IN THE HIGH COURT OF KARNATAKA AT BENGALURU DATED THIS THE 14TH DAY OF NOVEMBER, 2019 BEFORE THE HON' BLE MR. JUSTICE B. VEERAPPA CIVIL MISCELLANEOUS PETITION No.185/2018 BETWEEN:
1 . SRI C. MUNIRAJU, S/O LATE CHINNAPPA, AGED ABOUT 46 YEARS.
2 . SRI.C.SRINIVAS S/O LATE CHINNAPPA, AGED ABOUT 42 YEARS.
3 . SRI.C.BABU S/O LATE CHINNAPPA, AGED ABOUT 32 YEARS, ALL ARE R/AT NO.196, BOREWELL ROAD, NELLURAHALLI, WHITEFIELD POST, BENGALURU-560 066.
...PETITIONERS (BY SRI VIJAYA SHEKARA GOWDA V., ADVOCATE) AND:
1 . M/S CMRS BUILDERS, A PARTNERSHIP FIRM HAVING ITS OFFICE AT NO.63 & 64, FLAT NO.A1, GRACE APARTMENTS, SUNSHINE LAYOUT, T.C.PALYA, K.R.PURAM, BENGALURU-560 036.
ALSO AT:CMRS GROUP, FLAT NO.268, A BLOCK, AECS LAYOUT, OPP. TO KIDZEE PLAY SCHOOL, KUNDALAHALLI MAIN ROAD, BENGALURU-560 037.
REPRESENTED BY ITS MANAGING PARTNERS 2 . SRI.CHENNAM RANGASWAMY, S/O SRI.C.RANGAIAH, AGED ABOUT 39 YEARS, R/AT NO.H.108, SRIRAM SPURTHI, AECS LAYOUT, BROOKFIELD, KUNDALAHALLI, BENGALURU-560 037.
3 . SRI.UMA MAHESHWARA REDDY S/O SRI.K.VEERA REDDY, AGED ABOUT 37 YEARS, R/AT NO.63 & 64, FLAT NO.A1, GRACE APARTMENTS, SUNSHINE LAYOUT, T.C.PALYA, K.R.PURAM, BENGALURU-560 036.
4 . SRI.MUNAGA SUBHASHCHANDRA BOSE S/O SRI.MUNAGA KOTESWARA RAO, AGED ABOUT 65 YEARS, R/AT VEMPADU, UNGUNTUR MANDAL, KRISHNA DISTRICT, ANDHRA PRADESH-521 260.
5 . SRI.K.N.SOMA SINGH S/O LATE K.NARAYANA SINGH, AGED ABOUT 50 YEARS, R/AT NO.40, SRI SAI LAYOUT, FCI ROAD, KODUGODI, BENGALURU-560 067.
…RESPONDENTS (BY SRI DINESH M. BHAT, ADVOCATE FOR R1 TO R4; SRI SHOWRI H.R., ADVOCATE FOR R5) ...
THIS CIVIL MISCELLANEOUS PETITION IS FILED UNDER SECTION11(6) OF THE ARBITRATION AND CONCILIATION ACT 1996, PRAYING TO APPOINT ARBITRATOR/S TO REDRESS THE EXISTING DISPUTE BETWEEN THE PETITIONERS AND THE RESPONDENTS AS PER SECTION 11(6) OF ARBITRATION AND CONCILIATION ACT 1996 AND FURTHER BE PLEASED TO APPOINT ANY LEARNED RETIRED DISTRICT OR HON’BLE HIGH COURT JUDGE AS ARBITRATOR IN THE PRESENT CASE TO RESOLVE THE EXISTING DISPUTE BETWEEN THE PETITIONERS AND THE RESPONDENTS AS IN VIEW OF THE RESPONDENTS HAVE DECEIVED AND DEPRIVED AND NEGLECTED AND ALSO COMMITTED BREACH OF TERMS AND CONDITIONS OF THE JDA DATED 30.04.2014 VIDE ANNEXURE-A AND ETC.
THIS CIVIL MISCELLANEOUS PETITION COMING ON FOR ADMISSION THIS DAY, THE COURT MADE THE FOLLOWING:
ORDER The petitioners have filed the present Civil Miscellaneous Petition under the provisions of Section 11(6) of the Arbitration and Conciliation Act, 1996, seeking appointment of sole arbitrator to adjudicate the dispute between the parties in terms of clause 15 of the Joint Development Agreement dated 30.04.2014 entered into between the parties, vide Annexure-A.
2. It is the case of the petitioners that the respondent firm represented by its Managing Partners entered into a registered Joint Development Agreement in favour of the petitioners to develop the land in Sy.No.60/3 measuring 1 acre 20 guntas of Nallurahalli village, K.R.
Puram Hobli, Bengaluru East Taluk, to construct residential flats under the name and style ‘Moonstone Apartments’, with their sole cost as per sanction plan and license that may be issued by the Bruhath Bengaluru Mahanagara Palike, as per clause 4 of the registered Joint Development Agreement. As per clause 5 of the registered Joint Development Agreement, it was agreed that the respondents are entitled for 57% undivided share and the petitioners are entitled for 43% of the undivided share in the apartment flats. From the date of commencement i.e., from obtaining plan approval, the respondents agreed to complete construction of the apartment in all respects within a period of 24 months with extended period of six months, thus in all, within 30 months. The respondents agreed that, in case, if delivery of shares of the petitioners exceeds 30 months, then they will pay existing rent in respect of 43% of the shares of the petitioners without fail.
