[Cites 4, Cited by 0]
Karnataka High Court
Ssv Developers vs Sunder S/O Premraj Jotwani on 25 February, 2026
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CMP No. 100026 of 2025
HC-KAR
IN THE HIGH COURT OF KARNATAKA, AT DHARWAD
DATED THIS THE 25TH DAY OF FEBRUARY, 2026
BEFORE
THE HON'BLE SMT. JUSTICE LALITHA KANNEGANTI
CIVIL MISC PETITION NO.100026 OF 2025
BETWEEN:
1. SSV DEVELOPERS,
A PARTNERSHIP FIRM, HAVING ITS REGISTERED
OFFICE AT SHOP NO.16-17, HUBBALLI
CENTRAL MALL UGF, ABOVE VISHAL
MEGA MART, VIDYANAGAR, HUBBALLI-580021.
REPRESENTED BY ITS MANAGING PARTNER,
VIJAYKUMAR KRISHNASA KABADI.
2. VIJAYKUMAR KRISHNASA KABADI,
AGE. 52 YEARS, OCC. BUSINESS,
R/O. H.NO.105, OLD BADAMI NAGAR,
KESHWAPUR, HUBBALLI, TQ. HUBBALLI,
DIST. DHARWAD-580023.
Digitally signed by ...PETITIONERS
YASHAVANT
NARAYANKAR
Location: HIGH COURT (BY SRI. MAHANTESH R.PATIL, ADVOCATE)
OF KARNATAKA
AND:
1. SUNDER S/O. PREMRAJ JOTWANI,
AGE. 49 YEARS, OCC. BUSINESS,
R/O. KALYANI CLASSIC APARTMENTS,
T1, III FLOOR, OPP. SBI ZONAL OFFICE,
KUSUGAL ROAD, KESHWAPUR, HUBBALLI,
TQ. HUBBALLI, DIST. DHARWAD-580023.
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CMP No. 100026 of 2025
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2. A. P. MURARI,
ARBITRATOR / ARBITRAL TRIBUNAL,
NO.15A, MICHIGAN COMPOUND,
SAPTAPUR, DHARWAD,
TQ. AND DIST. DHARWAD-580001.
3. SHIVAPRAKASH SHANKARAPPA ROTTI,
AGE. 52 YEARS, OCC. BUSINESS,
R/O. R.K. BUILDERS, II FLOOR,
EUREKA JUNCTION, TB ROAD,
DESHPANDE NAGAR, HUBBALLI,
TQ. HUBBALLI, DIST. DHARWAD-580029.
4. SMITA RAMESH CHAVAN,
AGE. 54 YEARS, OCC. BUSINESS,
R/O. H.NO.7, EUREKA COLONY,
KESHWAPUR, HUBBALLI, TQ. HUBBALLI,
DIST. DHARWAD-580023.
...RESPONDENTS
(BY SRI. V.G. BHAT, ADVOCATE AND
SRI. SURAJ M.KATAGI, ADVOCATE)
THIS CIVIL MISCELLANEOUS PETITION IS FILED UNDER
SECTION 11 (6) OF ARBITRATION AND CONCILIATION ACT
1996, PRAYING TO I) TO EXERCISE ITS JURISDICTION AND
POWER UNDER SECTION 11 (6) OF THE ARBITRATION AND
CONCILIATION ACT, 1996 AND APPOINT NEW ARBITRATOR AND
CONSTITUTE ARBITRAL TRIBUNAL, IN ACCORDANCE WITH LAW,
TO ADJUDICATE AND RESOLVE THE DISPUTES BETWEEN THE
PETITIONERS AND THE RESPONDENT NO.1, 3 TO 4. II) GRANT
SUCH OTHER RELIEF AS THIS HON'BLE COURT MAY CONSIDER
DEEM FIT AND PROPER IN THE FACTS AND CIRCUMSTANCES OF
THIS CASE.
THIS CIVIL MISCELLANEOUS PETITION HAVING BEEN
HEARD AND RESERVED ON 19.01.2026, COMING ON FOR
PRONOUNCEMENT OF ORDER THIS DAY, THE COURT
PRONOUNCED THE FOLLOWING:
CORAM: THE HON'BLE SMT. JUSTICE LALITHA KANNEGANTI
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CMP No. 100026 of 2025
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CAV ORDER
The present Civil Miscellaneous Petition is filed to exercise
jurisdiction and power under Section 11(6) of the Arbitration and
Conciliation Act, 1996, (hereinafter referred to as 'Act') and to
appoint new Arbitrator and constitute Arbitral Tribunal in
accordance with law, to adjudicate and resolve the disputes
between the petitioners and respondent Nos.1, 3 to 4.
