1. The petitioner is before this Court seeking for the following reliefs:

a. Appoint an Arbitrator as per the clause 5 of the Memorandum of Agreement dated 24.06.2011 Annexure-A between parties to adjudicate and resolve the dispute between the parties in the above Civil Miscellaneous Petition.

b. Grant such other reliefs as this Hon’ble Court deems fit to grant during the circumstances of the case in the interest of justice and equity.

2. The petitioner is a House Building Cooperative Society registered under the Karnataka Cooperative Societies Registration Act, 1959. The petitioner and one Vasundhara Associates had entered into a Memorandum of Understanding (MOU) dated 25.04.2007 whereunder the said Vasundhara Associates was required to carry out certain actions in respect of 20 acres of land in Sy.No.27, 28, 29, 30, - 3 - 20/1 and 20 situate at Choranahalli and transfer the same to the petitioner. Subsequent thereto, the said Vasundhara Associates being a partnership was dissolved and another agreement dated 24.06.2011 came to be executed between the petitioner and the former partners of Vasundhara Associates namely the respondents herein, whereunder similar obligations were set-forth in the said agreement. The said agreement is governed by an arbitration clause in terms of clause 5 thereof which is reproduced hereunder for easy reference:

“5. It is mutually agreed that, in the event of there being any disputes with respect to this Agreement, the same shall be resolved by way of arbitration in the manner contemplated under the Indian Arbitration Act.”

3. Subsequent thereto there appear to be various disputes between the parties in furtherance of which notices were exchanged, finally the petitioner invoked the arbitration clause vide its notice dated 12.07.2021 and nominated its arbitrator. Despite the said notice having been served, there was no reply from the - 4 -respondent and as such the petitioner is before this Court.4. The respondents upon service entered appearance and filed their statement of objections contending that there is no live lis which is pending between the petitioner and the respondents inasmuch as upon the petitioner not complying with the requirements of the agreement, the petitioner has entered into one another agreement with one Mr.Sanjay of Nibhandana infrastructure as regards the said properties. As such, the obligation of the respondent towards the petitioner has been discharged. The petitioner is required to make payment of the monies to the respondent which has not been paid. There being no obligation on part of the respondent, the present proceedings have to be dismissed.5. Apart therefrom, it is submitted that it is the respondents who have to receive monies from the petitioners, in fact the cheque which has been issued by the petitioner to the respondents has been- 5 - dishonoured on account of insufficiency of funds as regards which proceedings under Section 420 of IPC in PCR No.45/2019 which is pending.

6. Sri.H.B.Chandrashekhar, learned counsel relies on the decision of the Hon’ble Apex Court in the case of Jagdish Chander -vs- Ramesh Chander and others reported in (2007) 5 SCC 719, [LQ/SC/2007/567] more particularly para 8 thereof which is reproduced hereunder for easy reference:

"8. This Court had occasion to refer to the attributes or essential elements of an arbitration agreement in K.K. Modi v. K.N. Modi [(1998) 3 SCC 573] [LQ/SC/1998/154] , Bharat Bhushan Bansal v. U.P. Small Industries Corpn. Ltd. [(1999) 2 SCC 166] [LQ/SC/1999/48] and Bihar State Mineral Development Corpn. v. Encon Builders (I) (P) Ltd. [(2003) 7 SCC 418] [LQ/SC/2003/811] In State of Orissa v. Damodar Das [(1996) 2 SCC 216] [LQ/SC/1995/1344] this Court held that a clause in a contract can be construed as an “arbitration agreement” only if an agreement to refer disputes or differences to arbitration is expressly or impliedly spelt out from the clause. We may at this juncture set out the well-settled principles in regard to what constitutes an arbitration agreement:

(i) The intention of the parties to enter into an arbitration agreement shall have to be gathered from the terms of the agreement. If the terms of the agreement clearly indicate an intention on the part of the parties to the agreement to refer their disputes to a private tribunal for adjudication and a willingness to be bound by the decision of such tribunal on such disputes, it is arbitration agreement. While there is no - 6 - specific form of an arbitration agreement, the words used should disclose a determination and obligation to go to arbitration and not merely contemplate the possibility of going for arbitration. Where there is merely a possibility of the parties agreeing to arbitration in future, as contrasted from an obligation to refer disputes to arbitration, there is no valid and binding arbitration agreement.

(ii) Even if the words “arbitration” and “Arbitral Tribunal (or arbitrator)” are not used with reference to the process of settlement or with reference to the private tribunal which has to adjudicate upon the disputes, in a clause relating to settlement of disputes, it does not detract from the clause being an arbitration agreement if it has the attributes or elements of an arbitration agreement. They are: (a) The agreement should be in writing. (b) The parties should have agreed to refer any disputes (present or future) between them to the decision of a private tribunal. (c) The private tribunal should be empowered to adjudicate upon the disputes in an impartial manner, giving due opportunity to the parties to put forth their case before it. (d) The parties should have agreed that the decision of the private tribunal in respect of the disputes will be binding on them.

