- 1 - IN THE HIGH COURT OF KARNATAKA AT BENGALURU DATED THIS THE 25TH DAY OF SEPTEMBER, 2025 BEFORE THE HON'BLE DR. JUSTICE K.MANMADHA RAO WRIT PETITION NO.21644 OF 2022 (GM-CPC) BETWEEN: MR. K. M. DASTAGIR SAB ALIAS K. M. DASTAGEER SAB SON OF LATE MOHIDEEN SAB, AGED ABOUT 55 YEARS, RESIDING AT NO. 19, PAPAIAH REDDY BLOCK, MANORAYANAPALYA, R.T. NAGAR, BENGALURU-560 03 …PETITIONER (BY SRI. SYED KHAMRUDDIN, ADVOCATE) AND: 1 . SMT. V. VARALAKSHMI DAUGHTER OF MR. VENKATARAYAPPA, AGED ABOUT 39 YEARS 2 . MR. SATYAPRAKASH FATHERS NAME NOT KNOWN, AGED ABOUT 46 YEARS, NOS.1 AND 2 ARE RESIDING AT SIDALGATTA, CHIKKABALLAPURA TALUK, CHIKKABALLAPURA DISTRICT. …RESPONDENTS (BY SRI. VIJAYA KUMAR K, ADVOCATE) ® - 2 - THIS WRIT PETITION IS FILED UNDER ARTICLE 227 OF THE CONSTITUTION OF INDIA PRAYING TO QUASH/SET ASIDE THE ORDER DTD 10.10.2022 IN O.S.NO.1280/2020 PASSED BY THE HONBLE II ADDL. SENIOR CIVIL JUDGE, BENGALURU RURAL DISTRICT, BENGALURU (ANNEXURE-A) AND RESTORE THE SUIT IN O.S.NO.1280/2020 (ANNEXURE-F) ON THE FILE OF THE HONBLE II ADDL. SENIOR CIVIL JUDGE, BENGALURU RURAL DISTRICT, BENGALURU AND ETC. THIS PETITION HAVING BEEN HEARD AND RESERVED FOR ORDERS ON 15.09.2025 AND COMING ON FOR PRONOUNCEMENT THIS DAY, THE COURT MADE THE FOLLOWING: CORAM: HON'BLE DR. JUSTICE K.MANMADHA RAO CAV ORDER 1. This writ petition has been filed seeking to quash/set aside the order dated 10.10.2022 passed by the II Additional Senior Civil Judge, at Bengaluru in O.S.No.1280/2020 and restore the suit in O.S.No.1280/2020 and also to dismiss I.A.No.II filed under Sections 5 and 8 of the Arbitration and Conciliation Act, 1996. - 3 - 2. The petitioner herein is the plaintiff before the Trial Court and respondents Nos.1 & 2 are defendant Nos.1 & 2 respectively before the Trial Court. 3. The facts of the case are as follows: The petitioner is an agriculturist and is the sole and absolute owner of the following properties in Survey No.21/1 measuring to an extent of 3 acres 08 guntas, situated at Chennasandra Village, Hessargatta Hobli, Bangalore North Taluk, as mentioned in Schedule ‘A’ property and Survey No.22/1-P1 measuring to an extent of 1 acre situated at Chennasandra Village, Hessargatta Hobli, Bangalore North Taluk, as mentioned in schedule ‘B’ property. The petitioner purchased schedule A & B properties vide sale deed dated 13.02.2004 and 04.04.2004. The petitioner being in need of funds to meet his legal necessities and as such the petitioner was introduced to the 2nd respondent as kind and honourable person who would provide the required financial assistance to the petitioner. Thus, the petitioner approached the 2nd respondent to advance Rs.1,00,00,000/- (Rupees One - 4 - Crore Only). The 2nd respondent agreed to advance the amount against schedule A & B properties and the petitioner agreed to deposit the title deeds of the aforesaid properties as security for the repayment of the loan. On 10.09.2015, a memorandum of deposit of title deeds was prepared in the name of the petitioner and the 1st respondent, who is the wife of the 2nd respondent. The petitioner executed the Memorandum of Deposit of Title Deeds acknowledging receipt of the sum of Rs.1,00,00,000/- (Rupees One Crore Only) repayable within 3 months along with interest at 1.5% per month as security, the petitioner accordingly deposited the original title deeds in respect of the petition Schedule ‘A’ and ‘B’ properties. Subsequently, the petitioner has made repayments upto an extent of Rs. 63,00,000/- (Rupees Sixty Three Lakhs Only) as on 10.09.2016. Since the amount was paid in cash, the petitioner has made the payments in the presence of witnesses. However, due to financial constraints, he was unable to repay the balance amount of 55,00,000/- (Rupees Fifty-Five Lakhs Only). In - 5 - 2019, the 2nd respondent started harassing the petitioner for repayment of the loan amount and the respondents had also approached C.C.B, Bengaluru, summoned the petitioner and threatened to arrest the petitioner if he failed to repay the amounts along with interest. 