2. The facts of the case are that the petitioner No.1 is a
registered partnership firm. It is into the business of developing
land, the formation of layouts and construction of apartments
and complexes. The petitioner No.2 is the authorized
representative of petitioner No.1. The respondent Nos.3 & 4
herein were also the partners of petitioner No.1 at the time of
transaction as on the date of the alleged Agreement of Sale
between petitioner No.1 and respondent No.1. Though the
respondent No.4 herein was arrayed as an opponent before
respondent No.2, she has since retired from the partnership firm
and hence has been arrayed as respondent No.4 in the present
petition as her presence is necessary for effective adjudication of
the matter.
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3. It is stated that the dispute arose between the petitioner
and respondent No.1 herein and the respondent No.1 filed
CMP.No.100028/2015 before the High Court seeking
appointment of Arbitrator. On 06.07.2018, the Court appointed
respondent No.2 as the Arbitrator. The disposal of the civil
miscellaneous petition has come to the knowledge of the
petitioner on 28.07.2018 and as per the Act, within 15 days the
petitioners ought to have moved an application for recusal of the
sole Arbitrator from adjudicating the dispute as the petitioners
believed that there is every chance that respondent No.2 would
move with the same rapport and with the same state of mind
tilting towards respondent No.1 who happens to be the claimant
in Arbitration Case No.1/2016 and Arbitration case No.2/2016
which were also adjudicated by the same Arbitrator.
4. The petitioners have filed an application seeking recusal
of respondent No.2 from Arbitration Case No.3/2018. The said
application came to be rejected by respondent No.2 on
22.09.2018. The petitioner being aggrieved by the said order
have approached this Court by filing WP.No.107273/2018 and
after contest, the High Court was pleased to set aside the order
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and asked respondent No.2 to reconsider his decision on
I.A.No.1. Despite the same, the Arbitrator rejected the
application for recusal vide order dated 11.02.2019 and
continued with the arbitration proceedings for the best reasons
known to him. While passing the award, the respondent No.2 has
not only favoured respondent No.1 without considering the
validity of the alleged agreement of sale/Ex.P.1, but has also
exceeded his jurisdiction in accepting the inflated claim of
Rs.87,60,000/- raised by respondent No.1 claiming interest at
24% per annum compounded quarterly on Rs.30,00,000/- claim.
In addition, the Arbitrator has awarded interest of 18% per
annum till realization, which is arbitrary and not known to the
prevailing law of interest to be awarded and also not agreed
upon between the parties. Only with an intention to favour
respondent No.1 such high rate of interest is awarded without
there being any clause in the agreement. Holding the then
partners of petitioner No.1 personally liable is also bad in law.
5. The petitioners being aggrieved by the said order by
respondent No.2 filed a petition under Section 34 of the
Arbitration and Conciliation Act before the Principal District and
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Sessions Judge, Dharwad, in Arbitration Petition No.74/2020. In
the said petition, the petitioners filed an interim application
under Section 34 of the Arbitration and Conciliation Act, 1996
R/w Section 151 of CPC seeking for limited remand to the
arbitral Tribunal for the purpose of cross examination of P.W.1
and permitting the petitioner to lead evidence. The respondent
No.1 filed his objections to the said application. The trial Court
by its order dated 13.10.2025 allowed the application and gave
opportunity to the petitioner to cross examine PW.1 and to lead
defense evidence. It is also directed by the trial Court that the
Arbitrator is directed to send the award back to the Court by
15.12.2025 along with the file.
6. After remand by the District Court, the sole Arbitrator in
spite of giving opportunity to the petitioners to cross examine
and adduce evidence, by its order dated 21.11.2025 terminated
the arbitral Tribunal proceedings and the entire file in
A.P.No.74/2020 and additional order sheet in Arbitration Case
No.3/2018, vakalath and application are resubmitted to the
District Court, Dharwad. Hence, the petitioners have come before
this Court for appointment of Arbitrator.
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7. Learned counsel appearing for the petitioners submits
that after remand to the Arbitrator, the petitioners have filed a
memo stating that they will give fees of Rs.15,000/- in view of
remand. But the respondent No.2 without receiving the said
amount asked for lean amount and rejected the remand order.
Hence, the appointment of new Arbitrator is very much
necessary. It is submitted that while allowing the application by
the trial Court, trial Court fixed the fees after remand, but there
is no direction to the sole Arbitrator for collection of the lean
fees. But the Arbitrator without looking into the memo produced
by the petitioners asked for lean fees and terminated him from
the case. Hence, the appointment of Arbitrator is very much
essential in this case. It is also submitted that there is a
provision for collection of the fees from the client if not paid. But
in this case the move of Arbitrator is very strange after remand
instead of taking remand fees, he asked for the main fees and
terminated the arbitration proceedings. Hence, the appointment
of new Arbitrator is very much necessary.
