- 1 - NC: 2025:KHC:9552 CMP No. 113 of 2024 IN THE HIGH COURT OF KARNATAKA AT BENGALURU DATED THIS THE 6TH DAY OF MARCH, 2025 BEFORE THE HON'BLE MR JUSTICE ASHOK S.KINAGI CIVIL MISC. PETITION NO. 113 OF 2024 BETWEEN: 1. SRI SHANKAR @ SHANKARAPPA S/O LATE SRI SALLAPURAPPA, AGED ABOUT 50 YEARS 2. SMT. SUMA W/O SRI. SHANKAR, AGED ABOUT 37 YEARS 3. SRI. PAPAIAH S/O LATE SRI. SALLAPURAPPA, AGED ABOUT 62 YEARS 4. SMT. GANGAMMA W/O SRI. PAPAIAH, AGED ABOUT 52 YEARS 5. SMT. MUNIYAMMA D/O SRI. PAPAIAH, AGED ABOUT 35 YEARS 6. SRI. MANJAPPA S/O SRI. PAPAIAH, AGED ABOUT 33 YEARS 7. SMT. PADMA D/O SRI. PAPAIAH, AGED ABOUT 31 YEARS Digitally signed by SUNITHA K S Location: HIGH COURT OF KARNATAKA - 2 - NC: 2025:KHC:9552 CMP No. 113 of 2024 8. SMT. SARASA D/O SRI. PAPAIAH, AGED ABOUT 29 YEARS 9. SMT. SHOBHA D/O SRI. PAPAIAH, AGED ABOUT 27 YEARS 10. SMT. RATHNAMMA W/O LATE MUNIYAPPA, AGED ABOUT 50 YEARS 11. SMT. VENKATAMMA W/O LATE MUNIGANGAPPA, AGED ABOUT 58 YEARS 12. SMT. SARASAMMA W/O LATE MUNIGANGAPPA, AGED ABOUT 58 YEARS, 13. SMT. SALLAMMA @ SALLAPURAMMA D/O SMT. VENKATAMMA AND LATE MUNIGANGAPPA, AGED ABOUT 40 YEARS, 14. SMT. MUNIYAMMA D/O SMT. VENKATAMMA AND LATE SRI. MUNIGANGAPPA, AGED ABOUT 38 YEARS, 15. SRI. SHIVARAJ S/O SMT. SARASAMMA AND LATE MUNIGANGAPPA, AGED ABOUT 30 YEARS, 16. SMT. SUMATHI D/O SMT. SARASAMMA AND LATE MUNIGANGAPPA, AGED ABOUT 28 YEARS, 17. SMT. NAVEENA D/O SMT. SARASAMMA AND LATE MUNIGANGAPPA, AGED ABOUT 26 YEARS - 3 - NC: 2025:KHC:9552 CMP No. 113 of 2024 18. SRI. SAGAR S/O LATE SMT. DEVAMMA AND LATE MUNIRAJU, AGED ABOUT 31 YEARS 19. SMT. MAMATHA D/O LATE SMT. DEVAMMA AND LATE MUNIRAJU, AGED ABOUT 29 YEARS 20. SMT. LAKSHMI W/O LATE SRI. MUNIRAJU, AGED ABOUT 40 YEARS ALL ARE R/AT BHOGANAHALLI VILLAGE, BELANDOOR POST, VARTHUR HOBLI, BENGALURU EAST TALUK, BENGALURU-560103 THE PETITIONERS 2 TO 20 HEREIN ARE REPRESENTED BY THEIR GPA HOLDER/PETITIONER NO.1, SRI. SHANKAR @ SHANKARAPPA, S/O LATE SRI. SALLAPURAPPA, AGED ABOUT 50 YEARS, R/AT NO.131/101, BHOGANAHALLI VILLAGE, BELANDOOR POST, VARTHUR HOBLI, BENGLAURU EAST TALUK, BENGALURU-560103 …PETITIONERS (BY SRI. R.RAKESH KUMAR, ADVOCATE) AND: 1. M/S PRIYANKA DEVELOPERS A REGISTERED PARTNERSHIP BUSINESS CONCERN HAVING ITS OFFICE AT NO.148, FLAT NO.402, SILVER SPRINGS APARTMENT, 6TH MAIN, OPPOSITE TO STATE BANK OF INDIA, DODDANEKUNDI, MARATHAHALLI POST, - 4 - NC: 2025:KHC:9552 CMP No. 113 of 2024 BENGALURU-560037 REPRESENTED BY ITS PARTNERS, A. SRI.R. RAJESH REDDY, B. SRI.N. SREENIVASULU REDDY, C. SMT. SRIKUMARI, D. SRI. MADHUSUDHAN REDDY, E. SRI. A VENUDHAR REDDY 2. SRI.R. RAJESH REDDY S/O LATE. M RAMA REDDY, AGED ABOUT 38 YEARS, PARTNER, M/S PRIYANKA DEVELOPERS, NO.148, FLAT NO.402, SILVER SPRINGS APARTMENT, 6TH MAIN, OPPOSITE TO STATE BANK OF INDIA, DODDANEKUNDI, MARATHAHALLI POST, BENGALURU-560037. 3. SRI. N SREENIVASULU REDDY S/O LATE N LATCHA REDDY, AGED ABOUT 53 YEARS, PARTNER, M/S PRIYANKA DEVELOPERS, NO.148, FLAT NO.401, SILVER SPRINGS APARTMENT, 6TH MAIN, OPPOSITE TO STATE BANK OF INDIA, DODDANEKUNDI, MARATHAHALLI POST, BENGALURU-560037. 4. SMT. SRIKUMARI W/O LATE M RAMA REDDY, AGED ABOUT 58 YEARS, PARTNER M/S PRIYANKA DEVELOPERS, NO.148, FLAT NO.402, SILVER SPRINGS APARTMENT, 6TH MAIN, OPPOSITE TO STATE BANK OF INDIA, DODDANEKUNDI, MARATHAHALLI POST, BENGALURU-560037. - 5 - NC: 2025:KHC:9552 CMP No. 113 of 2024 5. SRI. MADHUSUDHAN REDDY S/O SRI N SUBBA REDDY, AGED ABOUT 59 YEARS, PARTNER, M/S PRIYANKA DEVELOPERS, NO.148, FLAT NO.402, SILVER SPRINGS APARTMENT, 6TH MAIN, OPPOSITE TO STATE BANK OF INDIA, DODDANEKUNDI, MARATHAHALLI POST, BENGALURU-560037. 