M/S. S. K. Suraksha Properties vs. Sri. B. K. Vasudev Pradeep - Karnataka High Court, 16 July 2025

Cause title — parties, addresses and appearances

- 1 - HC-KAR NC: 2025:KHC:26508 CMP No. 370 of 2023 IN THE HIGH COURT OF KARNATAKA AT BENGALURU DATED THIS THE 16TH DAY OF JULY, 2025 BEFORE THE HON'BLE MR. JUSTICE ASHOK S.KINAGI CIVIL MISC. PETITION NO. 370 OF 2023 (-) BETWEEN: 1. M/S. S. K. SURAKSHA PROPERTIES HAVING ITS OFFICE AT NO. 36/52, 11TH A MAIN, 27TH CROSS, JAYANAGARA, 4TH BLOCK EAST, BENGALURU-560011 REPRESENTED BY MANAGING PARTNERS. 2. SRI. V. RAMESH KUMAR AGED ABOUT 55 YEARS, S/O LATE V CHANDRASEKHRA NAIDU 3. SRI. V. KAMAESWARA CHOWDARY AGED ABOUT 50 YEARS, S/O LATE V CHANDRASEKHRA NAIDU …PETITIONERS (BY SRI. G.V. SUDHAKAR, ADV) AND: 1. SRI. B. K. VASUDEV PRADEEP S/O LATE V. KRISHNAPPA, AGED ABOUT 46 YEARS, 2. SRI. B K RAGHAVENDRA PRAMOD S/O LATE V KRISHNAPPA, AGED ABOUT 44 YEARS, BOTH ARE R/AT. NO.8, GANESHA NILAYA, 8TH AND 9TH CROSS, INDIRA GANDHI CIRCLE, BEHIND SBM SARAKKI, BENGALURU SOUTH J.P. NAGAR, BENGALURU-560078 …RESPONDENTS (NOTICE TO R1 & R2 ARE SERVED) THE ADVOCATE FOR THE PETITIONER HAS FILED THE ABOVE CIVIL MISC. PETITION UNDER SEC.11(6) OF THE ARBITRATION AND Digitally signed by SUNITHA K S Location: HIGH COURT OF KARNATAKA - 2 - HC-KAR NC: 2025:KHC:26508 CMP No. 370 of 2023 CONCILIATION ACT, 1996 R/W NOTIFICATION NO. LCA/I/402/1996 DATED 13/11/1996 OF HIGH COURT OF KARNATAKA, PRAYING THAT THIS HONBLE COURT MAY BE PLEASED TO APPOINT MR. H.R.DESHPANDE (RETIRED DISTRICT JUDGE), AS A SOLE ARBITRATOR TO ADJUDICATE THE DISPUTE ARISING OUT OF THE JOINT DEVELOPMENT AGREEMENT DATED 06/12/2019, REGISTERED AS DOCUMENT NO. BTM-1-04270/2019-20, STORED IN CD NO.BTMD379 IN THE OFFICE OF SUB-REGISTRAR, JAYANAGAR (BTM LAYOUT) AS PER CLAUSE NO.24 OF JOINT DEVELOPMENT AGREEMENT (ANNEXURE-A) AND TO PASS SUCH OTHER SUITABLE ORDERS AS NECESSARY UNDER THE FACTS AND CIRCUMSTANCES OF THE CASE. 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 under Section 11(6) of the Arbitration and Conciliation Act, 1996, seeking the appointment of an Arbitrator to resolve the arbitral dispute that has arisen between the parties to the petition in terms of clause 24 of the Joint Development Agreement dated 06.12.2019 vide Annexure 'A'.

Brief facts, leading rise to the filing of this petition are as follows: The petitioner and the respondents have entered into a Joint Development Agreement dated 06.12.2019 regarding HC-KAR NC: 2025:KHC:26508 the converted land bearing Sy.No.343/1, measuring 1 acre 20 guntas situated at Begur Village, Begur Hobli, Bengaluru South Taluk, Bengaluru for construction of the residential apartment. In terms of the Joint Development Agreement, the respondents are liable to pay the Goods and Services Tax (“GST”) for their share of constructed area to the petitioner. The petitioner obtained the sanction plan and constructed the apartment building in the aforesaid land, and also handed over the possession of the flats fallen to the share of respondents. The petitioner obtained the Occupancy Certificate from the Bruhat Bengaluru Mahanagara Palike (“BBMP”). The petitioner has called upon the respondents to pay the GST on share of the flats allotted to them. However, the respondents failed to pay the GST amount to the petitioner. The petitioner paid an amount of Rs.86,65,818/- towards GST on the respondents share of built up area. The petitioner issued a legal notice dated 08.07.2023 invoking an arbitration clause to the respondents, calling upon them to pay the HC-KAR NC: 2025:KHC:26508 GST amount along with interest, failing which the petitioner would propose to appoint Sri.H.R.Deshpande (Retired District Judge) as an Arbitrator to adjudicate the dispute between the parties to the petition.

