Karnataka High Court
Regenta Hotels Private Limited vs Dawood Ashraf on 28 November, 2025
Author: Suraj Govindaraj
Bench: Suraj Govindaraj
-1-
NC: 2025:KHC:50372
CMP No. 335 of 2025
HC-KAR
IN THE HIGH COURT OF KARNATAKA AT BENGALURU
DATED THIS THE 28TH DAY OF NOVEMBER, 2025
BEFORE
THE HON'BLE MR. JUSTICE SURAJ GOVINDARAJ
CIVIL MISC. PETITION NO. 335 OF 2025
BETWEEN:
REGENTA HOTELS PRIVATE LIMITED
(FORMERLY ROYAL ORCHID ASSOCIATED
HOTELS PRIVATE LIMITED)
A COMPANY INCORPORATED UNDER THE PROVISIONS OF
THE COMPANIES ACT 1956
HAVING ITS REGISTERED OFFICE AT
NO. 1 GOLF AVENUE KODIHALLI
OFF AIRPORT ROAD
BANGALORE 560008
REPRESENTED HEREIN BY
ITS AUTHORIZED SIGNATORY
MR AMIT JAISWAL.
...PETITIONER
(BY SRI. SUNDARA RAMAN M V., ADVOCATE)
AND:
DAWOOD ASHRAF
Digitally signed PROPRIETOR OF LESSERMO LADAKH
by SHWETHA
RAGHAVENDRA AGED ABOUT 26 YEARS
Location: HIGH S/O LATE MOHAMMED ASHRAF
COURT OF HAVING OFFICE AT CHULUNG OLD ROAD
KARNATAKA
LEH 194 101
...RESPONDENT
(BY SRI. USHA S NAIR., ADVOCATE)
THIS CMP IS FILED UNDER SECTION 11(6) OF THE
ARBITRATION AND CONCILIATION ACT, 1996, PRAYING TO
APPOINT, SOLE ARBITRATOR AS THIS HONBLE COURT MAY DEEM
FIT, AND REFER THE DISPUTE THAT HAVE ARISEN BETWEEN THE
PARTIES IN RELATION TO THE HOTEL OPERATIONS AGREEMENT
DATED 16.11.2021 (ANNEUXRE B) R/W SEC.SETTLEMENT
AGREEMENT DATED 14.05.2024 (ANNEUXRE F) TO ARBITRATION
CLAUSE 28.
-2-
NC: 2025:KHC:50372
CMP No. 335 of 2025
HC-KAR
THIS PETITION, COMING ON FOR FINAL HEARING, THIS DAY,
ORDER WAS MADE THEREIN AS UNDER:
CORAM: HON'BLE MR. JUSTICE SURAJ GOVINDARAJ
ORAL ORDER
1. The petitioner is before the Court seeking for the following reliefs:
(a) APPOINT, a sole Arbitrator as this Hon'ble Court may deem fit, and refer the disputes that have arisen between the parties in relation to the Hotel Operations Agreement dated 16 November 2021 (Annexure C) read with the Settlement Agreement dated 14.05.2024 (Annexure F) to arbitration clause.28
(b) DIRECT the Respondent to pay the costs of these proceedings;
(c) GRANT such other reliefs as this Hon'ble Court may deem fit, in the interests of justice and equity.
2. The petitioner had initially entered into a Hotel Operation Agreement with one Sri Mohammed Ashraf for a 59 guest room hotel to be maintained in Chulung Old Road, Leh, which is governed by an arbitration clause in terms of clause Article 28, which is reproduced hereunder for easy reference:
Settlement of Disputes
1. In the event of any dispute, claim, question, or disagreement arising from or relating to this agreement or the breach thereof, the parties hereto shall use their best efforts to settle the dispute, claim, question, or disagreement. To this effect, they shall -3- NC: 2025:KHC:50372 CMP No. 335 of 2025 HC-KAR consult and negotiate with each other in good faith and, recognizing their mutual interests, attempt to reach a just and equitable solution satisfactory to both parties. The parties agree to meet to pursue resolution through negotiation before resorting to litigation. If they do not reach such solution within a period of 30 days, then, upon notice by either party to the other, all disputes, claims, questions, or differences shall be referred to Arbitration in accordance with the provisions of the Arbitration and Conciliation Act, 1996.
2. The venue of the arbitration shall be at Bangalore.
The proceedings of arbitration shall be conducted in English by a sole arbitrator jointly appointed by the Parties. If the Parties fail to mutually agree on an arbitrator, the arbitrator shall be appointed in terms of the Arbitration and Conciliation Act, 1996. The decision and award of arbitrator shall be binding upon both Owner and Operator.
3. Except the matter in controversy or dispute, all other terms and conditions of this Agreement shall remain in full force and effect, pending the award of the arbitration proceedings.
