- 1 - HC-KAR NC: 2025:KHC:37154-DB COMAP No. 479 of 2025 IN THE HIGH COURT OF KARNATAKA AT BENGALURU DATED THIS THE 17TH DAY OF SEPTEMBER, 2025 PRESENT THE HON'BLE MR. VIBHU BAKHRU, CHIEF JUSTICE AND THE HON'BLE MR. JUSTICE C M JOSHI COMMERCIAL APPEAL NO. 479 OF 2025 BETWEEN: 1. SRI BABU SHUNMUGAM AGED ABOUT 49 YEARS S/O. SHUNMUGAM RESIDING AT: NO.24/2 STEPHEN'S ROAD, FRAZER TOWN BENGALURU - 560 005. 2. SRI PRABHAKAR REDDY AGED ABOUT 59 YEARS S/O. KRISHNA REDDY. R RESIDING AT: NO.2250 15TH C CROSS, 22ND B MAIN HSR LAYOUT, 1 SECTOR BENGALURU - 560 102. 3. SRI SHANTHI KUMAR CHELLURI AGED ABOUT 60 YEARS S/O. SUBBARAO RESIDING AT:No.02, 19TH MAIN 14TH SECTOR, NEAR KSRTC BUS STOP HSR LAYOUT BENGALURU - 560 102. 4. SRI. H.S. SUDHEENDRA AGED ABOUT 67 YEARS Digitally signed by SRIDEVI S Location: High Court of Karnataka - 2 - HC-KAR NC: 2025:KHC:37154-DB COMAP No. 479 of 2025 S/O. SHESHAGIRI SHARMA RESIDING AT NO.3 1ST MAIN ROAD VENKATESHWARA LAYOUT HEROHALLI ANDRAHALI MAIN ROAD VISHWANEEDAM NORTH BENGALURU - 560 091. …APPELLANTS (BY SRI R. KRISHNAAMORTI, ADVOCATE FOR SRI VAMSHI KRISHNA C., ADVOCATE) AND: 1. SRI K.A. MURTHY AGED ABOUT 67 YEARS S/O. LATE K.P. ANNE GOWDA RESIDING AT: FLAT NO. 194 TOWER-5, PEBBLE BAY APARTMENT RAMAKRISHNAPPA LAYOUT NAGASETTY HALLI R.M.V. 2ND STAGE BENGALURU - 560 094. ALSO AT: MOHINI VILLA APARTMENTS NO.22-F-03, MOHINI VILLA ROAD LANGFORD TOWN BENGALURU - 560 027. 2. M/S. CASA GRANDE GARDEN CITY BUILDERS PVT. LTD. RESIDING AT NO.34, 4TH FLOOR MEANEE AVENUE ROAD OPP. TO LAKESIDE HOSPITAL ULSOOR ROAD, NEAR ULSOOR LAKE BENGALURU - 560 042. …RESPONDENTS - 3 - HC-KAR NC: 2025:KHC:37154-DB COMAP No. 479 of 2025 THIS COMMERCIAL APPEAL IS FILED UNDER SECTION 13(1-A) OF THE COMMERCIAL COURTS ACT, 2015 R/W SEC.37(1) (b) OF ARBITRATION & CONCILIATION ACT, 1996 PRAYING TO SET ASIDE THE IMPUGNED ORDER DATED 01.04.2025 PASSED BY LXXXIII ADDITIONAL CITY CIVIL AND SESSIONS JUDGE, BENGALURU IN COM.A.A.NO.292/2024 (CCH-84) AT BENGALURU AND CONSEQUENTLY ALLOW THE SAID APPLICATION UNDER SECTION 9 OF THE ARBITRATION AND CONCILIATION ACT, 1996 IN THE INTEREST OF JUSTICE, EQUITY AND GOOD CONSCIENCE & ETC. THIS APPEAL, COMING ON FOR ORDERS, THIS DAY, JUDGMENT WAS DELIVERED THEREIN AS UNDER: CORAM: HON'BLE MR. VIBHU BAKHRU, CHIEF JUSTICE and HON'BLE MR. JUSTICE C M JOSHI ORAL JUDGMENT (PER: HON'BLE MR. VIBHU BAKHRU, CHIEF JUSTICE) 1. For the reasons stated in the application – I.A.2/2025 – the same is allowed. The delay in filing the appeal is condoned. 2. The appellants have filed the present appeal under Section 37(1)(b) of the Arbitration and Conciliation Act, 1996 [A&C Act] impugning an order dated 01.04.2025 passed by the learned Commercial Court in Com. AA. No.292/2024 [impugned order]. In terms of the impugned order, the learned Commercial Court had rejected the appellants' application for interim measures of protection under Section 9 of the A&C Act. - 4 - HC-KAR NC: 2025:KHC:37154-DB COMAP No. 479 of 2025 3. The appellants have filed the said application inter alia praying that the respondent No.1 be restrained from, in any way, alienating or encumbering the property as described in Schedule B – specified residential flats (31 in number) in project known as CasaGrand Flamingo, HSR Layout. It is the case of the appellants that they were engaged as facilitators by respondent No.1 in respect of the development of a real estate project on their lands. 