IN THE HIGH COURT OF KARNATAKA AT BENGALURU DATED THIS THE 29th DAY OF AUGUST 2019 BEFORE THE HON'BLE Mr. JUSTICE B.VEERAPPA CIVIL MISCELLANEOUS PETITION NO.176/2018 BETWEEN:
1. Smt. M.M. Lakshmana Murthy, S/o. late Doddamuniyappa, Since dead by her LR’s, 1(a) Smt. Janakamma, W/o. M.M. Lakshmana Murthy, Aged about 60 years, Mallasandra Village, Mallasandra, Nadavatthi Post, Hoskote Taluk, Bengaluru Rural District.
2. Yogichandra M.L., S/o. Lakshmana Murthy, Both residing at Mallasandra Village, Mallasandra, Nadavatthi Post, Hoskote Taluk, Bengaluru Rural District.
3. Smt. Mala, D/o. Sri M.M. Lakshmana Murthy, W/o. Sri Muni Narayanappa, 4. Smt. Leelavathy, D/o. Sri M.M. Lakshmana Murthy, W/o. Sri Manjunath, Both R/at Thaggali Hosalli, Jadagena Halli Hobli, Hoskote Taluk, Bengaluru Rural District.
5. Smt. Sheelamma, D/o. Sri M.M. Lakshmana Murthy, W/o. late Sri Prabhakar, R/at Thirumalashetty Halli, Samathnahalli Post, Hoskote Taluk, Bengaluru Rural District.
6. Smt. Kempamma, D/o. late Dodda Muniyappa, W/o. late Nanjappa, R/at Mallasandra, Hoskote Taluk, Bengaluru Rural District.
7. Smt. Akkayamma alias Achamma, D/o. late Dodda Muniyappa, W/o. Sri Ramaiah, R/at Thirumalashetty Halli, Samathnahalli Post, Hoskote Taluk, Bengaluru Rural District.
8. Smt. Sakamma, D/o. late Dodda Muniyappa, W/o. Sri S. Ramachandrappa, R/at Kumbena Agrahara, Kadugodi Post, Bengaluru.
9. Smt. Nagamma, D/o. late Dodda Muniyappa, W/o. late Sonnappa, R/at Medihalli, Virgonagar, Bengaluru.
10. Smt. Anasuyamma, D/o. late Beeramma, W/o. Sri Channabeerappa, R/at Kurubara Halli, Hoskote Taluk, Bengaluru Rural District.
11. Smt. Sakamma, D/o. late Beeramma, W/o. Sri Venkataswamappa, R/at Kannurahalli Village, Hoskote Taluk, Bengaluru Rural.
12. Smt. Venkatalakshmamma, D/o. late Beeramma, W/o. Sri Narayanappa, R/at Sonnehallipura Village, Hoskote Taluk, Bengaluru Rural.
13. Smt. Mari Muniyamma, D/o. late Beeramma, W/o. Sri Narayanappa, R/at Hoskote, Bengaluru Rural.
14. Sri Ramesh, S/o. late Beeramma and Sri Venkatagirappa, R/at Kannurahalli Village, Hoskote Taluk, Bengaluru Rural.
15. Smt. Radha, D/o. late Beeramma, W/o. Sri Anantharam, R/at Thyagarajanagar, Bengaluru.
16. Smt. Rukmini, D/o. late Beeramma, W/o. Sri Muniraju, R/at Hosadoddi, Kanakapura, Ramanagar District.
17. Smt. Uma, D/o. Smt. Katamma, Grand Daughter of late Beeramma, W/o. Sri Ramesh, R/at Kannurhalli, Hoskote Taluk, Bengaluru.
….. Petitioners (By Sri Mallikarjun Kurubar, Advocate for Sri R. Nataraj, Advocate) AND:
1. Encore Avenues LLP, No.202, Meridian Plaza, Green Lands, Ameerpet, Hyderabad – 500 016.
2. P. Harikrishnan, Partner, Encore Avenues LLP, S/o. P. Balarami Reddy, No.510, Road No.12, Banjara Hills, Hyderabad – 500 034.
.... Respondents (By Sri B.C. Chethan, Advocate for R-1 Sri Balakrishna M., Advocate for R-2) This Civil Miscellaneous Petition is filed under Section 11(6) of the Arbitration and Conciliation Act, 1996 praying to appoint sole arbitrator from the panel of arbitrators at the Bangalore Arbitration Centre to arbitrate the dispute between the petitioners and the respondents flowing out of the Joint Development Agreement dated 15.04.2013 and etc.
This Civil Miscellaneous Petition coming on for Admission, this day, the court made 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 for appointment of sole Arbitrator to adjudicate the dispute between the parties in terms of clause 23 of the Joint Development Agreement dated 15.04.2013 entered into between the parties.
2. It is the case of the petitioners that the petitioners are the owners of 1 acre 9 guntas of land in Sy.No.146 and 39 guntas of land in resurvey No.151/1, all situated at Mallasandra, Kasaba Hobli, Hoskote Taluk, Bengaluru Rural District. The petitioners and the respondents entered into a Joint Development Agreement on 15.04.2013 to form layout of residential sites. In terms of the Joint Development Agreement, the respondents were required to complete the development and formation of sites by converting it to non- agricultural residential use and obtain plan from the BMRDA or concerned authority. Even after lapse of five years, the respondents failed to convert the land for non-agricultural purpose though the petitioners executed a general power of attorney which enabled the respondents to do all that was required for conversion of land and for obtaining the development plan from local planning authority. There was arbitration clause to resolve the dispute between the parties by virtue of arbitration in the Joint Development Agreement. Therefore, the petitioners issued a legal notice terminating the Joint Development Agreement and also claimed damages of Rs.1 crore for breach of contract nominating the arbitrator to decide the dispute between them. The respondents received the notice on 06.04.2018 and have replied on 07.05.2018 denying the averments made in the notice. Hence, the present Civil Miscellaneous Petition is filed.