4. Subject to clauses above, all disputes are subject to the exclusive jurisdiction of Bangalore Courts.
3. Unfortunately, the said Mohammed Ashraf having expired, a settlement agreement came to be entered into between the petitioner and the respondent on 14.05.2024 where under the respondent agreed to make payment of a sum of Rs.41,49,646/-. This agreement is also governed by an arbitration clause in terms of Clause 5 thereof, which is reproduced hereunder for easy reference:
Governing Law And Dispute Resolution -4- NC: 2025:KHC:50372 CMP No. 335 of 2025 HC-KAR a. This settlement agreement shall be governed by and construed in accordance with the laws of India and subject to the exclusive jurisdiction of courts of Bangalore City.
b. Any Dispute or Difference that may arise in relation to this Settlement Agreement shall be resolved by reference to arbitration by a sole arbitrator under the provisions of the Arbitration and Conciliation Act, 1996 at Bangalore City. The seat of arbitration shall be Bangalore City and Bangalore Courts alone shall have jurisdiction.
4. Contending that the respondent has not made payment of the due amounts and also has terminated the agreement. The petitioner initiated the proceedings under Section 9 of the Arbitration and Conciliation Act, 1996 (for short, "the Act,") in Com.A.A.No.417/2024 before the Commercial Court, at Bengaluru where an ex parte interim order had been passed on 01.03.2025, which subsequently has been disposed of, confirming the said injunction order on 29.11.2025.
5. The respondent invoked the arbitration clauses under both the aforesaid agreements and issued a notice on 07.04.2025, nominating its arbitrator. The respondent, though served, did not reply to the same and it is in that background, the petitioner has approached this Court. -5-
NC: 2025:KHC:50372 CMP No. 335 of 2025 HC-KAR
6. Notice having been issued to the respondent, the respondent has been served and has entered appearance by his counsel.
7. The submission of Sri. Akhail Ahmed Bardi, learned counsel for the respondent, firstly, is that the respondent is not a party to the Hotel Operation Agreement. The said agreement was entered into between the petitioner and his father. What agreement has been entered into between the petitioner and the respondent is only a settlement agreement to clear the dues of the deceased father of the respondent. The same cannot give rise to a continuity of the Hotel Operation Agreement and the disputes raised by the petitioner cannot be arbitrated inasmuch as the respondent is not a signatory or a party to the Hotel Operation Agreement.
8. His submission is that the amounts which were due under the settlement agreement have also been paid by the respondent and as such, on that ground also, there are no arbitration proceedings that can be initiated. Alternatively, he submits that the petitioner having -6- NC: 2025:KHC:50372 CMP No. 335 of 2025 HC-KAR initiated proceedings under Section 138 of the Negotiable Instrument Act, 1988 (for short "NI Act,") as regards the dishonour of the cheques issued by the respondent, the question of maintaining arbitral proceedings would not arise since proceedings have already been initiated by the petitioner under Section 138 of the NI Act. On all the aforesaid grounds, he submits that the above petition is required to be dismissed.
9. Sri M.V. Sundara Raman, learned counsel appearing for the petitioner, would in rejoinder submit that the amounts have not been paid under the settlement agreement, cheques having been dishonored, and the proceedings under Section 138 of the NI Act have been initiated.
10. His further submission is that the respondent being the legal heir of late Sri.Mohammed Ashraf, he would be bound by the arbitration clause and the agreement entered into between the petitioner and the Mohammed Ashraf.
-7-
NC: 2025:KHC:50372 CMP No. 335 of 2025 HC-KAR
11. Having heard both the counsels, though several conditions have been taken up as indicated Supra, the fact remains that there is no dispute as regards the Hotel Operation Agreement entered into between the petitioner and Sri. Mohammed Ashraf and the settlement agreement entered into between the petitioner and the respondent.
12. All the other contentions which have been raised are disputed questions of fact as to whether the respondent would be bound by the Hotel Operation Agreement and whether the payments have been made in terms of the settlement agreement, which would have to be determined by the arbitrator so appointed.
13. The aspect of initiation of proceedings under Section 138 of the NI Act and the initiation of arbitral proceedings stand on two different footings inasmuch as the proceedings under Section 138 of the NI Act are quasi- criminal in nature initiated to seek penal remedies for the dishonour of cheques, where as arbitration is proposed to be initiated is for recovery of monies. Hence, the filing of -8- NC: 2025:KHC:50372 CMP No. 335 of 2025 HC-KAR proceedings under Section 138 of the NI Act would not come in the way of the initiation of arbitral proceedings under the Arbitration and Conciliation Act.
14. For all the aforesaid reasons, I am unable to agree with the submissions made by Sri. Akhail Ahmed Bardi, learned counsel for the respondent and as such, I pass the following:
ORDER
i) The CMP is allowed.
ii) Sri Ganesh Kuruvatti, a retired District Judge is appointed as a sole Arbitrator to arbitrate the dispute between the parties under the aegis of the Arbitration Centre attached to this Court.
iii) Registry is directed to forward a copy of this order to the Director, Arbitration and Conciliation Centre for doing the needful.
iv) Since the order is passed in the presence of both the counsels, the petitioner shall appear physically and the respondent shall appear virtually before the -9- NC: 2025:KHC:50372 CMP No. 335 of 2025 HC-KAR Director, Arbitration center at 02.30 p.m. on 17.12.2025. Since the respondent is a resident of Leh and is appointed by counsel from Leh, the arbitrator should as far as possible ensure that the arbitral proceedings are conducted virtually by following the applicable rules.
v) All contentions are left open.
vi) Registry is directed to return the original and/or certified copies, if produced, to the respective parties who have produced it/them by following due procedure.
SD/-
(SURAJ GOVINDARAJ) JUDGE GJM