MOHAMMAD RAFEEQ KARNAI vs BASHIR AHMAD KARNAI AND ORS.
- Court
- Jammu and Kashmir High Court
IN THE HIGH COURT OF JAMMU & KASHMIR AND
LADAKH AT SRINAGAR
Reserved on: 27.08.2026
Pronounced on: 08.09.2026
Uploaded on: 08.09.2026
Whether the operative part or full
judgment is pronounced: Full
Arb P No.4/2025
c/w
CM(M) No.380/2025
CM(M) No.485/2025
Arb. P No.4/2025
MOHAMMAD RAFEEQ KARNAI
...PETITIONER(S)/APPELLANT(S)
Through: - Mr. Z. A. Shah, Sr. Advocate, with
Mr. A. Hanan & Mr. Saqib Shabir, Advocates.
Vs.
BASHIR AHMAD KARNAI & ORS.
…RESPONDENT(S)
Through: - Mr. Jahangir Iqbal Ganai, Sr. Advocate, with
Mr. Owais, Advocate-for R1.
Mr. Manzoor A. Dar, Advocate-for R2.
Mr. S. M. Ayoub, Advocate-for R3.
Mr. M. A. Rathore, Advocate-for R3 & R4.
CM(M) No.380/2025:
BASHIR AHMAD KARNAI
...PETITIONER(S)/APPELLANT(S)
Through: - Mr. Jahangir Iqbal Ganai, Sr. Advocate, with
Mr. Owais, Advocate.
Vs.
MOHAMMAD RAFEEQ KARNAI & ORS.
…RESPONDENT(S)
Through: - Mr. Z. A. Shah, Sr. Advocate, with
Mr. A. Hanan & Mr. Saqib Shabir, Advocate-for R1.
Mr. M. A. Rathore, Advocate-for R2.
Mr. Manzoor A. Dar, Advocate-for R3.
CM(M) No.485/2025:
Arb. P No.4/2025 c/w
CM(M) No.380/2025
CM(M) No.485/2025 Page 1 of 24
REGENTA HOTELS PRIVATE LIMITED
...PETITIONER(S)/APPELLANT(S)
Through: - Ms. Asifa Padroo, Advocate.
Vs.
MOHAMMAD RAFEEQ KARNAI & ORS.
…RESPONDENT(S)
Through: - Mr. Z. A. Shah, Sr. Advocate, with
Mr. A. Hanan & Mr. Saqib Shabir, Advocate-for R1.
Mr. S. M. Ayoub, Advocate-for R2
Mr. Jahangir Iqbal Ganai, Sr. Advocate, with
Mr. Owais, Advocate-for R3.
Mr. Manzoor A. Dar, Advocate-for R4.
Mr. M. A. Rathore, Advocate-for R5.
CORAM: HON’BLE MR. JUSTICE SANJAY DHAR, JUDGE
JUDGMENT
01. By this common order, afore-titled three petitions are
proposed to be disposed of. Arb. P No. 4/2025 has been filed
by the petitioner Mohammad Rafeeq Karnai under Section
11(6) of the Arbitration and Conciliation Act, seeking
reference of disputes arising between the parties to an
independent Arbitrator on the strength of arbitration clause
rd
contained in family settlement deed dated 23 December,
2021, which has matured into a consent decree dated
20.04.2022 passed by the learned Additional District
Judge, Srinagar. CM(M) No.80/2025 is a petition filed
under Article 227 of the Constitution of India by petitioner
th
Bashir Ahmad Karnai, challenging order dated 26 August,
2024, passed by the learned Additional District Judge,
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CM(M) No.380/2025
CM(M) No.485/2025 Page 2 of 24
Srinagar, in execution proceedings arising out of an
Execution Petition in respect of the consent judgment and
decree dated 20.04.2022, whereas vide CM(M)
No.485/2025, filed by M/S Regenta Hotels Private Limited
under Article 227 of the Constitution of India, the same
order i.e. order dated 26.08.2024 passed by the learned
Additional District Judge, Srinagar, has been put to
challenge.
02. The parties to the petitions, excepting M/S Regenta
Hotels Private Limited, belong to the same family.
Mohammad Rafeeq Karnai, Bashir Ahmad Karnai, Nazir
Ahmad Karnai, Manzoor Ahmad Karnai and Hilal Ahmad
Karnai are brothers whereas Mst. Mehra happens to be
their mother. M/S Regenta Hotels Private Limited is the
franchisor which has entered into a Hotel Operation
Agreement with the partnership firm, M/S Grand Center
Point Hotel located at Zero Bridge, Rajbagh, Srinagar,
which is one of the properties forming subject matter of
dispute.
