IN THE HIGH COURT OF KARNATAKA AT BENGALURU DATED THIS THE 22ND DAY OF AUGUST, 2019 BEFORE THE HON’BLE Mr. JUSTICE B. VEERAPPA CMP No.128/2018 BETWEEN :
1. D. B. JATTI S/O LATE B.D.JATTI, AGED ABOUT 71 YEARS PRESENTLY R/AT VILLA No.7, DWARAKAMAI ECC ROAD, WHITEFIELD, BENGALURU-560 066.
2. JATTI ENGINEERING INDIA PVT LTD., A COMPANY INCORPORATED UNDER THE COMPANIES ACT, 1956 HAVING ITS REGD. OFFICE AT SY. No.51, PATTANDUR AGRAHARA, BEHIND LOURDES CHURCH, OUTER CIRCLE WHITEFIELD, BENGALURU-560 066.
REPRESENTED BY ITS MANAGING DIRECTOR MRS.LAKSHMI D.JATTI. ... PETITIONERS (BY SRI CHETHAN A C, ADVOCATE) AND:
1. SRI. TUSHAR TEREDESAI S/O SRI.PRAKASH TEREDESAI AGED ABOUT 46 YEARS 2. SMT. SMRUTEE HARNE W/O SRI TUSHAR TEREDESAI, AGED ABOUT 43 YEARS PRESENTLY BOTH R/AT VILLA NO.6, DWARAKAMAI, ECC ROAD, WHITEFIELD, BENGALURU-560 066. ... RESPONDENTS (BY SRI V B SHIVAKUMAR, ADVOCATE) ---
THIS CMP IS FILED UNDER SEC.11(6) OF THE ARBITRATION AND CONCILIATION ACT 1996, PRAYING TO APPOINT KUKKAJE RAMAKRISHNA BHAT, RETIRED DISTRICT JUDGE AS AN ARBITRATOR AS PER THE AGREEMENT TO SELL DATED:23/01/2010 OR IN THE ALTERNATIVE, APPOINT ANY OTHER ARBITRATOR AS PER THE AGREEMENT TO SELL DATED:23/01/2010 AND ETC.
THIS CMP COMING ON FOR ADMISSION THIS DAY, THE COURT PASSED THE FOLLOWING:
O R D E R The petitioners have filed the present Civil Miscellaneous Petition under the provisions of Section 11(6) of the Arbitration and Conciliation Act, 1996 to appoint sole arbitrator to adjudicate the dispute in terms of clause 25 of the agreement to sale dated 23.01.2010 entered into between the parties.
2. It is the case of the petitioners that the petitioners and respondents entered into an agreement to sell on 23.01.2010 for purchase of a Villa bearing No. 6 at Dwarakamai layout developed by the petitioners. Clause 25 of the said agreement provides for arbitration clause. It is further contended that in pursuance of the said agreement, sale deed was executed by the petitioners in favour of the respondents on 03.03.2010 conveying villa No. 6 in Dwarakamai layout. Petitioners are maintaining the layout and managing the common areas and facilities as per the terms and conditions of the agreement to sell and sale deed. Petitioners are entitled to collect maintenance charges for the work as agreed by the respondents. As agreed the petitioners are managing the water treatment plant, sewage treatment plant, security, gardens, car parking areas, generator, children park, internal roads, lighting and other common areas and facilities. Despite repeated requests made by the petitioners, the respondents have not paid the maintenance charges to the petitioners. Thereafter the petitioners sent a letter to the respondents dated 10.07.2017 demanding payment of arrears of maintenance in a sum of Rs.4,89,115/- being the arrears till the date of notice.
3. It is the further case of petitioners that subsequently they issued a legal notice on 09.09.2017 nominating their arbitrator as per clause 25 of the sale agreement. The respondents vide their reply denied the applicability of arbitration clause and refused to accept for arbitration. Therefore, the present Civil Miscellaneous Petition is filed.
4. I have heard the learned counsel for the parties to the lis and perused the records carefully.
5. Sri. A.C. Chetan, learned counsel for petitioner reiterating the submissions made in the Civil Miscellaneous Petition contended that the there is an arbitration clause provided in the agreement to sell entered into between the parties on 23.01.2010. It is also not in dispute that the petitioners executed sale deed in favour of the respondents in respect of villa bearing No. 6 of Dwarakamai layout and the respondents are in possession of that villa. He further contended that in compliance of the provisions of Section 11(5) of the Arbitration and Conciliation Act, 1996 the petitioners had issued legal notice to the respondents on 09.09.2017. In the reply sent to the said legal notice the respondents have not raised the grounds urged in the statement of objections filed before this Court. Therefore, learned counsel for petitioners sought to allow the Civil Miscellaneous Petition.
