- 1 - NC: 2025:KHC:7926 CMP No. 477 of 2024 IN THE HIGH COURT OF KARNATAKA AT BENGALURU DATED THIS THE 21ST DAY OF FEBRUARY, 2025 BEFORE THE HON'BLE MR. JUSTICE SACHIN SHANKAR MAGADUM CIVIL MISC. PETITION NO.477 OF 2024 BETWEEN: 1. MR. M.B. SHASHIDHARA S/O LATE BORAIAH T. AGED ABOUT 65 YEARS RESIDING AT NO.510, SWASTHI, BHCS LAYOUT, PADUKA MANDIRA ROAD, UTTARAHALLI, SUBHRAMANYAPURA POST, BENGALURU - 560 061. 2. MRS. BHARATHI N. W/O M.B. SHASHIDHARA AGED ABOUT 60 YEARS RESIDING AT NO.510 SWASTHI BHCS LAYOUT, PADUKA MANDIRA ROAD, UTTARAHALLI, BENGALURU - 560 061. …PETITIONERS (BY MS. ANUSHA DEVI H., ADVOCATE) AND: BIPIN TEXTILES PROCESSING INDUSTRIES PRIVATE LIMITED, A COMPANY REGISTERED UNDER, THE COMPANIES ACT, 1956, Digitally signed by NAGARAJA B M Location: HIGH COURT OF KARNATKA - 2 - NC: 2025:KHC:7926 CMP No. 477 of 2024 HAVING ITS REGISTERED OFFICE, AT PLOT NO.9B, 2ND PHASE, PEENYA INDUSTRIAL ESTATE, BENGALURU - 560 058. REPRESENTED BY ITS DIRECTOR SUMAN AGARWAL. …RESPONDENT (BY SRI. PRADEEP S SAWKAR, SRI. SUNDARSWAMY AND RAMDAS., ADVOCATES) THIS CIVIL MISC. PETITION IS FILED UNDER SEC. 11(5) AND SECTION 11(6) OF THE ARBITRATION & CONCILIATION ACT, 1996, PRAYING TO APPOINT THE ARBITRATOR AS SUGGESTED AT PARAGRAPH 15 OR ANY OTHER ARBITRATOR AS THIS HON'BLE COURT DEEMS FIT AS THE SOLE ARBITRATOR BETWEEN THE PARTIES UNDER CLAUSE 32.5 OF THE JOINT DEVELOPMENT AGREEMENT DATED 22.06.2023 VIDE ANNEXURE-A FOR ADJUDICATION OF DISPUTES THAT HAVE ARISEN BETWEEN THE PARTIES TO BE CONDUCTED AT THE ARBITRATION CENTRE OF KARNATAKA AT BENGALURU IN ACCORDANCE WITH THE ARBITRATION CENTRE - KARNATAKA (DOMESTIC AND INTERNATIONAL) RULES, 2012. THIS PETITION, COMING ON FOR ADMISSION, THIS DAY, ORDER WAS MADE THEREIN AS UNDER: - 3 - NC: 2025:KHC:7926 CMP No. 477 of 2024 CORAM: HON'BLE MR. JUSTICE SACHIN SHANKAR MAGADUM ORAL ORDER 1. This Civil Miscellaneous Petition is filed under section 11(5) and 11(6)of the Arbitration & Conciliation Act, 1996 (hereinafter referred to as 'the 1996 Act), seeking appointment of sole arbitrator to resolve the dispute between the parties in terms of the Joint Development Agreement dated 22.06.2023. 2. Respondent - Company, on receipt of notice has engaged Sri. Pradeep S. Sawkar, learned counsel on its behalf and the statement of objections is filed. 3. Petitioners and respondent / Company have entered into a Joint Development Agreement and the same is dated 22.06.2023 which is evidenced at annexure-A. Clause 32.5 of the Joint Development Agreement reads as under: "32.5) In the event of the parties being unable to resolve the dispute by conciliation as above or within 30 days from the date of receipt of a notice regarding the dispute, the dispute shall be referred to arbitration by a Sole Arbitrator mutually appointed by the parties, in accordance with the provisions of - 4 - NC: 2025:KHC:7926 CMP No. 477 of 2024 the Arbitration and Conciliation Act, 1996 or any re- enactment or modification thereof and shall be decided by such Arbitral Tribunal. The reasoned and considered award shall be final and binding on the parties. The place of arbitration shall be Bengaluru." 4. The petitioners contend that a registered Power of Attorney was executed in favor of the respondent, authorizing the latter to undertake necessary steps for obtaining plans, licenses, permissions, and other approvals required for developing a residential layout on the petitioners' land. Despite this authorization, the title of the property continued to remain with the petitioners. It is the specific allegation of the petitioners that the respondent has failed to fulfill its obligations under the Joint Development Agreement, particularly in undertaking the agreed-upon development activities within the stipulated timeframe. As a result of this alleged breach, the petitioners initially issued a legal notice dated 12.07.2024, calling upon the respondent to rectify the non-compliance. Since there was no satisfactory response or corrective action from the respondent, the petitioners followed up with a second legal notice sent via e-mail, reiterating their grievances. Subsequently, when the respondent replied to the notices and - 5 - NC: 2025:KHC:7926 CMP No. 477 of 2024 disputed the petitioners' claims, the petitioners were compelled to issue a final notice invoking Section 21 of the Arbitration and Conciliation Act, 1996, thereby proposing the appointment of a sole arbitrator to resolve the dispute. The respondent, however, contested this notice as well, leading to a failure in reaching a consensus regarding arbitration. Given this impasse, the present petition has been filed before this Court seeking the appointment of a sole arbitrator. 