IN THE HIGH COURT OF KARNATAKA AT BENGALURU DATED THIS THE 31ST DAY OF OCTOBER, 2019 BEFORE THE HON’BLE MR. JUSTICE B. VEERAPPA CIVIL MISCELLANEOUS PETITION No.291/2018 BETWEEN:
M/S SOBHA LIMITED, A COMPANY REGISTERED UNDER THE COMPANIES ACT 1956, HAVING ITS REGISTERED AND CORPORATE OFFICE AT ‘SOBHA’, SARJAPUR-MARATHAHALLI OUTER RING ROAD BELLANDUR POST, BANGALORE-560103.
REPRESENTED BY ITS AUTHORISED SIGNATORY MR. RAGHAVENDRA N. R., ...PETITIONER (BY SRI VEERESH R. BUDIHAL, ADVOCATE) AND:
1 . M/S DEVAGIRI BUILDERS AND PROMOTERS PVT. LTD., HAVING ITS OFFICE AT NO.12/4, 1ST FLOOR, VANI VILAS ROAD, OPP: CAUVERY PETROL BUNK V. V. PURAM, BANGALORE 560004.
ALSO AT NO.43, 1ST FLOOR, 27TH CROSS, 11TH MAIN, BSK 2ND STAGE, BANGALORE-560070.
REPRESENTED BY ITS CHAIRMAN AND MANAGING DIRECTOR MR. P. V. GOVINDACHARYULU.
2 . MR. P. V. GOVINDACHARYULU CHAIRMAN AND MANAING DIRECTOR M/S DEVAGIRI BUILDERS AND PROMOTERS PVT. LTD., NO.43, 1ST FLOOR, 27TH CROSS, 11TH MAIN, BSK 2ND STAGE BANGALORE-560070.
ALSO AT NO.14:4, 1ST FLOOR, VANIVILAS ROAD, V. V. PURAM BANGALORE-560 004.
ALSO AT NO.12/4, 1ST FLOOR, VANI VILAS ROAD, OPP CAUVERY PETROL BUNK, V. V. PURAM, BANGALORE-560004 3 . MRS. SHANTABAI, W/O LATE MEGHRAJ JAIN NO.188, MEGHASHANTHI, AKKIPET MAIN ROAD, BANGALORE-560053.
…RESPONDENTS (BY SMT. SHILPA SHARAD SHRIKHANDE, ADVOCATE FILED VAKALATH FOR R3- SAME HAS BEEN RETURNED WITH OFFICE OBJECTIONS; R1 AND R2 SERVED) ***** THIS CIVIL MISCELLANEOUS PETITION IS FILED UNDER SECTION 11(6) OF THE ARBITRATION AND CONCILIATION ACT 1996, PRAYING TO APPOINT AN ARBITRATOR TO ADJUDICATE THE DISPUTE THAT HAS ARISEN BETWEEN PETITIONER AND RESPONDENTS. INTERMS OF CLAUSE 22 OF THE MEMORANDUM OF UNDERSTANDING DATED 16.09.2010 ENTERED INTO BETWEEN PETITIONER AND RESPONDENTS AS PER ANNEXURE-B CONCERNING THE SCHEDULE PROPERTY.
THIS CIVIL MISCELLANEOUS PETITION COMING ON FOR ORDERS 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 (for short, hereinafter referred to as ‘the Act’) for appointment of Sole Arbitrator to adjudicate the dispute in terms of Clause-22 of the Memorandum of Understanding dated 16.9.2010, Annexure- B, entered into between the parties.
2. It is the case of the petitioner that it entered into a Memorandum of Understanding dated 16.9.2010 with the respondents for development of the property bearing Sy.No.33/28 (Old Sy.No.33/2) measuring 2 acres situated in Nagawara Village, Kasaba Hobli, Bangalore North Taluk and had paid a sum of Rs.2 Crores to the respondents on various dates as refundable security deposit. Subsequently five more supplementary Memorandum of Understandings were executed between the parties in furtherance of the Memorandum of Understandings dated 16.9.2010, 27.7.2011, 27.2.2012, 5.12.2012, 7.4.2014 and 23.6.2014 and in total, the respondents had received a sum of Rs.3 Crores towards Refundable Security Deposit and another sum of Rs.1 Crore towards Non-Refundable Security Deposit from the petitioner agreeing to comply with the terms and conditions of the said Agreement. In view of the default committed by the respondent, the petitioner requested and demanded the respondents to refund the entire amount of Rs. 4 Crores with interest at 18% per annum, but the respondents have not responded to the said letter or complied with the demand made therein. Subsequently, the petitioner sent various demand letters to the respondents demanding repayment of the amount deposited by it along with interest, still the respondents did not reply. Therefore, the petitioner had no other option except to issue legal notice dated 22.8.2018 proposing the nominee’s name to be appointed as Arbitrator in terms of Clause-22 of the Memorandum of Understanding dated 16.9.2010 for resolving the dispute through arbitration. Inspite of service of legal notice, the respondents have not replied. Therefore, the present civil miscellaneous petition is filed for the relief sought for.
3. Though Smt Shilpa Sharad Shrikhande, learned Counsel appearing for the 3rd respondent has not rectified the office objections inspite of granting sufficient time on several occasions as stated in the First Part of the present order (separate order) nor has filed statement of objections. Respondent Nos. 1 and 2 have been served and unrepresented.
4. I have heard the learned Counsel for the petitioner.
5. Sri Veeresh R. Budihal, learned Counsel for the petitioner reiterating the averments made in the civil miscellaneous petition contended that it is an undisputed fact that the petitioner and respondents entered into Memorandum of Understanding on 16.9.2010 in terms of which the respondents shall return a sum of Rs.3 Crores deposited towards Refundable Secretury Deposit and another sum of Rs.1 Crores towards Non-Refundable Security Deposit inspite of legal notice issued and though received, the respondents have not replied nor have refunded the amount. Therefore, he sought to allow the civil miscellaneous petition.
6. Having heard the learned Counsel for the petitioner, it is an undisputed fact that the parties have entered into the Memorandum of Understanding dated 16.9.2010 and the parties have duly signed the said document on each and every page as contemplated under the provisions of Section 7 of the Act. It is also not in dispute that there is an arbitration clause in the said Memorandum of Understanding i.e., Clause - 22 which provides for resolving the dispute which reads as under:
“12. In the event of any dispute with regard to the agreement or the interpretation or any of the clauses hereof, the same shall be referred to Arbitration. The arbitration shall be as per the provisions of Indian Arbitration and Conciliation Act, 1996 and the jurisdiction will be at Bangalore.”
7. It is also not in dispute that the petitioner has complied with the provisions of Section 7(5) of the Act by issuing legal notice dated 22.8.2018 for which there is no reply nor any objections to the assertions made in the present Civil Miscellaneous Petition. In view of the aforesaid admitted facts, there is no impediment for this Court to appoint Sole Arbitrator to resolve the dispute between the parties.
8. For the reasons stated above, civil miscellaneous petition is allowed. The Hon’ble Sri Justice B.S. Patil, Former Judge of this Court, is appointed as the Sole Arbitrator to adjudicate the dispute between the parties in terms of Clause-22 of the Memorandum of Understanding dated 16.9.2010 entered into between the parties.
9. Registry is directed to send a copy of this order to the Hon’ble Sri Justice B.S. Patil, Former Judge of this Court, the respondent and as well as to the Arbitration Centre, forthwith, for reference.
Sd/-
JUDGE Nsu/-