3. The respondents filed statement of objections and contended that it is the petitioners who have not performed their part of contract in terms of the Joint Development Agreement entered into between the parties. It is further contended that there is no penalty clause in the Joint Development Agreement and the petitioners are not entitled for the relief sought for.
4. It is further contended that it is the obligation of the owner of the land to provide an approach to the property in question. The petitioners totally neglected to carryout the phodi and hand over the title deeds and required documents to the respondents in order to seek conversion order for the change of land from the concerned authorities. The petitioners have failed in fulfilling their obligations as per the Joint Development Agreement. Therefore, sought to dismiss the Civil Miscellaneous Petition.
5. I have heard learned counsel for the parties to lis.
6. Sri. Mallikarjun Kurubar, learned counsel appearing for Sri R. Nataraj learned counsel for the petitioners reiterating the averments made in the Civil Miscellaneous Petition have contended that there is no dispute with regard to existence of the Joint Development Agreement dated 15.04.2013 duly signed by both the parties and there exists arbitration clause. The petitioners have complied the provisions of Section 7(5) of the Arbitration and Conciliation Act by issuing a legal notice. When the same is admitted by the respondents, there is no impediment for the Court to appoint arbitrator mentioned in the legal notice by the petitioner. Therefore, they sought to allow the Civil Miscellaneous Petition.
7. Per contra Sri B.C. Chethan, learned counsel appearing for respondent No.1 and Sri Balakrishna M. learned counsel appearing for respondent No.2 reiterating the objections filed to the main petition have contended that it is the mistake on the part of the petitioners who are the land owners to fulfill their basic obligations and they have not provided any approach to the property in question and also failed to fulfill their obligation to get the land converted from Agricultural to non-agricultural purpose by handing over the title deeds and other required documents to respondents and also totally neglected to carryout the phodi in order to seek conversion order for the change of land from the concerned authorities. One of the vital document to be produced before the Revenue Authority is the Survey Sketch to have any sort of clearances. Unless and until the sub-division proceedings or phodi is done, the sketch cannot be done. The petitioners suppressed the fact that the phodi proceedings were not done and made the respondents to enter into the Joint Development Agreement. Therefore, sought to dismiss the Civil Miscellaneous Petition.
8. Having heard the learned counsel for the parties, it is an undisputed fact that the petitioners and the respondents have entered into Joint Development Agreement dated 15.04.2013 duly signed by both the parties before the Sub-registrar and there are several conditions in terms of the agreement between the parties to discharge their respective duties. It is the specific case of the petitioners that the respondents have not performed their obligation in terms of the Joint Development Agreement. Same is denied by the respondents and contended that it is the petitioners to perform the conditions in terms of the contract. There is no dispute that there exists arbitration clause in the Joint Development Agreement. Clause 23 of the Joint Development Agreement reads as under:
“23. Arbitration The parties hereto agree that in the event of any disputes between the First Party and the Developer, with regards to this agreement interpretation of any of the terms of this Agreement, the same shall be referred to the Arbitration in terms hereof.
Arbitration shall be conducted as follows:
a. All proceedings in any Arbitration shall be conducted in English.
b. The Dispute shall be referred to a panel of 3 Arbitrators each one of them appointed by Owners and Developer, who shall appoint a Principal Arbitrator.
c. The Arbitration award shall be final and binding on the parties and the parties agree to be bound thereby and to act accordingly.
d. The seat of such Arbitration Tribunal shall be at Bangalore.
e. The Arbitration proceedings shall be governed by the Arbitration and Conciliation Act, 1996.”
9. It is also not in dispute that the petitioners have complied the provisions of Section 7(5) of the Arbitration and Conciliation Act by issuing legal notice. The respondents have replied to the said legal notice. Though several contentions raised by both respondents and the petitioners, the same has to be adjudicated before the learned Arbitrator.
10. In view of the admitted facts that existence of the Joint development Agreement and arbitration clause and compliance of provisions of Section 7(5) of the Arbitration and Conciliation Act, there is no impediment for appointing sole arbitrator to adjudicate the dispute between the parties in terms of clause 23 of the Joint Development Agreement. At this stage, both learned counsel for the parties fairly submits that sole arbitrator may be appointed as stated in the arbitration clause of the joint Development Agreement.
The said submission is placed on record.
11. For the reasons stated above, the Civil Miscellaneous Petition is allowed. Hon’ble Mr. Justice B. Padmaraj, former Judge of this Court is appointed as sole arbitrator to adjudicate the dispute in terms of clause 23 of the Joint Development Agreement dated 15.04.2013 entered into between the parties.
12. Registry is directed to send a copy of this order to Hon’ble Mr. Justice B.Padmaraj, former Judge of this Court and Arbitration Centre for reference forthwith.
Sd/- JUDGE PN/-