IN THE HIGH COURT OF KARNATAKA AT BENGALURU DATED THIS THE 12TH DAY OF DECEMBER, 2019 B E F O R E THE HON’BLE MR. JUSTICE B. VEERAPPA CIVIL MISCELLANEOUS PETITION NO.345/2019 BETWEEN:
SURAJ DWELLERS PRIVATE LIMITED A COMPANY REGISTERED UNDER THE COMPANIES ACT, 1956, HAVING ITS OFFICE AT SURAJ GANGA ARCADE, NO.332/7, 14TH CROSS, 2ND BLOCK JAYANAGAR, BENGALURU-560 011 REPRESENTED BY ITS DIRECTOR MR.L.SURESH.
… PETITIONER (BY SHRI LOMESH KIRAN N, ADVOCATE) AND:
SMT.SULOCHANA RAMESH W/O SRI P.RAMESH AGED 57 YEARS, R/A NO.3797 ‘SAI CHITTA,’ 7TH MAIN HAL, 2ND STAGE, INDIRANAGAR BENGALURU-560 038.
AND ALSO AT:
BLISS BLOSSOM, 4TH FLOOR “G” MAIN STREET, JOGUPALYA ROAD, DODDAIAH LAYOUT, OPPOSITE CORPORATION CHOULTRY BANGALORE-560 008.
… RESPONDENT (BY SHRI S.KALYAN BASAVARAJ, ADVOCATE) ---
This Civil Miscellaneous Petition is filed under Section 11(5) of the Arbitration and Conciliation Act, 1996, praying to appoint an arbitrator, the first choice of the petitioner being Hon’ble Justice Subhash B.Adi, or any other retired Judge of the High Court as this Hon’ble High Court may deem fit, towards constitution of arbitral tribunal for adjudication upon all claims and disputes of the petitioner and respondent pursuant to the Amended JDA dated 22nd April, 2015, clause 40 as per Annexure-G, and etc.
This petition coming on for admission this day, the Court made the following:
ORDER The petitioner has filed the present Civil Miscellaneous Petition under the provisions of Section 11(5) and (6) of the Arbitration and Conciliation Act, 1996 for constitution of an Arbitral Tribunal in terms of Clause 40 of the registered amended Joint Development Agreement (for short, ‘JDA’) dated 22nd April, 2015 entered into between the parties.
2. It is the case of the petitioner that the petitioner is a company incorporated under the provisions of the Companies Act and in the field of real estate business, it has, over the years, earned enviable reputation in the market for the quality of its services. It is contended that the respondent, being the owner of the property bearing Nos.31, 31/1, 31/2, 31/3 and 31/4 situated at 1st Cross, Someshwarapura, Cambridge Layout, Ulsoor, Corporation Ward No.75, Bengaluru, desired to develop the schedule property by constructing a commercial complex.
3. After considering the reputation and goodwill of the petitioner in the market, the respondent entered into mutual discussions with the petitioner for developing the said property to construct a multi-storeyed commercial complex (the Project). It is contended that after mutual negotiations and discussions, both the parties entered into a JDA which was registered in the Office of the Sub Registrar on 30th March, 2007. It is further contended that at the time of execution of the JDA, the respondent had categorically assured the petitioner inter alia that the schedule property is a self-acquired property and no one has any manner of right or interest in it. It was further represented by the respondent that she would, at her own cost and expense, would fulfill all the obligations on her part which was a condition precedent to the JDA. Clause (4) mandates that it shall be a condition precedent to the JDA that the owner of the schedule property shall perform certain obligations including, but not limited to settlement of all disputes concerning the property. It is further contended that after the execution of the JDA, the petitioner made all efforts to commence the respective works pertaining to the project, like survey of the land, demarcation, excavation and construction of a wall to safeguard the schedule property. It is contended that although the respondent was well aware of all these activities, at no point of time she objected to the same including the sanction by the various authorities. Thus, based on the assurances given by the respondent, the petitioner continued to develop the schedule property by expanding further resources, time and effort in order to give effect to the terms of the JDA.
