- 1 - HC-KAR NC: 2025:KHC-D:11177 CMP No. 100022 of 2024 IN THE HIGH COURT OF KARNATAKA,AT DHARWAD DATED THIS THE 2ND DAY OF SEPTEMBER, 2025 BEFORE THE HON'BLE MR. JUSTICE G BASAVARAJA CIVIL MISC PETITION NO. 100022 OF 2024 (-) BETWEEN: M/S GURU RAJENDRA MINERALS TRADING COMPANY PVT LTD., HAVING ITS REGISTERED OFFICE AT SATYANARAYANA NILAYA 100 BED HOSPITAL ROAD, HOSPET-583201 REPRESENTED BY ITS GPA HOLDER MANOJ KUMAR JAIN AGE. 54 YEARS, OCC. BUSINESS R/O. HOSPET. …PETITIONER (BY SRI. ANOOP G. DESHPANDE, ADVOCATE) AND: M/S SRI SUBRAMANYA SPONGE IRON PVT. LTD., HAVING ITS REGISTERED OFFICE AT SY.NO.136B VEENIVERAPURA-HARGINADONI ROAD, HARAGINDONI, BALLARY REPRESENTED BY ITS AUTHORIZED PERSON MR. B.BHASKAR NAIDU. …RESPONDENT (BY SRI. MANJUNATH G. PATIL, ADVOCATE) THIS CIVIL MISCELLANEOUS PETITION FILED UNDER SECTION 11(6) OF THE ARBITRATION AND CONCILIATION ACT 1996, PRAYING TO APPOINT ANY SOLE ARBITRATOR OR ARBITRATORS TO ADJUDICATE THE DISPUTE THAT HAS ARISEN BETWEEN THE PETITIONER AND THE RESPONDENTS IN RELATION TO THE JOINT VENTURE AGREEMENT DATED MALLIKARJUN RUDRAYYA KALMATH Digitally signed by MALLIKARJUN RUDRAYYA KALMATH Date: 2025.09.11 10:35:45 +0530 - 2 - HC-KAR NC: 2025:KHC-D:11177 CMP No. 100022 of 2024 01.06.2011 AS PER ANNEXURE-A AND AWARD COST OF THIS PETITION TO THE PETITIONERS AND PASS SUCH OTHER ORDERS AS THIS COURT MAY DEEM FIT AND PROPER IN THE FACTS AND CIRCUMSTANCES OF THE CASE. THIS PETITION, COMING ON FOR ADMISSION, THIS DAY, ORDER WAS MADE THEREIN AS UNDER: ORAL ORDER (PER: THE HON'BLE MR. JUSTICE G BASAVARAJA) 1. The petitioner has filed this petition under Section 11(6) of the Arbitration and Conciliation Act, 1996 (for short, ‘the Act, 1996’), seeking for appointment of sole Arbitrator or an Arbitrator to adjudicate the dispute between the petitioner and the respondent in relation to the Joint Venture Agreement dated 01.06.2011, as per Annexure-A. In the petition, it is stated that the petitioner-Company is engaged in the trading of iron ore, and the respondent- Company is a manufacturer of sponge iron. The respondent- Company entered into a Joint Venture Agreement with the petitioner-Company on 01.06.2011, whereby it was agreed that the petitioner-Company would be responsible for funding the procurement of iron ore or supplying iron ore to - 3 - HC-KAR NC: 2025:KHC-D:11177 CMP No. 100022 of 2024 the respondent-Company for the production of sponge iron at the unit belonging to the respondent-Company, situated at Sy.No.1 36B, Veniveerapura, Haraginadoni, Bellary Taluk. It was further agreed that the profit earned from the sale of sponge iron so manufactured, either by utilizing the funds provided by the petitioner-Company or by utilizing the iron ore supplied by the petitioner-Company, would be shared equally. It was specifically agreed that the petitioner-Company shall not be responsible for any loss arising therefrom. 2. In pursuant to the said agreement, petitioner- Company has supplied the iron ore to the respondent- Company commencing from 17.07.2011 up to 17.09.2011 towards which the respondent has made some part payments. After reconciliation of the accounts, the respondent has become due in a sum of Rs.4,20,23,507/- payable to the petitioner-Company towards value of the material supplied to the respondent-Company excluding the share of profit on sale of sponge iron, which the - 4 - HC-KAR NC: 2025:KHC-D:11177 CMP No. 100022 of 2024 respondent-Company is liable to pay. The respondent has also confirmed the said balance in letter dated 01.02.2012. After taking account of the profit earned on sale of sponge iron, it was found that the petitioner-Company is entitled to get Rs.1,45,00,000/- towards the share of profit. Thus, in all the Petitioner is entitled to receive a total amount of Rs.5,65,23,507/- from the respondent, which you agreed to pay in three installments. 