- 1 - HC-KAR NC: 2025:KHC:24580 CMP No. 457 of 2024 IN THE HIGH COURT OF KARNATAKA AT BENGALURU DATED THIS THE 7TH DAY OF JULY, 2025 BEFORE THE HON'BLE MR. JUSTICE ASHOK S.KINAGI CIVIL MISC. PETITION NO. 457 OF 2024 BETWEEN: 1. M/S G.S. CREATIONS NO.2-35, 1ST MAIN ROAD, KAMAKSHAMMA LAYOUT, YELAHANKA, BENGALURU - 560 064, REPRESENTED BY ITS PARTNER SRI. G. ESHWARAPPA. 2. SRI. G. ESHWARAPPA, AGED ABOUT 64 YEARS, SON OF LATE SRI. G. NARAYANAPPA, 3. SMT. G. REDDAMMA, AGED ABOUT 59 YEARS, WIFE OF SRI. G. ESHWARAPPA 1 TO 3 AS ABOVE ARE AVAILABLE FOR SERVICE AT NO. 2228, 1ST CROSS, KAMAKSHAMMA LAYOUT, YELAHANKA, BENGALURU - 560 064. 4. SMT. G. UMA, AGED ABOUT 36 YEARS, W/O SRI. G. HARIKRISHNA, RESIDING AT NO.2229, 1ST CROSS, KAMAKSHAMMA LAYOUT, YELAHANKA, BENGALURU - 560 064. …PETITIONERS (BY SRI. C. SHANKAR REDDY, ADVOCATE) Digitally signed by SHILPABAI S Location: HIGH COURT OF KARNATAKA - 2 - HC-KAR NC: 2025:KHC:24580 CMP No. 457 of 2024 AND: SMT. G. SUSHMA, AGED ABOUT 38 YEARS, WIFE OF SRI. G. SHANKARAPPA, RESIDING AT NO.2228, 1ST CROSS, KAMAKSHAMMA LAYOUT, YELAHANKA, BENGALURU - 560 064. …RESPONDENT (BY SRI. B. RAMESH, ADVOCATE) THIS CIVIL MISC. PETITION IS FILED UNDER SECTION 11(5) OF THE ARBITRATION AND CONCILIATION ACT, 1996 READ WITH RULE 2 OF SCHEME FOR APPOINTMENT OF ARBITRATOR BY KARNATAKA HIGH COURT, PRAYING TO EXERCISE THE POWER UNDER 11(5) OF THE ARBITRATION AND CONCILIATION ACT, 1996 AND APPOINT AS ARBITRATOR SRI. VEERANNA G. TIGADI OR ANY RETIRED DISTRICT AND SESSIONS JUDGE, AS THE ARBITRATOR AND DIRECT THE ARBITRATOR, ADJUDICATE THE DISPUTE THAT HAS ARISEN BETWEEN THE PETITIONERS AND THE RESPONDENT AS REFERRED IN THE CLAUSE 19 IN THE PARTNERSHIP DEED DATED 13.01.2013, THE ANNEXURE-B TO THIS PETITION AND PASS SUCH OTHER ORDERS THAT THIS HONBLE COURT DEEMS FIT TO GRANT IN THE FACTS AND CIRCUMSTANCES OF THE CASE IN THE INTEREST OF JUSTICE AND EQUITY. THIS PETITION, COMING ON FOR ADMISSION, THIS DAY, ORDER WAS MADE THEREIN AS UNDER: CORAM: HON'BLE MR. JUSTICE ASHOK S.KINAGI ORAL ORDER This Civil Miscellaneous Petition is filed by the petitioners under section 11(6) of the Arbitration and - 3 - HC-KAR NC: 2025:KHC:24580 CMP No. 457 of 2024 Conciliation Act, 1996, for the appointment of an Arbitrator to resolve the dispute that arises between the petitioners and the respondent as per clause 19 of the Partnership Deep dated 13.01.2013. 2. Brief facts leading rise to the filing of this petition are as follows: It is the case of the petitioners that the petitioners and the respondent are the partners of M/s. G.S. Creations, and the same was registered on 27.03.2013 by virtue of registered Partnership Deed dated 13.01.2013. The said firm was a partnership at will, and the capital of the partnership firm was ₹10,00,000/- (Rupees Ten Lakhs only). The said firm commenced with effect from 13.01.2013. The said firm held a bank account, and all financial transactions were done through the said bank account. The details of the bank are within the respondent’s knowledge. Each of the partners is entitled to an equal share in all the profits and losses of the partnership firm. A bank account bearing current account - 4 - HC-KAR NC: 2025:KHC:24580 CMP No. 457 of 2024 No.0694102000003711 was opened at IDBI Bank, Yelahanka New Town branch, Bengaluru, with a closing balance of ₹1,00,28,828.54/- (Rupees One Crore Twenty Eight Thousand Eight Hundred and Twenty Eight and Fifty Four paise only). 