03. It appears that one of the brothers, namely, Hilal
Ahmad Karnai, filed a suit for declaration, partition,
injunction and rendition of accounts before the Court of
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CM(M) No.485/2025 Page 3 of 24
learned Additional District Judge, Srinagar. In the said suit,
the other four brothers and the mother were impleaded as
defendants. The said suit came to be filed on 10.08.2021.
During pendency of the suit, a compromise was arrived at
between the parties, which was reduced into writing in the
rd
shape of Settlement Deed dated 23 December 2021. The
suit came to be disposed of in the light of the contents of
the aforesaid Compromise/Settlement Deed in terms of
judgment and decree 20.04.2022 passed by the learned
Additional District Judge, Srinagar. The compromise decree
pertained to all the properties owned and possessed by the
parties jointly. In the Settlement Deed, Mst Mehra, the
mother, has been shown as the first party, Bashir Ahmad
Karnai has been shown as the second party, Mohammad
Rafeeq Karnai has been shown as the third party, Nazir
Ahmad Karnai has been shown as fourth party, Manzoor
Ahmad Karnai has been shown as the fifth party whereas
Hilal Ahmad Karnai has been shown as the sixth party. The
Settlement Deed pertains to the following properties:
a. Four storeyed Hotel building captioned "Hotel
Grand Centre) Point" with Land underneath and
appurtenant thereto admeasuring 2 Kanal, 6
Marlas and 86 Sft comprising survey) Nos 1345
and 1346 situated at Rajbagh Srinagar Mouza
Nursing Garh Srinagar purchased vide Sale Deeds
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CM(M) No.380/2025
CM(M) No.485/2025 Page 4 of 24
nd rd
dated 2-6-2011 & 4-6-2011 in the name of 2 ,3 ,
th th th
4 , 5 and 6 parties.
b. Four storeyed Hotel building captioned "Hotel
Centre Point" with Land underneath and
appurtenant thereto admeasuring 1 Kanal, 4
Marlas and 84 Sft. comprising survey No.
1685/1344 situated at Mouza Brarinambal
Srinagar purchased vide Sale Deed executed on
4-11-2006 in the name of all the parties abovesaid.
c. Houseboat captioned 'Peace of Mind' (2
bedrooms) moored at Nigeen Lake near Nigeen
Club registered with J&K Tourism Department.
d. Houseboat captioned "New Dilshad" (2 bedrooms)
moored at Nigeen Lake near Nigeen Club
registered with J&K Tourism Department.
e. Donga boat "D" Class captioned "Young Dilshad"
moored at Nigeen Lake near Nigeen Club
registered with J&K Tourism Department.
f. Single Storied Office Situated at N-9/1 Connaught
Place Middle Circle New Delhi.
g. Three BHK Flat with lobby (200) yards situated at
nd
1-42 2 Floor Jangpora Extension New Delhi.
h. Shop NO. 07 located at First Floor Boulevard
Shopping Z Complex Boulevard Road Srinagar.
i. Office space located in the first floor of Competent
House Z block-F Connaught Place New Delhi.
The terms of settlement in respect of the aforesaid
properties are quoted below:
i. That the 1ª party (Mst. Mehra Karnai) shall have
life interest in all the abovesaid immoveable
properties which would mean that she shall have
right of use and enjoyment over the properties
specified above during her life time.
nd rd th th
ii. That the 2 , 3 , 4 , 5 parties (Bashir Ahmad
Karnai, Mohammad Rafiq Karnai, Nazir Ahmad
Karnai and Manzoor Ahmad Karnai) abovesaid
shall own and possess the Four storeyed Hotel
building captioned "Hotel Grand Centre Point" with
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CM(M) No.485/2025 Page 5 of 24
Land underneath and appurtenant thereto
admeasuring 2 Kanal, 6 Marlas and 86 Sft
comprising survey Nos. 1345 and 1346 situated at
Rajbagh Srinagar Mouza Nursing Garh Srinagar in
equal proportion (i.e. 1/4th share each), to all
intents and purposes as owners as well partners
thereof. All the claims, interest/s; present or future
in respect of the said Four storeyed Hotel
captioned "Hotel Grand Centre Point" have been
fully and finally settled and in consequence
thereof, 1" and 6th parties have relinquished and
surrendered all their rights, claims and interests
whether present or future including causes of
action, chooses in action etc. in respect of the said
Four storeyed Hotel captioned "Hotel Grand
nd rd, th
Centre Point" in favour of 2 , 3 4 and
th
5 parties.
