- 1 - HC-KAR NC: 2026:KHC:5412 CMP No. 697 of 2022 IN THE HIGH COURT OF KARNATAKA AT BENGALURU DATED THIS THE 30TH DAY OF JANUARY, 2026 BEFORE THE HON'BLE MR. JUSTICE ASHOK S.KINAGI CIVIL MISC. PETITION NO. 697 OF 2022 BETWEEN: THE KARNATAKA TELECOM DEPARTMENT EMPLOYEES CO OPERATIVE SOCIETY LTD. PRESENTLY HAVING ITS REGSITRED OFFICE AT NO 706, AMMIA'S KASTELE 1ST FLOOR, CBI ROAD HMT LAYOUT, R T NAGAR POST BENGALURU 560032 REP. BY ITS PRESIDENT BAKTHAVACHALAM AND SECRETARY B S MANJUANTH …PETITIONER (BY SRI. D.R.RAVISHANKAR, LEARNED SENIOR COUNSEL, SRI. VIJAYA SHEKARA GOWDA V., ADVOCATE) AND: 1. M/S YASHOMATI URBAN PROJECTS PVT. LTD. NO 135, SRINIDHI NILIAYA 1ST CROSS, ALLASADNRAN GKVK POST BENGALURU 560065 REP. BY ITS MAANGING DIRECTOR SRI S NAGARAJ S/O SUBBAIAH 2. S NAGARAJ AGED 46 YEARS Digitally signed by KIRAN KUMAR R Location: HIGH COURT OF KARNATAKA - 2 - HC-KAR NC: 2026:KHC:5412 CMP No. 697 of 2022 S/O SUBBAIAH MANAINGING DIRCTOR M/S YASHOMATHI URBANPROJECTS PVT LTD HAVING ITS OFF NO 135 SRINIDHI NILAYA 1ST CROSS, ALLSADNRANRA GKVK POST BENGALURU 560065 …RESPONDENTS (BY SRI. KRISHNAMURTHY, LEARNED SENIOR COUNSEL, SMT.G.K.BHAVANA., ADVOCATE) THIS CIVIL MISC. PETITION IS FILED UNDER SECTION 11(6) OF THE ARBITRATION AND CONCILIATION ACT 1996, PRAYING THAT THIS HON’BLE COURT BE PLEASED TO APPOINT ARBITRATOR/S TO REDRESS THE EXISTING DISPUTE BETWEEN THE PETITIONER AND THE RESPONDENT AS PER SECTION 11 (6) OF ARBITRATION AND CONCILIATION ACT, 1996 AND FURTHER BE PLEASED TO APPOINT ANY LEARNED RETIRED DISTRICT JUDGE OR HON’BLE HIGH COURT JUDGE AS HON’BLE ARBITRATORS IN THE PRESENT CASE TO RESOLVE THE EXISTING DISPUTE BETWEEN THE PETITIONER AND THE RESPONDENT AS IN VIEW OF THE RESPONDENTS HAVE DECEIVED AND DEPRIVED AND NEGLECTED AND ALSO COMMITTED BREACH OF TERMS AND CONDITIONS UNDER THE MEMORANDUM OF AGREEMENT FOR RESIDENTIAL LAYOUT TURNKEY PROJECT DATED 07/01/2009 AT ANNEXURE-A AND FURTHER THIS HON’BLE COURT BE PLEASED TO GRANT SUCH OTHER APPROPRIATE ORDER/S, RELIEF/S, DIRECTION/S AS THE CASE MAY BE DEEMS FIT IN THE FACTS AND CIRCUMSTANCES OF THE CASE IN THE INTEREST OF JUSTICE AND EQUITY. - 3 - HC-KAR NC: 2026:KHC:5412 CMP No. 697 of 2022 THIS PETITION, COMING ON FOR ADMISSION, THIS DAY, ORDER WAS MADE THEREIN AS UNDER: CORAM: HON'BLE MR. JUSTICE ASHOK S.KINAGI ORAL ORDER 1. This Civil Miscellaneous Petition is filed under Section 11(6) of the Arbitration and Conciliation Act, 1996, for the appointment of an arbitrator to resolve the dispute between the parties to the petition in terms of clause 25 of the Memorandum of Agreement (hereinafter referred to as ‘MOU’ for short) for Residential Layout Turnkey Project dated 07.01.2009 vide Annexure-A. 2. Brief facts, leading rise to the filing of this Civil Miscellaneous Petition are as follows: 3. The petitioner and respondents have entered into a Memorandum of understanding with the petitioner- society on 07.01.2009 to procure the lands adjoining to Huyilalu and Megalapura villages, Ilavala Hobli, Mysore Taluk for the formation of residential layout of - 4 - HC-KAR NC: 2026:KHC:5412 CMP No. 697 of 2022 the said land which may be procured and purchased by the respondents at the investment of the petitioner's society, enable the petitioner's society to allot such sites to its members and accordingly, to procure the said lands more or less 50 acres in and around the said villages by the respondents, the petitioner society paid ₹4,55,00,000/- to the respondents, as and when the respondents demanded the money. The petitioner society has paid the said amount, but out of the said proposed lands, the respondents have only entrusted the said lands worth for a sum of ₹ 1,25,00,000/- and fell due sum of ₹ 3,30,00,000/- towards the worth of the remaining land. In spite of the repeated requests and demands made by the petitioner society, the respondents did not wake up from their deep sleep and neglected in procuring the lands, and entrusting the lands to the petitioner society. 