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2025 Supreme(Online)(Kar) 17494
KARNATAKA HIGH COURT
VIBHU BAKHRU, CJ, C M JOSHI, J
M/S BHADRA LANDMARKS PVT LTD – Appellant
Versus
SMT. S N SHEELA, SUMATHY KANNAN W/O. SRI A.SURESH BABU – Respondent
Commercial Appeal No. 343 of 2025
For the Appellants/Petitioners: R B SADASIVAPPA
For the Respondents: H.V DEVARAJU
The court upheld interim measures under the Arbitration Act to prevent alienation of disputed property, safeguarding the interests of parties pending resolution.
Headnote:(A) Arbitration and Conciliation Act, 1996 - Sections 9 and 37 - Dispute arising from a Joint Development Agreement concerning property rights - Respondents filed a petition under Section 9 for interim relief against appellant's actions to alienate property - Court upheld interim measures to preserve subject matter of dispute. (Paras 1, 6, 10, 11)
(B) Jurisdiction - Appellate court must ensure that lower court's orders on interim measures should protect the interests of parties involved pending adjudication. (Paras 10)
Facts of the case:
The appellant entered a Joint Development Agreement with the respondents for property development and ownership was contested concerning additional space claimed by the respondents.
Findings of Court:
The appeal was dismissed as the lower court's interim order was deemed appropriate to sustain the dispute resolution process without friction.
Issues: The main issue was whether the respondents held rights to the additional developed property beyond their allotted flats.
Ratio Decidendi: The court reasoned that allowing the appellant to alienate property without resolution of rights would frustrate the respondents' claims, thus, interim protection was necessary.
Result: Appeal dismissed.
| Table of Content |
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| 1. the appeal arises under the arbitration act challenging a prior order regarding property rights. (Para 1 , 2) |
| 2. disputes center on property development shares and unauthorized claims by the respondents. (Para 3 , 4 , 5 , 6) |
| 3. arguments presented on the extent of the respondents' rights concerning additional constructed space. (Para 8 , 9) |
| 4. court's observation emphasizes the need to uphold interim protections during dispute resolution. (Para 10) |
| 5. final decision of the court is to dismiss the appeal, maintaining the lower court's order. (Para 11) |
(PER: HON'BLE MR. VIBHU BAKHRU, CHIEF JUSTICE)
1. The appellant has filed the present appeal under Section 37 (1)(b) of the Arbitration and Conciliation Act, 1996 [A&C Act], impugning an order dated 07.04.2025 passed by the learned LXXXII Additional City Civil and Sessions Judge, Bengaluru [Commercial Court], in Comm. A.A. No. 324 of 2024.
2. The respondents had preferred the said petition under Section 9 of the A&C Act, inter alia praying that the appellant be restrained from alienating or creating third party rights in a portion of the property developed on Municipal No.14/1 (earlier being Municipal Nos. 14 and 17) situated at Haudin Road, Bharathi Nagar, Ward No.81, Bengaluru [the subject property].
3. The disputes between the parties stem from a Joint Development Agreement entered into between the appellant [Developer] and the respondents [Owners]. In terms of the Joint Development Agreement, the Developer had agreed to construct and develop the subject property and the developed property was to be shared equally. There is no dispute that the respondents have been allocated and given possession of five residential flats, in terms of the Joint Development Agreement.
4. The dispute raised, relates to an area measuring 39.3' x 12.4', which has been developed in the stilt area of the building constructed on the subject property.
5. It is the respondents' case that the said space has been developed as an office for association of apartment owners. The same was not contemplated in the original building plan. In other words, it is their case that the said area is an additional construction, which has been carried on by the appellant. Whilst the respondents claim an equal share of the said area and assert that the same is required to be used as an office for the association of apartment owners, the appellant [Developer] claims that the said space belongs to it exclusively, and it has the right to alienate the same.
6. The said disputes are required to be adjudicated in arbitration. However, in the meanwhile, the respondents became aware that the appellant has issued an advertisement for sale of one BHK ready-to-move apartment in the building in question. The respondents apprehend that the appellant is attempting to alienate the space in question described in Schedule 'B' and create third party rights. This led the respondents to file the application under Section 9 of the A&C Act.
7. The Learned Commercial Court examined the dispute between the parties and had restrained the appellant [developer], from alienating or creating any third party right in respect of the property described in Schedule 'B' to the petition; that is, the additional space developed on the stilt area of the building in question.
8. The learned counsel appearing for the appellant submits that the respondents cannot claim any share in the subject property other than the five flats which have been allotted to them. He also referred to the Deed of Confirmation whereby the respondents had confirmed that the project is complete and that they had received possession of their share of the developed property. He also contends that since the project is complete, the arbitration clause is exhausted.
9. There is no cavil that the respondents are in possession of the five separate flats, which have fallen to their share. There is also no dispute that the respondents have no claim in respect of the portion of the