rd th th th
iii. That the 3 , 4 , 5 and 6 parties (Mohammad
Rafiq Karnai, Nazir Ahmad Karnai Manzoor
Ahmad Karnai and Hilal Ahmad Karnai) above
said shall own and possess the Four storeyed
Hotel building captioned "Hotel Centre Point" with
Land underneath and appurtenant thereto and
measuring 1 Kanal, 4 Marlas and 84 Sft
comprising survey No.1685/1344 situated at
Mouza Brarinambal Srinagar in equal proportion
rd
i.e. 3 party (Mohammad Rafiq Karnai) =
th th
1/4 share, 4 party (Nazir Ahmad Karnai) --
th th
1/4 share, 5 parties (Manzoor Ahmad
th th
Karnai)=1/4 share and 6 party (Hilal Ahmad
th
Karnai) = 1/4 share to all intents and purposes as
st
owners as well partners to the exclusion of 1 and
nd
2 parties. All the claims, interest/s; present or
future in respect of the said Four storeyed Hotel
captioned "Hotel Centre Point" have been fully and
st
finally settled and in consequence thereof, 1 and
nd
2 parties have relinquished and surrendered all
their rights, claims and interests whether present
or future including causes of action, chooses in
action etc. in respect of Hotel Centre point
rd th th th
Bishember Nagar in favour of 3 , 4 , 5 and 6
parties.
nd
iv. That the 2 party namely Bashir Ahmad Karnai
shall continue to hold the immoveable property
comprising of Single Storied Office Situated at N-
9/1 Connaught Place Middle Circle New Delhi,
Three BHK Flat with lobby (200) yards situated at
nd
1-42, 2 Floor Jangpora Extension New Delhi and
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CM(M) No.485/2025 Page 6 of 24
Shop NO. 07 located in the First Floor of
Boulevard Shopping Complex Boulevard Road
Srinagar in his ownership and possession to all
intents and purposes and to the exclusion of all
other parties above said. All the claims, interest/s;
present or future in respect of said immoveable
properties situated in New Delhi and the shop
situated at Boulevard Road Srinagar mentioned in
this clause have been fully and finally settled and
in consequence thereof, all other parties have
relinquished and surrendered all their rights,
claims and interests whether present future
including causes of action, chooses in action etc.
in respect of the properties mentioned in this
nd
clause in favour of 2 party.
rd
v. That the 3 party shall continue to hold the
Houseboat captioned 'New Dilshad (2 Bedrooms)
moored at Nigeen Lake near Nigeen Club
registered with J&K Tourism Department in his
ownership and possession to all intents and
purposes and to the exclusion of all other parties
abovesaid. All the claims, interest/s; present or
future in respect of said house boat has been fully
st
and finally settled and in consequence thereof, 1 ,
nd th th th
2 , 4 , 5 and 6 parties have relinquished and
surrendered all their rights, claims and interests
whether present or future including causes of
action, chooses in action etc. in respect of said
rd
Houseboat in favour of 3 party. However, in
consideration of the relinquishment and surrender
rd
of share in the said houseboat, the 3 party was
liable to pay an amount of Rs. 3400000/- (Rupees
th
thirty four Lakhs only) unto 4 party. However, in
lieu of relinquishment of share in the Office space
located in the first floor of Competent House, the
amount of Rs. 34.00 Lakhs has been adjusted/set-
off as per the terms and conditions as specified in
clause-(xiv) of this settlement deed.
nd
vi. That the 2 Party shall continue to hold the
Houseboat captioned "Peace of Mind" (2
bedrooms) moored at Nigeen Lake near Nigeen
Club registered with J&K Tourism Department in
his ownership and possession to all intents and
purposes and to the exclusion of all other parties
abovesaid. All the claims, interest/s; present or
future in respect of said house boat has been fully
st
and finally settled and in consequence thereof, 1 ,
rd th th th
3 , 4 , 5 and 6 parties have relinquished and
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surrendered all their rights, claims and interests
whether present or future including causes of
action, chooses in action etc. in respect of said
nd
Houseboat in favour of 2 party.
nd rd
vii. That the 2 and 3 parties (Bashir Ahmad Karnai,
and Mohammad Rafiq Karnai) abovesaid shall
both own and possess Donga boat "D" Class
captioned "Young Dilshad" moored at Nigeen Lake
near Nigeen Club registered with J&K Tourism
nd
Department in equal proportion. The 2 party shall
use the portion of Donga Boat "Young Dilshad as
Kitchen. However, the License of the said Donga
boat "D" Class captioned "Young Dilshad" issued
by the J&K Tourism Department shall be
th
transferred in the name of 5 party by all other
parties. The Kitchen structure located near the
rd
houseboats shall exclusively belong to 3 party.
nd rd th th
viii. That the 2 , 3 , 4 and 5 party shall regularly pay
an amount of Rs. 50,000/- per month unto the
st
1 party as maintenance for meeting her day to
day expenses on medicine etc. The amount of Rs.
