SRI INDUDHAR A vs SMT T N RAKSHITHA
- Court
- Karnataka High Court
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HC-KAR
NC: 2026:KHC:58894
WP No. 27887 of 2026
CNR: KAHC010593842026
IN THE HIGH COURT OF KARNATAKA AT BENGALURU
TH
DATED THIS THE 16 DAY OF OCTOBER, 2026
BEFORE
THE HON'BLE SMT. JUSTICE LALITHA KANNEGANTI
WRIT PETITION NO. 27887 OF 2026 (GM-CPC)
BETWEEN:
SRI INDUDHAR A.,
S/O CHANDRAMOULI. A.
AGED ABOUT 40 YEARS,
R/AT 16/1, NO.B001,
VAJRA GOLBAL, 7TH STAGE,
BEML LAYOUT,
BENGALURU – 560 059.
…PETITIONER
(BY SRI. GOPALA B.V., ADVOCATE)
AND:
1. SMT T.N.RAKSHITHA
D/O, T.S. NAGARAJU,
AGED ABOUT 39 YEARS,
R/AT. 218, SIMMONS
DR. CEDAR PARK TEXAS,
UNITED STATES OF AMERICA.
(REP BY FATHER GPA HOLDER
RD
3 RESPONDENT)
Digitally
signed by
SUVARNA T
Location:
HIGH COURT
OF
KARNATAKA
2. SRI. T.N. PRAJWAL,
AGED ABOUT 35 YEARS,
S/O. T.S. NAGARAJU,
R/AT. NO.5259, PARAMPARE 2ND CROSS,
1ST BLOCK, NEAR DATTAGALLI
SHANIMAHATHMA TEMPLE,
KANAKADAS NAGAR,
MYSORE – 570 022
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3. SRI. T.S. NAGARAJU,
S/O LATE SIDDEGOWDASIDDAIAH
AGED ABOUT 70 YEARS
R/AT. NO.5259
NEAR D.S. TEMPLE
KANAKADAS NAGAR,
MYSORE-570 022
…RESPONDENTS
(BY SRI.Y.D.HARSHA, ADVOCATE)
THIS W.P. IS FILED UNDER ARTICLES 226 AND 227 OF
THE CONSTITUTION OF INDIA, PRAYING TO QUASHING THE
IMPUGNED ORDER DATED 01/08/2026 PASSED BY THE
LEARNED 1 ADDL. DISTRICT AND SESSIONS AND
COMMERCIAL JUDGE, KODAGU AT MADIKERI. ON APPLICATION
UNDER ORDER SECTION 8 OF ARBITRATION AND
CONCILIATION ACT, 1996, READ WITH ORDER VII RULE 11
R/W SECTION 151 OF CPC, IN COM O.S. NO.29/2025, AS PER
ANNEXURE - M, BY ALLOW THE SAID APPLICATION.
THIS WRIT PETITION HAVING BEEN HEARD AND
RESERVED ON 03.09.2026, COMING ON FOR
PRONOUNCEMENT OF ORDER THIS DAY, THE COURT
PRONOUNCED THE FOLLOWING:
CORAM: HON'BLE SMT. JUSTICE LALITHA KANNEGANTI
CAV ORDER
Aggrieved by the orders passed on I.A.No.V in
Com.O.S.No.29/2025 dated 01.08.2026 by the I Additional
District & Sessions and Commercial Judge, Kodagu at Madikeri,
the defendant is before this Court.
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2. The respondent Nos.1 to 3 herein has filed the
Commercial O.S.No.29/2025 seeking to direct the
defendant/appellant to quit, vacate and deliver possession of
the schedule property or alternative to pay damages for
executing cancellation of the rent agreement, arrears of rent
outstanding amount of Rs.4,31,584/- with 18% interest. In the
said suit, the defendant has filed an application under Section 8
of the Arbitration and Conciliation Act, 1996 read with Order VII
Rule 11 r/w Sec. 151 of CPC, praying to reject the plaint and
refer the parties to arbitration in terms of the arbitration clause
contained in the agreement.