5. In response, the learned counsel representing the respondent has strongly opposed the petition, reiterating the stand taken in the statement of objections. It is contended that the dispute raised by the petitioners is misconceived and not maintainable in law. The respondent emphasizes that, as per the terms of the Joint Development Agreement, the stipulated period for completing the development work and delivering the petitioners' share of the developed property was fixed at 17 months. The respondent argues that, at the time of filing the present petition, this 17-month period had not yet lapsed, and hence, the petitioners' unilateral termination of the Joint Development Agreement is premature, unwarranted, and legally untenable. The respondent further submits that the - 6 - NC: 2025:KHC:7926 CMP No. 477 of 2024 petitioners have acted in an arbitrary and high-handed manner by prematurely canceling the agreement, despite the fact that the contractual period for development was still subsisting. 6. The respondent’s learned counsel has placed reliance on the decision of the Hon’ble Supreme Court in GOQII Technologies Private Limited v. Sokrati Technologies Private Limited, reported in 2024 SCC OnLine SC 3189, to bolster their argument that the dispute in question does not qualify as an arbitrable matter. According to the respondent, the documents annexed with the petition do not prima facie establish the existence of a valid dispute that can be referred to arbitration in accordance with the agreed arbitration clause. It is contended that the petitioners have failed to demonstrate any substantial grounds that would justify invoking the arbitration mechanism under the 1996 Act. However, the petitioners’ counsel has vehemently countered this position by asserting that the respondent was in clear breach of its obligations under the Joint Development Agreement, particularly by failing to secure the necessary conversion order within the stipulated timeframe. The petitioners argue that this failure on the respondent’s part amounted to a material breach of contract, - 7 - NC: 2025:KHC:7926 CMP No. 477 of 2024 thereby justifying the cancellation of the agreement and the invocation of arbitration proceedings. 7. Upon considering the rival submissions and examining the factual and legal aspects of the case, this Court is of the view that the contentions raised by both parties involve complex and contentious issues that merit adjudication by an arbitral tribunal. Since there is no dispute regarding the existence of a valid arbitration clause within the Joint Development Agreement, this Court is satisfied that the petitioners have met the procedural requirements under the Arbitration and Conciliation Act, 1996. Accordingly, in light of the arbitration agreement and the necessity to resolve the dispute through the prescribed mechanism, this Court finds merit in the petitioners' plea for the appointment of a sole arbitrator. 8. For the foregoing reasons, this Court proceeds to pass the following: ORDER (i) The Civil Miscellaneous Petition is allowed appointing Sri. Justice A.V. Chandrashekar, former Judge, High Court of Karnataka, as the sole - 8 - NC: 2025:KHC:7926 CMP No. 477 of 2024 Arbitrator to enter reference of the dispute between the petitioners and the respondent and conduct proceedings at the Arbitration & 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) The Office is directed to communicate this order to the Arbitration and Conciliation Centre and to Sri. Justice A.V. Chandrashekar, former Judge, High Court of Karnataka, as required under the Arbitration & Conciliation Centre Rules, 2012. SD/- (SACHIN SHANKAR MAGADUM) JUDGE sac List No.: 3 Sl No.: 23