(iii) Where the clause provides that in the event of disputes arising between the parties, the disputes shall be referred to arbitration, it is an arbitration agreement. Where there is a specific and direct expression of intent to have the disputes settled by arbitration, it is not necessary to set out the attributes of an arbitration agreement to make it an arbitration agreement. But where the clause relating to settlement of disputes, contains words which specifically exclude any of the attributes of an arbitration agreement or contains anything that detracts from an arbitration agreement, it will not be an arbitration agreement. For example, where an agreement requires or permits an authority to decide a claim or dispute without hearing, or requires the authority to act in the interests of only one of the parties, or provides that the decision of the authority will not be final and binding on the parties, or that if either party is not satisfied with the decision of - 7 - the authority, he may file a civil suit seeking relief, it cannot be termed as an arbitration agreement.

(iv) But mere use of the word “arbitration” or “arbitrator” in a clause will not make it an arbitration agreement, if it requires or contemplates a further or fresh consent of the parties for reference to arbitration. For example, use of words such as “parties can, if they so desire, refer their disputes to arbitration” or “in the event of any dispute, the parties may also agree to refer the same to arbitration” or “if any disputes arise between the parties, they should consider settlement by arbitration” in a clause relating to settlement of disputes, indicate that the clause is not intended to be an arbitration agreement. Similarly, a clause which states that “if the parties so decide, the disputes shall be referred to arbitration” or “any disputes between parties, if they so agree, shall be referred to arbitration” is not an arbitration agreement. Such clauses merely indicate a desire or hope to have the disputes settled by arbitration, or a tentative arrangement to explore arbitration as a mode of settlement if and when a dispute arises. Such clauses require the parties to arrive at a further agreement to go to arbitration, as and when the disputes arise. Any agreement or clause in an agreement requiring or contemplating a further consent or consensus before a reference to arbitration, is not an arbitration agreement, but an agreement to enter into an arbitration agreement in future."

7. By relying on the aforesaid paragraph he submits that there is no intention for reference of the matter to the arbitration, it is only if there is a particular intention established by a reading of the arbitration clause, the matter is to be referred to arbitration that the matter may be referred to arbitration. In the present case, - 8 -he submits that there is no such intention, as such the petition is liable to be dismissed.

8. He relies upon the decision of the Apex Court in Vidya Drolia and others -vs- Durga Trading Corporation [(2021) 2 SCC 1] [LQ/SC/2020/837 ;] , more particularly para 146 which is reproduced hereunder for easy reference:

"146. We now proceed to examine the question, whether the word “existence” in Section 11 merely refers to contract formation (whether there is an arbitration agreement) and excludes the question of enforcement (validity) and therefore the latter falls outside the jurisdiction of the court at the referral stage. On jurisprudentially and textualism it is possible to differentiate between existence of an arbitration agreement and validity of an arbitration agreement. Such interpretation can draw support from the plain meaning of the word “existence”. However, it is equally possible, jurisprudentially and on contextualism, to hold that an agreement has no existence if it is not enforceable and not binding. Existence of an arbitration agreement presupposes a valid agreement which would be enforced by the court by relegating the parties to arbitration. Legalistic and plain meaning interpretation would be contrary to the contextual background including the definition clause and would result in unpalatable consequences. A reasonable and just interpretation of “existence” requires understanding the context, the purpose and the relevant legal norms applicable for a binding and enforceable arbitration agreement. An agreement evidenced in writing has no meaning unless the parties can be compelled to adhere and abide by the terms. A party cannot sue and claim rights based on an unenforceable document. Thus, there are good reasons to hold that an arbitration agreement exists only when it is valid and legal. A void and unenforceable understanding is no agreement to do anything. Existence of an arbitration agreement means - 9 - an arbitration agreement that meets and satisfies the statutory requirements of both the Arbitration Act and the Contract Act and when it is enforceable in law."

9. He submits that when there is no enforceable rights as regards any particular agreement, the question of reference of the matter to the arbitration would not arise.

10. Heard Sri.Bhaskar.K, learned counsel for the petitioner and Sri.H.B.Chandrashekhar and Sri.Veeresha.K, learned counsel for respondent No.1. Perused papers.

11. The arbitration clause has been reproduced hereinabove. The contention of the respondent is that the said arbitration clause does not envisage an intention to refer the parties to arbitration. A reading of the said clause, in my considered opinion, would indicate that any disputes with respect to the agreement is required to be resolved by way of arbitration in the manner contemplated under the Arbitration and Conciliation Act. The same in my - 10 - considered opinion relates to resolving of the dispute, and therefore indicates the intention of the parties to be bound by an arbitral award as and when passed in terms of the Arbitration Act.

12. Thus, I am of the considered opinion that the decision relied upon by the respondents in Jagadish Chandra’s case (supra) would not be of any assistance to the respondents in the present case.

13. As regards the other contention that the dispute between the parties have been resolved and there is no pending lis between the parties, the agreements which have been entered into between the parties, as also the agreement which has been entered into by the petitioner with Nibhandhana Enterprise as regards the property, the cheque having been issued to the respondent which has been dishonoured and proceedings in PCR No.45/2019 are pending would itself indicate that there are disputes which are pending between the parties. Thus, the decision in - 11 - Vidhya doli’s case (supra) relied upon by the counsel for the respondents would also not be of assistance to the respondents in the present case.

14. This Court refrains from making any statement as regards the merits of the matter since the same would have to be decided by the arbitrator appointed. As such, I pass the following:

ORDER

i) The petition is allowed.

ii) Sri.R.Venkatesh, retired District Judge is appointed as a sole arbitrator to arbitrate the dispute between the parties.

iii) Registry is directed to forward a copy of this order to the above Arbitrator for doing the needful.