IN THE HIGH COURT OF KARNATAKA AT BENGALURU DATED THIS THE 17TH DAY OF OCTOBER, 2019 BEFORE THE HON'BLE MR. JUSTICE B. VEERAPPA CIVIL MISCELLANEOUS PETITION NO.181/2016 BETWEEN:
M/s. Jain Heights and Structures Pvt. Ltd., (A Company incorporated under the Companies Act) Having its Registered Office at: No.2, Solus, 11th Floor, 1st Cross, J.C.Road, Bengaluru – 560 027. Represented by its Managing Director Sri.Kishore Kumar.
... Petitioner (By Sri.Ranjan Kumar K, Advocate) AND:
1. Sri.R.Veeraswamy, S/o Late Rudra Muniyappa. Aged about 87 years, 2. Smt.Shivarajamma, W/o R.Veeraswamy, Aged about 74 years, 3. Smt.R.V.Rooparani, D/o Sri.R.Veeraswamy, Aged about 59 years, 4. Smt.V.Annapoorna, D/o Sri.R.Veeraswamy, Aged about 49 years, 5. Smt.V.Geetha, D/o Sri.R.Veeraswamy, Aged about 45 years, All are residing at C/o No.207, 16th Cross, Wilson Garden, Bengaluru – 560 030.
6. Smt.V.Suma, W/o Sri.B.R.Mahalinga, D/o R.Veeraswamy, Aged about 42 years, Residing at C/o No.207, 16th Cross, Wilson Garden, Bengaluru – 560 030.
7. Smt.V.Jamuna, W/o Sri.S.F.Hoogar, D/o R.Veeraswamy, Aged about 39 years, Residing at No.14/40, 2nd Cross, Lakkasandra, Near Bimba Studio.
... Respondents (By Sri.H.V.Devaraju, Advocate for R.1, 3, 4 and 5; Sri.G.Ravindra Babu, Advocate for R.6 & 7) This Civil Miscellaneous Petition is filed under Section 11(6) of the Arbitration and Conciliation Act 1996, praying this Hon’ble Court to a) Appoint Mr.V.Tarakram, Senior Advocate or any other competent person as the sole Arbitrator as this Hon’ble Court deems fit and proper to adjudicate upon the dispute under the Joint Development Agreement dated: 25.04.2007 and the consequential agreements executed there under and consequently refer the dispute of the parties to Arbitration b) pass such other orders or grant such other reliefs as this Hon’ble Court may deem fit in the interest of justice and equity c) Award costs of this Petition in favour of the petitioner and etc.
This Civil Miscellaneous Petition coming on for Admission, this Day, the Court made the following:
O R D E R The petitioner has 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 35 of the Joint Development Agreement entered into between the parties on 25.04.2007.
2. It is the case of the petitioner that the petitioner is a reputed builder and developer and respondent Nos.1 to 5 along with other daughters namely Smt.V.Suma and Smt.Jamuna are the owners of the land bearing Sy. No.65/1B, situated at Kaikondrahalli Village, Varthur Hobli, Bengaluru East Taluk measuring to an extent of 0.36 ½ guntas. They are interested in jointly developing Schedule A Property. Accordingly, a Joint Development Agreement was entered between the parties on 25.04.2007. As per the terms and conditions of the Joint Development Agreement, the petitioner has paid a security deposit amount of Rs.60,00,000/- to respondent Nos.1 to 5 and other daughters as refundable security deposit as per the clause 50 of the Joint Development Agreement. After registration of the Joint Development Agreement, the petitioner with utmost honestly started the work and obtained all the sanctions, clearances and after obtaining the Approved Plan, entered into a sharing agreement with respondent Nos.1 to 5 and other daughters on 10.01.2008.