4. When things stood thus, some stray owners filed cases against the respondent claiming to have right, title and interest in the schedule property and sought for partition on the ground that they have a share in the schedule property. It is stated that the petitioner remained patient and co-operated with the respondent despite the pending litigations. Ultimately, the respondent came forward to execute an Amended JDA on 22nd April, 2015 and agreed to develop the schedule property as a residential property instead of a commercial complex. In the light of such understanding, the clauses of the agreement were suitably amended and in spite of efforts being made by the petitioner to perform its part of the contract, the respondent failed to discharge her part of the terms and conditions of the Amended JDA. It is further contended that despite the respondent receiving huge sums as per the terms of the JDA, she resorted to violate of the terms and conditions of the agreement. Therefore, the petitioner was constrained to issue a legal notice dated 3rd June, 2019 invoking Clause 40 of the JDA pertaining to arbitration. The same was replied by the respondent on 17th June, 2019 denying the contents of the legal notice and alleged that there was no existing dispute between the parties. Therefore, the present Chief Miscellaneous Petition is filed for the relief sought for.
5. I have heard the learned counsel for the parties to the lis.
6. Shri Lomesh Kiran, learned counsel appearing for the petitioner, while reiterating the averments made in the Civil Miscellaneous Petition, contended that earlier there was a registered JDA executed between the petitioner and the respondent on 30th March, 2007. Subsequently since certain disputes arose, it was decided that some more clauses have to be incorporated in the JDA based on the assurances given by the respondent. Therefore, the parties entered into the registered Amended JDA on 22nd April, 2015. He submitted that the respondent once again failed to perform her part of the contract in terms of the newly executed Amended JDA, which ultimately compelled the petitioner to issue a legal notice as contemplated under the provisions of Section 11(5) of the Arbitration and Conciliation Act invoking Clause 40 of the JDA. Therefore, he submits that in view of the admitted facts, constitution of an arbitral tribunal is just and necessary for adjudication upon all the claims and disputes between the parties. Therefore, he prays for allowing this Civil Miscellaneous Petition by appointing Hon’ble Justice Subhash B.Adi, former Judge of this Court as nominee-Arbitrator on behalf of the petitioner.
7. Per contra, Shri S.Kalyan Basavaraj, learned counsel appearing for the respondent contended that it is the petitioner who violated the terms and conditions of the JDA and in fact, before the filing of the present Civil Miscellaneous Petition, the petitioner has rescinded the contract. The learned counsel for the petitioner reiterated that that it is only the General Power of Attorney dated 30th March, 2007 which was rescinded and not the entire contract. According to the learned counsel for the respondent, Hon’ble Justice N.Kumar, former Judge of this Court, be appointed as the nominee-Arbitrator on behalf of the respondent.
8. The learned counsel for the parties submit that the third Arbitrator can be appointed by this Court to constitute the Arbitral Tribunal. The said submission is placed on record.
9. This Court suggested the name of Hon’ble Justice Ashok B.Hinchigeri, the former Judge of this Court, to which both the parties have agreed.
10. In view of the aforesaid admitted facts, there is no impediment to constitute an arbitral tribunal as contemplated under Clause 40 of the Amended JDA dated 22nd April, 2015.
11. For the reasons stated above, the Civil Miscellaneous Petition is allowed. The Arbitral Tribunal consisting of three Arbitrators viz., Hon’ble Shri Justice N.Kumar, Hon’ble Shri Justice Ashok B.Hinchigeri and Hon’ble Shri Justice Subhash B.Adi, former Judges of this Court, is constituted to adjudicate the dispute, in terms of Clause 40 of the amended JDA dated 22nd April, 2015 between the parties as per Annexure-G, in accordance with law. Hon’ble Shri Justice N.Kumar, the seniormost Judge is appointed as the Presiding Member of the Arbitral Tribunal.
The arbitration proceedings shall be conducted at the Arbitration Centre, Bengaluru, as desired by the parties to the lis.
Registry is directed to send copy of this order to all the Hon’ble Judges stated supra as well as to the Arbitration Centre forthwith.
Sd/- JUDGE vgh*