4. The petitioner has been allegedly coerced the petitioner to give an undertaking stating that the petitioner has obtained a loan of Rs.1,40,00,000/- (Rupees One Crore Forty Lakhs Only) and failed to repay and as such, the petitioner is offering to sell the schedule A & B properties for a total sale consideration of Rs.36,40,000/- (Rupees Thirty Six Lakh Forty Thousand Only) and it was also alleged that the 1st respondent with the help of C.C.B compelled the petitioner to execute an agreement of sale deed dated 16.05.2019 in respect of the plaint schedule properties for a total sale consideration of Rs.36,40,000/- which was shown to be paid by cheque and no cheque was shown to be paid to the petitioner. Thereafter on 18.05.2019, the respondent got the agreement of sale dated 16.06.2019 registered in the office of the Sub- - 6 - registrar, Malleshwaram and obtained a registered power of attorney in respect of the schedule A & B properties from the petitioner. 5. As the 2nd respondent warned to sell the schedule A & B properties, if he fails to repay a sum of Rs.1,40,00,000/- by 30.11.2020, the petitioner was constrained to file the suit and filed the suit in O.S.No.1280/2022 against the respondents seeking declaration and injunction in respect of the suit schedule properties and also along with the suit the petitioner had also filed an application under Order XXXIX Rules 1 & 2 read with Section 151 of CPC seeking exparte interim order against the respondent restraining them from alienation of the petition schedule properties. 6. The Trial Court vide order dated 25.11.2020 had ordered the respondents not to alienate the petition schedule property till the filing of the written statement and objections. The respondents on entering appearance on 19.11.2021, filed an application under Sections 5 & 8 of the Arbitration and Conciliation Act to refer the parties to - 7 - arbitration in view of the arbitration clause in agreement of sale dated 16.05.2019. 7. The Trial Court after hearing both sides allowed the application under Sections 5 & 8 of the Arbitration Act (I.A.No.II) and returned the plaint with a direction to the parties to resolve their dispute through arbitration by an order dated 10.10.2022. Aggrieved by the same, the current writ petition has been filed. 8. Heard learned counsel for both the parties. 9. Learned counsel for the petitioner would contend that the impugned order is not sustainable either in law or on facts and the same is based on surmises and conjectures and has resulted in gross miscarriage of justice. 10. It was contended that the Trial Court has failed to appreciate that the suit was filed for redemption of mortgage and declare that the agreement of sale dated 16.06.2019 is null and void as the same is obtained by force and coercion and the Trial Court has further failed to consider that the memorandum of Deposit of Title Deeds - 8 - dated 10.09.2015 did not contain arbitration clause for resolution of disputes. Further, the Hon’ble Supreme Court in the case of Booz-Allen & Hamilton Inc vs SBI Home Finance Ltd & Ors that “right in rem is a right exercisable against the world at large, as contrasted from a right in personam which is an interest protected solely against specific individuals. 11. It was further contended, by relying on the Booz- Allen case, that suit for sale, foreclosure or redemption of a mortgaged property, should only be tried by a public forum and not by an arbitral tribunal. 12. It was also contended that the Trial Court has not referred to the reliefs sought in the suit and merely has proceeded on the basis of the relationship between the parties created by the agreements of sale and the Trial Court has erred in concluding that any dispute between the parties in respect of the subject matter of the agreement shall be decided by the arbitrator as agreed by the parties. - 9 - 13. It can be observed from the impugned order that the Trial Court has relied on Clause No.11.3 of the registered agreement of sale dated 16.05.2019 and held that its jurisdiction is taken away by the parties and even the Arbitration Act clearly empowers upon the Court, referred the parties to Arbitration in terms of the agreement. The Clause No.11.3 reads as follows: “11.3 All disputes between the seller and purchaser shall be a subject matter of a reference to arbitration to sole arbitrator to be appointed by the parties by mutual consent, failing which the arbitrator to be appointed through the process of the court in accordance with the provision of the Arbitration and Conciliation Act, 1996 or such corresponding law for the time being in force. The Venue of arbitration shall be at Bengaluru only and the language and proceedings shall be English Only.” 14. It can be observed further that the Trial Court has categorically held that the cases relied upon by the plaintiff therein are not applicable and held that Arbitration is meant for speedy disposal. 