4. On 15.07.2020, the petitioner issued a legal notice to the respondents demanding them to pay the principal - 5 - HC-KAR NC: 2026:KHC:5412 CMP No. 697 of 2022 and interest and as well as to give a consent for the appointment of an arbitrator. 5. Though notice was served, the respondents, did not reply to the petitioner’s request. On 15.03.2021, a legal notice was issued, but the respondents have deliberately avoided the service of notice of the petitioner. Final notice was issued on 16.12.2021 invoking sub clause for the appointment of the arbitrator. However, the respondents did not comply with the petitioner’s demand. It is contended that the dispute arose between the petitioner and respondents and the dispute has to be resolved through an arbitration as there is an arbitration agreement. Hence, this petition. 6. The respondents filed a statement of objections contending that the petitioner’s reply notice dated 02.01.2014 to the legal notice dated 16.12.2013 clearly shows that the claim of the petitioner arose on 02.01.2014 wherein MOU dated 07.01.2009 was - 6 - HC-KAR NC: 2026:KHC:5412 CMP No. 697 of 2022 terminated. However, the petitioner has initiated arbitration proceedings for recovery of the amount as claimed under the notice dated 02.01.2014 along with interest by way of issuing a legal notice dated 15.07.2020 i.e., after a lapse of 6 years from the date on which the claim arose. Therefore, the petitioner is seeking initiation of arbitration proceedings with respect to the time barred claim. Hence, prays to dismiss the petition. 7. Heard the arguments of Sri. D.R. Ravishankar learned senior counsel for the petitioner and Sri. Krishnamurthy, learned senior counsel for the respondents. 8. The learned senior counsel for the petitioner submits that the petitioner and respondents have entered into a memorandum of agreement for residential layout turnkey project and the respondents have committed a breach of terms and conditions of the MOU. He submits that the petitioner issued a demand notice to - 7 - HC-KAR NC: 2026:KHC:5412 CMP No. 697 of 2022 the respondents. The respondents have replied, but did not repay the amount. The petitioner invoked an arbitration clause by issuing an arbitration notice, and the respondents replied to the arbitration notice, on untenable grounds. 9. Although the respondents have contended that the claim made by the petitioner is barred by limitation, he submits that the said aspect cannot be considered while deciding a petition under Section 11(6) of the Arbitration and Conciliation Act, 1996 and to buttress his arguments, he has placed reliance on the judgment of Hon’ble Apex Court in the case of Uttrakhand Purva Sainik Kalyana Nigama Ltd. v. Northern Coal Field Ltd.1; Aslam Ismail Khan Deshmuk v. ASAP Fluids Private Limited and another2 and Hindustan Petroleum Corporation Ltd. v. BCL 1 (2020) 2 SCC 455 2 (2025) 1 SCC 502 - 8 - HC-KAR NC: 2026:KHC:5412 CMP No. 697 of 2022 Secure Premises Private Ltd3. Hence, on these grounds, he prays to allow the petition. 10. Per contra, learned senior counsel appearing for the respondents submits that the respondents have issued a notice dated 02.01.2014, and a cause of action commences from the date of reply to the legal notice. He submits that the petitioner has filed this petition under Section 11(6) after a lapse of more than 6 years. Hence, he submits that the petition filed by the petitioner is barred by limitation, and to buttress his arguments, he has placed reliance on the judgments of the Hon’ble Apex Court in the cases of Geo Miller and Co.(P) Ltd vs. Rajasthan Vidyut Utpadan Nigam Ltd4; B and T AG Vs. Ministry of Defence5; and Extramarks Education India Private Limited 3 2025 SCC Online SC 2746 4 (2020) 14 SCC 643 5 (2023) SCC Online SC 657 - 9 - HC-KAR NC: 2026:KHC:5412 CMP No. 697 of 2022 Vs. Shri Ram School and another6. Hence, on these grounds, he prays to dismiss the petition. 11. Perused the records, and considered the submissions of the learned senior Counsel for the parties. 