4. Respondent No.1 is the owner of land measuring 3 acres 35 guntas and 16 guntas of Kharab land falling in Survey No.50 located at Haralukunte Village, Begur Hobli, Bangalore South Taluk, Bangalore [hereafter the said property]. The appellants claim that there were some disputes regarding the said property and in the aforesaid context, the appellants were engaged as facilitators in terms of an agreement dated 21.05.2021. The appellants claim that in terms of the said agreement, respondent No.1 had agreed to pay any amount collected by respondent No.1 over and above an amount of `72 crores in respect of its share of 39% of the developed property (space to be allotted to it) on development of the said property by a developer. The appellants claim that in terms of the facilitation agreement, that they had thereafter - 5 - HC-KAR NC: 2025:KHC:37154-DB COMAP No. 479 of 2025 facilitated settlement of disputes and also found a developer (respondent No.2) for developing the said property. The respondent Nos.1 and 2, had entered into a joint development agreement for construction of multistorey residential apartments on the land in question and to share the sale proceeds of the same in the ratio of 39% and 61% respectively. 5. The appellants claimed that the total consideration from sale of the residential project was estimated to be `417.72 Crores and 39% share of the same works out to `162.91 Crores. On the strength of the aforesaid calculation and the facilitation agreement, the appellants claim that they are entitled to facilitation charges of `90,91,45,619/- (Rupees Ninety Crores Ninety One Lakhs Forty Five Thousand Six Hundred and Nineteen Only). The appellants also claim that respondent Nos.1 and 2 have fraudulently entered into the joint development agreement for sharing of the sale proceeds instead of sharing of residential developed space. In terms of the joint development agreement executed between the said parties, respondent No.1 would not be allotted any flats, but would be entitled to sale proceeds. - 6 - HC-KAR NC: 2025:KHC:37154-DB COMAP No. 479 of 2025 6. The appellants apprehend that if the interim measures of protection are not granted, respondent No.1 would not pay any facilitation fee to the appellants. 7. Respondent No.1 disputes that it is not obliged to pay any facilitation fee or that the appellants have performed any work for being entitled to such fee. According to respondent No.1, the facilitation agreement dated 21.05.2021 set up by the appellants is a forged and fabricated document. 8. In the aforesaid context, the learned Commercial Court had briefly considered the question whether the appellants have performed any work, which would entitle them to receive any facilitation fee. The learned Commercial Court found that although the appellants claimed that they were entitled to facilitation fee for settlement of disputes, the application did not mention particulars of the disputes, which were allegedly resolved by the appellants or their role in resolving the same. The learned Commercial Court found that the appellants had failed to set up a prima facie case. 9. The learned counsel appearing for the appellants submits that the appellants have already filed a petition under Section 11(6) - 7 - HC-KAR NC: 2025:KHC:37154-DB COMAP No. 479 of 2025 of the A&C Act for appointment of an arbitrator in terms of the arbitration clause contained in the agreement dated 21.05.2021. He also referred to the decision of the Supreme Court in Essar House Private Limited v. Arcellor Mittal Nippon Steel India Limited : (2022) 20 SCC 178 and earnestly contended that it was not necessary for the appellants to establish a prima facie case for securing an order of interim measure of protection. He submitted that it would be sufficient to set up an agreement and indicate the disputes, for the appellants to be entitled to interim measures for protecting the subject matter of disputes. 