15. The Trial Court by relying upon the citation cited by the defendant i.e., B.M.Mohan Rao vs M/S Mohit Sham - 10 - Complexes Private Limited, Mangalore and Anr, ILR 2020 KAR 374, where in it was held as follows: “ Once an application in due compliance of section 8 of the Arbitration Act is filed, the approach of the civil court should not see whether the court has jurisdiction. It should be to see whether its jurisdiction has been ousted. There is a lot of differences between the two approaches. Once it is brought to the notice of the court that its jurisdiction has been taken away in terms of the procedure prescribed under as a special statute, the civil court shall first see whether there is ouster of jurisdiction in terms of compliance of the procedure under the special statute. The general law should yield to the special law – generalia specialibus non derogant. In such a situation, the approach shall not be to see whether there is still jurisdiction in the civil court under the general law. Such approaches would delay the resolution of disputes and complicate the redressal of grievance and unnecessarily increase the pendency in the court.” 16. The Trial Court by relying on the above case held that the citation squarely applies to the facts on hand and accordingly this Court does not have power to keep the matter itself, in view of Arbitration and Conciliation Act, is special and the general law should yield to the special law and lastly held that it does not have the jurisdiction as it is ousted by the clause mentioned supra. Ultimately, the Trial - 11 - Court has allowed the application under Sections 5 & 8 of the Arbitration and Conciliation Act and ordered for return of the plaint along with the documents relied upon by the plaintiff. 17. Learned counsel for the petitioner relies upon the following citations: (i)Masters Management Consultants (India) Private Ltd., represented by its Regional Manager-South and Authorised Signatory Mr. Vishnu Prasada Rao Vs Nitesh Estates Limited, represented by its Managing Director, ( 2022 SCC Online KAR 1836) 12.On meticulous examination of the material on record, the following points would arise for consideration: 1) Whether the impugned order passed by the. learned Judge on an application filed under Section 8 of the Act can be questioned by invoking the writ jurisdiction under Article 227 of the Constitution of India? 2) Whether the finding of the learned Judge that plaintiff and defendant Nos. 1 and 2 in terms of arbitration clause incorporated at clause 12 of the agreement have to seek redressal of their dispute by referring the dispute to an Arbitrator in terms of clause 12 of the agreement dated 30.05.2012 is palpably erroneous? - 12 - 13. Insofar as maintainability of the writ petition is concerned, the law in that regard is no more res integra. Learned counsel appearing for the defendants has laid more emphasis on the operative portion of the order. The operative portion of the order under challenge indicate that plaint is returned. The defendants claim that this order is passed under the provisions of Order 7 Rule 11(d) of CPC and plaint is returned and therefore, the plaintiff has a remedy of an appeal. It woula be useful for this Court to cull out para 11 of the reported judgment rendered by the Division Bench of this Court in the case of Jagdish Chander (supra) and the same reads as under: “11. The existence of an arbitration agreement as defined under Section 7 of the Act is a condition precedent for exercise of power to appoint an arbitrator/Arbitral Tribunal, under Section 11 of the Act by the Chief Justice or his designate. It is not permissible to appoint an arbitrator to adjudicate the disputes between the parties, in the absence of an arbitration agreement or mutual consent. The designate of the Chief Justice of Delhi High Court could not have appointed the arbitrator in the absence of an arbitration agreement.” 