12. The point, that would arise for my consideration is as follows: “ Whether the petitioner has made out a ground to refer the dispute to the Arbitration in terms of clause 25 of the memorandum of agreement for residential layout Turnkey project as per the provisions of Act?” 13. It is an undisputed fact that the petitioner and respondents have entered into Memorandum of Agreement for Residential layout Turnkey project vide Annexure-A, to procure the lands and to allot the sites to the members of the petitioner's society and the petitioner paid a sum of ₹4,55,00,000/- to the respondents. The respondents have utilized only 6 (2022) SCC Online Del 3123 - 10 - HC-KAR NC: 2026:KHC:5412 CMP No. 697 of 2022 ₹1,25,00,000/-. Admittedly, the respondents have committed a breach of terms and conditions contract. There is a breach of contract on terms and conditions of MOU. If any dispute arises between the parties to the petition, the said dispute has to be resolved through an arbitration in terms of clause 25 of Annexure-A. The petitioner invoked an arbitration clause by issuing an arbitration notice under Section 21 of the Arbitration and Conciliation Act, 1996, proposing the name of an arbitrator. 14. The respondents replied to the arbitration notice. The respondents did not concur with the name proposed by the petitioner, and contended that the claim made by the petitioner is barred by limitation. The dispute arose between the petitioner and respondents, and the same has to be resolved through an arbitration. 15. Admittedly, the petitioner and respondents are parties to the Memorandum of agreement for Residential Layout Turnkey Project. As far as the claim of the - 11 - HC-KAR NC: 2026:KHC:5412 CMP No. 697 of 2022 petitioner is concerned, as to whether the claim was dead one or time barred claim is to be decided by the arbitrator. The scope of judicial intervention under Section 11 of the Act is restricted to the situation that the judicial authorities to find that arbitration agreement does exist or is null and void. The scope of examination is now confined only to the existence of the arbitration agreement, as per the law laid down by the Hon'ble Apex Court in the case of Uttrakhand Purva Sainik Kalyana Nigama Ltd. v. Northern Coal Field Ltd7; the relevant portion is extracted as follows: “7.13 In view of the provisions of Section 16, and the legislative policy to restrict judicial intervention at the pre-reference stage, the issue of limitation would require to be decided by the arbitrator. Sub- section (1) of Section 16 provides that the arbitral tribunal may rule on its own jurisdiction, “including any objections” 7 (2020) 2 SCC 455 - 12 - HC-KAR NC: 2026:KHC:5412 CMP No. 697 of 2022 with respect to the existence or validity of the arbitration agreement. Section 16 is as an inclusive provision, which would comprehend all preliminary issues touching upon the jurisdiction of the arbitral tribunal. The issue of limitation is a jurisdictional issue, which would be required to be decided by the arbitrator under Section 16, and not the High Court at the pre-reference stage under Section 11 of the Act. Once the existence of the arbitration agreement is not disputed, all issues, including jurisdictional objections are to be decided by the arbitrator.” 16. The Hon'ble Apex Court held that the issue of limitation is a jurisdictional issue, which would be required to be decided by the arbitrator under Section 16 of the Act, and not the High Court at the pre- reference stage under Section 11 of the Act. Once the existence of the Arbitration Agreement is not disputed, all issues, including the jurisdictional objections, are to be decided by the Arbitrator. - 13 - HC-KAR NC: 2026:KHC:5412 CMP No. 697 of 2022 17. The Hon'ble Apex Court in the case of Hindustan Petroleum Corporation Ltd. (supra) has held that the scope of jurisdiction of referral Court, hearing a Section 11 petition, when faced with an issue of a joinder of a non-signatory to the arbitration agreement, has been lucidly set out by the five Benches of the Hon'ble Apex Court in Cox and Kings Ltd. v. SAP India. Pvt. Ltd. and another8. The Hon’ble Apex Court also held that if the referral Court prima facie arrives at the satisfaction that a non- signatory is a veritable party, then only the Arbitral Tribunal is not denuded of its jurisdiction to decide whether non-signatory is indeed a party to the Arbitration Agreement on the basis of factual evidence and application of legal doctrine. 