The existence of an arbitration agreement necessitates referral of disputes to arbitration, leaving substantive issues for the arbitrator.

S.MANU, J.

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A.R.No.187 of 2025 -------------------------------------------

Dated this the 26^th day of November, 2025

ORDER

In 2003, the respondent – Municipality invited tender for purchase of land to construct a new bus stand. The petitioner offered to provide 1.35 acres of land free of cost and also agreed to construct a bus stand with parking facility for 40 buses and to hand it over to the Municipality. Annexure A1 is a copy of the agreement executed between the petitioner and the respondent on 21.02.2005. Later, on 06.02.2006 a gift deed was also executed by the petitioner.

A copy of the gift deed is produced as Annexure A2.

2. According to the petitioner, the Municipality violated the terms of Annexure A1 agreement and decided to use the bus stand building constructed and gifted by the petitioner for conducting a food and fun park. The petitioner filed W.P(C)No.18950 of 2025 before this Court aggrieved by the action taken by the Municipality. It was later withdrawn on 27.05.2025.

3. The petitioner approached Sub Court, Manjeri, in M.A. (Arb.)No.84 of 2025 under Section 9 of the Arbitration and Conciliation Act , as Annexure A1 agreement contains an arbitration clause. In I.A.No.3 of 2025 the Sub Court passed an order of interim injunction in favour of the petitioner. A copy of the order is produced as Annexure A6.

4. The petitioner caused to issue Annexure A7 lawyer's notice dated 20.07.2025 invoking the arbitration clause to initiate the arbitration. Municipality issued Annexure A8 reply denying the assertions in Annexure A7. Municipality specifically contended that clause 22 of Annexure A1 has lost its enforceability and if there is any dispute between the petitioner and the Municipality, it can only be a civil dispute to be resolved by a competent Civil Court.

Therefore, the petitioner approached this Court.

5. Respondent – Municipality has filed a counter affidavit in this arbitration request. It is contended in the affidavit that the petitioner is not entitled for reference of dispute for arbitration. It is further contended in the counter affidavit that Annexure A1 is only an agreement for transfer of land and building and efficacy of the same lost with execution of Annexure A2 gift deed. Now the petitioner is demanding that the Municipality should return the land and building. It is not permissible in view of Section 215 of the Kerala Municipality Act and Kerala Municipality (Acquisition and Disposal of Property) Rules , 2000. It is further pointed out that the petitioner has not sought to revoke or set aside the gift deed executed in favour of the Municipality and hence he is not entitled for any relief.

6. Heard Sri.N.P.Ashok Kumar, learned counsel for the petitioner and Sri.P.C.Sasidharan, learned Standing Counsel for the respondent – Municipality.

7. The learned counsel for the petitioner submitted that the Municipality violated the conditions of not only Annexure A1 but also of Annexure A2. He further contended that recitals in Annexure A2 would show that it was executed in continuation of Annexure A1. Clause 22 of Annexure A1 provides for arbitration as the mutually agreed mode of resolution of disputes that may arise between the parties from Annexure A1. The learned counsel submitted that the proper remedy for the petitioner is, therefore, to invoke clause 22 and to resolve to arbitration. The learned counsel relied on the following judgments in support of his contentions.

(i) Sushma Shivkumar Daga & Anr v. Madhurkumar Ramkrishnaji Bajaj & Ors. [AIR 2024 SC 1