IN THE HIGH COURT OF KARNATAKA AT BENGALURU DATED THIS THE 5TH DAY OF APRIL 2019 BEFORE THE HON’BLE MR.JUSTICE ALOK ARADHE CIVIL MISCELLANEOUS PETITION NO.267 OF 2015 BETWEEN:
M/S. HIGH POINT FINANCE PVT. LTD., NO.4406-7-8, HIGH POINT IV NO.45, PALACE ROAD BENGALURU-560 001. REPRESENTED BY ITS MANAGING DIRECTOR SRI SURESH BHATIA. …PETITIONER (BY SRI H.R. ANANTHA KRISHNAMURTHY, ADV.) AND:
1. SMT. JAYAMMA W/O. RAMAKRISHNAPPA AGED ABOUT 54 YEARS R/AT HOODI VILLAGE MAHADEVAPURA POST K.R. PURAM HOBLI BENGALURU EAST TALUK.
2. SMT. NAGAMMA W/O. VEERABHADRAPPA AGED ABOUT 52 YEARS R/AT GARUDACHARPALYA MAHADEVAPURA POST K.R. PURAM HOBLI BENGALURU EAST TALUK.
3. SMT. GUNDAMMA W/O. RAJAPPA AGED ABOUT 48 YEARS R/AT HOODI VILLAGE MAHADEVAPURA POST K.R. PURAM HOBLI BENGALURU EAST TALUK.
4. SMT. GOWRAMMA W/O. PADMANABH AGED ABOUT 45 YEARS R/AT KARIYAMMA PALYA DODDAKENAHALLI VILLAGE BENGALURU.
5. SRI N. KODANDA REDDY S/O. LATE NARAYANAPPA AGED ABOUT 51 YEARS 6. SRI K. MADHU S/O. N KODANDA REDDY AGED ABOUT 26 YEARS RESPONDENTS 5 AND 6 BOTH R/AT NO.222, ‘A’ NARAYANAPURA DOORAVANINAGAR POST BENGALURU-560 016.
7. SRI K.M. RAMACHANDRA S/O. MUNINAGAIAH AGED ABOUT 43 YEARS R/AT NO.140, KOTE TEMPLE STREET OPP. ANJANEYA TEMPLE NEW POLICE STATION ROAD KRISHNARAJPURAM BENGALURU-560 036.
8. MR. R. DEVARAJU S/O. LATE RAMAIAH AGED ABOUT 36 YEARS R/AT BIDARE AGRAHARA VILLAGE BIDARAHALLI HOBLI BENGALURU EAST TALUK BENGALURU DISTRICT.
9. SMT. ROOPA W/O. SRI. K.S. MAHESH AGED ABOUT 32 YEARS R/AT NO.184, AMRUTHA NILAYA KITTAGANURU BENGALURU EAST TALUK BENGALURU DISTRICT. …RESPONDENTS (BY SRI V.B. SHIVAKUMAR, ADV. FOR R8 & R9;
R1, R3, R5, R6 AND R7 SERVED AND UNREPRESENTED; NOTICE TO R2 & R4 IS HELD SUFFICIENT V/O. DT. 4.10.17) THIS CIVIL MISCELLANEOUS PETITION IS FILED UNDER SECTION 11(5) OF THE ARBITRATION AND CONCILIATION ACT 1996, PRAYING TO (1) APPOINT AN ARBITRATOR TO DECIDE THE DISPUTES WITHIN THE PARTIES, (2) GRANT SUCH OTHER RELIEFS AS ARE JUST AND NECESSARY INCLUDING COSTS OF THIS PETITION, IN THE INTEREST OF JUSTICE.
THIS CIVIL MISCELLANEOUS PETITION COMING ON FOR ADMISSION, THIS DAY, THE COURT MADE THE FOLLOWING:
O R D E R Sri H.R. Anantha Krishnamurthy, learned counsel for petitioner. Sri V.B. Shivakumar, learned counsel for respondent Nos. 8 and 9. None for respondent Nos.1,3 and 5 to 7 though served.
2. The petition is admitted for hearing. With the consent of learned counsel for the parties, the matter is heard finally.
3. By means of this application under Section 11(5) of the Arbitration and Conciliation Act, 1996 (hereinafter referred to as ‘the Act’ for short), the petitioner seeks appointment of an Arbitrator to adjudicate the dispute between the parties.
4. Facts giving rise to filing of the petition briefly stated are that the parties had entered into a Joint Development Agreement dated 01.08.2009. The aforesaid agreement contains an arbitration clause namely, Clause-20.2. In relation to the said agreement, the dispute between the parties had arisen. Therefore, the petitioner sent a notice dated 09.06.2015 to the respondents invoking the arbitration clause. However, the respondents failed to act upon the notice which was sent by the petitioner. In the aforesaid factual background, this petition has been filed.