6. SRI.A. VENUDHAR REDDY S/O LATE A MADHAVA REDDY, AGED ABOUT 62 YEARS, PARTNER, M/S PRIYANKA DEVELOPERS, NO.148, FLAT NO.402, SILVER SPRINGS APARTMENT, 6TH MAIN, OPPOSITE TO STATE BANK OF INDIA, DODDANEKUNDI, MARATHAHALLI POST, BENGALURU-560037. …RESPONDENTS (BY SRI. R1, R2, R4 TO R6 ARE SERVED R3 SERVICE HELD SUFFICIENT) THIS CIVIL MISC. PETITION IS FILED UNDER SEC.11(6) OF THE ARBITRATION AND CONCILIATION ACT, 1996 SEEKING APPOINTMENT OF AN ARBITRATOR, PRAYING TO 1. CONSIDER APPOINTMENT OF AN ARBITRATOR TO ADJUDICATION THE DISPUTE INTER-SE BETWEEN THE PETITIONER AND THE RESPONDENT ARISING OUT OF THE JOINT DEVELOPMENT AGREEMENT DATED 23.03.2017 IN PARA NO. 29(4) EXECUTED BY THE PETITIONERS IN FAVOUR OF RESPONDENTS WHICH IS AT ANNEXURE F. 2. COSTS OF THE PETITION. THIS PETITION, COMING ON FOR ADMISSION, THIS DAY, ORDER WAS MADE THEREIN AS UNDER: CORAM: HON'BLE MR JUSTICE ASHOK S.KINAGI - 6 - NC: 2025:KHC:9552 CMP No. 113 of 2024 ORAL ORDER This Civil Miscellaneous Petition is filed under Section under Section 11(6) of the Arbitration and Conciliation Act, 1996 (hereinafter referred to as ‘the Act’ for brevity) for the appointment of an Arbitrator to resolve the dispute arising between the parties in terms of clause 29 of the Joint Development Agreement dated 23.3.2017 vide Annexure-F, as per the provisions of the aforesaid Act. 2. Brief facts, leading rise to the filing of this petition are as follows: Respondent no.1 is the registered partnership firm represented by its partners i.e., respondents no.2 to 6, and the said partnership firm is engaged in the business of construction and land development. The respondents approached the petitioners to undertake the development of the schedule property by offering to construct a residential apartment building on the schedule property on a 50% sharing ratio. Respondent no.1 entered into an agreement on 19.2.2016 with the petitioners agreeing to - 7 - NC: 2025:KHC:9552 CMP No. 113 of 2024 enter into a joint development agreement. Respondent no.1- the firm paid an amount of Rs.15,00,000/- under the registered agreement dated 19.2.2016 as an advance of a non-refundable deposit. The petitioners entered into a joint development agreement with respondent no.1 on 23.03.2017. On the same day, a registered power of attorney was also executed in favour of respondent no.1 to enable respondent no.1 to undertake the construction of multi-storied apartment building in terms of the joint development agreement. Respondent no.1 paid an additional non-refundable deposit of Rs.15.00 lakhs under the joint development agreement dated 23.03.2017. In all, respondent no.1 had paid an amount of Rs.30.00 lakhs as a non-refundable deposit to the petitioners. Respondent No.1 commenced construction of the apartment buildings and had delayed to start the construction work. The apartment building is named by the respondents as ‘Silver Oak’. The respondents failed to adhere to the terms of the joint development agreement in completing the construction within the agreed period of 36 months, and - 8 - NC: 2025:KHC:9552 CMP No. 113 of 2024 an additional grace period of 6 months. The construction was delayed. The construction ought to have been completed within 06.12.2020, and if Covid-19 pandemic is taken into consideration, the respondents by availing grace period, ought to have completed the construction work by 2021, within 42 months i.e., 6.6.2021. The respondents have failed to complete the entire construction work within the stipulated period. The Respondents all of a sudden stopped the construction work in 201. The petitioners were put to loss due to non-completion of the construction work. The respondents have undertaken alienation of unfinished apartments and executed 9 sale deeds regarding 9 apartments without completing the construction. The said act goes against the terms of Joint Development Agreement. The respondents are entitled to a 50% share only after the construction, and delivery of the petitioners’ 50% share. The petitioners issued a notices to the respondents on 26.09.2022 and 17.10.2022 calling upon the respondents to complete construction, and adhere to the terms of the joint - 9 - NC: 2025:KHC:9552 CMP No. 113 of 2024 development agreement. The respondents received the notice, but failed to comply with the demand made by the petitioners. The petitioners filed a suit in O.S.No.4538/23 seeking a mandatory injunction against the respondents to complete the construction in terms of the joint development agreement. The trial court granted an interim order of temporary injunction restraining the respondents from alienating the 3 apartments that are unsold by the respondents. 