Karnataka HC Upholds Direction To Re-present Heirs’ Residential-Layout Award Challenge In Rural Commercial Court, Citing Territorial Jurisdiction

The appellants challenged under Section 34 of the Arbitration and Conciliation Act, 1996, an arbitral award arising from a 2016 MoU concerning the formation of a residential layout and sale of sites.

They filed the challenge before the Bengaluru Commercial Court on 19 August 2024.

In December 2025, they applied under Order VII Rule 10 read with Section 151 CPC for return of the petition, arguing both that the dispute was not a commercial dispute under Section 2(1)(c)(vii) of the Commercial Courts Act, 2015, and that the properties were outside the court’s territorial jurisdiction.

The Commercial Court allowed the application on territorial-jurisdiction grounds but directed presentation before the jurisdictional Commercial Court in Bengaluru Rural District, subject to costs.

The appellants appealed that direction, contending that the court had not decided whether the dispute was commercial and that the petition should instead be presented before a regular civil court.

Order VII Rule 10 CPC provides for return of a plaint for presentation to the court in which it should have been instituted; the Commercial Court applied that provision to the Section 34 petition and returned it for want of territorial jurisdiction.

The proceedings arose under Section 34 of the Arbitration and Conciliation Act, 1996, and the underlying dispute was considered in the context of Section 2(1)(c)(vii) of the Commercial Courts Act, 2015.

The Court’s decision turned on territorial jurisdiction, including the location of the schedule properties and the arbitration clause’s reference to Bengaluru without a specific identification of the seat.

The judgment did not determine whether the dispute independently qualified as a “commercial dispute” under the Commercial Courts Act.

The Court accepted the Commercial Court’s finding that the schedule properties were in Nelamangala Taluk, Bengaluru Rural District, outside its territorial jurisdiction; it also noted that the MoU referred to Bengaluru as the place of arbitration but did not specifically identify the seat.

It therefore upheld the return of the petition and the direction to present it before the competent Commercial Court in the rural district.

The Court considered the appellants’ delay in seeking return of the petition and the costs imposed, and found no basis to interfere with the direction merely because the appellants sought a different forum.

Although the appellants raised the separate question whether the dispute was commercial, the Court did not decide that question on its merits.

The pending interlocutory application was disposed of.