10. The learned counsel also handed over a copy of the Deed of Settlement dated 18.01.2022 entered into by appellant Nos.1 and 2 along with one Mr. Suresh and M/s. Casa Grande Garden City Builders Private Limited. He submitted that the Deed of Settlement also clearly establishes that the appellants were engaged as facilitators. 11. We note that there is a serious dispute as to the facilitation agreement dated 21.05.2021, which has been set up by the appellants. There is also no material whether the appellants had - 8 - HC-KAR NC: 2025:KHC:37154-DB COMAP No. 479 of 2025 performed any work as claimed. The facilitation agreement is also sketchy. As rightly noted by the learned Commercial Court, the appellants have not mentioned any disputes, which were required to be settled and their precise role, if any, in settling those disputes. Considering that the appellants' claim for facilitation charges is premised on the basis that respondent No.1 had agreed to pay the consideration for facilitating the settlement of disputes, the finding of the learned Commercial Court that the appellants have failed to make out a prima facie case, cannot be faulted. 12. The copy of the Deed of Settlement, which was handed over by the appellants during the course of the hearing, does not further the case of the appellants. Respondent No.1 is not a party to the said deed. And, a plain reading of the same indicates that M/s. Casa Grande Garden City Builders Private Limited (which is the developer of the property) had paid an amount of `55,00,000/- as commission/charges to the parties of the first part, including the appellants, for facilitating the joint development agreement with the owner of the scheduled property. The appellants had also acknowledged that no further amounts were due from the said developer. The said agreement does not in any way establish the - 9 - HC-KAR NC: 2025:KHC:37154-DB COMAP No. 479 of 2025 appellants claim for a sum of `90,91,45,619/- as facilitation charges as claimed from respondent No.1. 13. Prima facie, it is also difficult to accept that whilst the appellants would be entitled to facilitation charges of `90,91,45,619/-, the landowner’s share would be confined to `72 Crores. 14. The contention that under Section 9 of the A&C Act, interim measures are required to be ordered notwithstanding that applicant fails to make out a strong prima facie case, is without any merit. The reliance placed by the learned counsel on the decision of the Supreme Court in Essar House Private Limited (supra) is misplaced. The said decision does not support the appellant’s contention. On the contrary, the said decision underscores the requirement of the applicant establishing a strong prima facie case, We consider it relevant to refer to the following observations of the Supreme Court: "49. If a strong prima facie case is made out and the balance of convenience is in favour of interim relief being granted, the Court exercising power under Section 9 of the Arbitration Act should not withhold relief on the mere technicality of absence of averments, - 10 - HC-KAR NC: 2025:KHC:37154-DB COMAP No. 479 of 2025 incorporating the grounds for attachment before judgment under Order 38 Rule 5 of the CPC." 15. In the present case, the appellants have failed to make out a strong prima facie case or establish that the balance of convenience lies in their favour. We are also unable to accept that any irreparable loss would be caused to the appellants if the interim measures as sought for are not granted. In the given circumstances, we find no infirmity with the impugned order. 16. The appeal is accordingly dismissed. 17. Pending applications also stand disposed of. Sd/- (VIBHU BAKHRU) CHIEF JUSTICE Sd/- (C M JOSHI) JUDGE SD List No.: 1 Sl No.: 26