18. Further, the Hon'ble Apex Court in case of Aslam Ismail Khan Deshmuk v. ASAP Fluids Private 8 (2024) 4 SCC 1 - 14 - HC-KAR NC: 2026:KHC:5412 CMP No. 697 of 2022 Limited and another9 has held in paragraph 43 as follows: “43. Therefore, while determining the issue of limitation in the exercise of powers under Section 11(6) of the Act, 1996, the referral court must only conduct a limited enquiry for the purpose of examining whether the Section 11(6) application has been filed within the limitation period of three years or not. At this stage, it would not be proper for the referral court to indulge in an intricate evidentiary enquiry into the question of whether the claims raised by the petitioner are time barred. Such a determination must be left to the decision of the arbitrator.” 19. From the perusal of paragraph 43 of the aforesaid judgment, it discloses that the Referral Court must only conduct a limited enquiry for the purpose of examining, whether Section 11(6) application has been 9 (2025) 1 SCC 502 - 15 - HC-KAR NC: 2026:KHC:5412 CMP No. 697 of 2022 filed within limitation of 3 years or not. At that stage, it would not be proper for the Referral Court to indulge in an intricate evidentiary enquiry into the question of whether the claim raised by the petitioners are time- barred. Such a determination must be left to the decision of the Arbitrator. 20. Considering the proposition laid down by the Hon'ble Apex Court in case of Aslam Ismail Khan Deshmuk, Uttrakhand Purvi Sainik Kalyan Nigam Ltd., and Hindustan Industrial Petroleum Corporation Ltd., (supra), the issue of limitation cannot be considered at the stage of considering an application under Section 11 of the Act, and the contentions of the learned Senior Counsel for respondents cannot be accepted, for the reasons stated above. 21. Admittedly, there is an Arbitration Clause 25 in Memorandum of Agreement vide Annexure- A, which is extracted as follows: - 16 - HC-KAR NC: 2026:KHC:5412 CMP No. 697 of 2022 “25. All matters in question whatsoever which shall during the continuance of the Memorandum of Understanding thereof arise between the parties hereto shall be referred in case all the parties agreeing to the arbitration of a sole arbitrator otherwise to the arbitration of the arbitrators one to be appointed by each of the said parties and the award of the sole arbitrator or arbitrators by majority as the case may be shall be binding on the partners thereto and/or their respective legal representatives and these presents shall be deemed to be an Arbitration Agreement within the meaning of Indian Arbitration Act, 1940 or any statutory modification or re-enactment thereof, for time being in force.” 22. Admittedly, the arbitral dispute arose between the petitioner and respondents, and the same has to be resolved through an arbitrator. Hence, the petitioner has made out a ground to refer the dispute to the arbitration. Accordingly, answer the point in the affirmative. 23. In view of the above discussion, I proceed to pass the following order: - 17 - HC-KAR NC: 2026:KHC:5412 CMP No. 697 of 2022 ORDER i. The Civil Miscellaneous Petition is allowed. ii. Hon’ble Sri. Justice Sreenivas Harish Kumar, Former Judge, High Court of Karnataka, is nominated as an arbitrator to resolve the dispute between the petitioner and respondents as per the provisions of Arbitration and Conciliation Act, 1996 and Rules. iii. The Registry is directed to forward the copy of this order to the learned arbitrator and the Director of the Arbitration and Conciliation Centre, Bengaluru. iv. All the contentions of the parties are kept open, including limitation. - 18 - HC-KAR NC: 2026:KHC:5412 CMP No. 697 of 2022 v. Pending IA(s), if any, shall stand disposed of. Sd/- (ASHOK S.KINAGI) JUDGE SKS CT:KHV