Bangalore District Court
Abdul Razak vs M/S Ashritha House Building Co ... on 11 March, 2025
KABC170004762023
IN THE COURT OF LXXXVII ADDL.CITY CIVIL &
SESSIONS JUDGE, BENGALURU (CCH.88)
Present: Smt. Roopa K.N., B.Sc., LL.B.,
LXXXVII Addl.City Civil &
Sessions Judge, Bengaluru.
Dated : 11th day of March, 2025
Com.A.P.No.194/2023
PETITIONER 1. Mr.A.R.Abdul Razak,
S/o S.Abdul Raheem,
Aged about 37 years,
R/at No.42, 9th 'B' Main,
LIC Colony, Jeevan Bhima Nagar,
Bengaluru-560 075.
Represented by his Power of Attorney
Holder
Mr.Jaffer Ali Khan,
S/o Munir Khan,
Aged about 42 years,
Presently R/at No.379,
Kullappa Lane, Nanjareddy Colony,
Near Om Shakthi Temple,
Murugesh Palya,
Bengaluru-560 017.
(Rep. by Sri.C.P.P. - Advocate)
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Com.A.P.194/2023
-Vs-
RESPONDENTS : 1. M/s.Ashritha House Building
Co-operative Society Ltd.,
A Society registered under the
Karnataka Co-operative Societies Act,
1959, having its Registered Office at
No.10 and 11,
1st Floor, Kaveri Patanam
Complex, Gandhi Square,
Mysuru 570 001.
Represented by its President
S.B.Chandre Gowda,
Aged about 72 years,
Son of Putte Gowda.
2. Mr.P.D.Chandrakanth,
Son of late P.Dodde Gowda,
Aged about 63 years,
Residing at No.40/1,
14th Cross, Vyalikaval,
Behind Hotel Rejesh,
Bengaluru-560 003.
3. Mr.Pushparaj Shetty,
Son of Sri.Jagannatha Shetty,
Aged about 68 years,
Residing at No.603,
SLR Mansion, 1st Block,
Basaveshwaranagar,
Bengaluru - 560 078.
4. Justice A V Chandrashekar
Former Judge of the High Court of
Karnataka,
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Com.A.P.194/2023
Arbitrator attached to the
Arbitration and Conciliation Center,
Bengaluru, 3rd Floor, East Wing,
Khanija Bhavan, Race Course Road,
Bengaluru - 560 001.
(R-1 by Sri.NGS Advocate
(R-2 & R-3 By Sri.BML/SG Advocate)
(R-4 Sole Arbitrator)
Date of Institution of the suit 28.11.2023
Nature of the suit (suit on U/S 34 of The Arbitration
pronote, suit for declaration & Conciliation Act.
Possession, Suit for injunction
etc.)
Date of commencement of -
recording of evidence
Date on which judgment was 11.03.2025
pronounced
Total Duration Year/s Month/s Day/s
01 03 13
(ROOPA K.N.),
LXXXVII Addl.City Civil & Sessions Judge,
(Exclusive Dedicated Commercial Court)
Bengaluru.
-: J U D G M E N T :-
This Petition is filed by the petitioner under Sec.34 of
Arbitration and Conciliation Act, 1996 challenging the
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Com.A.P.194/2023
impugned award dtd:31.08.2023 passed by the Learned
Sole Arbitrator in A.C.No.196/2019.
2. The parties are referred as per their original rank
before the arbitral tribunal for the sake of clarity.
3. It is the case of the petitioner that, the 1st respondent
herein was the claimant before the Arbitration Tribunal.
The petitioner was the 3rd respondent. It was the claim of
the claimant that, it is a Society registered under Karnataka
co-operative Societies Act having its main purpose to
provide residential sites to its members. In this regard, the
Society entered into a contract with respondents on
27.10.2010 and the document was styled as development
agreement, under which the respondents agreed to form
residential layout in an area measuring about 19 Acres 4
guntas of land carved out of different survey numbers in
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Com.A.P.194/2023
Hanchya Village, Kasaba Hobli, Mysore Taluk. The
claimant had agreed to pay an amount of Rs.495/- per Sq.