6. Per contra Sri. V.B. Shivakumar, learned counsel for respondents contended that the present petition filed for appointment of arbitrator is not maintainable as the petitioners have played fraud on the respondents on the date of execution of the agreement to sale by misrepresenting these respondents that there is a residential villa in the Dwarakamai layout pertaining to plot described in the schedule given to the agreement to sale. He contended that the property along with basic amenities provided in the layout does not belong to the petitioners for seeking adjudication of the arbitration dispute, also for the purpose of appointment of the arbitrator and to recover the amount which the petitioners are entitled to receive from the respondents. The learned counsel further contended that the true facts are that insofar as scheduled immovable property mentioned in schedule A and B to the agreement to sell and also the schedule which is mentioned in the sale deed is concerned, the petitioners have misled and got the documents as if they are owners in respect of the total extent of the property named as Dwarakamai Layout. The layout developed indicates that villa No. 6 belongs to the respondents but, the respondents submit that they have been misled by the petitioners by not providing proper documents.
7. The learned counsel for respondents further contended that property bearing survey Nos. 51 and 51/1, Pattandur Agrahara, K.R. Puram Hobli, Bengaluru East Taluk measuring 1 acre 34 guntas belonged to petitioner No. 1 – Sri. D.B. Jatti. He applied for the purpose of development of property into a layout and a layout was formed pertaining to residential sites and not villas. Thereafter property came to be vested with the Bruhat Bengaluru Mahanagara Palike (for short hereinafter referred to as `BBMP’) in view of the notification issued by the Government dated 05.05.2007. It is further submitted that under Section 13(1) of the Bangalore Development Authority Act read with Section 4 of the Karnataka Municipal Corporations Act the Government of Karnataka declared all streets formed in the jurisdiction of Bangalore Development Authority in the layout specified in Column 2 of the scheme having been fully leveled, paved, metalled, flagged, channeled, drained and served in the manner provided for in the plans of the said layouts and such lamps, lamp posts and other apparatus for BBMP to maintain, keep in good condition, repair lights and clean such streets. The BBMP took possession of the entire layout except the residential houses on 09.11.2007. Thus the BBMP became the absolute owner of common areas, common amenities, roads, play grounds, street lights and other such facilities. The learned counsel for respondents submitted that therefore the petitioners are not entitled to any relief before this Court and sought to dismiss the Civil Miscellaneous Petition.
8. The learned counsel for respondents also contended that in view of the notification issued by the Bangalore Development Authority the State Government became the owner of the said property and therefore, the petitioners are not entitled to recover the arrears of maintenance charges and hence, the petition is not maintainable as the petitioners have suppressed the facts at the time of entering into the agreement to sale and executing the sale deed.
9. Having heard the learned counsel for the parties it is not in dispute, that the petitioners and respondents have entered into an agreement to sell on 03.03.2010. It is also not in dispute that there exists an arbitration Clause 25 in the agreement to sell reads as under:
25. In the event of any dispute or difference arising between the parties hereto in regard to any matter relating to or concerned to or connected with Agreement to sell or sale deed the same shall be first referred for arbitration of a sole arbitrator and the arbitration proceeding shall be in accordance with the provisions of the Arbitration and Conciliation Act, 1996 and decision of the Arbitrator shall be final and binding on both parties. The venue of Arbitration shall be Bangalore.
10. Further, it is not in dispute the petitioners issued a legal notice to the respondents on 09.09.2017. The respondents have replied to the said legal notice, but have not taken the contentions raised by their learned counsel before this Court. If the land in question was a government land, first of all the agreement entered into between the parties would not be a valid agreement in the eye of law and secondly if the land in question is a government land, then how the petitioners got the property registered in favour of the respondents by sale deed dated 03.03.2010 is not forthcoming. When the same is not stated in the reply sent to the legal notice, now cannot be permitted to be raised for the first time before this Court. When there is no dispute between the parties with regard to existence of arbitration clause, the respondents can very well urge all these contentions before the arbitrator and it is for the arbitrator to decide the said contentions which requires recording of evidence. This Court cannot venture to record evidence on the disputed facts in view of the provisions of Section 11 of the Act.
11. It is also relevant to state at this stage, that in an identical circumstances in respect of very layout, this Court has already appointed a sole arbitrator to adjudicate the dispute between the parties in CMP No. 124/2018 disposed of on 25.07.2019 and the said order has been implemented and reached finality. Therefore, this Court cannot take a different view, when the said order has reached finality.
12. For the reasons stated above, the Civil Miscellaneous Petition is allowed. Sri. M. Nagarajan, Former Judicial Member of CAT is appointed as sole arbitrator to adjudicate the dispute in terms of clause 25 of the agreement to sell dated 03.03.2010 entered into between the parties. The parties are at liberty to urge all the contentions raised before this Court before the learned Arbitrator.
13. Registry is directed to send a copy of this order to the learned Arbitrator and the Arbitration Centre, Bengaluru, forthwith, for reference.
LRS.
Sd/- JUDGE