3. As per the said agreement, the petitioner is entitled to 48 apartments and respondent Nos.1 to 5 along with Smt.V.Suma and Smt.V.Jamuna are entitled to 43 flats. The petitioner completed the construction of the residential Apartments without giving room for any complaints. Petitioner soon after the completion of the project handed over possession of 39 flats out of 43 flats, which the petitioner ought to have handed over as per the sharing agreement entered between the parties and demanded for repayment of the amount in terms of the agreement totally amounting to Rs.1,20,31,114/-. After the demand, Smt.V.Suma and Smt.V.Jamuna repaid their share of the amount to be paid to the petitioner and therefore, the petitioner has no grievance against them. After deducting the amount paid by Smt.V.Suma and Smt.V.Jamuna, the petitioner is entitled to Rs.1,01,31,114/- from the respondents. In spite of several demands and negotiations, respondents have not paid the amount and therefore, the petitioner by invoking the arbitration clause under the Joint Development Agreement, issued a legal notice dated 04.07.2016 seeking referral of the dispute between the parties and nominate his advocate as the Sole Arbitrator. In spite of repeated demands, the respondents have not come forward, but gave reply notice dated 08.07.2016 and disagreed the appointment of the sole arbitrator suggested by the petitioner. Therefore, the petitioner is before this Court for the relief as sought for.
4. The respondents have not filed any objection to the Civil Miscellaneous Petition.
5. I have heard the learned counsel for the parties to the lis.
6. Sri.Ranjan Kumar K, learned counsel for petitioner reiterating the averments made in the Civil Miscellaneous Petition contended that there is no dispute with regard to Joint Development Agreement entered into between the parties. In terms of the Joint Development Agreement, the respondents are liable to return the amount of Rs.1,01,31,114/- to the petitioner. In spite of repeated requests made, the respondents have not paid the amount in terms of the Joint Development Agreement. Therefore, the petitioner by invoking the arbitration clause under Joint Development Agreement, issued legal notice dated 04.07.2016. In response to the same, the respondents gave untenable reply. Therefore, he sought to allow the Civil Miscellaneous Petition.
7. Per contra, Sri.H.V.Devaraju, learned advocate for respondent Nos.1, 3, 4 and 5 disputed the averments made in the petition and contended that the petitioner has violated the terms and conditions of the Joint Development Agreement and not by the respondents. But, he has not disputed the arbitration clause mentioned in the Agreement and issuance of legal notice to the respondents. Hence, he sought for dismissal of the present Civil Miscellaneous Petition.
8. Having heard the learned counsel for the parties, it is an undisputed fact that respondent Nos.1 to 5 along with other daughters namely Smt.V.Suma and Smt.V.Jamuna are the owners of the land bearing Sy. No.65/1B situated at Kaikondrahalli Village, Varthur Hobli, Bengaluru East Taluk measuring to an extent of 0.36 ½ guntas. It is also not in dispute that the petitioner and respondents entered into Joint Development Agreement to construct residential apartments in terms of the Agreement and the petitioner has completed the construction and handed over 39 flats to the respondents and requested to refund of the security deposit. The respondent Nos.6 and 7 have paid their shares and remaining respondents have not paid their shares.
9. It is also not in dispute that there is an existence of arbitration clause to resolve the dispute between the parties in terms of clause 35 of the Agreement, which reads as under;
“35. Any dispute or difference which may arise between the PARTIES herein with regard to the intents and meanings of this Joint Development Agreement or its interpretation or any part thereof or any matters relating to the agreement shall be referred for Conciliation as provided for in the Indian Arbitration and Conciliation Act, 1996, or as amended from time to time, and the decision of the Arbitral Tribunal shall be final and binding on the PARTIES.”
10. It is also not in dispute that the petitioner issued legal notice dated 04.07.2016 and respondents issued untenable reply dated 08.07.2016. In view of the aforesaid admitted facts, there is no impediment for this Court to appoint Sole Arbitrator to adjudicate the dispute between the parties.
11. For the reasons stated above, the Civil Miscellaneous Petition is allowed. Hon’ble Mr.Justice N.K.Patil, Former Judge of this Court is appointed as an Arbitrator to adjudicate the dispute between the parties in terms of clause 35 of the agreement dated 25.04.2007 entered between the parties.
12. All the contentions urged by the parties are kept open to be urged before the learned arbitrator.
13. Registry is directed to send a copy of this order to Hon’ble Mr.Justice N.K.Patil, Former Judge, High Court of Karnataka and Arbitration Centre forthwith for reference.
SD/- JUDGE NBM