Karnataka High Court
M/S Sobha Limited vs M/S Nava Vishwa Shashi Vijaya on 8 July, 2022
Bench: P.S.Dinesh Kumar, C.M. Poonacha
COMAP No.144/2022
1
IN THE HIGH COURT OF KARNATAKA AT BENGALURU
DATED THIS THE 8TH DAY OF JULY, 2022
PRESENT
THE HON'BLE MR. JUSTICE P.S. DINESH KUMAR
AND
THE HON'BLE MR. JUSTICE C.M. POONACHA
COMAP No.144 OF 2022
BETWEEN :
M/s SOBHA LIMITED
A COMPANY INCORPORATED UNDER THE
PROVISIONS OF THE COMPANIES ACT, 1956
"SOBHA", SARJAPURA-MARATHALLI RING ROAD
BELLANDUR POST
BENGALURU - 560 013
REPRESENTED BY ITS
AUTHORISED SIGNATORY
SRI. RAJESH MARATHE ... APPELLANT
(BY SHRI. P.S. RAJAGOPAL, SENIOR ADVOCATE FOR
SHRI. MADHUKAR M. DESHPANDE, ADVOCATE)
AND :
1. M/s NAVA VISHWA SHASHI VIJAYA
KRISHNA PROPERTIES Pvt. Ltd.,
NO.103, EMBASSY CENTRE
NO.11, CRESCENT ROAD
BANGALORE - 560 001.
REPRESENTED BY ITS DIRECTOR
ALSO AT:
NO.25, 15TH MAIN ROAD
RMV EXTENSION, SADASHIVANAGAR
BENGALURU - 560 003.
E-MAIL: [email protected]
2. MR. SURYANARAYANA ARUMILLI
S/O NOT KNOW TO THE APPELLANT
COMAP No.144/2022
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MAJOR BY AGE
DIRECTOR, NVSVK PROPERTIES PVT. Ltd.
PLOT NO.A33, FILM NAGAR
APOLLO HOSPITAL, JUBILEE HILLS
HYDERABAD - 500 096.
3. Ms. LAKSHMI PRIYADARSHINI CHINTA
D/O NOT KNOW TO THE APPELLANT
MAJOR BY AGE
DIRECTOR, NVSVK PROPERTIES PVT. Ltd.
PLOT NO.A33, SRI VISWANVITHA
ROAD NO.11, FILM NAGAR
JUBILEE HILLS, HYDERABAD - 500 033.
4. Ms. CHINTA SAISUDHA
D/O NOT KNOWN TO THE APPELLANT
MAJOR BY AGE
DIRECTOR, NVSVK PROPERTIES PVT. Ltd.
PLOT NO.854/B, ROAD NO.44
JUBILEE HILLS, HYDERABAD - 500 033.
5. MR. BHARATH REDDY GOPU
S/O NOT KNOWN TO THE APPELLANT
MAJOR BY AGE
DIRECTOR, NVSVK PROPERTIES PVT. Ltd.
11-1-44, KOTHURU ROAD
KOVURU, NELLORE - 524 137.
6. MR. CHINTA SASIDHAR
S/O NOT KNOWN TO THE APPELLANT
MAJOR BY AGE
DIRECTOR, NVSVK PROPERTIES PVT. Ltd.
PLOT NO.32, 33 ROAD NO.11
NEXT TO M.P. RAJAGOPAL HOUSE
FILM NAGAR, JUBILEE HILLS
HYDERABAD - 500 033.
ALSO AT:
PLOT NO.550, A/1 ROAD NO.92
JUBILEE HILLS-PHASE III
HYDERABAD-560 032.
7. MR. UDDARAJU BANGAR RAJU
S/O NOT KNOWN TO THE APPELLANT
MAJOR BY AGE
2-7-8A, PENNUMATSAAVARI STREET
COMAP No.144/2022
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SIVA RAO PETA BHIMAVARAM
WEST GODAVARI - 534 202.
8. MR. ZARNA BHARATH SHINGALA
S/O NOT KNOWN TO THE APPELLANT
MAJOR BY AGE
H NO.1-8-472, PLOT NO.131
NEW MCH COLONY
DILSUKHNAGAR
HYDERABAD - 500 060.
9. MR. G.M. VIJAYKUMAR
S/O NOT KNOWN TO THE APPELLANT
MAJOR BY AGE
EX-MANAGING DIRECTOR &
AUTHORISED SIGNATORY
NVSNK PROPERTIES PVT. Ltd.
NO.103, EMBASSY CENTRE
NO.11, CRECENT ROAD
BANGALORE - 560 001.
ALSO AT:
NO.22/5, B.R. HILLS ROAD
CHAMARAJ NAGAR
KARNATAKA - 571 313.
ALSO AT:
C/O MR. CHINTA SASIDHAR
PLOT NO.32, 33, ROAD NO.11
NEXT TO M.P. RAJAGOPAL HOUSE
FILM NAGAR, JUBILLE HILLS
HYDERABAD - 500 033. ... RESPONDENTS
(BY SHRI. C.K. NANDA KUMAR, SENIOR ADVOCATE FOR
SHRI. M.S. SIVARAMAKRISHNAN, ADVOCATE FOR
R1, R3, R5, R6, R7, R9;
SHRI. RISHAB D. DESAI, ADVOCATE FOR
Ms. ANUPAMA HEBBAR FOR R2, R4 & R8)
....