Ft. as consideration for the developed saleable area. A
GPA was executed by all the 3 respondents in favour of
claimant Society on 27.12.2010 authorizing the claimant to
do certain acts on their behalf. In view of this agreement,
claimant paid Rs.3.5 Crores to the respondents and agreed
to pay balance consideration within 14 months as per the
progress achieved by the respondents. Respondents were
bound to complete the development work within a period of
14 months from the date of agreement which provided for
revision in respect of consideration to be paid after mutual
discussion. Thereafter, it was agreed that, claimant should
pay consideration at Rs.620 per Sq. Ft. and accordingly,
claimant paid Rs.6,52,02,425/- to 1 st respondent
Rs.3,78,42,000/- to the 2nd respondent and
Rs.3,52,66,436/- to the 3rd respondent. It was the
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contention of claimant that, respondents have completed
the development work of the layout as promised and MUDA
passed a resolution permitting the claimant Society to form
residential layout and claimant was called upon to execute
a deed of relinquishment towards civic amenities.
Accordingly, claimant conveyed an area of 14,358.19 square
meters towards civil amenities. On 01.09.2012 MUDA
released 73 sites in favour of claimant society. On
28.02.2013 2nd set of sites i.e., 23 sites were released in
favour of claimant. Totally 121 sites formed as per sanction
plan were released in favour of claimant and sale dates were
executed by the respondents in favour of the members of
the Society. After release of remaining 25 sites by MUDA
respondents were liable to execute sale deeds in favour of
its members and hence, claimant called upon respondents
1 to 3 to appear before sub-registrar for execution of sale
deed of remaining sites. On 25.01.2019 Society issued
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notice to the respondents for which respondent No.1 and 2
replied that, they are ready to execute sale deed but, the 3 rd
respondent / petitioner on receipt of the notice gave reply
that, society has not paid him the fair market value by
colluding with respondent No.1 P.D.Chandrakanth and also
alleged that, market value of the schedule property in 2012-
2013 was much more than what was shown in the sale
transactions and he claimed present market value for those
sites. This was the cause of action for the claimant society
to approach arbitration tribunal by invoking arbitration
clause provided in the development agreement.
4. It was the contention of the 3rd respondent / petitioner
that, the 1st respondent P.D.Chandrakanth had contributed
3 acres, 10 guntas, 2nd respondent contributed 3 Acres 26
guntas and this 3rd respondent contributed 4 Acres 30
guntas making in total 11 Acres, 26 guntas for formation of
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Com.A.P.194/2023
the layout. It was further his case that, reduction of the
extent of the layout was done was without his information
and according to agreement the contribution of 3 rd
respondent was 40.77%, 2nd respondent 31.33% and 1st
respondent 27.90%. According to him, claimant society
approached him almost 3 years after the layout was
completed and by the time claimant approached, the
market value raised to Rs.3,000/- to Rs.4,000/- per Sq. Ft.
and hence he is entitle for that valuation of the site amount.
According to him claimant was not entitled for the relief of
specific performance as same is barred by time. On the
basis of these rival pleadings, the arbitration tribunal
framed 8 issues out of them issue No.1 and 2 are framed on
claimant. After holding due enquiry, considering the oral
and documentary evidence on record, the arbitration
tribunal passed an award by allowing the claim petition of
the claimant society and thereby directed this petitioner to
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Com.A.P.194/2023
join respondents 2 and 3 herein to execute sale deed of
remaining sites in favour of the members of the society.
Further, the society was directed to pay this petitioner
consideration at the rate of Rs.620 per Sq. Ft. in respect of
his share of 40.77%. Apart from this, 3 rd respondent was
also directed to pay a sum of Rs.10,00,000/- to the
claimant as towards legal expenses and other miscellaneous
charges. Aggrieved by this award the petitioner herein
being the 3rd respondent before the tribunal, filed the
present petition under Sec.34(2) of Arbitration and
Conciliation Act 1996.
5. Heard both side.
6. Now the point that arise for my consideration are;
1. Whether, the present petition deserves to
be allowed and the impugned award
dtd:31.08.2023 passed by the Learned
Sole Arbitrator in A.C.No.196/2019
requires to be set aside under Sec.34 of
Arbitration and Conciliation Act?
2. What Order?
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Com.A.P.194/2023
7. My findings on the above Points are as under:
Point No.1 : In the "Negative".
Point No.2: As per the final order for the
following reasons
-: R E A S O N S :-
8. Point No.1:- This petition, is filed under Sec.34 of
the Arbitration and Conciliation Act 1996 by the petitioner
challenging the award passed by the sole arbitrator in
A.C.196/2019. The present petition runs up to 182 pages
on perusal of the petition from page 3 to 69 the claim of
claimant, respondents before the tribunal, counter claim
has been discussed. The petitioner has took several
grounds from page 70 to page 178 which shows that he
has urged grounds from para 1 to 129. If we peruse these
grounds, they are nothing but the grounds for appeal.