3. Further, it is stated that respondent had issues all three cheques in favour of the petitioner as shown below drawn on State Bank of Mysore, Bellary Branch:- Cheque No. Date Amount 390294 30.11.2011 Rs.3,25,23,507/- 390295 02.12.2011 Rs.2,00,00,000/- 290280 25.02.2012 Rs.40,00,000/- 4. The petitioner presented all the above said cheques for collection on 27.02.2012 through his banker’s viz., HDFC Bank Ltd., Hospet Branch, but the same have - 5 - HC-KAR NC: 2025:KHC-D:11177 CMP No. 100022 of 2024 been returned dishonored to the petitioner on the same day with the endorsement "FUNDS INSUFFICIENT". Therefore, the petitioner has instituted criminal proceedings against the respondent-company in C.C.No.1652/2012 in the Court of Principal Civil Judge & JMFC, Hospet, which was later on transferred to the Court of Principal Senior Civil Judge, JMFC, Hospet where it was renumbered as C.C.No.168/2013. However, the said case was dismissed by the Court vide order dated 07.01.2019 against which the petitioner has preferred an appeal to the Hon'ble High Court of Karnataka, Dharwad Bench in Criminal Appeal No.100095/2019, which is still pending adjudication. 5. Further, it is stated that the petitioner also instituted a civil suit against the respondent in O.S.No.40/2012 on the file of Principal Senior Civil Judge, Hospet for the recovery of above said dues along with costs and future interest. In the said suit, the respondent has moved an application in I.A.No.V under Section 8 of the Arbitration and Conciliation Act, 1996 seeking to refer the - 6 - HC-KAR NC: 2025:KHC-D:11177 CMP No. 100022 of 2024 matter to Arbitrator in view of Clause No.10.13 of the above said Joint Venture Agreement, which stipulated that any dispute relating to the interpretation or performance of the Agreement shall be resolved at the request of either party through binding arbitration. Accordingly, the Court allowed the said application vide its Order dated 28-3-2018 returning the plaint with a direction to both parties to resolve the matter in dispute by way of arbitration as per Clause No.10.13 of Article X of the Joint Venture Agreement. 6. Further it is stated that in view of the above said Order of the civil Court directing the parties to approach arbitral tribunal for resolving the dispute, the Petitioner got issued arbitration notice through its advocate to the Respondent Company proposing to appoint the Shri.H.R.Showri, Advocate, Bengaluru as the sole Arbitrator to adjudicate upon the dispute and for passing of necessary Award in the matter, a copy of said notice dated 02.09.2024 is produced. - 7 - HC-KAR NC: 2025:KHC-D:11177 CMP No. 100022 of 2024 7. Further it is stated that respondent-Company sent reply notice dated 19.09.2024 refusing the request for referring the dispute for arbitration on the sole ground of limitation. 8. Further it is stated that, being aggrieved by the denial of the Respondent for referring the matter for arbitration, having no any efficacious remedy has approached this Hon'ble Court for seeking appointment of arbitration invoking its jurisdiction under Sec.11 of the Arbitration and Conciliation Act, 1996. 9. The respondents has entered appearance but not filed any objections to this petition. 10. Learned counsel for the petitioner has submitted his argument reiterating the grounds urged in the petition and sought for allowing of this petition. 11. As against this, learned counsel for the respondent would submit that this petition is barred by time. The respondent has issued a reply notice on 19.09.2024, in which it is clearly stated that appointment of - 8 - HC-KAR NC: 2025:KHC-D:11177 CMP No. 100022 of 2024 an Arbitrator is barred by time as per the orders of the Senior Civil Judge and JMFC, Hospet passed in O.S.No.40/2012 dated 28.03.2018 which was more than 3 years of the notice. Hence, this petitioner has no locus standi to file this petition to appoint sole Arbitrator as same is barred by time. 12. In reply, learned counsel for the petitioner has submitted that period of limitation by filing an application under Section 11 would be governed by Article 137 of the First Schedule of the Limitation Act, 1963. The period of limitation will begin to run from when there is failure to appoint an Arbitrator. To substantiate his argument, he has relied on a decision of the Hon’ble Apex Court in the case of Bharat Sanchar Nigam Limited vs. Nortel Networks India Private Limited in Civil Appeal Nos.843-844/2021 (arising out of SLP (C) No.1531-32/2021). 