- 1 - HC-KAR NC: 2025:KHC:32642 CMP No. 1 of 2025 IN THE HIGH COURT OF KARNATAKA AT BENGALURU DATED THIS THE 21ST DAY OF AUGUST, 2025 BEFORE THE HON'BLE MR. JUSTICE E.S.INDIRESH CIVIL MISC. PETITION NO. 1 OF 2025 BETWEEN: 1. M/S BAGADIA PROPERTIES PVT LTD., A COMPANY INCORPORATED UNDER THE COMPANIES ACT, 1956, FORMERLY AT NO.49/23, 19TH MAIN ROAD, II BLOCK, RAJAJINAGAR, BENGALURU-560010. AT PRESENT HAVING ITS REGISTERED OFFICE AT NO. 1097 (OLD), NEW NO. 58, 18TH 'B' MAIN ROAD, V BLOCK, RAJAJINAGAR, BENGALURU 560 010. REPRESENTED BY ITS AUTHORIZED DIRECTOR. SRI. SRIRAM CHITTURI, S/O CHITTURI BALASYVA SUBRAHMANYAM, AGED ABOUT 49 YEARS. …PETITIONER (BY SRI. SEENAPPA K.,ADVOCATE) AND: 1. SRI B JAYARAMAIAH S/O LATE BHAKTAPPA, AGED ABOUT 77 YEARS. Digitally signed by SHARADAVANI B Location: High Court of Karnataka - 2 - HC-KAR NC: 2025:KHC:32642 CMP No. 1 of 2025 2. SMT. SAROJAMMA, W/O B. JAYARAMAIAH, AGED ABOUT 73 YEARS. 3. SRI. J. VASUDEVA, S/O B. JAYARAMAIAH, AGED ABOUT 55 YEARS. 4. SRI. J. RAGHU, S/O B. JAYARAMAIAH, AGED ABOUT 50 YEARS. 5. SRI. J. RAMKUMAR, S/O B. JAYARAMAIAH, AGED ABOUT 47 YEARS. 6. SRI. J. LAKSHMAN KUMAR, S/O B. JAYARAMAIAH, AGED ABOUT 47 YEARS. 7. SRI. J. SHANKAR, S/O B. JAYARAMAIAH, AGED ABOUT 44 YEARS. ALL ARE RESIDENTS OF PATTANDURU AGRAHARA VILLAGE WHITEFIELD POST KRISHNARAJPURAM HOBLI BENGALURU EAST TALUK BENGALURU - 560 066 …RESPONDENTS (BY SRI. S.V.GANESH, ADVOCATE) THIS CIVIL MISC. PETITION FILED UNDER SEC.11(5) OF ARBITRATION AND CONCILIATION ACT, 1996 PRAYING TO APPOINT A ARBITRATORS IN TERMS OF THE JOINT DEVELOPMENT AGREEMENT DATED 11.08.2008 AS PER CLAUSE VIDE ANNEXURE- C, TO ADJUDICATE UPON THE DIFFERENCES AND DISPUTES BETWEEN THE PARTIES HERETO AND PASS SUCH - 3 - HC-KAR NC: 2025:KHC:32642 CMP No. 1 of 2025 FURTHER OR OTHER ORDERS AS THIS HONBLE COURT MAY DEEM FIT AND PROPER, IN THE FACTS AND CIRCUMSTANCES OF THE CASE AND THUS RENDER JUSTICE. THIS PETITION, COMING ON FOR ADMISSION, THIS DAY, ORDER WAS MADE THEREIN AS UNDER: CORAM: HON'BLE MR. JUSTICE E.S.INDIRESH ORAL ORDER The petitioner has filed this petition under Sections 11(5) and 11(6) of the Arbitration and Conciliation Act, 1966 seeking appointment of Arbitrators to adjudicate the differences and disputes that have arisen between the parties. 2. Heard the learned counsel for the parties. 3. Sri Seenappa. K, learned counsel appearing for the petitioner referred to Clause 25.3 of the Agreement dated 11.08.2008 (Annexure-C) and submitted that, certain obligations were cast on the respondent under the said Agreement with regard to payment of statutory deposit, which ought to have been made by the respondents herein for completion of the project, and upon the said payments to be made by the respondents, the statutory deposit had to be made with regard to the terms and conditions as stipulated in the Agreement dated 11.08.2008 (Annexure-C). It is also submitted by the learned counsel appearing for the petitioner inviting to the prayer made in the notice dated 28.01.2023 (Annexure-F), that the respondents herein are liable to pay the principal amount of Rs.1,88,30,000/- along with interest and - 4 - HC-KAR NC: 2025:KHC:32642 CMP No. 1 of 2025 therefore, sought for appointment of Arbitrator under Section 11(6) of the Arbitration and Conciliation Act, 1996. 4. Per contra, Sri S V Ganesh, learned counsel appearing for the respondents, invited the attention of the Court to the Supplementary Agreement dated 25.05.2013 (Annexure-E), and contended that the said Agreement, as per Clause 4, provides for resolution of the dispute, governed by the law in force, and the said agreement does not provide for resolution of dispute under the Arbitration and Conciliation Act, 1996. It is also further contended that any claim made under the Agreement dated 11.08.2008 (Annexure-C) is time barred, and therefore, sought for dismissal of the petition. In this regard, he places reliance on the decision of the Hon'ble Supreme Court in the case of Elite Engineering and Construction (Hyderabad) Private Limited represented by its Managing Director vs. Techtrans Construction India Private Limited represented by its Managing Director reported in (2018) 4 SCC 281, and by referring to the earlier document at Annexure-C, Supplementary Agreement cannot be considered for resolution of dispute as per Clause 25.3 of the Agreement dated 11.08.2008 (Annexure-C). Therefore, he submitted that, the claim made by the petitioner is liable to be rejected. 