Full Judgment Text
- 1 -
CMP No. 461 of 2022
IN THE HIGH COURT OF KARNATAKA AT BENGALURU
®
RD
DATED THIS THE 23 DAY OF SEPTEMBER, 2022
BEFORE
THE HON'BLE MR JUSTICE SURAJ GOVINDARAJ
CMP NO. 461 OF 2022
BETWEEN:
CAMPUS STUDENTS COMMUNITIES PVT LTD
HAVING REGISTERED OFFICE AT
NO.33/5, FIRST AND SECOND FLOORS,
NATIONAL HIGH SCHOOL ROAD,
V.V. PURAM
BENGALURU 560004
REP BY ITS DIRECTOR
MR. SANJAY JALAN,
PH. 9945211014
EMAIL SANJAY@CAMPUSVILLE.IN
…PETITIONER
(BY SRI. ANUPAM AGARWAL.,ADVOCATE)
AND:
M/S BAGAMANE ENTERPRISES
A REGISTERED FIRM
PRESENTLY HAVING ITS OFFICE AT
TH
NO.23/2, 7 FLOOR, COFFEE DAY SQUARE,
VITTAL MALYA ROAD,
BENGALURU 560001
REP BY ITS PARTNER
SRI. NITIN BAGAMANE
…RESPONDENT
(BY SRI. A RAVISHANKAR.,ADVOCATE)
THIS CMP IS FILED UNDER SEC.11(6) OF THE ARBITRATION
AND CONCILIATION ACT 1996, PRAYING TO EXERCISE THE POWER
UNDER THE SECTION 11(6) OF THE ARBITRATION AND
CONCILIATION ACT, 1996 AND APPOINT AN ARBITRATOR AS PER
THE AGREED TERMS OF THE LEASE DEED DATED 22/11/2016
Digitally signed by
POORNIMA
SHIVANNA
Location: HIGH
COURT OF
KARNATAKA
- 2 -
CMP No. 461 of 2022
EXECUTED BETWEEN THE PETITIONER AND RESPONDENTS AS
DETAILED IN ANNEXURE NO.A TO ARBITRATE THE DISPUTE THAT
HAVE ARISEN BETWEEN THE PETITIONER AND RESPONDENT And
Etc.
THIS CMP COMING ON FOR ADMISSION, THIS DAY, THE
COURT MADE THE FOLLOWING:
ORDER
1. The petitioner is before this Court seeking for the
following reliefs:
a) To exercise the power under the Section 11(6) of
the Arbitration and Conciliation Act, 1996 and
appoint an Arbitrator as per the agreed terms of the
Lease Deed dated 22/11/2016 executed between
the Petitioner and Respondents as detailed in
Annexure No.A to arbitrate the dispute that have
arisen between the Petitioner and Respondent.
b) Cost of the Petition to the Petitioner.
c) Grant any such other and further relief(s) to the
petitioner as are just in the interest of justice and
equity.
2. The petitioner and respondent had entered into a
lease deed on 22.11.2016. The same is governed by
the arbitration clause in terms of Clause 28 which is
extracted hereunder for easy reference:
28. ARBITRATION
28.1 The parties agree that in case of any dispute or
difference arising out of this Lease Deed, the matter
shall be referred to arbitration of an Arbitrator of the
standing of not less than a retired High Court Judge.
The Arbitration shall be as per the provisions of the
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CMP No. 461 of 2022
Arbitration and Conciliation Act, 1996, as may be
amended from time to time. The decision of the
Arbitration so the Arbitrator so appointed shall be
binding upon the Lessor and the Lessee” .
3. There being certain disputes between the parties, the
petitioner issued a dispute notice on 30.11.2021 and
subsequently invoked arbitration clause vide notice
dated 18.01.2022 and nominated its arbitrator. Said
notice having been served, the respondent not
having concurred, the petitioner is before this Court.
4. Sri.Anupama Agarwal, learned counsel for the
petitioner submits that dispute between the parties is
governed by an arbitration clause and the matter be
referred to arbitration.
5. Per contra, Sri.A.Ravishankar, learned counsel for
the respondent would submit that there will be no
purpose which will be served by arbitration,
inasmuch as the petitioner has not paid huge
amounts of rentals about Rs.1,50,00,000/-. He
submits that the arbitration proceedings are only an
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CMP No. 461 of 2022
hogwash to harass the respondent and even if a
award is passed in favour of the petitioner, the
petitioner would not be able to comply with the
same.
6. In reply thereto Sri.Anupam Agarwal, learned counsel
for the petitioner submits that the petitioner has
invested more than Rs.Five crores on the property,
as such, the petitioner has a serious interest and
investment in the matter and the award which would
be passed would be capable of being implemented.