THIS COMMERCIAL APPEAL IS FILED UNDER SECTION 13 OF
COMMERCIAL COURTS ACT, 2015 R/W SECTION 37(1)(b) OF THE
ARBITRATION AND CONCILIATION ACT, 1996, PRAYING TO CALL FOR
RECORDS IN COM.A.A.NO.9/2021 ON THE FILE OF LXXXIII
ADDITIONAL CITY CIVIL AND SESSIONS JUDGE, BENGALURU
(CCH-84) AND ETC.
COMAP No.144/2022
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THIS COMAP, HAVING BEEN HEARD AND RESERVED FOR
JUDGMENT ON 30.06.2022 COMING ON FOR PRONOUNCEMENT OF
JUDGMENT, THIS DAY, P.S.DINESH KUMAR J , PRONOUNCED THE
FOLLOWING:-
JUDGMENT
This appeal is directed against order dated March 3,
2022 in Com. A.A. No.9/2021 passed by LXXXIII Addl. City
Civil and Sessions Judge, Bengaluru (CCH-84), dismissing
appellant's application filed under Section 9 of Arbitration
and Conciliation Act.
2. Heard Shri. P.S. Rajagopal, learned Senior
Advocate for the appellant and Shri. C.K. Nanda Kumar,
learned Senior Advocate for respondents No.1, 3, 5, 6, 7 &
9 and Shri. Rishab D. Desai, learned Advocate for
respondents No.2, 4 & 8.
3. Brief facts of the case are, appellant filed an
application under Section 9 of the Arbitration and
Conciliation Act, 19961, with a prayer to injunct the
respondents from alienating the property mentioned in the
schedule to the application and in the alternative, to direct
'Arbitration Act' for short
COMAP No.144/2022
the respondents to provide adequate security to cover the
amount due and payable by the respondents. The
application has been dismissed by the Commercial Court.
Hence, this appeal.
4. Shri. Rajagopal, learned Senior Advocate
submitted that appellant is a reputed real estate developer.
First respondent entrusted the work of design and
construction of a residential building in Bengaluru and
issued a work order on January 15, 2014. Being satisfied
with the quality and progress in work, respondents informed
that a residential building needs to the constructed in
Hyderabad. As per respondent's instructions, appellant has
carried out all the construction work at Bengaluru and
Hyderabad; and respondent is liable to pay
Rs.24,53,84,605/-. In the event, respondents were to
alienate the schedule property or create third party rights,
appellant's legal recourse to recover the amount becomes
remote. The Commercial Court, without appreciating these
facts has rejected the application and further it has
COMAP No.144/2022
recorded a finding in para 20 of its order that the claim is
not within limitation.
5. In reply, Shri. Nanda Kumar, learned Senior
Advocate submitted that the work order has been issued by
the first respondent on January 15, 2014 in respect of a
residential building in Bengaluru. The other respondents are
in no way connected with the case. Hence, they are neither
proper nor necessary parties. Further, the claim against the
first respondent is also time barred.
6. Shri. Nanda Kumar further submitted that
appellant has also filed C.M.P. No.24/2022 in this Court and
the same has been dismissed on June 10, 2022, holding
that the pre-condition of conciliation before invoking
Arbitration clause has not been fulfilled.
7. In reply, Shri. Rajagopal fairly submitted that
after disposal of C.M.P. No.24/2022, a notice under Section
61 of the Arbitration and Conciliation Act, 1996 has been
issued by the appellant.
COMAP No.144/2022
8. We have carefully considered rival contentions
and perused the records.
9. We have perused the work order dated January
15, 2014 issued by the first respondent, in respect of
construction of a building in Bengaluru. It is averred in the
application filed under Section 9 of the Act that whilst the
construction work of building in Bengaluru was in progress,
respondents had informed that there is need to construct a
building in Hyderabad also. It is further averred that the
Work Order dated January 15, 2014 is the basis for
construction of residential building at Hyderabad also. It is
further averred that appellant has completed construction of
buildings both at Bengaluru and Hyderabad and requested
the respondents to make the payment of balance amounts
which are overdue of Rs.24.53 Crores.
10. It was argued by Shri. Nanda Kumar that Section
7(3) of the Arbitration Act mandates that Arbitration
COMAP No.144/2022
Agreement shall be in writing and there is no agreement
with regard to construction of building in Hyderabad.
11. Shri. Nanda Kumar is right in his submission that
there is no agreement with regard to Hyderabad building.
The Work Order dated January 15, 2014, is in respect of
Bengaluru building. Admittedly, the same has been issued
by the first respondent. There is no material on record,
which would bind the other respondents. Hence,
Shri. Nanda Kumar's contention that other respondents
except the first respondent are neither proper nor necessary
parties has force. Thus, it is clear that there is no privity of
Contract with other respondents, either in respect of the
building at Bengaluru or Hyderabad. So far as the Work
Order with regard to Bengaluru Building is concerned, after
disposal of CMP No.24/2022 seeking appointment of an
Arbitrator, the appellant has issued notice under Section 61
of the Act. The prayer in the application under Section 9 is
for an injunction against respondents from alienating the
COMAP No.144/2022
Schedule Property or in the alternative to provide adequate
security.
12. In the light of the facts recorded herein, in our
considered view, the Commercial Court has rightly held that
appellant has failed to make out a case for grant of order
under Section 9 of the Arbitration Act.
13. Resultantly, this appeal must fail and it is
accordingly dismissed.
No costs.
Sd/-
JUDGE
Sd/-
JUDGE
SPS