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Com.A.P.194/2023
9. For the sake of convenience provision under Sec.34(2)
of Arbitration and Conciliation Act 1996 is hereby re-
iterated.
34. Application for setting aside
arbitral award.--(1) Recourse to a
Court against an arbitral award may
be made only by an application for
setting aside such award in
accordance with sub-section (2) and
sub-section (3).
(2) An arbitral award may be set
aside by the Court only if--
(a) the party making the application
1[establishes on the basis of the
record of the arbitral tribunal
that]--
(i) a party was under some
incapacity, or
(ii) the arbitration agreement is not
valid under the law to which the
parties have subjected it
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Com.A.P.194/2023
or, failing any indication thereon,
under the law for the time being in
force; or
(iii) the party making the application
was not given proper notice of the
appointment of an arbitrator or of
the arbitral proceedings or was
otherwise unable to present his case;
or
(iv) the arbitral award deals with a
dispute not contemplated by or not
falling within the terms of the
submission to arbitration, or it
contains decisions on matters beyond
the scope of the submission to
arbitration:
Provided that, if the decisions on
matters submitted to arbitration can
be separated from those not so
submitted, only that part of the
arbitral award which contains
decisions on matters not submitted to
arbitration may be set aside; or
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Com.A.P.194/2023
(v) the composition of the arbitral
tribunal or the arbitral procedure
was not in accordance with the
agreement of the parties, unless such
agreement was in conflict with a
provision of this
Part from which the parties cannot
derogate, or, failing such agreement,
was not in accordance with this Part;
or
(b) the Court finds that--
(i) the subject-matter of the dispute is
not capable of settlement by
arbitration under the law for the time
being in force, or
(ii) the arbitral award is in conflict
with the public policy of India.
10. In catena of decisions Hon'ble Apex Court made it
clear "A court does not sit in appeal over the award of
an arbitrator by reassessing or re-appreciating the
evidence. An award can be challenged only under the
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Com.A.P.194/2023
grounds mentioned in Sec.34(2) of the Act. The Court
when applying the public policy test to an arbitration
award should not forget that, it does not act as a court
of appeal and consequently errors of facts cannot be
corrected. A possible view by the arbitrator on facts
has necessarily to pass muster as the arbitrator is the
ultimate master of the quantity and quality of evidence
to be relied upon when he delivers his arbitral award.
Thus, an award based on little evidence or on evidence
which does not measure-up in quality to a trained legal
mind would not be held to be invalid on this score.
Once it is found that, the arbitrators approach is not
arbitrary or capricious, then he is the last word on
facts (these observations are by Hon'ble Apex Court in
Para 33 of the decision in Associate Builders .Vs. DDA
(2015) 3 SCC 49. In this legal background the award
passed by the learned sole arbitrator has to be assessed
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Com.A.P.194/2023
to know whether petitioner has made out reasonable
grounds to hold that, the award passed by the sole
arbitrator deserves to be set aside as it comes under
the purview of Sec.34(2) of Arbitration and Conciliation
Act 1996. In this background I would like to proceed
further. The facts of the case, disputed and undisputed
facts have already been discussed in the above
paragraphs. Further, it is well settled principle of law
that, an Arbitrator is the master of his case and unless
the petitioner makes out a ground under Section 34(2)
Arbitration and Conciliation Act the Arbitration Award
cannot be set aside for the reason Arbitrator has no has
not properly accessed of the evidence or he took a
different view when other view is possible.
11. On careful perusal of the award in the light of above
legal background the undisputed facts of this case are as
hereunder;
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Com.A.P.194/2023
1) The total saleable area as approved in its sanction
plan by MUDA vide Ex R16 is 2,50,235 sq ft.
2) The claimant on the basis of Ex.P2, has relinquished
the requisite extent of land in favour of MUDA.
3) MUDA has carried out 121 sites in the layout the
total extent of which is 2,50,235 sq ft, as mentioned
in point no.1 above.
4) The total consideration works out to
Rs.15,51,45,700/- i.e., as the rate of Rs.620 per sq
ft for 2,50,235 sq ft.
5) The respondent have executed sale deeds in
respondent of 84 sites in favour of the members of
the claimant society.
6) The respondent are liable to execute sale deeds in
respective of 37 sites and one site is being used as
specific tank in the layout.
