Karnataka High Court
Gravity One Living Space Pvt Ltd vs Marigowda on 9 February, 2023
Author: R Devdas
Bench: R Devdas
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CMP No. 419 of 2021
IN THE HIGH COURT OF KARNATAKA AT BENGALURU
DATED THIS THE 9TH DAY OF FEBRUARY, 2023
BEFORE
THE HON'BLE MR JUSTICE R DEVDAS
CIVIL MISC. PETITION NO. 419 OF 2021
BETWEEN:
GRAVITY ONE LIVING SPACE PVT LTD
A COMPANY INCORPORATED AND REGISTERED
UNDER COMPANIES ACT 2013,
WITH ITS REGISTERED OFFICE AT NO.1062,
VISHNUVARDHANA ROAD,
OPP. ZILLA PANCHAYATH,
CHAMARAJPURAM, MYSURU 570 005,
REPRESENTED BY ITS DIRECTOR.
...PETITIONER
(BY SRI. RUPESH KUMAR .S, ADVOCATE)
AND:
1. MARIGOWDA
Digitally AGED ABOUT 58 YEARS,
signed by
JUANITA S/O MARIGOWDA,
THEJESWINI
Location: 2. EKAMBHARA,
HIGH
COURT OF AGED ABOUT 48 YEARS,
KARNATAKA
S/O MARIGOWDA,
3. KUMARA,
AGED ABOUT 44 YEARS,
S/O MARIGOWDA,
4. ROOPA,
AGED ABOUT 35 YEARS,
W/O KUMARA,
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CMP No. 419 of 2021
ALL ARE RESIDENTS OF
MARTIKYATHANAHALLI,
JAYAPURA HOBLI,
MYSURU TALUK- 570 026.
...RESPONDENTS
(BY SRI. RANGARAMU .V, ADVOCATE)
THIS CIVIL MISC. PETITION IS FILED UNDER
SECTION.11(5) OF THE ARBITRATION AND CONCILIATION ACT
1996, PRAYING TO A. APPOINT A SOLE ARBITRATOR NAMELY
HON'BLE RETIRED DISTRICT JUDGE, KAMALA OR ANY OTHER
RETIRED DISTRICT JUDGE TO ADJUDICATE UPON THE LIS
BETWEEN THE PARTIES AROSE UNDER THE JOINT
DEVELOPMENT AGREEMENT DATED:19/02/2013 AS PER
ANNEXURE-F. AND ETC.
THIS PETITION, COMING ON FOR ADMISSION, THIS DAY,
THE COURT MADE THE FOLLOWING:
ORDER
R.DEVDAS J., (ORAL):
The petitioner has filed this civil miscellaneous petition under Section 11(5) of the Arbitration and Conciliation Act, 1996 for appointment of an arbitrator to adjudicate the dispute between the parties under the joint development agreement dated 19.02.2013. -3- CMP No. 419 of 2021
2. It is not disputed by the respondents that the parties have indeed entered into a joint development agreement dated 19.02.2013 wherein the respondents, the owner of the land permitted the petitioner herein to develop the same into the residential layout. In terms of the joint development agreement dated 19.02.2013, the petitioner herein was required to complete the development within a period of 18 months from the date of the joint development agreement, subject to any intervening circumstances either at the instance of the government or by act of god. It is also not disputed that subsequently, the parties entered into continued joint development agreement dated 07.11.2014 wherein the time period for completion of the development stood extended by another period of twelve months on the same condition.
3. Leaned counsel for the respondent submits that in terms of the continued joint development agreement dated 07.11.2014 the time period for completion of the -4- CMP No. 419 of 2021 development work came to an end on 06.11.2015. Learned counsel submits that the cause of action for the petitioner arose immediately after the completion of the period of contract, i.e., on 07.11.2015 and within a period of three years from there the petitioner should have invoked the arbitration clause and sought for resolution of the dispute by appointment of arbitrator. However, a notice was issued by the petitioner only on 23.08.2021 long after the expiry of the period of limitation and therefore, the learned counsel for the respondent submits that the prayer made in the civil miscellaneous petition cannot be granted.
4. Per contra, learned counsel for the petitioner seeks to place reliance on a decision of the Hon'ble Supreme Court in the case of BHARAT SANCHAR NIGAM LIMITED AND ANOTHER VS. M/S NORTEL NETWORKS INDIA PRIVATE LIMITED reported in (2021) 5 SCC 738. Learned counsel would contend that in terms of the said decision although Article 137 of the -5- CMP No. 419 of 2021 schedule of the Limitation Act would became applicable, nevertheless, the period for construing the three years as provided in Article 137 would commence only when the arbitration notice is issued and not before that.
5. In the considered opinion of this Court, the decision of the Hon'ble Supreme Court makes it very clear that there are two aspects to the question of limitation that would arise in an arbitration proceedings.
6. Having regard to the admitted facts, this Court finds that the Hon'ble Supreme Court considered the issue as to whether the Court may refuse to make the reference under Section 11 where the claims are ex-facie time barred. The Hon'ble Supreme Court held that the period of limitation for issuing notice of arbitration would not get extended by mere exchange of letters or by mere settlement discussions, where a final bill is rejected by making a deduction or otherwise. Sections 5 to 20 of the Limitation Act, 1963, do not exclude the time taken on account of settlement discussions. It was noticed that -6- CMP No. 419 of 2021 Section 9 of the limitation act, makes it clear that where once the time has begun to run, no subsequent disability or inability to institute a suit or make an application stops it. The Hon'ble Supreme Court held that the period of limitation that filing an application under Section 11 of the Act, would be governed by Article 137 of the 1st schedule of the Limitation Act, 1963. In terms of Article 137, the period of limitation prescribed is three years.
7. Having regard to the settled position of law, this Court is of the considered opinion that the petitioner issued the arbitration notice on 23.08.2021 beyond the period of three years as prescribed in Article 137 of the Limitation Act. That being the position, the prayer made by the petitioner to appointment an arbitrator to resolve the dispute under the agreement dated 19.02.2013 cannot be granted.
8. Although the facts obtained herein are similar to another civil miscellaneous petition decided by this Court today in CMP No.418/2021, the only difference is -7- CMP No. 419 of 2021 that during the year 2017, the respondents filed O.S.No.349/2017 on the file of XII Additional I Civil Judge and JMFC, Mysuru, seeking an order of permanent injunction to restrain the petitioner herein from interfering with the peaceful possession of the suit schedule property. However, this would make no difference, since the cause of action arose for the petitioner on 07.11.2015 and the arbitration notice was issued on 23.08.2021, long after the expiry of the period of limitation.
Accordingly, the civil miscellaneous petition stands dismissed.
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JUDGE rv