3. According to the defendant, there is a clause of
arbitration and as such the present suit is not maintainable,
that came to be dismissed by the Court by order impugned.
While dismissing the application, the trial Court observed that a
plain reading of the dispute resolution clause reveals that the
parties created an optional mechanism, pertaining permitting
dispute resolution either through reference to a sole arbitrator
or by instituting a civil suit before a civil court at the option of
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the parties. It is pertinent to note that when the dispute initially
arose between the parties, the defendant himself invoked the
jurisdiction of the civil court by instituting O.S.No.131/2024.
The defendant consciously chose not to invoke arbitration prior
to filing of the said suit. Having exercised his option in favour of
judicial proceedings before the Civil Court, the defendant made
an irrevocable election of forum. Consequently, he is now
precluded by his own conduct from seeking a reference to
arbitration under Section 8 of the Arbitration and Conciliation
Act, 1996. The defendant voluntarily instituted a full-fledged
civil suit for injunction in OS.No.131/2024 against the plaintiff’s
in respect of the very same subject matter. The defendant
consciously exercised his option and elected the Civil Court as a
forum for dispute resolution. Hence, the trial Court had
dismissed the application. Aggrieved thereby, the defendants
are before this Court.
4. Learned counsel appearing for the defendant submits
that once an application is filed in due compliance with Section
8 of the Arbitration Act, the Civil Court's approach should not
be to determine whether it has jurisdiction. It should determine
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whether its jurisdiction has been ousted. There is a significant
difference between the two approaches. Once it is brought to
the court's attention that jurisdiction has been taken away
under the procedure prescribed by a specific statute, the Civil
Court should first determine whether jurisdiction has been
ousted by compliance with the procedure under the special
statute. The general law should yield to the special law. In such
a situation, the approach shall not be to determine whether the
Civil Court still has jurisdiction under the general law. Such an
approach would only delay the resolution of disputes,
complicate the redress of grievances, and unnecessarily
increase the pendency in the Court. The learned counsel
submits that the trial court misdirected itself and stated that
when the dispute initially arose between the parties, the
defendant himself invoked the jurisdiction of the Civil Court by
instituting O.S. No. 131/2024. The defendant consciously
chosen not to invoke arbitration before filing the suit. It is
submitted that mere inclusion of an arbitration clause in the
agreement does not bar or oust the jurisdiction of the Civil
Court provided under Section 9 of the CPC. This view is further
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supported by Section 5 of the Arbitration and Conciliation Act,
1996, which provides that no judicial authority shall intervene
except where so provided in the first part. This means that the
jurisdiction of the Civil Court is not completely ousted by
Section 8 of the Arbitration and Conciliation Act. Section 5 of
the Arbitration and Conciliation Act does not bar the exercise of
the general powers of the Civil Court to grant interim relief,
including specific injunctive relief under Order XXXIX of the CPC
and the Specific Relief Act. It is submitted that the order
passed by the Court is without any basis, contrary to settled
law, and the same is liable to be set aside. The
petitioner/defendant had relied on a judgment of the Apex
Court in the case of M/s. Sundaram Finance Limited and
1
Anr Vs. T. Thankam . She relied on paragraph No.16, which
read as follows:
“The order dated 21.06.2010 passed by the trial
court and order dated 17.03.2014 passed by the
High Court, are set aside. The trial court is directed
to pass fresh orders on the application filed by the
appellant- defendant under Section 8 of the
Arbitration Act. The needful shall be done within a
1
AIR 2015 SC 1303
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period of two months from the date of receipt of
this order.”
5. Learned counsel appearing for the respondent submits
that the trial court has rightly focused on the clause that gives
the parties liberty to avail themselves of both remedies. It is
submitted that the trial court had rightly considered the matter
and passed an order, and there are no reasons to interfere with
the well-considered order passed by the trial court.
