- 1 - HC-KAR NC: 2025:KHC:21335 CMP No. 56 of 2020 IN THE HIGH COURT OF KARNATAKA AT BENGALURU DATED THIS THE 19TH DAY OF JUNE, 2025 BEFORE THE HON'BLE MR JUSTICE ASHOK S.KINAGI CIVIL MISC. PETITION NO. 56 OF 2020 BETWEEN: SRI. M. KHIMRAJ BALAR S/O LATE MITHLAL BALAR, AGED ABOUT 46 YEARS, NO.203, AVENUE ROAD, BANGALORE-560 002. …PETITIONER (BY SRI. RAMDAS D., ADVOCATE) AND: 1. M/S. NESTER PROJECTS SY.NO.152 AND 153, MAHADEVAPURA OUTER RING ROAD, BANGALORE-560 048 REPT. BY ITS PARTNERS BY MR. SREEKANTH REDDY. 2. MR. SREEKANTH REDDY AGE 45 YEARS, PARTNER M/S. NESTER PROJECTS, SY.NO.152 AND 153, MAHADEVAPURA OUTER RING ROAD, BANGLORE-560 048. 3. SRI. HEMANSHU M SHA S/O SRI. MAHENDRA SHA, (FLAT NO.301, 302) NO.77, SERPENTINE ROAD, PARK WEST, BANGALORE-560 020. Digitally signed by SUNITHA K S Location: HIGH COURT OF KARNATAKA - 2 - HC-KAR NC: 2025:KHC:21335 CMP No. 56 of 2020 4. MR. GIRISH KOTHARI S/O SRI. SAMPATHRAJ KOTHARI, AGED ABOUT 40 YEARS, NO.26, KALPAVRIKSH APARTMENTS, 12, RACE COURSE ROAD, MADHAVANAGAR, BANGALORE-560 001. 5. MR. PRIYES KOTHARI S/O SRI. SAMPATHRAJ KOTHARI, AGED ABOUT 40 YEARS, NO.26, KALPAVRIKSH APARTMENTS, 12, RACE COURSE ROAD, MADHAVANAGAR, BANGALORE-560 001. 6. MR. NARESH JAIN S/O SRI. AMRITH LAL JAIN, AGED ABOUT 45 YEARS, ETA GARDEN, C-BLOCK, 3RD FLOOR, NO.9, MAGADI ROAD, NEAR BINNY MILLS, BANGALORE-560 023. 7. MR. DINESH BALAR S/O LATE MITHALAL BALA, AGED ABOUT 46 YEARS, NO.203, AVENUE ROAD, BENGALURU-560 002. 8. MR. G. MADHUKAR S/O GOVINDARAJU AGED ABOUT 47 YEARS 9. SMT. CHITRA RAJAN W/o SRI. G. MADHUKAR AGED ABOUT 48 YEARS 10. M/S. ADHVIKA CONSTRUCTIONS A PARTNERSHIP FIRM - 3 - HC-KAR NC: 2025:KHC:21335 CMP No. 56 of 2020 REP. BY MR. G. MADHUKAR AND SMT. CHITRA RAJAN R8 TO R10 AT 7TH FLOOR, C BLOCK, AISHWARYA LAKE VIEW, 6TH CROSS, KAGADASANAPURA, C.V.RAMAN NAGAR, BENGALURU-560 093. …RESPONDENTS (BY SMT./MISS. SOWMYA ANANTH, ADVOCATE FOR SRI. SANDEEP LAHARI, ADVOCATE FOR R3; SRI. S.G. PRASHANTH MURTHY, ADVOCATE FOR SRI. SMT. LATHA S. SHETTY, ADVOCATE FOR R4 & R5; V/O.DATED 14.02.2023, SERVICE OF NOTICE TO R1 IS HELD SUFFICIENT; SRI. GURURAJ G. UDAGI, ADVOCATE FOR R2 (UNDERTAKES TO FILE VK); R6, R7, R8, R9 & R10 ARE SERVED) THIS CIVIL MISC. PETITION IS FILED UNDER SECTION 11(4)(a) OF THE ARBITRATION AND CONCILIATION ACT, 1996, PRAYING TO APPOINT A SUITABLE ARBITRATION BY EXERCISING POWER UNDER SECTION 1(4)(a) OF THE ARBITRATION AND CONCILIATION ACT, 1996, FOR THE RESOLUTION OF DISPUTE ARISING OUT OF ANNEXURE-A, DATED 25.01.2008. THIS PETITION, COMING ON FOR ADMISSION, THIS DAY, ORDER WAS MADE THEREIN AS UNDER: - 4 - HC-KAR NC: 2025:KHC:21335 CMP No. 56 of 2020 CORAM: HON'BLE MR JUSTICE ASHOK S.KINAGI ORAL ORDER This Civil Miscellaneous Petition is filed under Section 11(6) of the Arbitration & Conciliation Act, 1996, for the appointment of an arbitrator to resolve the dispute between the parties in terms of clause No.14 of the Memorandum Of Understanding (for brevity, the ‘MOU’) dated 25.01.2008, vide Annexure-A. 2. Brief facts leading rise to the filing of this petition are as follows: The petitioner and respondents No.4 to 7 are the partners of partnership firm M/s. Ambience Properties. Respondent Nos.2 and 3 are the partners of respondent No.1 – a partnership firm. Respondent Nos.8 to 10 are among the signatories to the Memorandum of Understanding dated 25.01.2008, and are made parties only for the said reason, and there is no claim against them. The firm M/s. Ambience Properties invested in the residential project, - 5 - HC-KAR NC: 2025:KHC:21335 CMP No. 56 of 2020 Advika, a venture of M/s. Advika Constructions, through its partners, and there is a recital in the MOU dated 25.01.2008. 