nd rd
50,000/- per month shall be paid by the 2 , 3 ,
th th st
4 , and 5 parties unto the 1 party till her lifetime
without any fail. The said amount shall be paid out
nd rd th th
of the profits earned by 2 , 3 , 4 and 5 party
from Hotel Grand Centre Point. Besides, Rs. 2.00
crore in cash have been allocated as share of
st
1 party in Hotel Grand Centre Point which shall be
paid to her on demand or shall be distributed/given
to any person/s as per her will and choice. This
amount of Rs. 2.00 Crores in cash in Hotel Grand
rd th th
Centre Point is due from 3 , 4 and 5 parties
only and shall be a charge on their share in Hotel
nd
Grand Centre Point as the 2 party has already
st
paid his due share unto the 1 party prior to the
execution of this settlement deed.
ix. That the Hotel operation of Hotel Grand Centre
Point Rajbagh, including finalization of rates,
appointment of staff, fixation and revision of Room
tariff, control on Hotel Staff, maintenance of proper
bank accounts, maintenance of Hotel etc. shall be
nd
sole responsibility of 2 party. Whileas day book
and daily cash transactions of the Hotel Grand
Centre Point shall be the sole responsibility of
rd
3 party. However, the marketing, promotion of
Hotel etc. shall be the sole responsibility of
th
5 party. The profits of Hotel Grand Centre Point
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nd rd th th
shall be shared by 2 , 3 , 4 and 5 party in the
nd rd th
ratio as 2 party =33. 50%, 3 party =25%, 4
th nd
party=20% and 5 party=21.50%. The 2 party
has been allocated additional 8.50% from the
profits every month in consideration of conducting
Hotel Operation of Hotel Grand Centre Point. The
nd
2 party shall wholly and solely operate Hotel
Grand Centre Point on the terms and conditions
initially for a period of two years from the date of
execution of this settlement deed and on expiry of
the period of two years, the Hotel operation shall
be conducted by such party who shall be
nd
nominated by the parties by voting. The 2 party
shall be bound under all circumstances to
distribute the profits of the Hotel Grand Centre
rd th th
Point amongst the partners (3 , 4 and 5 parties)
th
on monthly basis, latest by 10 of every month. It is
made clear that no payment shall be made to any
of the vendor/s other than partners, out of the
profits of Hotel Grand Centre Point without the
nd
consent of 2 party till such time he would be
conducting the Hotel operation of the Hotel and
thereafter the same condition would apply to other
party who would conduct the Hotel Operation. The
nd
2 party shall share the daily occupancy details
and rates thereof in respect of the Hotel Grand
rd th th
Centre Point with 3 , 4 and 5 parties either
through WhatsApp or through any other viable
th
mode. The 5 party shall be included/inducted as
signatory in all the bank account/s of Hotel Grand
Centre Point as a joint signatory. The parties shall
be bound to execute a fresh partnership deed in
respect of Hotel Grand Centre Point and shall be
bound to reflect all these conditions in the said
partnership deed.
nd rd th
x. That the 2 , 3 , 4 and 5ht parties shall be at
liberty either individually or collectively to look for a
potential buyer for Hotel Grand Centre Point
Rajbagh Srinagar, but none amongst the parties
shall offer to sell Hotel Grand Centre Point
Rajbagh Srinagar for an amount lesser than Rs.
55.00 crores and any amount over and above
55.00 crores shall be acceptable to all other
parties. The sale proceeds of the Hotel Grand
Centre Point Rajbagh shall be shared equally by
nd rd th th
2 , 3 , 4 and 5 parties above. However, in
case the parties fail to sell the Hotel within two
years period, then in that eventuality the minimum
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CM(M) No.485/2025 Page 9 of 24
cap of Rs. 55.00 corers shall be revised after the
period of two years subject to the consent of all
other parties. It is made clear that no party shall
cause any obstacle hindrance in the
selling/alienation of the Hotel as per the conditions
stipulated in this settlement deed.
xi. That the Hotel operation of Hotel Centre Point
Bishember Nagar including appointment of staff,
fixation and revision of Room tariff, control on
Hotel Staff, maintenance of proper bank accounts
th
shall be sole responsibility of 5 party. While as
maintenance of Hotel building, including necessary
repairs of the building etc. maintenance of day
book and handling of daily cash/cash counterof
the Hotel shall be the sole responsibility of Mr.
rd
Riyaz Ahmad Karnai (son of 3 party). However,
marketing, promotion of Hotel etc. shall be the sole
responsibility of 6 party. However, the profits of
Hotel Centre Point Bishember Nagar shall be
rd th th th
shared by 3 , 4 , 5 and 6 parties in the ratio as
rd th th
3 party=25%, 5 party=25%, and 6 party=50%.