5. In the light of the submissions made by the learned counsel appearing for the parties, I have carefully examined Clause 25.2 and - 5 - HC-KAR NC: 2025:KHC:32642 CMP No. 1 of 2025 Clause 25.3 of the Agreement dated 11.08.2008, which provides for resolution of dispute arising out of the said Agreement through the provisions contained under the Arbitration and Conciliation Act, 1996. In consequence with the said provision, I have carefully examined the Supplementary Agreement dated 25.05.2013 (Annexure-E), wherein Clause 4 provides for resolution of dispute through the law governed in force. 6. In that view of the matter, taking into consideration the declaration of law made by the Hon'ble Supreme Court in the case of Elite Engineering and Construction (Hyderabad) Private Limited (supra), paragraph-15 reads as under: "15. As per sub-section (5), an arbitration clause contained in an independent document can also be imported and engrafted in the contract between the parties, by reference to such independent document in the contract, even if there is no specific provision for arbitration. However, the Court noted that (SCC p. 703, para 13) such a recourse can be adopted only "if the reference is such as to make the arbitration clause in such document, a part of the contract." This interpretation to sub-section (5) of Section 7 was elaborated in the following manner: (M.R. Engineers case2, SCC pp. 703- 04, paras 14-16) "14. The wording of Section 7(5) of the Act makes it clear that a mere reference to a document would not have the effect of making an arbitration clause from that document, a part of the contract. The reference to the document in the contract should be such that shows the intention to incorporate the arbitration clause contained in the document, into the contract. If the legislative intent was to import an arbitration clause from another document, merely on - 6 - HC-KAR NC: 2025:KHC:32642 CMP No. 1 of 2025 reference to such document in the contract, sub- section (5) would not contain the significant later part which reads: 'and the reference is such as to make that arbitration clause part of the contract', but would have stopped with the first part which reads: 7. (5) The reference in a contract to a document containing an arbitration clause constitutes an arbitration agreement if the contract is in writing..... 15. Section 7(5), therefore, requires a conscious acceptance of the arbitration clause from another document, by the parties, as a part of their contract, before such arbitration clause could be read as a part of the contract between the parties. But the Act does not contain any indication or guidelines as to the conditions to be fulfilled before a reference to a document in a contract can be construed as a reference incorporating an arbitration clause contained in such document into the contract. In the absence of such statutory guidelines, the normal rules of construction of contracts will have to be followed. 16. There is a difference between reference to another document in a contract and incorporation of another document in a contract, by reference. In the first case, the parties intend to adopt only specific portions or part of the referred document for the purposes of the contract. In the second case, the parties intend to incorporate the referred document in entirety, into the contract. Therefore when there is a reference to a document in a contract, the court has to consider whether the reference to the document is with the intention of incorporating the contents of that document in entirety into the contract, or with the intention of adopting or borrowing specific portions of the said document for application to the contract." (emphasis in original 7. On careful consideration of the Clauses referred to above in the Agreement dated 11.08.2008 (Annexure-C) and Supplementary Agreement dated 25.05.2013 (Annexure-E), wherein, the intention of the - 7 - HC-KAR NC: 2025:KHC:32642 CMP No. 1 of 2025 parties is very clear that, the resolution of the dispute arising out of the Supplementary Agreement has to be made only through the relevant law and not under the provisions of the Arbitration and Conciliation Act, 1996. 8. In that view of the matter, I find force in the submission made by the learned counsel appearing for the respondents. Accordingly, the petition is dismissed. SD/- (E.S.INDIRESH) JUDGE BKM List No.: 3 Sl No.: 15