3. The partnership firm has become defunct and is not operating. The petitioners submit that the amount in the deposit in the bank account could not be withdrawn or kept in the fixed deposit in view of the differences between the respondent and petitioner Nos.2 to 4. Since the firm is no longer operational, the amount lying in the bank account must be divided equally among all the partners. All four partners of the firm are not joining together to operate the bank account; hence, the bank has recorded the objections raised by each partner and has frozen the account. Even before the account was frozen, the respondent had withdrawn the amount illegally without the consent of the other partners, and without their knowledge, for the respondent's personal needs, and the - 5 - HC-KAR NC: 2025:KHC:24580 CMP No. 457 of 2024 petitioners have complained on this behalf to the bank. Thus, it can be seen that the issue must be resolved at the earliest since, in view of the freezing of the account, the amount has not been transferred to a fixed deposit facility, despite the requests made by all the partners, citing that all the partners should make a joint request. 4. Clause 19 of the deed of partnership provides for resolving the dispute between the petitioners and the respondent, and the same is to be determined by the sole Arbitrator. The Arbitration shall be appointed as per the provisions of the Arbitration and Conciliation Act, 1996. The petitioners called upon the respondent to suggest a competent Arbitrator. If the petitioners were happy with the choice of the Arbitrator, the matter could be resolved, and the resolution could be made as soon as possible. The petitioners submit that they simultaneously propose the name of Sri Veeranna G Tigadi, the retired District And Session Judge, Karnataka, currently practising in Bengaluru, as the sole Arbitrator to resolve the dispute - 6 - HC-KAR NC: 2025:KHC:24580 CMP No. 457 of 2024 between the parties. Suppose, for some genuine/legal reasons the respondent was not inclined to accept the nomination of Sri. Veeranna G Tigadi, to conduct the arbitration proceedings, please do inform the Arbitrator of the respondent's choice. 5. The petitioners submit that, on their behalf, they had issued a legal notice dated 25.06.2024 addressed to the respondent calling upon the respondent to get an arbitrator appointed, resolving the long pending issues. It was further, brought out in the legal notice that, on failure to reply to the legal notice, the petitioners would understand that the respondent is happy with the Arbitrator, suggested by the petitioners. The petitioners submit that, the petitioners had called upon the respondent to either appear before the bank or co-operate to withdraw the amount kept in the account of the firm in the ratio of 1/4th in the name of each of the partners, and that the respondent being one of the partners would be entitled to 25% of the entire amount with interest. If the - 7 - HC-KAR NC: 2025:KHC:24580 CMP No. 457 of 2024 respondent felt that specific issues were required to be ignored, a request for the appointment of an Arbitrator was made, and further informing the petitioners of the same was called for. The said legal notice dated 25.06.2024 was duly served on the respondent. Instead of complying with the terms of the legal notice, the respondent had issued a reply dated 27.07.2024 through her counsel, taking up several untenable and incorrect stands, and thereby expressing that, the issue would not be resolved without an Arbitrator being appointed. 6. The petitioners submit that, even after issuing the reply notice, the petitioners had taken the assistance of mediators, who are on good terms with the parties. An effort was made to settle the matter. However, the same did not materialise in view of illegal and unethical demands made by the respondent, thereby signalling, that the situation cannot be settled outside the court. Hence, as a last resort, the petitioners have filed the instant petition for the appointment of an arbitrator. - 8 - HC-KAR NC: 2025:KHC:24580 CMP No. 457 of 2024 7. The respondent appeared through the counsel, and did not file the statement of objections. Hence, the statement of objection is taken as not filed. 8. Heard the arguments of the learned counsel for the petitioners, and the learned counsel for the respondent. 