8. The statement of objections is filed by the learned
counsel appearing for the respondent No.1. It is submitted that
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in pursuant to the orders passed in WP.No.107273/2018 dated
13.12.2018, the Arbitral Tribunal after hearing both parties had
passed a fresh order dated 11.02.2019 by dismissing I.A.No.1
and that order is not challenged till this date by the petitioners.
It is submitted that while hearing the petition filed under Section
34 of the Act, the District Court on the basis of the application
filed by the petitioner had passed an order remanding the matter
to Arbitral Tribunal in order to give opportunity to cross-examine
PW.1 to lead his further evidence with a condition that he should
bear the cost of Arbitral Tribunal proceedings. After the remand,
the petitioners herein have failed to pay the cost of the
arbitration. Hence, as per the direction of the District Court
entire file was re-submitted to the Principal District Judge,
Dharwad.
9. It is stated that now the petitioners are seeking to
appoint another Arbitrator which is not maintainable in the eye of
law. In CMP.No.100028/2015, Arbitrator has been appointed
with the consent of both the parties. Thereafter, an arbitral
award was passed on 15.02.2020. The said order is challenged
before the District Court and at this stage, the application under
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Section 11(6) of the Act is not maintainable. It is submitted that
the petitioners themselves have filed the application to remand
the case for cross examination of PW.1 to lead defense evidence
before the District Court. The District Court allowed the
application with a condition to pay the cost of Arbitration
proceedings. The fees of the Arbitrators have been fixed by the
statute, the question of bargaining is not within the scope of the
Arbitration and Conciliation Act, 1996. Hence the grounds made
by the petitioners in this petition are untenable in the eye of law.
It is submitted that this petition needs to be dismissed.
10. Having heard the learned counsels on either side,
perused the material on record. The petitioner is seeking
appointment of another Arbitrator after the award is passed and
when the matter is remanded for a limited purpose of cross
examination. In these circumstances, the issue that falls for
consideration before this Court is whether a substituted
Arbitrator can be appointed after an arbitral award as already
order has been passed and the matter was remanded to the
same Arbitrator for a limited purpose. It is also an admitted fact
that the trial Court has directed the parties to pay the fees of the
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Arbitrator and the fees of the Arbitrator is governed by the
statute.
11. The contention of the petitioners is that the Arbitrator
is demanding fees and there is a provision to recover the fees
and as such, a new Arbitrator should be appointed. This Court is
not able to appreciate the said submission. The power to appoint
another Arbitrator ordinarily arises when the mandate of the
existing Arbitrator terminates during the course of arbitral
proceedings. However, the present case stands on a different
footing. Appointment of another Arbitrator in the circumstances
of this case would effectively amount to re-opening concluded
arbitral proceedings and enlarging the scope of remand which is
impermissible in law. A substitute Arbitrator cannot be expected
to undertake the limited demand exercise which is connected
with the appreciation of evidence and findings recorded by the
original Arbitrator. Again, appointment of another Arbitrator
would effect the finality attached to arbitral awards would run
contrary to the legislative objective of expeditious dispute
resolution.
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12. In this case, the conduct of the parties is very much
important. An Arbitrator was appointed in the year 2018, they
have filed an application for recusal of the Arbitrator and the
same was dismissed. Against that, they filed a writ petition and
the matter was remanded. After remand, an order was passed
and the petitioners have kept quite. After that an award has
been passed and it was challenged before the District Court,
before the Court they only asked the Court to remand the matter
for limited purpose of cross examination. On their request, the
matter was remanded and the Court also observed about
payment of fees of the Arbitrator. The petitioners had failed to
pay the amount and the Arbitrator has recorded how many times
the matter has come up and how the petitioner has failed to pay
the fees to the Arbitrator. The petitioner having failed to pay the
fees as per the order passed by the District Court cannot seek to
circumvent the consequences of such default by requesting
appointment of another Arbitrator. Exceeding to the request of
the petitioner to appoint a new Arbitrator would encourage
parties to frustrate arbitral proceedings and seek repeated
reconstitution of tribunals which is not permissible and contrary
to the very purport of the Arbitration and Conciliation Act.
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13. In the considered opinion of this Court, appointment of
another Arbitrator in the facts and circumstances is
unsustainable. Accordingly, this court is passing the following
order:
ORDER
i. Accordingly, the Civil Miscellaneous Petition filed seeking appointment of an Arbitrator is dismissed.
ii. However, the parties are at liberty to avail appropriate remedies as may be available to them in law.
iii. All I.As. in this Civil Miscellaneous Petition shall stand closed.
Sd/-
JUSTICE LALITHA KANNEGANTI MEG CT: UMD List No.: 1 Sl No.: 4