the petitioners constrained to issue arbitration legal notice dated 27.02.2019 to the respondent invoking the arbitration clause 37.1. The respondent issued untenable reply on 08.04.2019 denying the averments made in the notice. Therefore the petitioners are before this Court for the reliefs sought for.
5. The respondent filed objections mainly contending that the existence of dispute as on today is in dispute and further contended that after completion of all the buildings, the petitioner accepted everything and therefore there is no dispute. Except in the letter dated 08.05.2017, it is stated by the petitioner that “we accept, confirm and acknowledge without prejudice”. Therefore there is no existence of any conditions of the JDA and two years later the present petition is filed. Therefore sought to dismiss the Civil Miscellaneous petition.
6. I have heard the learned counsel for the parties to the lis.
7. Sri Ajesh Kumar S, learned counsel for the petitioners reiterating the averments made in the petition has contended that there is no dispute with regard to registered JDA dated 10.02.2011 and existence of clause 37.1 and the petitioner has complied the provisions of Section 11(5) of the Act by issuing notice as contemplated. Though reply is issued, he pointed out from the documents produced by the respondent as per document No.20, wherein it is specifically stated that after taking possession of the commercial building and paying advance amount.
But stated that said acceptance and confirmation without prejudice to the further claim as contained in the emails. Therefore he sought to allow the Civil Miscellaneous petition.
8. Learned Senior Counsel for the respondent while justifying the objections specifically contended that there is no existence of agreement as the conditional agreement fully completed and acknowledged by the petitioner and the mere words used in document No.20 dated 08.05.2017, the petitioner while accepting everything, only using the word without prejudice that means there is still existence of dispute between the parties. Therefore he sought to dismiss the Civil Miscellaneous petition.
9. Having heard the learned counsel for the parties, it is an undisputed fact that both the parties entered into registered Joint Development Agreement dated 10.02.2011 in respect of Commercial building Schedule-II property and parties also entered in to power of attorney and development agreement dated 10.02.2011 and 11.02.2011. The Arbitration clause at 37.1 mentioned in the Development Agreement reads as under:
37.1. Dispute Resolution and Arbitration:
If any dispute/s or difference/ of whatsoever nature arise under or in connection with this Agreement relating to the enforcement of the rights, duties, powers and obligations conferred under this Agreement between the parties, such disputes shall be settled by a sole arbitrator to be appointed in accordance with the Arbitration and Conciliation Act, 1996.
10. Accordingly the parties also entered into power of attorney, development agreement dated 11.02.2011 and 10.02.2011. According to the petitioners, there is a due amount from the respondents in terms of Joint Development Agreement. According to the respondent, the respondent has complied the terms and conditions of the JDA and there is nothing to be complied.
11. By perusal of the documents produced by the respondent as per document No.20 filed along with objections, the present petitioners acknowledge taking of possession of the commercial building and paying advance amount to the respondent. But, by a rider that without prejudice means the conditions of JDA still existence. It is to be sorted out in terms of Clause 37.1 of the JDA.
12. In view of the above, there is no impediment for this Court to appoint Sole Arbitrator to adjudicate the dispute between the parties as sought for. However, all the contentions urged by both the parties including jurisdiction, if any, shall be considered by the learned Arbitrator in accordance with law.
13. At this stage, both the learned counsel for the petitioners and the learned counsel for the respondent jointly submit that Hon’ble Shri Justice Vikramajit Sen, Former Judge, Hon’ble Supreme Court of India may be appointed as sole Arbitrator. Said submission is placed on record.
14. In view of the above, the Civil Miscellaneous Petition is allowed. Hon’ble Shri Justice Vikramajit Sen, Former Judge, Hon’ble Supreme Court of India is appointed as sole Arbitrator to adjudicate the dispute in terms of clause 37.1 of the registered Joint Development Agreement dated 10.02.2011 entered into between the parties.
15. Registry is directed to send a copy of this order to Hon’ble Shri Justice Vikramajit Sen, Former Judge, Hon’ble Supreme Court of India as well to the Arbitration Centre forthwith for reference.
SD/- JUDGE KMV*