7) Claimant society has already paid a sum of
Rs.13,83,10,861/- to the respondents out of the
agreed consideration and the balance payable is
only 1,68,34,839/-
8) MUDA has released the sites on the following dates:
Date of release Exhibit No. of files
01.09.2012 Ex.P.3 73
28.02.2013 Ex.P.4 23
08.11.2017 Ex.P.5 25
Total 121
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12. The learned counsel for petitioner in his oral
arguments drawn the attention of this court to the Ex.P.3
which shows the extent of land provided by respondents 1
to 3 in favour of Society and the amount paid by the Society
to these 3 respondents. According to him, this petitioner
must have been paid par with P.D.Chandrakanth and
another but the calculation shows that, P.D.Chandrakanth
though contributed land to an extent of 3 Acres 10 Guntas
was paid with Rs.6,52,02,425/- and another another
Pushpa Shetty who contributed 3 Acre, 26 guntas was paid
with Rs.3,78,42,000/- but, this petitioner, who contributed
more extent of land i.e., 4 Acre 30 guntas was paid with
lesser amount i.e., Rs.3,52,60,436/-. According to
petitioner, the 1st respondent society never explained as to
why extra money was paid to P.D.Chandrakanth and there
was no mention in the JDA that, Chandrakanth had given
his extra land in favor of the society. He further argued
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Com.A.P.194/2023
about Ex.P.3 to Ex.P.5. According to him, from 2013 to
January 2019 Society never communicated anything about
release of sites and no notice was issued demanding this
petitioner to perform his part of contract. But anyhow,
Society has admitted that, they have given additional
amount to P.D.Chandrakanth. He further drawn the
attention of this court to the manner in which the learned
sole arbitrator had answered Issue No.3. According to him,
the sole arbitrator, though answered issue No.3 in Negative,
it is very strange as to how he again directed this
petitioner / 3rd respondent to execute sale deed. He also
drawn the attention of this court to the fact that, though
additional issue was framed by the sole arbitrator same
were not answered. The counsel further argued that, the
arbitrator was not suppose to give finding on the dispute
between respondents 1 to 3, when there is no such
pleadings. According to him the amount was not paid to
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petitioner by the society though as per Ex.P.3 project was
completed on 08.11.2017. The learned counsel for
petitioner much canvassed on the fact that, society paid
extra money to P.D.Chandrakanth and clause 6 and 7 of
the agreement was ignored by the arbitration tribunal. He
further drawn the attention of this court to the orders
passed by consumer forum, for which this petitioner was
not a party. It was further canvassed that, arbitrator has
not observed that society has not proved that it had money
so that, it can perform its part of contract and even the
society has not taken many steps to recover extra money
paid to P.D.Chandrakanth. It was also argued that, the
arbitration tribunal has gone out of the terms of
development agreement and has passed an award which
suffers from patent illegality and hence same liable to be set
aside.
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Com.A.P.194/2023
13. On the other hand, learned counsel for 1st respondent
argued and filed his written arguments and denied the
averments of the petition and inter-alia contended that the
award passed by the sole arbitrator do not suffer from any
patent illegality as the arbitrator was quite conscious about
the averments of the entire pleadings and the issues were
properly answered by holding full fledged enquiry.
According to him, Arbitrator has taken cognizance of the
fact that, respondent 1 and 2 before the tribunal vide
Ex.P.8, 9, 15 and 16 consented to participate for execution
of sale deeds without any objection and for that reason,
arbitrator thought fit to call upon this petitioner to join the
other to execute sale deed. According to him, grounds
urged by the petitioner seeking set aside of the award does
not fall within the purview of Section 34 of Arbitration and
Conciliation Act 1996 and hence, he sought for dismissal of
the petition.
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14. The learned counsel for petitioner in support of his
arguments, relied on following decisions;
1. AIR 1968 SC 1413 (Para 5)
2. 2007(12)SCC 27 (para 17 to 20)
3. 2014(1)SCC 113 (Para 23)
4. 1995 (5) SCC 115 (Para 5)
5. 2020(3) SCC 280 (para 16)
6. 1996 (4) SCC 562 (para 2)
7. ILR 2016 KAR 2252 (Head Note & Para 31 to 35)
15. Similarly respondents 2 and 3 also relied on the
decision reported in; S.V.Samudram Vs State of
Karnataka and Another, cited as (2024)3 SCC 623.