th
The 4 party has surrendered his share of profit in
th
favour of 6 party. The profits shall be calculated
at the end of each month and the net profits
earned out of the hotel business shall be credited
rd th
in the banking account of 3 and 6 party and it
th
shall be the sole responsibility of the 5 party and
Mr. Riyaz Ahmad Karnia to render proper
th
accounts of the Hotel business to 6 party details
rd
and rates thereof in respect of the Hotel with 3
th
and 6 party either through WhatsApp or through
th
any other viable mode. The 6 party shall be
included/inducted as signatory in all the bank
account/s of Hotel Centre Point Bishember Nagar
as a joint signatory. The parties shall be bound to
execute a fresh partnership deed in respect of
Hotel Centre Point and shall be bound to reflect all
these conditions in the said partnership deed.
th
xii. That 5 party shall be bound to change the name
of his "Tour and Travel business license" from
"Explore India Journeys" to any other name/s like
th
"Explore India Holidays etc, and the 4 party shall
register his Tour and Travel business under the
name and style "Explore India Journeys" with the
th
competent authority/s and the 5 party shall
th
cooperate with the 4 party in this regard and shall
th
not create any hindrance/obstacle thereof. The 5
party shall be bound to surrender the domain
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name www.exploreindiajourneys.com including the
user name and password of GoDaddy.com within
a period of three months from the date of
execution of this settlement Deed and in case the
th
5 party fails to change the name of his Tour and
Travel business license within a period of three
th
months, then in that eventuality, the 5 party shall
surrender the domain name
www.exploreindiajourneys.com including the user
name and password of GoDaddy.com in favour of
th th
4 party and 5 party shall not be entitled to carry
on any business in the name of "Explore India
th
Journeys". The 5 party shall use the Office Cabin
at Delhi temporary basis for a period of one year
or till the final payment as mentioned in clause xiv
th
is received by the 5ht party from 4 party in full
th
and final. The 5 party shall not cause any
interference either directly or indirectly with the
th
office staff and the functioning by 4 party at Delhi.
xiii. That the Tour and travel license captioned "Centre
nd
Tour and Travels: shall belong to 2 party whiles
the tour and travel licences captioned Discover
Journey and Amarnath Tour and Travels shall
rd
belong to 3 party. Besides the Guest house
license captioned Dilshad Guest House shall also
rd
belong to 3 party. It is made clear that all the
parties shall execute necessary document/s,
affidavit/s agreement/s etc. as may be required in
regard to charge of name/s in the respective
licence/s in their exclusive name.
th
xiv. That the 4 party namely Nazir Ahmad Karnai shall
own and possess the Office space located in the
first floor of Competent House block -F Connaught
Place New Delhi in his ownership and possession
to all intents and purposes and to the exclusion of
all other parties abovesaid. All the claims,
interest/s; present or future in respect of said
Office space located in the first floor of Competent
House Block-F Connaught Place New Delhi
mentioned in this clause have been fully and finally
settled and in consequence of relinquishment and
surrender of rights, claims and interests whether
present or future including causes of action,
chooses in action etc. in respect of Office space
located in the first floor of Competent House, the
th
4 party shall pay an amount of Rs. 31.00 Lakhs
rd
(Thirty One Lakhs) unto the 3 party and Rs.
th
65.00 Lakhs (sixty five Lakhs) unto 5 party within
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st
a period of One year by or before 31 of December
2021. However, this amount shall be paid by
th rd th
4 party unto the 3 and 5 parties after
reconciling outstanding dues of the vendors etc.
For removing ambiguity it is made clear that the
amount of Rs. 34.00 Lakhs due to be paid by
rd th
3 party unto the 4 party has been set-off as such
th
the 4 party shall pay only Rs. 31.00 Lakhs unto
rd
the 3 party in lieu of relinquishment of his share
in the Office space located in the first floor of
Competent House.
xv. That in respect of Hotel Centre Point Bishember
Nagar, this settlement shall be deemed to have
come into force w.e.f 10-12-2021and till 10-12-
rd th th
2021, the 3 , 4 and 5 parties shall be bound to
and reconcile accounts of Hotel Centre Point"
w.e.f 1-1-2019 till 10-12-2021 and the profit of
rd th
"Hotel Centre Point" shall be shared by the 3 , 4
th th
and 5 parties and credited into the account of 4
rd th
party. The 3 and 5 parties shall be bound to
give all the accounts of "Hotel Centre Point" till 10-
th th
12-2021 and share the same with 4 party. The 6
party shall not be responsible for liquidation of any
unpaid till 10-12-2021.
xvi. That in case of death of any of the parties above
said, the legal heirs of the deceased party shall
step into the shoes of the deceased party/s and all
the terms and conditions contained herein this
settlement, deed shall ipso facto apply to the legal
heirs of the deceased party.
xvii. That this settlement deed or a concise form of this
settlement deed shall be presented before the
court of Addl. District and Sessions Judge
Srinagar in the civil suit and the said civil suit shall
be deemed to have been settled as per the terms
and conditions of this settlement deed.
xviii. That all the documents/deeds which were
executed by the parties with regard to the
properties mentioned in this settlement deed, prior
to the execution of this settlement deed shall be
annulled and it shall be presumed that all those
documents have been superseded by this
settlement deed.
xix. That if any dispute arises out of this settlement
deed or as to interpretation, operation or
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enforcement of terms of this settlement deed
amongst the parties or their legal representatives,
the same shall be referred for adjudication to the
arbitrator to be appointed mutually by the parties.
