Cmp/312/2017 Of The Karnataka Income Tax v. M/S Sneha Developers

1 IN THR HIGH COURT OF KARNATAKA AT BENGALURU DATED THIS THE 21 DAY OF NOVEMBER, 2019 | BBRFORK THR HON’BLE MR. JUSTICK B.VBEERAPPA CIVIL MISCELLANEOUS PETITION NO.312 OF 2017 BETWEEN: THER KARNATAKA INCOME-TAXDBPARTMBNT HOUSHK BUILDINGCO-OPERATIVE SOCIETY LTD.,A SOCIETY REGISTERED UNDER THE PROVISIONSOF THR KARNATAKA CO-OPBRATIVESOCIETIES ACT, HAVING ITS OFFICE AT1 FLOOR, C.R. BUILDING ANNEXE,|QUEEN’S ROAD, BENGALURU-S60001AND RBPRBSENTBD BY ITS SKHCRBTARYSRI. K.B. RAJAN| _.. PRHTITIONER (BY SRI. B.N.PRAKASH, ADV.) AND: Ll.M/S SNEHA DEVELOPERS,NOW KNOWN ASM/S SNEHA TOWNSHIPS PRIVATE LIMITED,A PROPRIETORY CONCERN,PRESENTLY NO.16/1,HARIPRIYA CHAMBERS,10 CROSS, NARASIMHA RAJA COLONY,BBNGALURU-5600 19 iaoRI. N.S. MUKUND,PROPRIETOR,M/S SNEHA DEVELOPERS,PRESENTLY RESIDING AT M/S SNEHA DEVELOPERS, ? NO.11/94, — SOUTH END SAMPOORNA APARTMENT,MODEL HOUSE STREET,BASAVANGUDI, |BBNGALURU-560004. ... RESPONDENTS. (R1 & R2 ARE SERVED,BUT UNREPRESENTED). THIS CIVIL MISCBLLANBOUS PERTITION [IS FILEUNDER SECTION 11(6) OF THE ARBITRATION AND]CONCILIATION ACT 1996, PRAYING THIS HON’BLE COURT)TO (A) APPOINT A SOLE ARBITRATOR OR ARBITRATORS INTERMS OF THR ARBITRATION AGRBBMENT CONTAINEDIN THR AGREEMENT STYLED AS MEMORANDUM OFUNDERSTANDING|DATED.20 APRIL2OO /VIDEANNBXURE-A TO RESOLVE THR DISPUTKR BETWEREN THPRTITIONBER AND THR RESPONDENTS AND BITC THIS PRTITION COMING ON FOR ADMISSION THIS.DAY, THE COURT MADE THE FOLLOWING:| ORDER The petitioner filed the present civil miscellaneouspetition under the provision of Section 11(6) of theArbitration and Conciliation Act for appointment of asole Arbitrator to adjudicate the dispute in terms ofClause 19 of the Memorandum of Understanding dated20.04.2007 entered into between the parties. 3 2 |It is the case of the petitioner that the|petitioner is a Co-operative Society registered under theprovisions of the Co-operative Societies Act. Therespondents represented to the petitioner that they arethe absolute owners in possession of all the propertiesbearing Sy.Nos.7/1, 7/2, 7/3 (New No.7/6, 7/2 and7/8 respectively) totally measuring 5 acres O6 guntas—situated.1nNBethanagereVillage,BidadiHobli,Ramanagar Taluk, Bengaluru Rural District. | 3.|Accordingly, both the parties have enteredinto memorandum of understanding dated 20.04.2007.under which the respondents agreed to sell all the sitesto be formed at the rate of Rs.325/- per square feet. Thepetitioner had paid Rs.25,00,000/- as advance by wayof crossed cheque in favour of the respondents. It wasfurther agreed that further payment of Rs.1,50,00,000 /-within 45 days from the date of obtaining andfurnishing the copy of the conversion order and 4 Rs.1,25,00,000/- on commencement of development ofthe layout in not more than three installments and thebalance amount was agreed to be paid on the date ofexecutionandregistration OT the.sale|deed.Respondents also agreed to complete certain civildevelopment works as per Clause 8 of the saidagreement. But, by letter dated 27.08.2015, therespondents agreed to complete the work as per theagreement. Since the development was not completed,petitioner was forced to issue legal notice dated24.06.2017 invoking Arbitration Clause. But no replywas received. Therefore, the petitioner is before thisCourt for the relief sought for. 4The respondent served, but unrepresented. 5 |Il have heard the learned counsel for thepetitioner. 