SMT SEETHA S vs. M/S LANDSON INFRASTRUCTURE

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IN THE HIGH COURT OF KARNATAKA AT BENGALURU DATED THIS THE 20TH DAY OF OCTOBER, 2022 BEFORE THE HON'BLE MR JUSTICE B M SHYAM PRASAD CIVIL MISC. PETITION NO. 350 OF 2022 BETWEEN: 1. SMT SEETHA S D/O LATE H.V SRINIVAS AGED 61 YEARS,

PETITIONER NOS. 1 AND 2 ARE R/AT 4/1, BAGESRI 4TH MAIN, CHAMARAJPET, BANGALORE-560018.

PETITIONER NOS.3, 4 AND 5 ARE R/AT D 301/305, OMICRON RENAISSANCE PARK 1

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26/2, SUBRAMANYANAGAR, MALLESHWARAM(W) PO BANGALORE-560055. …PETITIONERS (BY SRI. DEEPASHREE., ADVOCATE) AND:

M/S LANDSON INFRASTRUCTURE A PARTNERSHIP FIRM WITH ITS OFFICE AT D 202, BRIGADE GATEWAY DR RAJKUMAR ROAD, BEHIND ORION MALL BANGALORE-560055

ALSO AT

M/S LANDSON INFRASTRUCTURE II FLOOR, HVV PLAZA, NO.76, 4TH MAIN ROAD, MALLESWARAM, BENGALURU-560 055

REPTD BY ITS MANAGING PARTNER SRI.D.S.GANESH. …RESPONDENT (BY SRI. VIKRAM G, AND SRI. K.V.RAMESH KUMAR, ADVOCATES)

THIS CIVIL MISC. PETITION IS FILED UNDER SEC.11(5) OF THE ARBITRATION AND CONCILIATION ACT 1996, PRAYING TO APPOINT MR. HON'BLE JUSTICE A.V.CHANDRASHEKHAR, RESIDING AT FLAT NO. 406, 3RD FLOOR, RAMSRIDHAR APARTMENT, 2ND CROSS, 9TH MAIN, BTM LAYOUT 2ND STAGE, BENGALURU - 560 076 TO ACT AS THE SOLE ARBITRATOR AND CONDUCT ARBITRATION PROCEEDINGS AT BENGALURU OR IN THE ALTERNATIVE APPOINT AN INDEPENDENT SOLE ARBITRATOR TO ARBITRATE UPON THE DISPUTES

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BETWEEN THE PETITIONERS AND THE RESPONDENT ARISING OUT OF THE ANNEXURE-A BEING THE LEASE DEED EXECUTED BETWEEN THE PETITIONERS AND THE RESPONDENT DATED 14/11/2013.

THIS PETITION, COMING ON FOR FINAL HEARING, THIS DAY, THE COURT MADE THE FOLLOWING:

ORDER

Ms. Deepashree and Mr. Vikram G, the learned counsels for the parties, are heard and the records perused.

It is undisputed that the petitioners and the respondent have executed a registered Lease of Deed dated 14.11.2013 which contemplates reference of all disputes to adjudication by a sole arbitrator. The parties have agreed that the arbitration shall be at Bengaluru subject to the provisions of Arbitration and Conciliation Act, 1996. The parties have exchanged legal notices, including the legal notice dated 10.01.2022. In this legal notice issued on behalf of the petitioners it is stated inter alia that the respondent is tendering Rs.6,00,000/ per month as rent despite the contractual terms, and the petitioners, who have paid Goods and Services Tax (GST) and income tax for the amount that they have not received for over a period of

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twelve [12] months, are constrained to raise invoice only for the amount tendered.

Mr. Vikram G., the learned counsel submits that this would be contrary to the provisions of Central Goods and Services Act, 2017 inviting penal consequences and because the petitioners' claim is premised in such stand, the dispute cannot be arbitrated. He relies upon the decision of the Hon'ble Supreme Court in Emaar MGF Land Limited Vs. Aftab Singh reported in (2019) 12 SCC 751. In rejoinder, Ms. Deepashree submits that the petitioners have only emphasized the reasons to raise the Invoice for an amount lesser than what would be the amount the respondent should pay, and this cannot be construed as inviting any penal consequence.

There cannot be any dispute on the proposition that if there are penal consequences, the dispute cannot be arbitrated. However, in the present case, prima facie it appears that the petitioners do not contend that they raised invoices for lesser amounts because they did not want to pay GST or income tax but they contend that they were

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constrained to raise invoices for the amount actually tendered by the respondent notwithstanding the contractual terms. This Court on a prima facie view is not inclined to opine that the respondent must prevail in their objections in the present proceedings. Hence, the following order leaving all contentions open. ORDER [a] The petition is allowed; [b] Honb'le Sri. Justice V Jagannathan, Former Judge of the High Court of Karnataka, Address: PRIDE ENCHANTA, No.003, Ground Floor, 4th Block, Opposite to BHEL Main Gate, Mysore Road, Bengaluru - 560026, is appointed as the Sole Arbitrator to enter reference of the dispute between the petitioners and the respondent and conduct the proceeding at the Arbitration and Conciliation Centre (Domestic and International), Bengaluru according to the Rules governing the Arbitration and Conciliation Centre (Domestic and International), Bengaluru;

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[c] The Registry is directed to communicate this order, but by Email, to the Arbitration and Conciliation Centre (Domestic and International), Bengaluru, and Hon'ble Sri. Justice V Jagannathan, Former Judge of High Court of Karnataka, Address: PRIDE ENCHANTA, No.003, Ground Floor, 4th Block, Opposite to BHEL Main Gate, Mysore Road, Bengaluru - 560026, as required under the Appointment of Arbitrators by the Chief Justice of Karnataka High Court Scheme, 1996.

Sd/- JUDGE