Karnataka High Court
Rajkumar Elango vs Mr. Arjun Aravindakshan on 30 June, 2025
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NC: 2025:KHC:23219
W.P. No.40926/2019
HC-KAR
IN THE HIGH COURT OF KARNATAKA AT BENGALURU
DATED THIS THE 30TH DAY OF JUNE, 2025
BEFORE
THE HON'BLE MR. JUSTICE VIJAYKUMAR A. PATIL
WRIT PETITION NO.40926/2019 (GM-CPC)
BETWEEN:
RAJKUMAR ELANGO
SON OF MR. S. ELANGO
AGED ABOUT 37 YEARS
R/AT:NO.126, THE RETREAT TARABANAHALLI
OFF BELLARY ROAD, BANGALORE-562157.
...PETITIONER
Digitally signed (BY SRI. SHRIHARI, ADV., FOR
by RUPA V SRI. AJESH KUMAR S, ADV.,)
Location: High
Court of AND:
karnataka
1. MR. ARJUN ARAVINDAKSHAN
S/O MR. K. ARAVINDAKSHAN
AGED ABOUT 33 YEARS
RESIDING AT PALM GROVE, PH-3
4TH CROSS, KORAMANGALA 6TH BLOCK
BANGALORE-560095.
2. M/S. FASHNVIA RETAIL PVT LTD
A COMPANY INCORPORATED UNDER
THE COMPANIES ACT, 1956
HAVING ITS REGISTERED OFFICE AT NO.173
GROUND FLOOR, 3RD CROSS, 1ST MAIN ROAD
KORAMANGALA 7TH BLOCK
BANGALORE 560095
REP. BY ITS CHIEF EXECUTIVE OFFICER
AND DIRECTOR
MR. ARUN ARAVINDAKSHAN.
...RESPONDENTS
(BY SRI. SUNIL PAUL, ADV., FOR R1 & R2 [ABSENT])
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W.P. No.40926/2019
HC-KAR
THIS W.P. IS FILED UNDER ARTICLE 227 OF THE
CONSTITUTION OF INDIA, PRAYING TO ISSUE A WRIT OF
CERTIORARI OR ANY OTHER APPROPRIATE WRIT, DIRECTION OR
ORDER TO QUASH THE ORDER DATED 11.07.2019 PASSED IN Com.
O.S.NO.26872/2012 INTER ALIA ALLOWING THE APPLICATION
DATED 30.05.2013 OF THE DEFENDANTS U/S 8 OF THE
ARBITRATION AND CONCILIATION ACT, 1996 AND DISMISSING THE
PLAINT AS NOT MAINTAINABLE BY THE HON'BLE COURT OF LXXXII
ADDL. CITY CIVIL AND SESSIONS JUDGE, BANGALORE CITY (CCH-
83) AS PER ANNX-A. ISSUE A WRIT OF MANDAMUS OR ANY OTHER
APPROPRIATE WRIT, DIRECTION OR ORDER TO DIRECT THE
HON'BLE COURT OF LXXXII ADDL. CITY CIVIL AND SESSIONS
JUDGE, BANGALORE CITY (CCH-83) TO EXPEDITIOUSLY DISPOSE OF
THE PROCEEDINGS PENDING IN Com. O.S.NO.26872/2012, AS PER
ANNX-B & ETC.
THIS PETITION, COMING ON FOR PRELIMINARY HEARING IN
'B' GROUP, THIS DAY, ORDER WAS MADE THEREIN AS UNDER:
CORAM: HON'BLE MR. JUSTICE VIJAYKUMAR A. PATIL
ORAL ORDER
This petition is filed seeking for the following reliefs:
i) Issue a writ of certiorari or any other
appropriate writ, direction or order to quash the order
dated 11.07.2019 passed in Com.O.S.No.26872/2012
inter alia allowing the application dated 30.05.2013 of
the defendants under Section 8 of the Arbitration and
Conciliation Act, 1996 and dismissing and plaint as not
maintainable by the Hon'ble Court of LXXXII Addl. City
Civil and Sessions Judge, Bangalore City (CCH No.83) as
per Annexure-A.
ii) Issue a writ of mandamus or any other
appropriate writ, direction or order to direct the Hon'ble
Court of LXXXII Addl. City Civil and Sessions Judge,
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Bangalore City (CCH No.83) to expeditiously dispose of
the proceedings pending in Com.O.S.No.26872/2012, as
per Annexure-B.