14. If the ratio laid down by the Division Bench at para 11 which is culled out supra is examined, then the objections raised by the defendants in regard to maintainability of the writ petition cannot be acceded to. Admittedly, the application is filed under Section 8 of the Act. At para 11, the Division Bench has held that where an application filed under Section 8 of the Act is rejected, no appeal is provided under the Act and therefore, - 13 - aggrieved party is entitled to seek redressal of his grievance by knocking the doors of a writ Court under Article 227 of the Constitution of India. Therefore, this Court is of the view that the writ petition is very much maintainable before this Court. Accordingly, point No. 1 formulated by this Court is answered in the affirmative. (ii) Hemanagouda v. Land Acquisition Officer, 2016 SCC OnLine Kar 8434 : ILR 2017 Kar 2410 : (2016) 3 KCCR 2577 at page 2413 5. Let me first examine whether revision petition under Section 115 of Code of Civil Procedure is maintainable. Section 115 as amended by incorporating a proviso vide Act 46 of 1999 has come into force with effect from 01.07.2002. The High Court, under Section 115 may call for the record of any case decided by any Court subordinate to it in which no appeal lies thereto, if such subordinate Court has exercised jurisdiction not vested in it by law or failed to exercise jurisdiction so vested or has acted in exercise of its jurisdiction illegally or with material irregularity. The proviso, which is relevant for our purpose, reads as under: “Provided that the High Court shall not, under this section, vary or reverse any order made, or any order deciding an issue, in the course of a suit or other proceeding, except where the order, if it had been made in favour of the party applying for revision, would have finally disposed of the suit or other proceedings” 6. Sub clause (2) of Section 115 also makes it clear that the High Court shall not, under this section, vary or reverse any decree or order against which an appeal lies either to the High Court or to any Court subordinate to it. - 14 - 7. In the instant case, as already referred to above, reference made to the Civil Court has been dismissed as barred by time. If the order of the reference Court had gone in favour of the claimants then the Court below would have held that reference was within time: In that event the proceedings before the Court below would not get disposed of finally, but would be pending for adjudication on merits. Therefore, as per proviso to Section 115(1) revision petition cannot be entertained to vary or reverse or set-aside the order passed by the reference Court. Hence, office objection raised deserves to be upheld. (iii) Booz Allen & Hamilton Inc. v. SBI Home Finance Ltd., (2011) 5 SCC 532 : (2011) 2 SCC (Civ) 781 : (2012) 173 Comp Cas 184 : 2011 SCC OnLine SC 636 at page 550 46. An agreement to sell or an agreement to mortgage does not involve any transfer of right in rem but creates only a personal obligation. Therefore, if specific performance is sought either in regard to an agreement to sell or an agreement to mortgage, the claim for specific performance will be arbitrable. On the other hand, a mortgage is a transfer of a right in rem. A mortgage suit for sale of the mortgaged property is an action in rem, for enforcement of a right in rem. A suit on mortgage is not a mere suit for money. A suit for enforcement of a mortgage being the enforcement of a right in rem, will have to be decided by the courts of law and not by Arbitral Tribunals. 47. The scheme relating to adjudication of mortgage suits contained in Order 34 of the Code of Civil - 15 - Procedure, replaces some of the repealed provisions of the Transfer of Property Act, 1882 relating to suits on mortgages (Sections 85 to 90, 97 and 99) and also provides for implementation of some of the other provisions of that Act (Sections 92 to 94 and 96). Order 34 of the Code does not relate to execution of decrees, but provides for preliminary and final decrees to satisfy the substantive rights of mortgagees with reference to their mortgage security. 48. The provisions of the Transfer of Property Act read with Order 34 of the Code, relating to the procedure prescribed for adjudication of the mortgage suits, the rights of mortgagees and mortgagors, the parties to a mortgage suit, and the powers of a court adjudicating a mortgage suit, make it clear that such suits are intended to be decided by public fora (courts) and therefore, impliedly barred from being referred to or decided by private fora (Arbitral Tribunals). We may briefly refer to some of the provisions which lead us to such a conclusion. (iv) Sukanya Holdings (P) Ltd. v. Jayesh H. Pandya, (2003) 5 SCC 531 : 2003 SCC OnLine SC 523 at page 536 15. The relevant language used in Section 8 is: “in a matter which is the subject of an arbitration agreement”. The court is required to refer the parties to arbitration. Therefore, the suit should be in respect of “a matter” which the parties have agreed to refer and which comes within the ambit of arbitration agreement. Where, however, a suit is commenced — “as to a matter” which lies outside the arbitration agreement and is also between some of the parties who are not parties to the arbitration - 16 - agreement, there is no question of application of Section 8. The words “a matter” indicate that the entire subject- matter of the suit should be subject to arbitration agreement. 