- 1 - HC-KAR NC: 2025:KHC:23098 CMP No. 577 of 2024 IN THE HIGH COURT OF KARNATAKA AT BENGALURU DATED THIS THE 30TH DAY OF JUNE, 2025 BEFORE THE HON'BLE MR JUSTICE ASHOK S.KINAGI CIVIL MISC. PETITION NO. 577 OF 2024 BETWEEN: SRI P D CHIDANAND AGED ABOUT 52 YEARS S/O SRI P DODDANAIAK R/AT C/O SRI A K ASHOK #003, KCR ELITE APARTMENT 25 FT ROAD, SARASWATHIPURAM BENGALURU 560 008 REP. BY HIS GPA HOLDER MR. SATVIK L …PETITIONER (BY SRI. M B ANIRUDH, ADVOCATE) AND: SRI K V NAIDU S/O K C NAIDU AGED ABOUT 54 YEARS R/AT GROUND FLOOR C DR GROOVE APARTMENT 1ST MAINROAD, RMV 2ND STAGE DOLLAR COLONY BENGALURU 560 094 …RESPONDENT (BY SRI. NANJA REDDY P N., ADVOCATE) THIS CMP IS FILED UNDER SECTION 11(6)(a) OF THE ARBITRATION AND CONCILIATION ACT, 1996 PRAYING TO APPOINT ANY SUITABLE PERSON AS THE SOLE ARBITRATOR IN Digitally signed by KIRAN KUMAR R Location: HIGH COURT OF KARNATAKA - 2 - HC-KAR NC: 2025:KHC:23098 CMP No. 577 of 2024 TERMS OF CLAUSE 12 OF THE AGREEMENT TO SELL DATED 16.10.2015 (ANNEXURE A) AS THIS HON’BLE COURT DEEMS FIT, TO ARBITRATE THE DISPUTE BETWEEN THE PETITIONER AND RESPONDENT ARISING OUT OF THE AGREEMENT TO SELL DATED 16.10.2015 (ANNEXURE-A). THIS PETITION, COMING ON FOR ORDERS, THIS DAY, ORDER WAS MADE THEREIN AS UNDER: CORAM: HON'BLE MR JUSTICE ASHOK S.KINAGI ORAL ORDER 1. This Civil Miscellaneous petition is filed under Section 11(6) of the Arbitration and Conciliation Act, 1996 (for short, “the Act”), seeking for the appointment of an Arbitrator to resolve the disputes between the parties to the petition in terms of Clause 12 of the Agreement of Sale of Development Rights Certificate (‘DRC’) dated 16.10.2015, vide Annexure “A” 2. Brief facts, leading rise to the filing of this petition are as follows : 3. The respondent was the owner of the land in Survey No. 14 of Mydarahalli Village, totally measuring 05 acres, 08 gunta, and 03 guntas of kharab land. - 3 - HC-KAR NC: 2025:KHC:23098 CMP No. 577 of 2024 4. The Bruhat Bengaluru Mahanagara Palike sought to form a road in a portion of the land measuring approximately 31,680 square feet, or 2,943.16 square meter. Instead of monetary compensation, the respondent opted to receive the Development Rights Certificate / Transferable Development Rights (“DRC/TDR”, for short) under the applicable law. 5. The petitioner being a businessman, sought to purchase the DRC from the respondent. The respondent, who is also a businessman, agreed to the same. After negotiations and discussions, the terms and conditions were reduced to writing, and an Agreement of Sale of DRC dated 16.10.2015 was executed between the petitioner and the respondent. 6. At the time of execution of the Agreement of Sale, the extent of land in Survey No.14 identified by the local authorities, and the parties was to an extent of 31,680 square feet or 2,943.16 square meter. During - 4 - HC-KAR NC: 2025:KHC:23098 CMP No. 577 of 2024 the course of processing the application of the respondent for the grant of DRC, the extent of the land has been identified as 27,589.62 square feet or 2,563.16 square meters, as determined by the statutory authorities. Notwithstanding the said change, both parties are bound to perform the Agreement of Sale. 7. The petitioner on discovering that, the respondent has, in utter breach of Agreement of Sale dated 16.10.2015 sought to sell the very same DRC / TDR in favour of third parties under the Agreement of Sale 23.01.2021, the petitioner filed a Commercial Arbitration Application No.242 of 2022 on the file of the Court below under Section 9 of the Act. 8. The Court below granted an ex parte_ad interim injunction restraining the respondent from transferring/assigning, etc. to any third party rights, - 5 - HC-KAR NC: 2025:KHC:23098 CMP No. 577 of 2024 over the DRC/TDR in respect of the subject matter land. 9. The respondent filed a statement of objections to the main application in Commercial Arbitration Application No.242 of 2022 contending that the subject matter dispute is not a commercial dispute. The Court below passed an order holding that the dispute is not a commercial dispute, and directed the return of the application. 10. The petitioner filed a Commercial Appeal in C.A. No. 464 of 2023 before this Court, which is pending for consideration. 11. It is pertinent to note that immediately after filing the Commercial Arbitration Application in Com.A.A. No.242 of 2022, the petitioner issued a notice on 27.06.2022 invoking the arbitration clause; however, the respondent evaded service, and the notice was returned un-served. - 6 - HC-KAR NC: 2025:KHC:23098 CMP No. 577 of 2024 12. It is averred that there is an arbitration clause in the Agreement of Sale. The respondent did not agree to appointment of an arbitrator. Hence, this petition. 13. The respondent filed a statement of objections contending that the petition seeking appointment of an Arbitrator is not maintainable in view of the pendency of Commercial Appeal before this Court. Hence, prays to dismiss the petition. 14. Heard the arguments of the learned counsel for the petitioner, and the learned counsel for the respondent. 