- 1 - NC: 2025:KHC:12336 CMP No. 460 of 2023 IN THE HIGH COURT OF KARNATAKA AT BENGALURU DATED THIS THE 28TH DAY OF FEBRUARY, 2025 BEFORE THE HON'BLE MR JUSTICE SACHIN SHANKAR MAGADUM CIVIL MISC. PETITION NO. 460 OF 2023 BETWEEN: 1. MR. RAMESH BABU VAKA S/O MR. VENKATESWARA REDDY VAKA AGED ABOUT 39 YEARS R/AT NO.301, CITRON APARTMENT 2ND CROSS, OWNERS COURT WEST KASAVANAHALLI BENGALURU-560 035. …PETITIONER (BY SRI. AJIT .P.B, ADVOCATE) AND: 1 . M/S SMART OWNER SERVICES INDIA PRIVATE LIMITED A COMPANY INCORPORATED UNDER THE PROVISIONS OF THE COMPANIES ACT 1956 REGISTERED OFFICE AT GROUND FLOOR ALPHA BLOCK, SIGMA TECH PARK VARTHUR-WHITEFIELD MAIN ROAD BENGALURU-560 066. REPRESENTED BY ITS FOUNDER CHAIRMAN AND CEO MR. VIKRAM CHARI, ALSO AT 8TH FLOOR DELTA BLOCK, SIGMA TECH PARK VARTHUR - WHITEFIELD MAIN ROAD BENGALURU-560 066. 2 . M/S SILVER STREAM DEVELOPERS PVT LTD A COMPANY INCORPORATED UNDER Digitally signed by NAGARAJA B M Location: HIGH COURT OF KARNATAKA - 2 - NC: 2025:KHC:12336 CMP No. 460 of 2023 THE PROVISIONS OF THE COMPANIES ACT 2013 REG OFFICE AT LEVEL 3 AND 4 EMBASSY DIAMANTE VITTAL MALLYA ROAD BANGALORE-560 001. REPRESENTED BY ITS AUTHORIZED SIGNATORY M.S ANAMIKA SINHA. …RESPONDENTS (BY SRI. RAGHURAM CADAMBI, ADVOCATE FOR R1; SRI. ANKITH .S REDDY, ADVOCATE FOR R2) THIS CIVIL MISC. PETITION IS FILED UNDER SECTION 11(5) OF ARBITRATION AND CONCILIATION ACT, 1996 PRAYING THAT IN TERMS OF CLAUSE 10 OF THE MASTER SERVICE AGREEMENT DATED 15/06/2020 (PRODUCED AS ANNEXURE-E) BE PLEASED TO APPOINT ANY RETIRED JUDGE OF THIS HONBLE COURT OR ANY RETIRED DISTRICT JUDGE AS THE SOLE ARBITRATOR TO ADJUDICATE THE DISPUTE ARISING OUT OF THE AFORESAID AGREEMENTS, IN RESPECT OF THE CLAIMS RAISED BY THE PETITIONER AND RESPONDENTS BEFORE THE KARNATAKA ARBITRATION CENTRE, BENGALURU, TO SERVE THE INTEREST OF JUSTICE AND EQUITY. THIS CIVIL MISC. PETITION, COMING ON FOR FURTHER HEARING, THIS DAY, ORDER WAS MADE THEREIN AS UNDER: CORAM: HON'BLE MR JUSTICE SACHIN SHANKAR MAGADUM ORAL ORDER This Civil Miscellaneous Petition is filed under Section 11(6) of the Arbitration and Conciliation Act, 1966 (for short 'the Act') between the parties in terms of the Master Service Agreement dated 15.06.2020 executed by respondent. - 3 - NC: 2025:KHC:12336 CMP No. 460 of 2023 2. The petitioner asserts that Respondent No.1 is an online consultancy and intermediary platform and vide email dt.9.6.2020 offered petitioner to invest his amount Rs.14,87,500 in the Respondent no.1’s Investment Multiplier Plan (for short ‘IMP’). Petitioner further contends that he has entered in Master Service Agreement (for short ‘MSA’) on 15.6.2020 and has executed a POA authorizing Respondent No.1 to act on his behalf. Petitioner further claims in pursuance of MSA respondent No.2 issued Non-convertible debenture (for short ‘NCD’) certificate on 3.12.2020. Petitioner alleging that respondent have failed to pay assured dividends has invoked arbitration clause in MSA and present petition is filed. 3. Respondents No.1 and 2 on receipt of notice have tendered appearance and engaged counsels. 4. Respondent No.1 primary objection while opposing present petition is that entire dispute is with respondent No.2 in regard to non-payment of dividend - 4 - NC: 2025:KHC:12336 CMP No. 460 of 2023 which clearly falls outside the scope of arbitration clause provided in MSA and therefore it is contended that there is no dispute between petitioner and Respondent No.1. 