7. Sri.A.Ravishankar, learned counsel for the
respondent submits that he is unwilling to make
payment of the cost of the arbitration and the matter
could be referred to arbitration if the petitioner is
willing to make payment of cost on behalf of
respondent also.
- 5 -
CMP No. 461 of 2022
8. Heard Sri.Anupam Agarwal.A.N, learned counsel for
the petitioner and Sri.A.Ravishankar, learned counsel
for the respondent.
9. The existence of the arbitration clause is not in
dispute. There being unresolved disputes between
the parties is also not in question. The only aspect
is as regards cost of arbitration.
10. In terms of first proviso to Subsection (2) of Section
38 of the Arbitration and Conciliation Act, 1996 (for
short ‘A&C Act), if one of the party fails to pay his
share of the deposit the other party may pay the
same and the said payment shall be the cost of the
proceedings which can be considered in terms of
Section 31A of the A&C Act.
11. In the present case, the respondent not willing to
make payment of the cost of the arbitration and the
petitioner having come forward to make payment of
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CMP No. 461 of 2022
cost of arbitration, both on behalf of the petitioner
and respondent, insofar as the claim of the petitioner
is concerned, there being no counter claim proposed
to be filed by the respondent, I pass the following:
ORDER
i. The petition is allowed. Sri. Justice Ram Mohan
Reddy, Former Judge of this Court is appointed as
a sole arbitrator to arbitrate the dispute between
the parties.
ii. The arbitration to be carried out under the aegis
of the Bangalore Arbitration Centre.
iii. The petitioner is directed to make payment of cost
of the arbitration cost on behalf of the petitioner
and respondent to the arbitration centre.
iv. In the event of any counter claim being raised by
the respondent, then the respondent would be
liable to make payment not only as regards the
counter claim but also as regards his share which
has been waived earlier.
- 7 -
CMP No. 461 of 2022
v. The cost which are paid by the petitioner shall
form cost of the proceedings which is to be taken
into consideration while orders under Section 31A
of the A&C Act are being passed.
vi. Registry is directed to forward a copy of this order
to the Director, Bangalore Arbitration Centre.
vii. All contentions are left open.
viii. Registry is directed to return the original
documents to the petitioner.
Sd/-
JUDGE
LN
List No.: 2 Sl No.: 30
CMP No. 461 of 2022
IN THE HIGH COURT OF KARNATAKA AT BENGALURU
®
RD
DATED THIS THE 23 DAY OF SEPTEMBER, 2022
BEFORE
THE HON'BLE MR JUSTICE SURAJ GOVINDARAJ
CMP NO. 461 OF 2022
BETWEEN:
CAMPUS STUDENTS COMMUNITIES PVT LTD
HAVING REGISTERED OFFICE AT
NO.33/5, FIRST AND SECOND FLOORS,
NATIONAL HIGH SCHOOL ROAD,
V.V. PURAM
BENGALURU 560004
REP BY ITS DIRECTOR
MR. SANJAY JALAN,
PH. 9945211014
EMAIL SANJAY@CAMPUSVILLE.IN
…PETITIONER
(BY SRI. ANUPAM AGARWAL.,ADVOCATE)
AND:
M/S BAGAMANE ENTERPRISES
A REGISTERED FIRM
PRESENTLY HAVING ITS OFFICE AT
TH
NO.23/2, 7 FLOOR, COFFEE DAY SQUARE,
VITTAL MALYA ROAD,
BENGALURU 560001
REP BY ITS PARTNER
SRI. NITIN BAGAMANE
…RESPONDENT
(BY SRI. A RAVISHANKAR.,ADVOCATE)
THIS CMP IS FILED UNDER SEC.11(6) OF THE ARBITRATION
AND CONCILIATION ACT 1996, PRAYING TO EXERCISE THE POWER
UNDER THE SECTION 11(6) OF THE ARBITRATION AND
CONCILIATION ACT, 1996 AND APPOINT AN ARBITRATOR AS PER
THE AGREED TERMS OF THE LEASE DEED DATED 22/11/2016
Digitally signed by
POORNIMA
SHIVANNA
Location: HIGH
COURT OF
KARNATAKA
- 2 -
CMP No. 461 of 2022
EXECUTED BETWEEN THE PETITIONER AND RESPONDENTS AS
DETAILED IN ANNEXURE NO.A TO ARBITRATE THE DISPUTE THAT
HAVE ARISEN BETWEEN THE PETITIONER AND RESPONDENT And
Etc.