5 6. sri.B.N.Prakash, learned counsel for thepetitioner reiterating the averments made in the civilmiscellaneous petition has contended that there is nodispute with regard to memorandum of understandingentered into between the parties and existence ofarbitration Clause and issuance of the legal notice ascontemplated under the provisions of Section 11(5) ofthe Act. But, no reply was received by the respondents. —Therefore, he sought to allow the Civil Miscellaneous.Petition. 4The respondent served, but unrepresented. 5 |Il have heard the learned counsel for thepetitioner. 5 6. sri.B.N.Prakash, learned counsel for thepetitioner reiterating the averments made in the civilmiscellaneous petition has contended that there is nodispute with regard to memorandum of understandingentered into between the parties and existence ofarbitration Clause and issuance of the legal notice ascontemplated under the provisions of Section 11(5) ofthe Act. But, no reply was received by the respondents. —Therefore, he sought to allow the Civil Miscellaneous.Petition. TS|Having heard the learned counsel for thepetitioner, it is undisputed fact that the petitioner is theabsolute owner in possession of the properties morefullydescribed in the agreement and itis also not in disputethat both the parties have entered into memorandum ofunderstandingOT]20.04.2007.Theoriginalmemorandum of understanding produced before thisCourt clearly depicts that both the parties have signed 6 each and every page of the document under theprovisionsoT|SectionToT|the.Arbitration andConciliation Act. 8.|It is the case of the petitioner that the|respondents have not complied with the provisions ofTerms|andconditions|ot the.memorandumot understanding. Therefore, legal notice was issued tothe office and residential address of the respondents.and one of the legal notice was returned with postal7,;3;‘addressee left OQ The Hon’ble Supreme Court has considered|the similar circumstances, in the case ofAjeet Seeds LimitedVs.K.GopalaKrishnaiahreported 02 (2014) 12 SCC 685,paragraph 10 reads as under. “It is thus clear that Section 114 of the|Evidence Act enables the Court to presume.that in the common course of natural events,the|communicationwouldhavebeen.delivered at the address of the addressee. 7 section 27 of the GC Act gives rise to a|presumption that service of notice has beeneffected when it is sent to the correct address|by registered post. It is not necessary to aver|in the complaint that in spite of the return ofthe notice unserved, it is deemed to have|been served or that the addressee is deemed|to have knowledge of the notice. Unless and|until the contrary is proved by the addressee,service of notice is deemed to have beeneffected at the time at which the letter would|have been delivered in the ordinary course of|business.” 10.|It is also not in dispute about the existence of Clause 19 of the Memorandum of Understandingwhich reads as under:| “In the event of any dispute betweenthe parties, the same _ shall be _ resolthrough Arbitration under the provisions of|the Arbitration and Conciliation Act.” 8 11.)In view of the aforesaid admitted facts, thereis no impediment for this Court to appoint the soleArbitrator to adjudicate the dispute between the parties. — 12.HOTtheTe€aSONnstatedabove,Civilmiscellaneous petition isallowed. ori...s.Antin, former|District Judge is appointed as an Arbitrator in terms ofClause 19 of the Memorandum of Understanding dated20.04.2007 entered into between the parties and inaccordance with law. Registry is directed to send a copy of this order to ori.I.S.Antin, former District Judge, the respondentsand as well as the Arbitration Centre forthwith. GH Sd/-.JUDGE