13. I have examined the materials placed before this Court. It is not in dispute between the parties that there is a Joint Venture Agreement entered between the parties and - 9 - HC-KAR NC: 2025:KHC-D:11177 CMP No. 100022 of 2024 same also produced before this Court. A perusal of this agreement in Clause 10.13 there is an Arbitration clause that any dispute relating to the interpretation or performance of this agreement shall be resolved at the request of either party through binding arbitration. Arbitration shall be conducted in Bangalore in accordance with the then-existing rules. The Arbitrator shall be appointed with mutual consent of the parties to this Joint Venture and in the event, the parties to this Joint Venture fail to arrive at a mutual consent to appoint an Arbitrator, the Arbitrator shall be appointed in accordance with the provisions of the Arbitration Act, 1996. Judgment upon any award by the Arbitrator may be entered by any court having jurisdiction. GPL and SSSIPL intend that this Agreement to arbitrate be irrevocable. 14. It is also not in dispute that petitioner has filed suit in O.S.no.40/2012, against this respondent before the Principal Civil Judge and JMFC, Hospet. As per the order dated 28.03.2018 consequently, plaint filed by the plaintiff - 10 - HC-KAR NC: 2025:KHC-D:11177 CMP No. 100022 of 2024 is returned with direction to resolve the matter between them by way of arbitration as per Clause 10.13 or Article 10 of the Joint Venture Agreement dated 01.06.2011. It is submitted that till this day plaint is not returned to this plaintiff. However, the petitioner has issued a notice as per notice dated 02.09.2024 as per Annexure-C calling upon the respondent to give their consent for the appointment of Arbitrator within 15 days from the date of receipt of the notice. Respondent has sent a reply contending that the appointment of an Arbitrator is barred by time as more than 3 years already lapsed from the date of order passed by the Principal Senior Civil Judge and JMFC, Hosapete in O.S.No.40/2012. That in view of the decision of the Hon’ble Apex Court in the case of Bharat Sanchar Nigam supra, it is held that the period of limitation for filing of an application under Section 11 would be governed by Article 137 of the First Schedule of the Limitation Act, 1963. The period of limitation will begin to run from the date when there is failure to appoint the Arbitrator. Apart from this, at this - 11 - HC-KAR NC: 2025:KHC-D:11177 CMP No. 100022 of 2024 stage, it is not just and proper to decide as to the point of limitation as this Court is not recorded any evidence. The same has to be adjudicated by the Arbitrator; hence under the given set of circumstances, it is just and proper to appoint the Arbitrator. Parties can urge all the grounds including point of limitation before the Arbitrator. Hence, I proceed to pass the following : ORDER (i) Petition filed under Section 11(6) of the Arbitration and Conciliation Act, 1996 is allowed. (ii) The retired District and Sessions Judge Sri Vishwanath V. Angadi, No.1240, 14th Main Road, Judicial Layout, Jakkur, Bengaluru- 560 065, Mob-9480617999, Email id: vvangadi2009@gmail.com is appointed as sole Arbitrator to resolve the dispute between the parties. - 12 - HC-KAR NC: 2025:KHC-D:11177 CMP No. 100022 of 2024 (iii) It is made clear that the respondent is at liberty to urge all the grounds before the Arbitrator including point of limitation. (iv) Send a copy of this order along with necessary materials to the Arbitrator. Sd/- (G BASAVARAJA) JUDGE AC,CKK Ct-cmu LIST NO.: 1 SL NO.: 46