3. Respondent Nos.1 and 2 are selling the apartments in the project ‘Advika Raga’ in deviation from the terms under the MOU, and respondents No.4 to 7 have remained silent. The investments are through M/s. Ambience properties of which the petitioner is a partner. In the Award passed on 26.04.2018 in A.C.No.141/2016, the arbitrator has held that the firm M/s. Ambience properties is dissolved with effect from 14.05.2008. The petitioner being a signatory to the MOU, and a partner in M/s. Ambience Properties has a right to ensure that the terms of the MOU are given effect by respondent Nos.2 and 3, the partners of respondent No.1- firm. Respondent Nos.4 and 6, with an understanding with the partners of M/s. Nester Projects are not disclosing the apartments coming to their share through the MOU dated 25.01.2008 to avoid a deduction in their capital account in M/s. Ambience Properties. On deduction of the receipts from respondent No.1, the capital account of respondent Nos.4 to 6 will be either nil or negative. They are suppressing the receipts coming to them under the MOU dated 25.01.2008. There is an attempt to frustrate the - 6 - HC-KAR NC: 2025:KHC:21335 CMP No. 56 of 2020 petitioner. There is an arbitration clause in the MOU. The petitioner invoked the arbitration clause by issuing a notice on 11.03.2018 vide Annexure-‘B’. Thereafter, the petitioner filed CMP No.107/2018, based on the MOU dated 25.01.2008. This Court, vide order dated 24.10.2019, granted the liberty to the petitioner to withdraw the said CMP and to file a fresh CMP. Accordingly, the petitioner filed this petition. It is also stated that Arbitration Application No.417/2017 filed under Section 9 of the Arbitration and Conciliation Act, 1996 is pending before the City Civil Court, Bengaluru. Hence, this petition. 4. The respondent did not file the statement of objections. 5. Heard the arguments of the learned counsel for the petitioner, and learned counsel for respondent No.2. 6. Learned counsel for the respondents submits no objection to allow the petition, and he has no objection to nominate Hon’ble Sri. Justice Anand Byra Reddy, Former Judge, High Court of Karnataka, as the sole arbitrator. - 7 - HC-KAR NC: 2025:KHC:21335 CMP No. 56 of 2020 7. Perused the records, and considered the submissions of the learned counsel for the parties. 8. The point, that arises for consideration is as follows: “Whether the petitioner has made out a ground to refer the dispute to the arbitrator in terms of clause No.14 of the MOU dated 25.01.2021 as per the provisions of the Arbitration and Conciliation Act, 1996?” 9. There is no dispute regarding the execution of the MOU dated 25.01.2008, and further the dispute arose between the petitioner and respondents regarding the terms of the MOU. The parties to the petition filed a claim petition in A.C.No.141/2016. The petitioner also invoked the arbitration clause by issuing a arbitration notice dated 11.03.2018. There is an arbitration clause No.14 in the MOU dated 25.01.2008, which reads as under: “14. All or any disputes between the parties on issues encompassing the present agreement shall be resolved by arbitration to be conducted by a Single Arbitrator to be jointly appointed by the parties, under the provisions of Indian Arbitration and Conciliation Act, 1996 along with its amendments - 8 - HC-KAR NC: 2025:KHC:21335 CMP No. 56 of 2020 from time to time. The language of the arbitration shall be in English. The venue of the Arbitration shall be at Bangalore, India. The award given by the arbitrator upon such references shall be final and binding upon the parties, and each party shall bear its own expenses in relation to such arbitration. Unless otherwise awarded by the arbitrator, the arbitration fees shall be shared equally by the parties.” 10. The learned counsel for the respondents submits no objection to allow the petition. In view of the above discussion, the petitioner has made out a ground to refer the dispute to the Arbitrator. Accordingly, I answer the point for consideration in the affirmative. 11. Accordingly, I proceed to pass the following: ORDER i. The Civil Miscellaneous Petition is allowed. ii. Hon’ble Sri. Justice Anand Byra Reddy, Former Judge, High Court of Karnataka is nominated as an Arbitrator to resolve the dispute between the parties as per the provisions of Arbitration and Conciliation Act, 1996 and Rules. - 9 - HC-KAR NC: 2025:KHC:21335 CMP No. 56 of 2020 iii. The office is directed to communicate a copy of this order to the learned Arbitrator, and the Arbitration and Conciliation Centre, Bengaluru. iv. All the contentions of the parties are kept open. In view of the disposal of the petition, pending IAs, if any, stand disposed of. Sd/- (ASHOK S.KINAGI) JUDGE sks