The decision of the arbitrator shall be final and
binding on all parties and their legal
representatives. The seat of the Arbitration shall
be at Srinagar and the courts at Srinagar only shall
have jurisdiction to decide any issue between the
parties.
04. Two brothers, namely, Mohammad Rafiq Karnai and
Manzoor Ahmad Karnai, filed an application before the
Court of learned Additional District Judge, Srinagar, on
28.03.2024, seeking execution of the decree and order
dated 20.04.2022 passed on the basis of the
rd
Compromise/Settlement Deed dated 23 December 2021.In
the execution petition, a direction was sought that the
judgment debtors be asked to comply with the terms of the
rd
Settlement Deed dated 23 December 2021 and they be
directed to submit details of accounts pertaining to Hotel
Grand Centre Point from January 2022 onwards.
05. During pendency of the execution petition, an
application came to be filed by Nazir Ahmad Karnai seeking
appointment of Receiver for enforcement and
rd
implementation of the Settlement Deed dated 23
December 2021. The learned Executing Court, vide
impugned order dated 26.08.2024, proceeded to decide the
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said application and appointed Mr. Ajaz Ahmad Hakak,
Advocate, as a Receiver in respect of Hotel Grand Centre
Point. It was also provided that the Receiver shall take
assistance of Shri Shafat Ahmad, Chartered Accountant.
The Court further directed that the Receiver shall perform
the following functions:
i. The Receiver shall review and examine all
financial transactions of Hotel Grand from
25-04-2022 (the day following the order
dated 24-04-2022) until the present date,
and prepare a detailed statement showing
the profits earned and distributed among
the partners of M/s Hotel Grand Centre
Point situated at Rajbagh and shall take
every measure to preserve, monitor and
manage all the affairs of M/s Hotel Grand
Centre Point.
ii. The Receiver shall consolidate the
amounts received by each partner strictly
in accordance with the Consent Decree,
ensuring payment toeach partner as per
the terms of the Settlement Deed. If any
partner has already received payments
under the Settlement Deed, such amounts
shall be duly deducted or set off against
any fresh claims and in case any partner
has remained unpaid qua any amount/
profit, same shall be paid to him as per the
terms of the Settlement Deed.
iii. The Receiver shall ensure that
Mohammad Rafeeq Karnai is not
permitted to enter the premises of the
hotel, nor shall create any hindrance in its
operation or management of the hotel,
until the decision of the Hon'ble Supreme
Court and the business ties between Royal
Orchid Associated Hotels Pvt Ltd and M/s
Hotel Grand Centre Point shall continue to
operate till the decision of the Hon'ble
Supreme Court.
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iv. The Receiver shall investigate any
diversion of funds, if any, from the profits
of the hotel business and furthermore the
receiver shall also ensure distribution of
other assets and properties reflected in the
consent decree among the parties/
signatories to Settlement Deed.
v. The Receiver shall verify the bank
accounts of all hotel employees to
ascertain whether hotel profits have been
diverted into their accounts. Further, it
shall also be examined whether Judgment
Debtor No. 1 Bashir Ahmad Karnai has
routed a substantial number of hotel
bookings through his personal travel
agency, "CentreTours& Travels", thereby
diverting hotel income for his personal
benefit.
vi. The Receiver shall monitor all business
transactions of the hotel and ensure that
all amounts, bookings, and claims are
deposited exclusively into the bank
accounts operated in the name of M/s
Hotel Grand Centre Point. No withdrawals
from such accounts shall be made without
prior permission of this Court, and any
withdrawal shall require a joint motion by
all the partners.
06. While the aforesaid proceedings were going on,
Mohammad Rafiq Karnai and Manzoor Ahmad Karnai filed
another petition under Section 9 of the Arbitration and
Conciliation Act before the learned Principal District Judge,
Srinagar on 01.04.2024. In the said petition, Bashir Ahmad
Karnai, Nazir Ahmad Karnai and Hilal Ahmad Karnai, as
also M/S Royal Orchid Associated Hotels Private Limited,
were impleaded as respondents. An order to restrain the
respondents therein from interfering into the participation
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CM(M) No.485/2025 Page 15 of 24
of the petitioners in the business of the hotel with a further
direction that the respondents therein be asked to render
accounts from January 2022 onwards, was sought in the
said petition. An ex-parte interim order came to be passed
by the learned Principal District Judge, Srinagar, in the
said petition on 01.04.2024, whereby status quo with
regard to operation of the hotel was directed to be
maintained. It was also directed that in the light of Clause
(ix) of the Settlement Deed, the respondents to the said
petition be temporarily restrained from causing any
interference to Shri Mohammad Rafiq Karnai in
maintaining the daybook and daily cash transactions of the
hotel. The said petition is still pending before the Court of
learned Principal District Judge, Srinagar.