6. Having heard the learned counsel on either side,
perused the material on record. The principal question is
whether the clause constitutes a binding agreement to submit
disputes to arbitration, thereby enabling the defendant to insist
on a reference under Section 8 of the Arbitration and
Conciliation Act, 1996. The mere presence of the word
arbitration or arbitrator in an agreement does not answer that
question. The provision must be read as a whole to determine
whether the parties have undertaken an obligation to arbitrate
or have merely contemplated arbitration as a possible means of
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resolving the dispute. At this juncture, it is relevant to extract
the arbitration clause, which reads as follows:
“DISPUTE RESOULTION:-
From this day onwards all or any of the
disputes that may arise in future from the in-the
said premises shall be solved by the First Party.
Whereas the operational issues Revenue
department may come across while running the
day-to-day Resort business of the day-to-day
business, including and not exclusive of Police
department. Excise Department are to be solved
by the Second party. The First Party as nothing to
do with day-to-day business of the Second party of
any kind.
All or any of the Excise and Police cases, dues and
fines if any, Bank loans, Private Finances pending
prior to this date shall be cleared by the First Party
only at its cost and risk and the Second Party is
nothing to do with the same.
The second party shall take care of the criminal
cases if accrued in the Resort while carrying on the
day-to-day Business of operational issues and
shall be responsible for all the costs, damages and
consequences arising there from.
In the event of any dispute or difference arising
between the parties in regard to this deed or any
matter connected therewith, the same shall be
referred to the sole Arbitrator appointed by the
consent of both the parties and settled under the
provisions of the. Arbitration and Conciliation Act,
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1996; for the dispute may be resolved through a
civil court at the option of the parties.”
Section 8 requires a reference where its statutory
conditions are satisfied. Unless the Court finds prima facie that
no valid arbitration agreement exists, the mandatory character
of the provision does operates upon the existence of a binding
arbitration agreement. It does not convert a permissive
contractual agreement into a compulsory reference, as per the
judgment of the Hon'ble Apex Court in the case of Wellington
2
Associates Ltd. Vs Mr. Kirit Mehta . The Supreme Court
construed an agreement which contemplated adjudication by
civil courts and also provided that disputes might be referred to
arbitration. Reading the provision together, the Court held that
the arbitration was an enabling alternative requiring consent.
The decision also distinguished the clause conferring upon one
party a unilateral option to invoke binding arbitration.
Therefore, the word 'may' is not decisive in isolation that a
contractual arrangement as a whole governs its meaning. The
Hon'ble Apex Court held in catena of case that the terms must
2
2000 (4) SCC 272
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disclose the present determination and the obligation to submit
the dispute to arbitration. A provision contemplating a further
agreement or consensus to arbitration does not, by itself,
constitute an arbitration agreement under the Act. The clause
relied upon by the defendant expressly preserves resolution of
the dispute before a Civil Court as an alternative to arbitration.
It does not stipulate that every dispute must be arbitrated.
Arbitration is an available course that the parties may adopt by
agreement. The defendant's application cannot supply the
mutual assent necessary to make that course binding upon the
plaintiff. The plaintiff's institution of the suit is consistent with
the alternative expressly preserved in the agreement, and the
clause does not warrant a compulsory reference to arbitratory.
However, the institution of an earlier suit cannot, without
examining the subject matter and the nature of the relief
sought, automatically be treated as a waiver of arbitration in
every subsequent dispute. It is unnecessary to decide the
question here, since the application falls on the terms of the
clause itself. The trial court rightly rejected the application filed
under Order VII Rule 11(d) and Section 8 of the Arbitration and
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Conciliation Act, 1996, and this Court finds no reason to
interfere.
7. In that view of the matter, this Court is passing the
following:
ORDER
i. The writ petition is dismissed.
ii. Pending I.As if any in the petition shall stand closed.
SD/-
(LALITHA KANNEGANTI)
JUDGE
TS
List No.: 1 Sl No.: 3
*AK