2.1. The respondents appeared and filed a written statement contending that the suit filed by the petitioners is not maintainable in view of the arbitration clause in the joint development agreement. The respondents filed an application under Section 8 of the Act. The said application was allowed, and the suit was dismissed as not maintainable in view of the arbitration clause in the joint development agreement. The petitioners issued an arbitration notice on 12.12.2023 calling upon the respondents to nominate an Arbitrator to resolve the - 10 - NC: 2025:KHC:9552 CMP No. 113 of 2024 dispute. The respondents neither replied nor complied with the demand made by the petitioners. The petitioners filed an application under section 9 of the Act in AA No.1/24 on the file of City Civil and Sessions Judge, Bangalore (CCH-28). The trial court granted an interim order on 03.01.2024. The petitioners issued one more notice on 8.1.2024 calling upon the respondents to come forward to appoint an Arbitrator to resolve the dispute. The petitioners have suggested the name of Sri Krishnamurthy B Sangannavar, learned District Judge (retired), a panel Arbitrator as the sole Arbitrator and suggested the Arbitration and Conciliation Centre, Bengaluru, as the venue. 2.2. Notice was taken out to respondents no.1 to 6. Despite service of notice, respondents no.1 to 6 remained unrepresented. 3. Heard the arguments of the learned counsel for the petitioners. - 11 - NC: 2025:KHC:9552 CMP No. 113 of 2024 4. Learned counsel for the petitioners submits that the petitioners and the respondents have entered into a joint development agreement for the construction of residential apartments. The respondents paid Rs.30 lakhs to the petitioners, and as per the terms and conditions of the joint development agreement, the respondents have to complete the construction within 36 months. The respondents have not completed the construction work. The said period was extended from 36 months to 42 months. Even after the extension of time, the respondents did not complete the construction work. He submits that there is an arbitration clause in the joint development agreement and the petitioners have proposed the name of Sri Krishnamurthy B Sangannavar, learned District Judge (retired), a panel Arbitrator as a sole Arbitrator and suggested the Arbitration and Conciliation Centre, Bengaluru, as the venue. The respondents neither replied nor agreed to the nomination of the Arbitrator. Hence, prays to allow the petition. - 12 - NC: 2025:KHC:9552 CMP No. 113 of 2024 5. Perused the records, and considered the submissions of the learned counsel for the parties. 6. The point, that arises for consideration is, “Whether the petitioners have made out a ground to refer a dispute to the Arbitrator for adjudication in terms of Clause 29 of the joint development agreement dated 23.3.2017 as per the provisions of the Act ?” 7. There is no dispute regarding the execution of the joint development agreement between the petitioners and respondents vide the joint development agreement dated 23.3.2017. As per the terms and conditions of the joint development agreement, the respondents have to complete the entire construction of the residential apartments. Respondent no.1 paid a sum of Rs.30 lakhs to the petitioners. The respondents could not complete the construction work within the stipulated period. The petitioners filed a suit in O.S.No.4538/23 on the file of the City Civil and Sessions Judge, Bengaluru (CH.15). In the said suit, the respondents filed a written statement - 13 - NC: 2025:KHC:9552 CMP No. 113 of 2024 contending that the suit filed by the petitioners is not maintainable, in view of the arbitration clause. Hence, the said suit was dismissed. 