07. It further appears that Manzoor Ahmad Karnai and
Mohammad Rafiq Karnai have filed another suit against
Bashir Ahmad Karnai, Branch Manager, J&K Bank, Branch
Rawalpora, Srinagar, and Firdos Ahmad, account holder of
S.B. Account No.26346, J&K Bank, Air Cargo, Rajbagh,
Srinagar, and Nazir Ahmad Karnai, seeking rendition of
accounts with regard to Hotel Grand Central Point situated
at Rajbagh.
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08. It also appears that an application under Order XXIII
Rule 3 CPC has been filed by Hilal Ahmad Karnai seeking
an order for setting aside/recall of the compromise decree
dated 20.04.2022, which is pending before the Court of
learned Additional District Judge, Srinagar.
09. The matter does not end here. Another set of litigation
has been initiated by M/S Regenta Hotels Private Limited.
The said company filed a petition under Section 9 of the
Arbitration and Conciliation Act before the Court of learned
th
9 Additional City Civil and Sessions Judge, Bengaluru,
against M/S Hotel Grand Centre Point, Rajbagh, and
others, including Bashir Ahmad Karnai. Initially, in the said
petition, an ex parte interim order came to be passed by the
Civil Court at Bengaluru on 17.02.2024, thereby
restraining Bashir Ahmad Karnai from interfering with the
operations/ management of the hotel. However, the
application under Section 9 came to be dismissed by the
City Civil Court at Bengaluru, which order was upheld by
th
the High Court of Karnataka vide its judgment dated 14
November, 2024. The said judgment was challenged by M/S
Regenta Hotels Private Limited by way of a Special Leave
Petition before the Supreme Court and, vide judgment
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th
dated 7 January 2026, the judgment of the High Court of
Karnataka was set aside and the ex-parte interim order
dated 17.02.2024 passed by the City Civil Court at
Bengaluru has been restored.
10. M/S Regenta Hotels Private Limited also filed a
petition under Section 11(6) of the Arbitration and
Conciliation Act before the High Court of Karnataka at
Bengaluru seeking appointment of Sole Arbitrator, as the
Franchise Agreement executed between the franchisor, M/S
Regenta Hotels Private Limited, and the franchisee M/S
Grand Centre Hotel contains an arbitration clause.
11. It appears that the High Court of Karnataka, vide its
th
order dated 12 March 2026, has referred the disputes
arising between the franchisor M/S Regental Hotels Pvt.
Ltd. and the partnership firm, which includes Bashir
Ahmad Karnai, Mohammed Rafiq Karnai, Manzoor Ahmad
Karnai and Nazir Ahmad Karnai, to the sole arbitration of
Shri S. Siddhalingesh, former District Judge. A copy of the
claim petition filed by the franchisor before the learned Sole
Arbitrator has been placed on record before this Court.
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12. The claims which are the subject matter of arbitration
before the learned Arbitrator appointed by the High Court of
Karnataka, are relating to the validity of notice dated
17.02.2024 issued by Mohammed Rafiq Karnai threatening
the termination of the Franchise Agreement and the issue
relating to interference in the operations of the hotel by the
franchisor.
13. I have heard learned Senior Counsels/counsels
appearing for the parties and I have also gone through the
entire record of the case.
14. The bone of contention between the parties seems to
be the operation and management of Hotel M/S Grand
Centre Point, Rajbagh, Srinagar. As per Clause (ix) of the
Settlement Deed, which has matured into a consent decree,
Bashir Ahmad Karnai was authorized solely to operate
Hotel Grand Centre Point on the terms and conditions
mentioned in the said clause for a period of two years from
the date of execution of the Settlement Deed.It is further
provided in the said clause that on expiry of the period of
two years, the operation of the hotel shall be conducted by
such party who shall be nominated by the parties by voting.
The grievance of the other brothers of Bashir Ahmad Karnai
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is that after the expiry of the period of two years from the
date of execution of the Settlement Deed, Bashir Ahmad
Karnai is not vacating his position as sole operator of the
hotel so as to pave way for operation of the said hotel by a
party to be nominated by the other parties to the
Settlement Deed.It is also the contention of brothers of
Bashir Ahmad Karnai that he has not rendered accounts
after the expiry of two years from the date of execution of
rd
the Settlement Deed dated 23 December 2021 and that
Bashir Ahmad Karnai has misappropriated and diverted the
funds, which fact is being denied by Shri Bashir Ahmad
Karnai.