5. Respondent No.1 further contends that NCD does not contain an arbitration agreement and therefore payout statement related to respondent No.2 downloaded by petitioner using online platform of Respondent No.1 cannot constitute a cause of action to lay claim on respondent invoking arbitration against Respondent provided under MSA. Respondent No.1 however asserts that it is only a service provider that provides platform to the investors. Reliance is placed on a judgment rendered by the Apex Court in Cox and King Ltd. v. SAP India Pvt. Ltd. & Anr1. 6. The email correspondence between Respondent no. 1 and the present petitioner clearly demonstrates that Respondent No. 1 has not merely functioned as a facilitator by providing an online platform for investors but 1 (2023)15 SCR 621 - 5 - NC: 2025:KHC:12336 CMP No. 460 of 2023 has also actively engaged in consultancy and intermediation services across various asset classes. A closer examination of the records, particularly the email communication from Respondent No. 1 dated 9th June 2020, reveals that Respondent No. 1 has floated the "Smart Owner Investment Multiplier Plan." Under this scheme, Respondent No. 1 has assumed the responsibility of investing the funds deposited by investors into a diversified portfolio, encompassing commercial properties, co-working spaces, Kumar residential projects, and other ventures. 7. Furthermore, the email explicitly mentions that the investments made under this plan are not confined to a single project but are strategically allocated across multiple ventures. The records also establish that the petitioner has directly invested funds with Respondent No. 1, and the dividends accruing from such investments have been received by Respondent No. 1 from Respondent No. 2. These factors collectively indicate that Respondent - 6 - NC: 2025:KHC:12336 CMP No. 460 of 2023 No. 1 has played a far more extensive role than that of a mere intermediary platform. It has actively participated in the structuring, management, and execution of investment plans. 8. Given these significant aspects, the contention of Respondent No. 1 that the investment made by the petitioner with Respondent No. 2 falls outside the ambit of the arbitration clause enshrined in the Master Service Agreement appears to be fundamentally misconceived. This court, therefore, finds no merit in the said argument and is not inclined to accept it. 9. Upon thorough examination of the petition, its annexures, and the supporting documents, this Court is satisfied that the petitioner has complied with the procedural requirements prescribed under Section 11(4) of the Act, for invoking the arbitration clause. Therefore, the present petition merits consideration for appointment of an arbitrator to adjudicate the dispute between the parties. - 7 - NC: 2025:KHC:12336 CMP No. 460 of 2023 10. In the light of the aforesaid clause of arbitration and the contentions advanced by the petitioner and respondent, this Court proceeds to pass the following: ORDER (i) This civil miscellaneous petition is allowed appointing Sri. Ashok L. Pujar, Retired District Judge, as the sole Arbitrator to enter reference of the disputes between the petitioner and the respondents and conduct proceeding at the Arbitration and Conciliation Centre (Domestic and International), Bengaluru according to the Rules governing the said Arbitration Centre; (ii) All contentions inter se parties are left open for adjudication in the arbitration proceedings; (iii) Office is directed to communicate this order to the Arbitration and Conciliation Centre and to Sri. Ashok L. Pujar, Retired District Judge, as required under the Arbitration and Conciliation Centre Rules, 2012; Sd/- (SACHIN SHANKAR MAGADUM) JUDGE ALB/List No.: 3 Sl No.: 1