Karnataka High Court
Sri R Krishna Murthy vs Sir M Krishna Murthy, on 17 July, 2014
Author: S.Abdul Nazeer
Bench: S.Abdul Nazeer
1
IN THE HIGH COURT OF KARNATAKA AT BANGALORE
DATED THIS THE 17th DAY OF JULY, 2014
BEFORE
THE HON'BLE MR.JUSTICE S.ABDUL NAZEER
CIVIL MISCELLANEOUS PETITION No.14 OF 2008
BETWEEN:
SRI. R.KRISHNA MURTHY
SON OF SRI.RAMASWAMY GOUNDER
AGED ABOUT 39 YEARS
NO.69, KARUMARAMPALYAM
UTHUKULI MAIN ROAD
TIRUPUR 641 604
TAMIL NADU. .... PETITIONER
(BY SRI.S.V.GANESH, ADV.,)
AND:
SRI. M. KRISHNA MURTHY,
S/O LATE D.R.MADHAVA KRISHNAIAH,
AGED ABOUT 75 YEARS,
RESIDING AT NO.73, 5TH MAIN ROAD,
CHAMARAJPET,
BANGALORE -560018. ... RESPONDENT
(BY SRI R.OMKUMAR, ADV.,)
THIS CMP IS FILED UNDER SECTION 11 (6) OF THE
ARBITRATION AND CONCILIATION ACT, 1996, PRAYING TO
APPOINT AN ARBITRATOR AS CONTEMPLATED UNDER
ARTICLE V(i) OF THE AGREEMENT DATED 22.12.2004 AS
THIS COURT DEEMS FIT IN THE CIRCUMSTANCES OF THE
CASE, etc.
2
THIS CMP COMING ON FOR ORDERS THIS DAY, THE
COURT MADE THE FOLLOWING:
ORDER
The petitioner has filed this civil miscellaneous petition under Section 11(6) of the Arbitration and Conciliation Act, 1996, (for short 'the Act') for appointment of an Arbitrator to resolve the dispute, which has arisen out of the share purchase agreement at Annexure-A dated 22.12.2004.
2. The contention of the petitioner is that he had entered into a share purchase agreement at Annexure - A dated 22.12.2004 with the respondent for the purchase of shares of M/s.T.R.Mills Pvt.Ltd., and M/s.Chandra Mills Pvt. Ltd. It is further contended that the respondent informed the petitioner that there are certain impediments, which are required to be cleared by the respondent. After clearance of those obstacles, the shares held by the respondent has to be sold to the petitioner upon payment of a sum of `14,00,00,000/- (Rupees fourteen crores only). The agreement further 3 envisaged that the time for transfer of shares was 180 days from the date of compliance of the conditions stated in the agreement. The agreement also contains an arbitration clause for resolution of the dispute.
3. Pursuant to the said agreement, the petitioner herein paid certain amount to the respondent. The respondent was not coming forward to perform his obligation under the agreement at Annexure-A. Therefore, the petitioner issued a notice as per Annexure-B dated 17.10.2007 calling upon the respondent to appoint a sole arbitrator for the resolution of the dispute. The respondent sent his reply at Annexure-C dated 20.11.2007 opposing the contents of the notice and to withdraw the said notice.
4. The respondent has filed statement of objections contending that the petitioner is trying to flag a dead horse by filing the above petition in relation to an agreement that has been abandoned by him. He has no right whatsoever under the agreement having 4 assigned it to third parties. Therefore, question of appointment of an arbitrator for resolution of the dispute does not arise.
5. Learned counsel for the parties in their arguments have reiterated their respective contentions raised in the pleadings.
6. I have carefully considered the arguments of the learned counsel for the parties made at the bar and perused the materials on record.
6. As noticed above, there is no dispute that the petitioner and the respondent have entered into a share purchase agreement at Annexure-A dated 22.12.2004. It is also not in dispute that the said agreement contains an arbitration clause for the resolution of the dispute. The contention of the respondent is that the petitioner has already assigned his right under the share purchase agreement at Annexure-A in favour of third parties. This question as 5 also the other contentions have to be adjudicated by the arbitrator. In the circumstances, it is just and proper to appoint an Arbitrator to resolve the dispute.
7. In the result, civil miscellaneous petition succeeds and it is accordingly allowed. Hon'ble Sri. Justice B.Padmaraj, a former Judge of this Court, is requested to enter upon the reference and arbitrate over the dispute and conduct arbitration proceedings at Arbitration Centre in terms of the Arbitration Centre - Karnataka (Domestic and International) Rules, 2012. No costs.
Sd/-
JUDGE KLY/