The respondents did not consent for the appointment of an Arbitrator. Hence, this petition.

A notice was issued to the respondents. Despite service of notice, the respondents remained unrepresented.

Heard the arguments of the learned counsel for the petitioner.

Learned counsel for the petitioner submits that, as per the terms and conditions of the Joint Development Agreement dated 06.12.2019, the respondents should pay the GST on their share. He submits that the respondents failed to pay the GST. The petitioner on behalf of the respondents paid the GST on the respondents’ share of built up area, and called upon the respondents to pay the HC-KAR NC: 2025:KHC:26508 amount. The respondents did not pay the amount. The petitioner invoked Arbitral Clause by issuing notice vide Annexure-C. The respondents neither replied to the Arbitral notice nor paid the amount. Hence, this arbitral dispute has arisen between the parties to the petition, and accordingly, prays to allow the petition.

Perused the records, and considered the submissions of the learned counsel for the parties.

The point, that arises for my consideration, is: " Whether the petitioner has made out a ground to refer the Arbitral Dispute to the Arbitrator in terms of clause 24 of the Joint Development Agreement dated 06.12.2019 as per the provisions of Arbitration and Conciliation Act, 1996 and the Rules?"

There is no dispute regarding the execution of the Joint Development Agreement between the petitioner and the respondents on 06.12.2019. Pursuant to the execution of the Joint Development Agreement, the petitioner has HC-KAR NC: 2025:KHC:26508 performed his part of a contract and handed over the possession of the apartments fallen to the share of respondents. As per the terms and conditions of the Joint Development Agreement, the respondents are liable to pay the GST on the apartments of the respondents’ share. The respondents did not pay the GST amount of their share. The petitioner issued a legal notice demanding the respondents to pay the GST. Despite service of the notice, the respondents did not pay the GST. To avoid future dispute, the petitioner has paid the GST of the respondents share, which comes to ₹.86,65,818/-. Now, the petitioner claims the amount paid by the petitioner on behalf of the respondents’ share towards the GST.

10.

From the perusal of the Joint Development Agreement dated 06.12.2019, there is an arbitration clause, at Clause 24, which reads as follows:

24.

In the event of any dispute or difference or claim arising between the parties to this Agreement, in any matter covered by this Agreement or HC-KAR NC: 2025:KHC:26508 subsequent Agreements, the same shall be settled by Arbitration in accordance with the provisions of Arbitration and Conciliation Act, 1996, subject to amendments from time to time. The proceedings shall be held in English language at Bangalore"

11.

Pursuant to the Arbitral clause, the petitioner issued an arbitral notice on 08.07.2023 vide Annexure 'C' proposing the name of an Arbitrator. The respondents neither replied to the legal notice invoking arbitration clause nor given consent for the appointment of an Arbitrator. From the bare reading of the aforesaid Clause, it is evident that there exists an arbitral clause, and the arbitral dispute has arisen between the parties to the petition, which must be resolved by an Arbitrator.

12.

In view of the above discussion, the petitioner has made out a ground to refer the arbitral dispute to the Arbitrator. Accordingly, I answer point for consideration in the affirmative. HC-KAR NC: 2025:KHC:26508

13.

I proceed to pass the following order: ORDER

The Civil Miscellaneous petition is allowed.

Shri. R.H.Raddi, Retired District Judge, is nominated as an arbitrator, to resolve the dispute between the parties as per clause 24 of Joint Development Agreement dated 06.12.2019 vide Annexure ‘A’ as per the provisions of the Arbitration and Conciliation Act, 1996 and the Rules.

The Office is directed to communicate this order to the learned Arbitrator, and the Arbitration and Conciliation Centre, Bengaluru. (ASHOK S.KINAGI) JUDGE

RCK, List No.: 1 Sl No.: 21