5. Learned counsel for the petitioner while inviting the attention of this Court to Clause-20.2 of the agreement dated 01.08.2009 submitted that the aforesaid clause is an arbitration clause and the parties to the agreement namely, respondent Nos.1 to 7 have neither disputed the execution of Joint Development Agreement nor the arbitration clause contained therein. It is further submitted that since, the dispute has arisen between the parties, the same may be referred for adjudication to an Arbitration.
6. On the other hand, learned counsel for respondent Nos.8 and 9, who represents the purchasers submitted that respondent Nos.8 and 9 are not parties to the agreement and Clause-20.2 is not an arbitration clause and therefore, the dispute between the parties cannot be referred to arbitration. In support of his submission, learned counsel for respondent Nos.8 and 9 has referred to the decision of the Hon’ble Supreme Court in the case of ‘JAGDISH CHANDER VS. RAMESH CHANDER AND OTHERS, LAWS(SC)-2007-4- 161 IN CIVIL APPEAL NO.4467 OF 2002’.
7. I have considered the submissions made by learned counsel for the parties and perused the records.
8. Admittedly, the Joint Development Agreement was executed between the petitioner and respondent Nos.1 to 7. The validity of the aforesaid Joint Development Agreement has not been disputed by the parties to the agreement. Clause 20.2 of the aforesaid agreement reads as under:
“20.2) In the event of the parties being unable to resolve the dispute by conciliation as above or within such further time as the parties may mutually agree, the dispute may be referred by either party to arbitration by a panel of three arbitrators (one to be appointed by First Party, the other by Second Party and third by the two arbitrators) in accordance with the provisions of the Arbitration and Conciliation Act, 1996 and shall be decided by such Arbitral Tribunal. The award shall be final and binding on the parties.
i) The arbitration will be held in Bangalore City ii) The language of the arbitration proceedings will be in English.
The disputes shall be resolved in thirty working days of reference or within a reasonable period as may be agreed between the parties in writing. It is however clarified the work will not stop, pending the arbitration process”.
9. From a perusal of the aforesaid clause, it is evident that, in case the parties are unable to resolve the dispute by conciliation as above or within such further time as the parties may mutually agree, the dispute may be referred by either party to arbitration by a panel of three arbitrators in accordance with the provisions of the Act. The terms of the agreement clearly indicate the intention on the part of the parties to refer the dispute to arbitration in accordance with the provisions of the Act.
10. The Hon’ble Supreme Court in Jagdish Chander’s case (supra) has held that, in order to refer the dispute to arbitration, following conditions must exist namely, “(a) The agreement should be in writing.
(b) The parties should have agreed to refer any disputes (present or future) between them to the decision of a private tribunal.
(c) The private tribunal should be empowered to adjudicate upon the disputes in an impartial manner, giving due opportunity to the parties to put forth their case before it.
(d) The parties should have agreed that the decision of the Private Tribunal in respect of the disputes will be binding on them.”
11. The agreement in no manner indicates a fresh consent of the parties for reference of the dispute to the arbitration. Therefore, the contention of the learned counsel for respondent Nos.8 and 9 that Clause-20.2 in question is not an arbitration clause does not deserve acceptance.
12. The decision of the Hon’ble Supreme Court relied upon by learned counsel for respondent Nos.8 and 9 has no application to the factual matrix of the present case, as the agreement does not use the expression such as “parties can, if they so desire, refer their disputes to arbitration” or “in the event of any dispute, the parties may also agree to refer the same to arbitration” or “if any disputes arise between the parties, they should consider settlement by arbitration”. The agreement requires the parties to refer the dispute for arbitration. Therefore, the aforesaid decision is of no assistance to the learned counsel for respondent Nos.8 and 9.
13. Admittedly, the agreement has been executed between the parties which contains an arbitration clause. Therefore, taking into account the provisions of Section 11(6-A) of the Act, I deem it appropriate to appoint Sri S.N. Navalgund, retired District and Sessions Judge as sole Arbitrator to adjudicate the dispute between the parties.
14. A copy of this order be dispatched to the Arbitration Centre, Khanija Bhavan, Bengaluru for necessary action in that regard. Learned counsel for the petitioner to also approach the Arbitration Centre with the relevant papers to be filed therein. The learned Arbitrator appointed herein shall thereupon enter reference and proceed with the matter in accordance with law and the Rules governing the Arbitration Centre.
Accordingly, petition is disposed of.
Sd/- JUDGE ST