3. It is further contended that in continuation of the registered Joint Development Agreement dated 30.04.2014, the respondents obtained registered General Power of Attorney from the petitioners to go on with construction activities in the schedule property at the cost of the respondents. On 06.02.2015, the Joint Commissioner, Mahadevapura Zone, BBMP, sanctioned plan to construct residential apartment on the schedule property valid upto 05.02.2017. The respondents, further insisted the petitioners to enter into supplemental agreement regarding shares in the constructed flats on the schedule property at the rate of 57:43. Under the supplemental agreement dated 11.03.2015, the petitioners were to be given 47 flats of different dimension of their 43% share and the respondents were to retain 73 flats, and thus, as per the sanction plan, the respondents agreed to construct 128 flats which included 8 flats to one K.N.Soma Singh, as his 10 guntas of land in the same Sy.No.60 was also amalgamated with the major portion of lands measuring 1 acre 20 guntas of the petitioners. The respondents started construction of apartment flats in the schedule property together with 10 guntas of land of K.N.Soma Singh, at the first instance in the North Block. 80 residential flats of different dimensions were constructed and kept unfinished on Southern Block. Subsequently, started construction of 48 residential flats and they are under construction, even now. Out of 128 flats, as of now, no single flat is finished and brought to human inhabitation. But before construction of flats, the respondents have sold away their share. The respondents ought to have completed the construction work on or before 05.02.2017. Inspite of completion of 24 months and extended time of 6 months and even after expiry of 60 months, the respondents have not completed the construction work. Inspite of supplemental agreement wherein the shares have been indicated, the respondents have sold away the flats without completing the construction work and no facilities have been provided. Therefore, in the first week of May 2017, petitioners requested the respondents to complete the work and hand over the keys of the flats of their 43% share. Inspite of repeated requests, the respondents did not complete the work in terms of the registered Joint Development Agreement. Therefore, petitioners were constrained to issue legal notice dated 08.05.2017. Though the respondents replied to the legal notice, did not fulfill the conditions of the registered Joint Development Agreement. Therefore, petitioners are before this Court for the relief sought for.
4. The respondents filed objections, denied the averments made in the Civil Miscellaneous Petition. Though the respondents did not deny the execution of registered Joint Development Agreement, existence of arbitration clause and issuance of legal notice, they contended that there is no violation of terms and conditions of the registered Joint Development Agreement and therefore, sought to dismiss the Civil Miscellaneous Petition.
5. I have heard the learned counsel for the parties to the lis.
6. Sri V.Vijayashekara Gowda, learned counsel for the petitioners, reiterating the averments made in the memorandum of Civil Miscellaneous Petition, contended that there is no dispute between the parties regarding execution of the registered Joint Development Agreement dated 30.04.2014. As the petitioners are the owners of the property bearing Sy.No.60/3, measuring 1 acre 20 guntas situated at Nallurahalli, K.R.Puram Hobli, Bengaluru East Taluk and the respondents agreed to construct residential apartment in the said property with an understanding that the respondents are entitled for 57% undivided share and the petitioners are entitled for 43% of the undivided share in the apartment building and though the time stipulated for completion of the project was 24 months with extended period of six months, the respondents did not hand over the petitioners’ share. Though the respondents admitted almost all the allegations made in the legal notice, gave evasive reply. In view of the existence of the arbitration clause in the registered Joint Development Agreement, learned counsel for the petitioners sought to allow the Civil Miscellaneous Petition.
7. Per contra, Sri Dinesh M. Bhat, learned counsel for the respondent Nos.1 to 4, reiterating the averments made in the statement of objections, did not dispute the execution of registered Joint Development Agreement dated 30.04.2014, existence of clause 15 providing for arbitration and issuance of legal notice. He only contended that the petitioners have violated the conditions of the registered Joint Development Agreement and not the respondents. He contended that by the end of December 2019, the construction will be completed. The submission is placed on record.
8. Having heard the learned counsel for the parties, there is no dispute with regard to execution of the registered Joint Development Agreement dated 30.04.2014 between the parties. The petitioners are the owners of the property bearing Sy.No.60/3, measuring 1 acre 20 guntas situated at Nallurahalli, K.R.Puram Hobli, Bengaluru East Taluk. It is also not in dispute that as per clause 5 of the registered Joint Development Agreement, the respondents are entitled for 57% undivided share and the petitioners are entitled for 43% of the undivided share in the apartment. It is also not in dispute that inspite of completion of the time stipulated in the registered joint development agreement, the respondents have not completed the construction work. According to the petitioners, the respondents have violated the terms and conditions of the registered Joint Development Agreement, but according to the respondents, almost all the work has been completed and they will hand over the share of the petitioners by the end of December 2019, the fact remains that as on the date of filing of the Civil Miscellaneous Petition, respondents have violated the terms and conditions of the registered Joint Development Agreement dated 30.04.2014. Clause 15 of the registered Joint Development Agreement reads as under:
“15. ARBITRATION: In the event of any dispute or difference arising between the parties the parties in regard to this agreement or any matter connected therewith, the same shall be referred to and settled by Arbitration at Bangalore to resolve such disputes by appointing Hon’ble Arbitrator required u/S 11(6) of the A & C Act and the decision of the Arbitrator is final”.
9. It is also not in dispute that in compliance of Section 11(5) of the Arbitration and Conciliation Act, 1996, the petitioners have issued legal notice to the respondents and the same has been replied by the respondents.
10. In view of the aforesaid admitted facts, there is no impediment for this Court to appoint a sole arbitrator, as prayed for.
11. In view of the above, the Civil Miscellaneous Petition is allowed. Hon’ble Mr. Justice H.N. Nagamohan Das, Former Judge of this Court is appointed as sole arbitrator to adjudicate the dispute in terms of clause 15 of the registered Joint Development Agreement dated 30.04.2014, entered into between the parties.
12. The Registry is directed to send copy of this Order to Hon’ble Mr. Justice H.N. Nagamohan Das, Former Judge of this Court and the Arbitration Centre forthwith, for reference.
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