7.1. Thereafter, the respondents filed an application under Section 8 of the Act before the trial court. The trial Court vide order dated 08.11.2023 allowed the appeal and dismissed the suit as not maintainable in view of the presence of arbitration clause. Thereafter, the petitioners filed Arbitration application u/s 9 of the Act in A.A.No.1/2024 on the file of City Civil and Sessions Judge, Bangalore (CCH-28). An interim order was passed in AA 1/2024. Thereafter, the petitioners got issued an arbitration notice on 08.01.2024, suggesting the name of Sri Krishnamurthy B Sangannavar, learned District Judge (retired), a panel Arbitrator as the sole Arbitrator, as per clause 29 of the joint development agreement dated 23.3.2017. - 14 - NC: 2025:KHC:9552 CMP No. 113 of 2024 8. I have perused the joint development agreement dated 23.3.2017. Clause 29 of the Joint Development Agreement provide an reads thus : 29) SPECIFIC PERFORMANCE AND DISPUTE RESOLUTION: 29.1) In the event of breach by either party, the other party (the aggrieved party) shall be entitled to specific performance and also be entitled to recover all losses and expenses incurred as a consequence of such breach from the party committing breach; 29.2) Irrespective of what is stated in this Agreement, any breach committed by a Party may be complained of by the Other Party in writing calling upon the Party in breach to remedy the breach. On the failure of such Party to remedy such breach within Fifteen days from the date of receipt of such notice to that effect, the non- defaulting Party shall take steps to resolve such compliance in terms stated below, 29.3) In the event of any dispute of difference arising in relation to this agreement, its Interpretation, performance or any other matter, the same shall be decided by mutual discussion between the Parties Either of the Parties shall be entitled to raise such question in writing in a letter addressed to the other party and the Parties representatives shall meet and use good faith efforts to resolve such dispute or differences within a week of either of the Parties raising a dispute. 29.4) In the event of the Parties being unable to resolve the dispute by conciliation as above or within such further time as the Parties may mutually agree, the dispute may be referred by either party to arbitration by sole arbitrator in accordance with the provisions of the Arbitration and Conciliation Act, - 15 - NC: 2025:KHC:9552 CMP No. 113 of 2024 1996 or any re-enactment or modification thereof and shall be decided by such Arbitral Tribunal. The award shall be final and binding on the parties i) The arbitration will be held in Bangalore City. ii) The language of the arbitration proceedings will be in English The disputes shall be resolved in thirty working days of reference or within a reasonable period as may be agreed between the parties in writing. It is however clarified the work will not stop, pending the arbitration process Admittedly, there is an arbitration clause in the joint development agreement, and the respondents have taken defense in O.S.NO.4538/23 that, in view of the arbitration clause, the suit filed by the petitioners is not maintainable. As observed above, the petitioners issued an arbitration notice. Despite service of notice, the respondents neither replied nor agreed for the nomination of the Arbitrator and for the venue of arbitrator. 9. In view of the above discussion, I am of the view that, the petitioners have made out a ground to refer the dispute for arbitration to adjudicate the dispute between the parties to the petition, in terms of clause 29 of the - 16 - NC: 2025:KHC:9552 CMP No. 113 of 2024 joint development agreement dated 23.03.2017. Accordingly, the point is answered in the affirmative. 10. Hence, I proceed to pass the following order : ORDER i) The CMP is allowed; ii) Sri Krishnamurthy B Sangannavar, learned District Judge (retired), a panel Arbitrator, is appointed as the sole Arbitrator, to resolve the dispute between the parties, fixing the Arbitration and Conciliation Centre, Bengaluru, as the venue. iii) The Office is directed to communicate the order to the learned Arbitrator and the Arbitration and Conciliation Centre, Bengaluru. SD/- (ASHOK S.KINAGI) JUDGE rs