16. The next question which requires consideration is — even if there is no provision for partly referring the dispute to arbitration, whether such a course is possible under Section 8 of the Act. In our view, it would be difficult to give an interpretation to Section 8 under which bifurcation of the cause of action, that is to say, the subject-matter of the suit or in some cases bifurcation of the suit between parties who are parties to the arbitration agreement and others is possible. This would be laying down a totally new procedure not contemplated under the Act. If bifurcation of the subject-matter of a suit was contemplated, the legislature would have used appropriate language to permit such a course. Since there is no such indication in the language, it follows that bifurcation of the subject-matter of an action brought before a judicial authority is not allowed. 17. Secondly, such bifurcation of suit in two parts, one to be decided by the Arbitral Tribunal and the other to be decided by the civil court would inevitably delay the proceedings. The whole purpose of speedy disposal of dispute and decreasing the cost of litigation would be frustrated by such procedure. It would also increase the cost of litigation and harassment to the parties and on occasions there is possibility of conflicting judgments and orders by two different forums. - 17 - 18. Learned counsel for the respondents relies upon the following citation: B.M. Mohan Rao v. Mohitsham Complexes (P) Ltd., 2019 SCC OnLine Kar 3491 : ILR 2020 Kar 3749 at page 3796 wherein it was held as follows: 49. A plain reading of Section 8 prior to amendment and post-amendment will clearly indicate that the powers of a Court to refer a dispute to arbitration have been substantially widened and expanded by virtue of the amendment. It is not in dispute that the present suit is governed by Section 8 after the aforesaid amendment. It is interesting to note that the scope of investigation under Section 8 of the Arbitration and Conciliation Act is restricted to finding out prima facie whether a valid arbitration agreement exists or not. In fact, after amendment, Section 8(1) is couched in the negative and there is a mandate cast upon the Court to refer the parties to arbitration unless the Court finds prima facie that no valid arbitration agreement exists. This indicates that as far as possible, Courts should endeavour to refer parties to arbitration to enable speedy resolution of disputes. 19. On hearing the submissions of the learned counsel for the petitioner and the respondents, on perusal of the entire record and the material placed before this Court and on perusal of the impugned order dated 10.10.2022 in - 18 - O.S.No.1280/2022, in view of the clause No.11.3 of the agreement dated 16.05.2019, it reads as follows: “11.3 All disputes between the seller and purchaser shall be a subject matter of a reference to arbitration to sole arbitrator to be appointed by the parties by mutual consent, failing which the arbitrator to be appointed through the process of the court in accordance with the provision of the Arbitration and Conciliation Act, 1996 or such corresponding law for the time being in force. The Venue of arbitration shall be at Bengaluru only and the language and proceedings shall be English Only.” 20. In view of the above specific clause with reference to the arbitration, it is opined that the Trial Court has rightly allowed I.A.II filed by the defendants under Sections 5 and 8 of the Arbitration and Conciliation Act 1996 and further the plaint is returned to plaintiff with a direction to process the arbitration in terms of the agreement dated 16.05.2019. 21. In view of the same, there are no merits to interfere in the impugned order dated 10.10.2022 passed in O.S.No.1280/2020 on the file of II Additional Senior Civil Judge, Bengaluru Rural District, Bengaluru on I.A.No.II. - 19 - The Trial Court has passed a reasoned order. Hence, the writ petition is dismissed. Sd/- (DR.K.MANMADHA RAO) JUDGE GH