9. Learned counsel for the petitioners submitted that the petitioners and the respondent have formed a partnership firm, and a dispute has arisen between the petitioners and the respondent. He submits that in the deed of partnership dated 13.01.2013, the arbitration clause states that, if there were to be any dispute among the partners during the continuance of the partnership, then, the same shall be referred to Arbitration. The petitioners issued an arbitration notice, proposing the name of Sri Veeranna G Tigadi, retired District and Session Judge, as Arbitrator to resolve the dispute between the petitioners and the respondent, and the respondent replied - 9 - HC-KAR NC: 2025:KHC:24580 CMP No. 457 of 2024 to the Arbitration notice on untenable grounds. He submits that, admittedly, there is an arbitration clause; the petitioners have a ground to refer the dispute to the Arbitrator. Hence, prays to allow the petition. 10. Learned counsel for the respondent submits no objection to allow the petition. 11. Considered the submissions of the learned counsel for the parties, and perused the records. 12. The point, that arises for my consideration is as follows: ‘Whether the petitioners make out a ground to refer the dispute to the Arbitrator in terms of clause 19 of the partnership deed dated 13.01.2013? as per terms of the Arbitration and Conciliation Act, 1996 and the Rules?’ 13. It is not disputed that the petitioners and the respondent formed a partnership firm. The said partnership firm was registered on 27.03.2013. The - 10 - HC-KAR NC: 2025:KHC:24580 CMP No. 457 of 2024 dispute has arisen between the parties regarding withdrawal of the deposited amount in IDBI bank account. The respondent did not come forward to settle the differences between the petitioners and the respondent. The said partnership firm has now become defunct. I have perused the deed of partnership dated 13.01.2013, which provides an Arbitration clause, which reads as follows: "19. If there were to be any disputes among the partners during the continuance of the partnership or thereafter, the same shall be referred to the Arbitration. The decision of the Arbitrators shall be binding on all partners. The provisions of the Indian Arbitration Act shall be applicable for all such arbitration proceedings, and all the disputes shall be settled within the jurisdiction of Bengaluru city." 14. From the bare reading of clause 19 of the partnership deed, the presence of an arbitration clause can be seen. The petitioners issued an Arbitration notice dated 25.6.2024, proposing the name of Sri Veeranna G Tigadi, retired District and Sessions Judge, as Arbitrator. The - 11 - HC-KAR NC: 2025:KHC:24580 CMP No. 457 of 2024 respondent replied to the arbitration notice vide reply notice dated 27.07.2024. 15. Admittedly, there is an arbitration clause in the partnership deed, and a arbitral dispute has arisen between the petitioners and the respondent. In view of the Arbitration clause, the petitioners have made out a ground to refer the dispute to the Arbitrator. In view of the above discussion, I answer the point for consideration in the affirmative. 16. Accordingly, I proceed to pass the following: ORDER i. The Civil Miscellaneous Petition is allowed. ii. Sri. Veerana G Tigadi, the learned retired District and Sessions Judge, is nominated as the sole Arbitrator to resolve the dispute between the petitioners and the respondent as per the provisions of the Arbitration and Conciliation Act, 1996 and the Rules. - 12 - HC-KAR NC: 2025:KHC:24580 CMP No. 457 of 2024 iii. The office is directed to send a copy of this order to the learned Arbitrator, and the Arbitration and Conciliation Centre, Bengaluru. In view of the dismissal of the petition, the pending IAs, if any, do not survive for consideration. Accordingly, disposed of. Sd/- (ASHOK S.KINAGI) JUDGE SSB CT: BHK