Research › Search › Judgment

Karnataka High Court · body

2019 DIGILAW 1904 (KAR)

Dy Prime Properties LLP, A Registered Limited Liability Partnership Firm v. Moula Ali

2019-08-29

B.VEERAPPA

body2019
JUDGMENT : B. Veerappa J. The petitioner has filed the present Civil Miscellaneous Petition under the provisions of Section 11(6) of the Arbitration and Conciliation Act,1996 for appointment of sole Arbitrator to adjudicate the dispute between the parties in terms of clause 21 of the Memorandum of Understanding dated 07.07.2016 entered into between the parties. 2. It is the case of the petitioner that the petitioner is a registered Limited Liability Partnership Firm engaged in the business of property development promoting affordable housing projects and all other incidental and related matters. The respondents approached the petitioner and represented that they would procure the land for the petitioner's project and respondent No.1 owns the land at Meesaganahalli Village, Devanahalli Taluk and also stated that they would procure the land in the said village to the petitioner for development of the residential layout. Subsequently, both the parties entered into Memorandum of Understanding on 07.07.2016. Clause 21 of the Memorandum of Understanding stipulates that, "If any question or dispute shall at any time arise between the parties to this Memorandum with respect to the mean or effect of any clause in this agreement or the rights or liabilities of the parties hereto respectively hereunder, then, such question or dispute, the parties shall have the option either to approach the Court of law or to approach the sole arbitrator. 3. On the basis of the Memorandum of Understanding, the respondents have received Rs.1,25,00,000/- and did not procure the land as agreed. Therefore, the petitioner issued a legal notice on 16.11.2017 calling upon the respondents to give their concurrence for appointment of an arbitrator. Notice served upon the respondents, but, have not replied. Hence, the present Civil Miscellaneous Petition is filed. 4. The respondents have filed objections to the main petition denying the existence of Memorandum of Understanding dated 07.07.2016 and denied receipt of a sum of Rs.1,25,00,000/- and further contended that the respondents were not aware of any arbitration clause entered into between them and contended that the petitioner has suppressed the material facts and has not come to the Court with clean hands and therefore, sought for dismissal of the Civil Miscellaneous Petition. 5. I have heard learned counsel for the parties to the lis. 6. Sri. 5. I have heard learned counsel for the parties to the lis. 6. Sri. S.D.N. Prasad, learned counsel for the petitioner reiterating the averments made in the Civil Miscellaneous Petition has contended that there is no dispute with regard to existence of Memorandum of Understanding dated 07.07.2016 duly signed by both the parties to each and every page as contemplated under the provisions of Section 7 of the Arbitration and Conciliation Act and their exists arbitral clause. Inspite of the legal notice issued by the petitioner to the respondents to discharge their obligations in terms of Memorandum of Understanding, the respondents have not replied. Therefore, he sought to allow the Civil Miscellaneous petition. 7. Per contra Sri M. Madhusudan, learned counsel for Sri V. Vishwanath Shetty, learned counsel for respondents sought to justify the action of the respondents and contended that there is no existence of Memorandum of Understanding as alleged on 07.07.2016, the question of arbitral clause would not arise. Therefore, sought to dismiss the Civil Miscellaneous petition. 8. Having heard learned counsel for the parties, the original Memorandum of Understanding at Annexure-A dated 07.07.2016 produced before this Court is duly signed by the parties as contemplated under the provisions of Section 7 of the Act. Though the respondents in their objections denied the existence of Memorandum of Understanding, but not denied the signatures on the original document produced before this Court. It is not their case in the objections that the signatures of the respondents were obtained by playing fraud by the petitioner and admittedly no reply was issued by the respondents to the legal notice issued by the petitioner. Once the signatures on the original document of the Memorandum of Understanding is admitted not disputed, mere denial of existence of Memorandum of Understanding is not a ground to deny the petitioner to approach an arbitrator as contemplated in clause 21 of the Memorandum of Understanding which reads as under: 21. "If any question or dispute shall at any time arise between the parties to this Memorandum with respect to the mean or effect of any clause in this agreement or the rights or liabilities of the parties hereto respectively hereunder then such question or dispute the First party shall have the option either to approach the Court of law or to refer the matter to the arbitration. The arbitrator shall be appointed by the Fist Party and whose award shall be conclusive and binding on both the parties." 9. The respondents have not stated anything about the signatures and the transaction between the parties in the statement of objections. Therefore, it is a fit case to appoint sole arbitrator to adjudicate the dispute between the parties as prayed for. 10. For the reasons stated above, the Civil Miscellaneous Petition is allowed. Hon'ble Dr. Justice N. Kumar, former Judge of this Court is appointed as sole arbitrator to adjudicate the dispute in terms of Clause-21 of the Memorandum of Understanding dated 07.07.2016 entered into between the parties. All the contentions of the parties are kept open to be urged before the Hon'ble arbitrator. Registry is directed to send a copy of this order to Hon'ble Justice Dr. N. Kumar, former Judge of this Court and Arbitration Centre for reference forthwith. Arbitration to be conducted in Arbitration Centre as desired by both the parties.