2. Heard.
3. Sri.Shrihari, learned counsel appearing on behalf of
the learned counsel Sri.Ajesh Kumar S, for the petitioner
submits that the petitioner has filed commercial suit in
Com.O.S.No.26872/2012. The said suit is a summary suit filed
under Order XXXVII of the Code of Civil Procedure, 1908, based
on the admitted e-mails of the respondents. In the said suit,
the respondents entered appearance and filed an application
under Order XXXVII Rule 3(5) read with Section 151 of the
CPC, seeking leave of the Court to defend the said case by
filing the written statement / objections. During the pendency
of the said application, after adjourning the matter for more
than 7 dates of hearing, both the respondents filed an
application under Sections 7 and 8 of the Arbitration and
Conciliation Act, 1996 (hereinafter referred to as 'the Act') read
with Sections 9 and 151 of the CPC, praying to dismiss the suit
on the ground that there is an arbitration clause in the
shareholders agreement entered into between the petitioner
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and the respondents. It is submitted that the petitioner had
advanced a loan of Rs.1,33,30,000/- to the respondent No.1
and it had nothing to do with the alleged shareholders
agreement executed between the petitioner and the respondent
No. 1. Based on the admitted e-mails wherein the respondent
No. 1 had agreed to return the money, a summary suit came to
be filed. However, the Trial Court, without appreciating the fact
that the application filed by the respondents seeking leave to
defend was pending, allowed the application filed under
Sections 7 and 8 of the Act read with Sections 9 and 151 of the
CPC, on the ground that there is an arbitration clause. It is
further submitted that filing an application seeking leave is as
good as waiving of the right to invoke the arbitration clause
and the Trial Court ought to have granted leave by allowing the
application of the respondents on merits. Hence, he seeks to
allow the petition.
4. There is no representation for the respondents.
5. I have heard the arguments of the learned counsel
for the petitioner and perused the material available on record.
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I have given my anxious consideration to the arguments
advanced by the learned counsel for the petitioner.
6. The petitioner filed Com.O.S.No.26872/2012 which
is a commercial suit and the said suit came to be filed under
Order XXXVII of the CPC against the respondents herein
seeking for a judgment and decree for a sum of
Rs.1,33,30,000/- together with the interest from 01.05.2011
until payment is made. The petitioner, in paragraph 5 of the
plaint made an assertion that the petitioner has paid the
aforesaid amount as the loan amount through various
transactions recorded in the said paragraph and the said
amount is a loan given to the respondent No.1 and the
respondent No.1 has admitted the said transaction in the e-
mails sent to the petitioner and also agreed to re-pay the
same. Hence, the suit was filed.
7. The respondents appeared in the aforesaid suit and
filed an application under Order 37 Rule 3(5) read with Section
151 of the CPC, seeking leave of the Court to defend the suit by
filing written statement / objections. The said application was
accompanied by an affidavit. In the said affidavit, the
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respondents have categorically made a statement that the
amount claimed by the petitioner is not the loan amount and
the petitioner is one of the Directors of the Company and there
is a specific shareholders agreement entered into between
them. At paragraphs 7 and 11 of the said affidavit, it is
averred that if any dispute arose with regard to the
shareholders agreement which is binding on the parties, the
matter is required to be referred under the provisions of the
Act. Admittedly, the said application was pending and on
30.05.2013, the respondents filed an application under Sections
7 and 8 of the Act read with Section 9 and 151 of the CPC,
seeking for dismissal of the suit. The said application was also
accompanied by an affidavit. The said affidavit indicated that
both Annexures 1 and 2 are the shareholders agreement and
Clause 13 speaks about the arbitration clause with regard to
any dispute which is not settled pursuant to Article 37(A) of the
Act shall be referred to a panel of Arbitrators which consists of
one arbitrator appointed by the petitioner in party or parties to
the case may be and both the Arbitrators shall appoint the
presiding arbitrator and the arbitration shall be conducted in
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accordance with the Indian Arbitration and Conciliation Act,
1996, as amended from time to time.
8. The Trial Court, considering the aforesaid
application filed by the respondents, recorded a finding in the
impugned order that the reply notice produced by the petitioner
dated 14.03.2012 issued by the respondents to the notice
dated 15.02.2012 of the petitioner in which the respondents
have clearly stated that the petitioner was also the Director of
the Company and the entire amount of Rs.1,33,30,000/-
transferred by the petitioner was credited in the account of the
Company and was based on a shareholders agreement.
Further, the copy of another notice dated 27.03.2012 was also
referred by the Trial Court. At paragraph 16, the Trial Court
recorded a finding that the petitioner himself, as a party to the
shareholders agreement dated 27.08.2010, 21.12.2010 and
26.03.2011 and other correspondence on record indicate that
the transaction between the petitioner and the respondents is
not a loan transaction as pleaded in the plaint and it was an
investment and considering the clause of the shareholders
agreement, allowed the application in I.A.No.III filed by the
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respondents under Sections 7 and 8 of the Act read with
Sections 9 and 151 of the CPC. I do not find any error or
perversity in the finding recorded by the Trial Court in allowing
the application. The respondents, at the initial stage, in the
application filed seeking leave to defend, had taken a clear
stand that the suit is not maintainable in view of the arbitration
clause. Hence, the contrary contention urged by the learned
counsel for the petitioner that the belated application filed by
the respondents under Sections 7 and 8 of the Act read with
Sections 9 and 151 of the CPC, amounts to waiver of his right,
cannot be accepted and does not have any merit for
consideration.
9. For the aforementioned reasons, I proceed to pass
the following:
ORDER
The writ petition is devoid of merits and the same is
rejected.
Sd/-
(VIJAYKUMAR A. PATIL)
JUDGE
RV