15. The Settlement Deed contains an arbitration
agreement in the shape of Clause (xix). This arbitration
agreement is comprehensive enough to deal with disputes
as to the interpretation, operation and enforcement of the
terms of the said Deed amongst the parties or their legal
representatives.
16. During the course of hearing, learned counsels
appearing for the parties have reached a consensus that if
all the disputes arising between the parties, not only in
respect of the terms of the Settlement Deed but also in
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respect of the other pending litigations between the
brothers including the application of Hilal Ahmad Karnai
seeking recall of the compromise decree, are referred to an
Arbitral Tribunal, they would have no objection to the
same. It has also been agreed by learned counsels for the
parties that if there is any need to pass an interim order or
to make an interim arrangement during the pendency of the
arbitration proceedings, the parties should be left free to
approach the learned Arbitrator for that purpose and that
the order passed by the learned Additional District Judge,
Srinagar, for appointment of Receiver may be set aside so
as to pave the way for the learned Arbitrator to pass a fresh
order, if need arises, without getting influenced by the order
passed by the learned Additional District Judge, Srinagar.
17. As already stated, arbitration proceedings are going on
between the franchisor and the partners of the firm which
is running the hotel Grand Centre Point, Rajbagh, Srinagar.
So, care has to be taken to ensure that there is no
overlapping of the areas of conflict which would be the
subject matter of the proposed arbitration and the subject
matter of dispute which is already under determination
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before the Arbitral Tribunal constituted pursuant to the
orders of the High Court of Karnataka.
18. In view of the consensus arrived at between the
parties, the following directions are issued:
(i) All the disputes arising between the parties, namely,
the brothers and their mother, relating to joint
properties owned and possessed by them, including
the dispute relating to interpretation, operation and
enforcement of the terms of the Settlement Deed
dated 23.12.2021, as also the claim of Hilal Ahmad
Karnai with regard to recall of the said Deed of
Settlement, are referred to arbitration.
(I) Hon’ble Sh. Justice Rashid Ali Dar (former Judge of
this Court), is appointed as the Sole Arbitrator to
adjudicate upon the disputes and differences
between the parties arising out of and in connection
with the agreement referred to above.
(II) A copy of this order be communicated to the
learned Sole Arbitrator by the Registry of this Court
within a period of ten days from today.
(III) The learned Sole Arbitrator is requested to forward
the statutory statement of disclosure under Section
11(8) read with Section 12(1) of the Act of 1996 to
the parties within a period of two weeks from the
date of receipt of this order.
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(IV) The parties shall appear before the learned Sole
Arbitrator on a date and place to be fixed by the
learned Sole Arbitrator.
(V) All the arbitral costs and fee of the Arbitral Tribunal
shall be borne by the parties equally and shall be
subject to final award that may be passed by the
learned Arbitrator in relation to the costs.
(VI) The learned Arbitrator shall be at liberty to pass
directions with regard to interim measures in terms
of Section 17 of the Arbitration and Conciliation Act
at the instance of any of the parties to the arbitration
and, as and when any such application is made, the
same shall be dealt with by the learned Arbitrator
with due dispatch.
(VII) Before making any orders with regard to any interim
measure, the learned Arbitrator shall issue notice to
the franchisor M/S Regenta Hotels Private Limited
so as to safeguard its rights under the franchise
agreement.
(VIII) The learned Arbitrator shall not deal with any aspect
or claim which is the subject matter of determination
before the Arbitral Tribunal constituted pursuant to
the orders of the High Court of Karnataka.
(IX) Order dated 26.08.2024passed by the learned
Additional District Judge, Srinagar, for appointment
of Receiver shall stand set aside.
(X) Since the matter regarding passing of orders
relating to interim measures is left to the jurisdiction
of the learned Arbitrator, the petition under Section
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9 of the Arbitration and Conciliation Act filed by
Mohammad Rafeeq Karnai and others before the
Court of learned Principal District Judge, Srinagar,
shall stand dismissed.
(XI) The proceedings in the execution petition as also
the proceedings in the application under Order XXIII
Rule 3 CPC filed by Hilal Ahmad Karnai and in the
suit titled “Manzoor Ahmad Karnai and another v.
Bashir Ahmad Karnai and others”, seeking rendition
of accounts, shall remain stayed till conclusion of
the arbitration proceedings or until further orders,
whichever is earlier.
19. The petitions along with connected applications shall,
stand disposed of in the above terms.
(Sanjay Dhar)
Judge
Srinagar,
08.09.2026
“Bhat Altaf-Secretary”
Whether the judgment is reportable: YES/NO
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KARAM CHAND
2026.09.08 00:07
I attest to the accuracy and
integrity of this document