16. The scope of Sec.34, power of this court, grounds
under which award can be set aside has already been
discussed in the earlier paragraphs. If the rival pleadings
and the award passed by the sole arbitrator are perused, it
is the main contention of this petitioner that, though he
gave larger extent of land than other 2 respondents to the
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Com.A.P.194/2023
Society, Society paid him less money than what he was
supposed to be paid and apart from that society paid excess
of money to P.D.Chandrakanth without having any reasons.
I have perused the Development Agreement dtd:27.10.2010.
No doubt it is true that, clause 11 of the agreement provides
for referring of any disputes between the Society, owners
and the developers shall be referred to the arbitrator and as
per this clause Hon'ble High Court of Karnataka appointed
the sole Arbitrator. In para 32 of the award, the learned
arbitrator has discussed about the evidence of the
respondents therein and by considering the evidence of this
petitioner / 3rd respondent the tribunal observed that this
P.D.Chandrakanth was entrusted with responsibility of
formation of the Layout in question, on their behalf and
that he was paid some money to spend the same for
development of the project. This petitioner, in his evidence,
has categorically deposed that, he do not remember the
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quantum of amount paid by him to the 1st respondent and
the dates on which such payments were made. The
tribunal, after considering the evidence opined that,
claimant society had already paid substantial amount to
the respondents as and when sale deeds were executed and
claimant society was awaiting for release of balance of 25
sites from MUDA. It was also held that, the contention of
Society that payments made to anyone of the respondents
will be deemed as payment to all the respondents and it
was also observed that when the amount was paid to 3
respondents separately, this petitioner did not raised his
little finger on the ground that, the amount paid to him was
not proportionate to the extent of land contributed by him.
Tribunal was right in observing the fact that, MUDA being a
statutory authority would release the sites only after being
satisfied about the compliance of all conditions and hence
till the remaining sites were released society could not have
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called upon the respondents to expedite the process of
execution and registration of sale deeds in favour of the
members. The learned counsel for petitioner argued that,
when all the 3 of them executed GPA in favour of society, as
per Ex.P.2 in the year 2010 itself it was the duty of the
society to obtain NOC from all statutory authorities and to
pursue MUDA for release of sites but society did not took
proper steps and committed inordinate delay with regard to
the release of sites. Tribunal was right in observing that,
respondents, 1 and 2 therein never made any such
allegations against the society. This petitioner admitted
Ex.R.21 and also the fact that, P.D.Chandrakanth was
entrusted with entire work of developing the layout with
respondent No.2 and he also admitted that, it is true that
MUDA released remaining 25 sites only after construction
of storm water drain. He has also admitted that, members
of the claimant society paying the consideration either at
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the time of execution of the sale deed are just prior to it and
hence it was observed that, the petitioner,
P.D.Chandrakanth and another have received consideration
in excess of their entitlement. The tribunal also observed
that, since MUDA did not released the sites
P.D.Chandrakanth could not execute substantial works and
hence the petitioner herein cannot contend that, society is
responsible for the delay. In para 69 of the award learned
arbitrator categorically held that, "At the best it is an inter-
say dispute between the respondents and the 3 rd
respondent". In my opinion, the learned sole arbitrator by
considering the oral and documentary evidence has come to
the conclusion that, there was no delay on the part of
claimant society and I do concede that, the objections
raised by this petitioner that excess amount was paid to
P.D.Chandrakanth for the reasons given by the society is
nothing but an inter-say dispute between this petitioner
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and P.D.Chandrakanth for which 1st responding society and
its members cannot be made to suffer then the society had
already paid money to all the 3 landlords.
17. Coming to the question of other aspects like not
answering additional issues by the learned arbitrator, as
discussed earlier this court cannot sit as an appellate court
while deciding the petition under Section 34 of Arbitration
and Conciliation Act 1996. If we peruse all the ground
urged by the petitioner they are all on facts and this court
has no power to decide a 34 petition on the ground of facts.
Further, on perusal of the award, I do not find any grounds
to hold that, it suffers from patent illegality as contended
by the petitioner in his petition. Accordingly, I answer
point No.1 in the "Negative."
18. Point No.2:- In view of my findings on Point No.1, I
proceed to pass the following;
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ORDER
The petition filed by the petitioner under Sec.34 of Arbitration and Conciliation Act, 1996 is hereby dismissed.
Office to issue Soft copy of this Judgment to both sides by e-mail if furnished.
(Dictated to the Stenographer, typed by her, corrected and then pronounced by me in open Court on this the 11th day of March, 2025).
(ROOPA K.N.), LXXXVII Addl.City Civil & Sessions Judge, (Exclusive Dedicated Commercial Court) Bengaluru.