THIS CMP COMING ON FOR ADMISSION, THIS DAY, THE
COURT MADE THE FOLLOWING:
ORDER
1. The petitioner is before this Court seeking for the
following reliefs:
a) To exercise the power under the Section 11(6) of
the Arbitration and Conciliation Act, 1996 and
appoint an Arbitrator as per the agreed terms of the
Lease Deed dated 22/11/2016 executed between
the Petitioner and Respondents as detailed in
Annexure No.A to arbitrate the dispute that have
arisen between the Petitioner and Respondent.
b) Cost of the Petition to the Petitioner.
c) Grant any such other and further relief(s) to the
petitioner as are just in the interest of justice and
equity.
2. The petitioner and respondent had entered into a
lease deed on 22.11.2016. The same is governed by
the arbitration clause in terms of Clause 28 which is
extracted hereunder for easy reference:
28. ARBITRATION
28.1 The parties agree that in case of any dispute or
difference arising out of this Lease Deed, the matter
shall be referred to arbitration of an Arbitrator of the
standing of not less than a retired High Court Judge.
The Arbitration shall be as per the provisions of the
- 3 -
CMP No. 461 of 2022
Arbitration and Conciliation Act, 1996, as may be
amended from time to time. The decision of the
Arbitration so the Arbitrator so appointed shall be
binding upon the Lessor and the Lessee” .
3. There being certain disputes between the parties, the
petitioner issued a dispute notice on 30.11.2021 and
subsequently invoked arbitration clause vide notice
dated 18.01.2022 and nominated its arbitrator. Said
notice having been served, the respondent not
having concurred, the petitioner is before this Court.
4. Sri.Anupama Agarwal, learned counsel for the
petitioner submits that dispute between the parties is
governed by an arbitration clause and the matter be
referred to arbitration.
5. Per contra, Sri.A.Ravishankar, learned counsel for
the respondent would submit that there will be no
purpose which will be served by arbitration,
inasmuch as the petitioner has not paid huge
amounts of rentals about Rs.1,50,00,000/-. He
submits that the arbitration proceedings are only an
- 4 -
CMP No. 461 of 2022
hogwash to harass the respondent and even if a
award is passed in favour of the petitioner, the
petitioner would not be able to comply with the
same.
6. In reply thereto Sri.Anupam Agarwal, learned counsel
for the petitioner submits that the petitioner has
invested more than Rs.Five crores on the property,
as such, the petitioner has a serious interest and
investment in the matter and the award which would
be passed would be capable of being implemented.
7. Sri.A.Ravishankar, learned counsel for the
respondent submits that he is unwilling to make
payment of the cost of the arbitration and the matter
could be referred to arbitration if the petitioner is
willing to make payment of cost on behalf of
respondent also.
- 5 -
CMP No. 461 of 2022
8. Heard Sri.Anupam Agarwal.A.N, learned counsel for
the petitioner and Sri.A.Ravishankar, learned counsel
for the respondent.
9. The existence of the arbitration clause is not in
dispute. There being unresolved disputes between
the parties is also not in question. The only aspect
is as regards cost of arbitration.
10. In terms of first proviso to Subsection (2) of Section
38 of the Arbitration and Conciliation Act, 1996 (for
short ‘A&C Act), if one of the party fails to pay his
share of the deposit the other party may pay the
same and the said payment shall be the cost of the
proceedings which can be considered in terms of
Section 31A of the A&C Act.
11. In the present case, the respondent not willing to
make payment of the cost of the arbitration and the
petitioner having come forward to make payment of
- 6 -
CMP No. 461 of 2022
cost of arbitration, both on behalf of the petitioner
and respondent, insofar as the claim of the petitioner
is concerned, there being no counter claim proposed
to be filed by the respondent, I pass the following:
ORDER
i. The petition is allowed. Sri. Justice Ram Mohan
Reddy, Former Judge of this Court is appointed as
a sole arbitrator to arbitrate the dispute between
the parties.
ii. The arbitration to be carried out under the aegis
of the Bangalore Arbitration Centre.
iii. The petitioner is directed to make payment of cost
of the arbitration cost on behalf of the petitioner
and respondent to the arbitration centre.
iv. In the event of any counter claim being raised by
the respondent, then the respondent would be
liable to make payment not only as regards the
counter claim but also as regards his share which
has been waived earlier.
- 7 -
CMP No. 461 of 2022
v. The cost which are paid by the petitioner shall
form cost of the proceedings which is to be taken
into consideration while orders under Section 31A
of the A&C Act are being passed.
vi. Registry is directed to forward a copy of this order
to the Director, Bangalore Arbitration Centre.
vii. All contentions are left open.
viii. Registry is directed to return the original
documents to the petitioner.
Sd/-
JUDGE
LN
List No.: 2 Sl No.: 30