Full Judgment Text
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NC: 2026:KHC:7008
WP No. 37764/2025
HC-KAR
IN THE HIGH COURT OF KARNATAKA AT BENGALURU
TH
DATED THIS THE 6 DAY OF FEBRUARY, 2026
BEFORE
THE HON'BLE MR. JUSTICE B M SHYAM PRASAD
WRIT PETITION NO.37764/2025 (GM-RES)
BETWEEN:
M/S DAMDEN PROPERTIES
A PARTNERSHIP FIRM REGD. UNDER THE
INDIAN PARTNERSHIP ACT, 1932
HAVING ITS OFFICE AT:
ND
DAMDEN YERRA, 2 CROSS
VENKATESHWARA LAYOUT
THAVEREKERE MAIN ROAD
KORAMANGALA, BENGALURU - 560 029
REPRESENTED BY ONE OF ITS PARTNERS
MR. DAMLA T MATHEW
SON OF MR. THOMAS T M
AGED ABOUT 58 YEARS
R/AT. DAMDEN YERRA
ND
2 CROSS, VENKATESHWARA LAYOUT
THAVEREKERE MAIN ROAD
KORAMANGALA, BENGALURU - 560 029
…PETITIONER
Digitally signed
by RAKESH S
HARIHAR
Location: High
Court of
Karnataka,
Dharwad Bench
(BY SRI. BALA NIKIT., ADVOCATE)
AND:
1. MR. SRIRAMAIAH B
S/O. LATE BIDDAPPA
AGED ABOUT 71 YEARS
BIDDARAGUPPE VILLAGE
ATTIBELE HOBLI, ANEKAL TALUK
BENGALURU DISTRICT
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2. MR. S.D. PARMAJ
FORMER DISTRICT JUDGE (RETD.)
ARBITRATION AND CONCILIATION CENTRE
RD
KHANIJA BHAVAN, EAST WING 3 FLOOR
BENGALURU
…RESPONDENTS
(BY SRI. MITHUN G A., ADVOCATE R1)
THIS W.P. IS FILED UNDER ARTICLES 226 AND
227 OF THE CONSTITUTION OF INDIA PRAYING TO
QUASHING THE IMPUGNED ORDER DATED 26/11/2025
ON IA NO.4 ANNEXURE - A UNDER SECTION 23 (3) OF
THE ARBITRATION AND CONCILIATION ACT, 1996 IN AC
NO.397/2023 PASSED BY SOLE ARBITRATOR MR. S.D.
ND
PARMAJ, FORMER DISTRICT JUDGE (2
RESPONDENT HEREIN), CURRENTLY PENDING BEFORE
THE ARBITRATION AND CONCILIATION CENTRE
(DOMESTIC AND INTERNATIONAL), KHANIJA BHAVAN,
BENGALURU, TO THE EXTENT OF DIRECTING THE
PETITIONER HEREIN TO DEPOSIT THE ENTIRE FEES AS
REQUIRED UNDER LAW; B. DIRECT THE
SUBSTITUTION OF THE HON BLE ARBITRATOR IN AC
NO.397/2023, CURRENTLY PENDING BEFORE THE
ARBITRATION AND CONCILIATION CENTRE (DOMESTIC
AND INTERNATIONAL), KHANIJA BHAVAN, BENGALURU.
THIS PETITION, COMING ON FOR PRELIMINARY
HEARING, THIS DAY, ORDER WAS MADE THEREIN AS
UNDER:
CORAM: HON'BLE MR. JUSTICE B M SHYAM PRASAD
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HC-KAR
ORAL ORDER
The petitioner and the first respondent are
parties to the arbitral proceedings with this Court
appointing the learned Arbitrator under Section 11 of
the Arbitration and Conciliation Act in petition in
CMP No.75/2023. This petition is disposed of on
01.08.2023. The first respondent is the claimant in
the arbitral proceedings, and the petitioner is the
opponent. The petitioner is aggrieved by the
Tribunal's order dated 26.11.2025 and also seeks
substitution of the learned Arbitrator. The
controversy relates to the deposit of arbitration
fees/costs.
2. It is seen from the impugned order that
the petitioner's application to make a counterclaim is
allowed but on conditions such as that the petitioner
must deposit the entire arbitration fee on the
counterclaim within 15 days. The learned Arbitrator
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has observed that the application for leave to file the
counterclaim would stand automatically rejected if
there is a failure to deposit the fees/ costs.
Subsequently, on 10.12.2025, the learned Arbitrator
has recorded that the petitioner has not complied
with the impugned order dated 26.11.2025 and it is
constrained to list the dispute for the claimant's
evidence. In effect, the learned Arbitrator has
reiterated the rejection of the petitioner's application
allowing the counter claim.