15. The learned counsel for the petitioner submits that there is a dispute regarding the measurement of the property under the sale, and the respondent is trying to alienate the DRC/TDR rights as shown in the Agreement of sale. However, on the spot, there is no open space available, as mentioned in the Agreement of Sale of DRC. - 7 - HC-KAR NC: 2025:KHC:23098 CMP No. 577 of 2024 16. In the event that any dispute or difference arises between the parties regarding the terms and conditions of this agreement, the dispute shall be decided and settled by a single arbitrator. Hence, he submits that there is an arbitral dispute arising between the parties to the petition. The petitioner has invoked the arbitration clause by issuing an arbitration notice dated 27.06.2022. Hence, he prays to allow the petition. 17. The learned counsel for the respondent submitted that there is no arbitral dispute and the petition is not maintainable. Hence, the question of appointing an arbitrator does not arise. Therefore, he prays to dismiss the petition. 18. Perused the records, and considered the submissions of the learned counsel for the parties. 19. The point, that arises for consideration in this petition, is: - 8 - HC-KAR NC: 2025:KHC:23098 CMP No. 577 of 2024 “Whether the petitioner has made out a ground to refer the matter to the Arbitrator to resolve the disputes between the parties to the petition in terms of Clause (12) of the Agreement of Sale of DRC dated 16.10.2015 as per the provisions of the Arbitration and Conciliation Act and the Rules?” 20. There is no dispute regarding the execution of the Agreement of Sale of DRC dated 16.10.2015. In the Agreement of Sale, the measurement of the property in question, is shown as 31,680 square feet or 2,943.16 square meter. During the course of processing the respondent’s application for the grant of DRC, the local authorities and the parties identified that the property shown in the Agreement of Sale was not to an extent of 31,680 square feet or 2,943.16 square meter. However, it is found to be an extent of 27,589.62 square feet, or 2,563.16 square meter. - 9 - HC-KAR NC: 2025:KHC:23098 CMP No. 577 of 2024 21. As there is a dispute regarding the measurement of the property in question, the petitioner approached the Trial Court by filing an application under Section 9 of the Act. 22. The respondent appeared and filed the statement of objections contending that there is no commercial dispute. The Trial Court, accepting the contention of the respondent, rejected the application filed by the petitioner, holding that the dispute was not a commercial dispute, and returned the application. The petitioner challenged the said order in Commercial Appeal No.464 of 2023 before this Court, which is pending for consideration. 23. The Agreement of Sale of DRC dated 16.10.2015 provides for an Arbitration Clause, which is extracted as follows: “12. In the event of breach of the terms of this Agreement or in the event of any differences or disputes arising between the - 10 - HC-KAR NC: 2025:KHC:23098 CMP No. 577 of 2024 parties in regard to this agreement or any matter relating thereto, the same shall be decided and settled by a single arbitrator appointed by the PURCHASER under the provision of the Arbitration and Conciliation Act and in the event of any disputes/litigations being raised for the sale of the DRC in favour of the Purchaser or his nominees and the sale of the DRC obtained from surrender of the schedule property becoming impossible, this Agreement shall be terminated and the Vendors shall be liable to refund the entire advance paid sale consideration received under this agreement.” 24. The petitioner, by invoking the said arbitration clause i.e., Clause 12 under the Agreement of Sale dated 16.10.2015, issued a notice dated 27.06.2022. The said notice was returned un-served. The petitioner has produced the said arbitral notice in CAA No.242 of 2022. The respondent did not consent to the appointment of an arbitrator. - 11 - HC-KAR NC: 2025:KHC:23098 CMP No. 577 of 2024 25. Admittedly, there is an arbitration clause, and as the arbitral dispute arose between the parties, it must be resolved through arbitration in terms of Clause 12 of the Agreement of Sale dated 16.10.2015, vide Annexure “A”. 26. Thus, in view of the above discussion, the petitioner has made out a ground to refer the dispute to the arbitrator in terms of Clause 12 of the Agreement of sale of DRC dated 16.10.2015. Accordingly, I answer the point for consideration in the affirmative, and proceed to pass the following order: ORDER (I) This Civil Miscellaneous Petition is allowed. (II) Sri.K.M.Thammaiah, Retired District Judge, is appointed as an arbitrator to resolve the disputes between the parties to the petition as per Clause 12 of the Agreement of sale of DRC dated 16.10.2015 vide Annexure “A” - 12 - HC-KAR NC: 2025:KHC:23098 CMP No. 577 of 2024 as per the provisions of the Arbitration and Conciliation Act, and the Rules. (III) The Office is directed to communicate this order to the learned Arbitrator and the Arbitration and Conciliation Centre, Bengaluru. (IV) The Office is directed to return the original documents, if any, to the petitioner after retaining a photocopy of the same. (V) In view of the disposal of the petition, pending interlocutory applications, if any, shall stand disposed of. Sd/- (ASHOK S.KINAGI) JUDGE RK CT:KHV List No.: 1 Sl No.: 33