3. Mr. Bala Nikit, the learned counsel for the
petitioner, and Mr. Mithun G.A., the learned counsel
who is permitted to enter appearance for the first
respondent, are heard. Mr. Bala Nikit is categorical,
when queried, that the learned Arbitrator’s order
dated 26.11.2025 is in the backdrop of the
respondents' specific case that the application [for
leave to file counterclaim] could be allowed if the
onus of paying the arbitration fee on such
counterclaim is on the petitioner.
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4. Mr. Mithun G.A. proposes to contest this
assertion, but when queried in the light of Rule 28 of
the Arbitration Centre - Karnataka (Domestic and
International) Rules, 2012 [for short, ' the Rules,
1
2012 ] , the learned counsel submits that this Court
could consider disposing of the petition observing
that the application for counterclaim, which is
allowed by the impugned order, would remain
notwithstanding the learned Arbitrator’s next order
dated 10.12.2025 giving some reasonable time to the
petitioner to deposit the arbitration fee and costs on
the counterclaim subject to the apportionment of the
costs as part of the final orders.
1
This Rule stipulates that if a party neglects or refuses to
make the deposit of the arbitration fee, the person who
raises a claim [even as a counterclaim] must deposit lest the
counterclaim be ignored. The Rule reads as under:
When one of the parties neglects or refuses to make
the deposit, the Director may require such deposit,
whether in relation to a Claim or a Counter-claim, to
be made by the other Party to the dispute (Claimant
or Respondent as the case may be) and costs so
deposited shall follow the cause.
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5. This Court is of the view that the
controversy as regards who should pay the
arbitration fee/costs on the counterclaim will not
survive in view of Rule 28(3) of the Rules, 2012 and
the petitioner's willingness to pay the entire fees/
costs subject to final orders. This Court cannot
entertain the request for substitution of the arbitrator
as a matter that should be considered in properly
instituted proceedings. The petitioner is reserved
liberty in this regard . Hence, the petition stands
disposed of holding that the counterclaim shall be
treated as part of the dispute for adjudication
permitting the petitioner to deposit the entire
arbitration fee/costs in terms of the Rules, 2012.
6. The Director of the Arbitration Center shall
inform the petitioner about the amount that has to be
deposited, and the petitioner shall deposit this
amount within two [2] weeks from the date of receipt
of a certified copy of this order. It is needless to
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observe that the first respondent will be at liberty to
file a rejoinder, and such rejoinder shall be filed
within two [2] months.
Sd/-
(B M SHYAM PRASAD)
JUDGE
SA
List No.: 2 Sl No.: 1
NC: 2026:KHC:7008
WP No. 37764/2025
HC-KAR
IN THE HIGH COURT OF KARNATAKA AT BENGALURU
TH
DATED THIS THE 6 DAY OF FEBRUARY, 2026
BEFORE
THE HON'BLE MR. JUSTICE B M SHYAM PRASAD
WRIT PETITION NO.37764/2025 (GM-RES)
BETWEEN:
M/S DAMDEN PROPERTIES
A PARTNERSHIP FIRM REGD. UNDER THE
INDIAN PARTNERSHIP ACT, 1932
HAVING ITS OFFICE AT:
ND
DAMDEN YERRA, 2 CROSS
VENKATESHWARA LAYOUT
THAVEREKERE MAIN ROAD
KORAMANGALA, BENGALURU - 560 029
REPRESENTED BY ONE OF ITS PARTNERS
MR. DAMLA T MATHEW
SON OF MR. THOMAS T M
AGED ABOUT 58 YEARS
R/AT. DAMDEN YERRA
ND
2 CROSS, VENKATESHWARA LAYOUT
THAVEREKERE MAIN ROAD
KORAMANGALA, BENGALURU - 560 029
…PETITIONER
Digitally signed
by RAKESH S
HARIHAR
Location: High
Court of
Karnataka,
Dharwad Bench
(BY SRI. BALA NIKIT., ADVOCATE)
AND:
1. MR. SRIRAMAIAH B
S/O. LATE BIDDAPPA
AGED ABOUT 71 YEARS
BIDDARAGUPPE VILLAGE
ATTIBELE HOBLI, ANEKAL TALUK
BENGALURU DISTRICT
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2. MR. S.D. PARMAJ
FORMER DISTRICT JUDGE (RETD.)
ARBITRATION AND CONCILIATION CENTRE
RD
KHANIJA BHAVAN, EAST WING 3 FLOOR
BENGALURU
…RESPONDENTS
(BY SRI. MITHUN G A., ADVOCATE R1)
THIS W.P. IS FILED UNDER ARTICLES 226 AND
227 OF THE CONSTITUTION OF INDIA PRAYING TO
QUASHING THE IMPUGNED ORDER DATED 26/11/2025
ON IA NO.4 ANNEXURE - A UNDER SECTION 23 (3) OF
THE ARBITRATION AND CONCILIATION ACT, 1996 IN AC
NO.397/2023 PASSED BY SOLE ARBITRATOR MR. S.D.
ND
PARMAJ, FORMER DISTRICT JUDGE (2
RESPONDENT HEREIN), CURRENTLY PENDING BEFORE
THE ARBITRATION AND CONCILIATION CENTRE
(DOMESTIC AND INTERNATIONAL), KHANIJA BHAVAN,
BENGALURU, TO THE EXTENT OF DIRECTING THE
PETITIONER HEREIN TO DEPOSIT THE ENTIRE FEES AS
REQUIRED UNDER LAW; B. DIRECT THE
SUBSTITUTION OF THE HON BLE ARBITRATOR IN AC
NO.397/2023, CURRENTLY PENDING BEFORE THE
ARBITRATION AND CONCILIATION CENTRE (DOMESTIC
AND INTERNATIONAL), KHANIJA BHAVAN, BENGALURU.
THIS PETITION, COMING ON FOR PRELIMINARY
HEARING, THIS DAY, ORDER WAS MADE THEREIN AS
UNDER:
CORAM: HON'BLE MR. JUSTICE B M SHYAM PRASAD
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WP No. 37764/2025
HC-KAR
ORAL ORDER
The petitioner and the first respondent are
parties to the arbitral proceedings with this Court
appointing the learned Arbitrator under Section 11 of
the Arbitration and Conciliation Act in petition in
CMP No.75/2023. This petition is disposed of on
01.08.2023. The first respondent is the claimant in
the arbitral proceedings, and the petitioner is the
opponent. The petitioner is aggrieved by the
Tribunal's order dated 26.11.2025 and also seeks
substitution of the learned Arbitrator. The
controversy relates to the deposit of arbitration
fees/costs.
2. It is seen from the impugned order that
the petitioner's application to make a counterclaim is
allowed but on conditions such as that the petitioner
must deposit the entire arbitration fee on the
counterclaim within 15 days. The learned Arbitrator
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has observed that the application for leave to file the
counterclaim would stand automatically rejected if
there is a failure to deposit the fees/ costs.
Subsequently, on 10.12.2025, the learned Arbitrator
has recorded that the petitioner has not complied
with the impugned order dated 26.11.2025 and it is
constrained to list the dispute for the claimant's
evidence. In effect, the learned Arbitrator has
reiterated the rejection of the petitioner's application
allowing the counter claim.
3. Mr. Bala Nikit, the learned counsel for the
petitioner, and Mr. Mithun G.A., the learned counsel
who is permitted to enter appearance for the first
respondent, are heard. Mr. Bala Nikit is categorical,
when queried, that the learned Arbitrator’s order
dated 26.11.2025 is in the backdrop of the
respondents' specific case that the application [for
leave to file counterclaim] could be allowed if the
onus of paying the arbitration fee on such
counterclaim is on the petitioner.
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WP No. 37764/2025
HC-KAR
4. Mr. Mithun G.A. proposes to contest this
assertion, but when queried in the light of Rule 28 of
the Arbitration Centre - Karnataka (Domestic and
International) Rules, 2012 [for short, ' the Rules,
1
2012 ] , the learned counsel submits that this Court
could consider disposing of the petition observing
that the application for counterclaim, which is
allowed by the impugned order, would remain
notwithstanding the learned Arbitrator’s next order
dated 10.12.2025 giving some reasonable time to the
petitioner to deposit the arbitration fee and costs on
the counterclaim subject to the apportionment of the
costs as part of the final orders.
1
This Rule stipulates that if a party neglects or refuses to
make the deposit of the arbitration fee, the person who
raises a claim [even as a counterclaim] must deposit lest the
counterclaim be ignored. The Rule reads as under:
When one of the parties neglects or refuses to make
the deposit, the Director may require such deposit,
whether in relation to a Claim or a Counter-claim, to
be made by the other Party to the dispute (Claimant
or Respondent as the case may be) and costs so
deposited shall follow the cause.
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5. This Court is of the view that the
controversy as regards who should pay the
arbitration fee/costs on the counterclaim will not
survive in view of Rule 28(3) of the Rules, 2012 and
the petitioner's willingness to pay the entire fees/
costs subject to final orders. This Court cannot
entertain the request for substitution of the arbitrator
as a matter that should be considered in properly
instituted proceedings. The petitioner is reserved
liberty in this regard . Hence, the petition stands
disposed of holding that the counterclaim shall be
treated as part of the dispute for adjudication
permitting the petitioner to deposit the entire
arbitration fee/costs in terms of the Rules, 2012.
6. The Director of the Arbitration Center shall
inform the petitioner about the amount that has to be
deposited, and the petitioner shall deposit this
amount within two [2] weeks from the date of receipt
of a certified copy of this order. It is needless to
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observe that the first respondent will be at liberty to
file a rejoinder, and such rejoinder shall be filed
within two [2] months.
Sd/-
(B M SHYAM PRASAD)
JUDGE
SA
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