Case Note & Summary
These commercial appeals under Section 37(1)(c) of the Arbitration and Conciliation Act, 1996 read with Section 13(1A) of the Commercial Courts Act, 2015 arise from a common judgment dated 30.01.2024 passed by the learned LXXXIX Additional City Civil and Sessions Judge, Bengaluru, dismissing petitions under Section 34 of the Arbitration and Conciliation Act, 1996. The dispute pertains to a Joint Development Agreement (JDA) dated 26.05.2014 between M/s Fortuna Constructions (India) Pvt. Ltd. (FCIPL), a real estate developer, and the landowners representing Smt. Shamalamma and her family. The parties initially entered into a Memorandum of Understanding on 04.03.2013 for joint development of property bearing Sy. No. 118 measuring 1 acre, with FCIPL paying goodwill of Rs.50,00,027 out of agreed Rs.60,00,036. A registered JDA and General Power of Attorney were executed on 26.05.2014, stipulating a 34% share for landowners and 66% for FCIPL in the constructed area. FCIPL applied for building plan sanction, but the National Green Tribunal's order dated 07.05.2015 required a 15-meter setback from Raja Kaluves/nalas. The Bangalore Development Authority directed revised plans with a 10-meter buffer zone. Alleging delay, the landowners terminated the JDA on 26.03.2018. FCIPL attributed the delay to pending Supreme Court proceedings challenging the NGT order, which were resolved on 05.03.2019. On applications under Section 11 of the Arbitration and Conciliation Act, 1996, a sole arbitrator was appointed. In the arbitration, the landowners sought cancellation of the JDA, while FCIPL filed a counterclaim. The arbitrator dismissed an application for a Court Commissioner inspection. The arbitral award dated 12.06.2023 partly allowed the claims and counterclaims, cancelling the JDA and GPA subject to the landowners paying FCIPL Rs.65,00,000, and permanently restrained FCIPL from interfering with the property. Both parties filed Section 34 petitions, which the Commercial Court dismissed. The present appeals assail that dismissal. The judgment text provided ends at paragraph 18 without recording the final decision of the High Court.
Issue of Consideration
Case Details
2026 LawText (KAR) (07) 104
Commercial Appeal No. 137 of 2024 C/W Commercial Appeal No. 190 of 2024
Hon'ble Mr. Vibhu Bakhru, Chief Justice, Hon'ble Mr. Justice C.M. Poonacha
Sri Dhyan Chinnappa, Senior Advocate for Sri Ajit P.B. & Sri Thontadharya R.K.; Sri Vivek Reddy, Senior Advocate along with Sri T.M. Venkata Reddy
M/S Fortuna Constructions (India) Pvt Ltd (in COMAP 137/2024); Smt. Shamalamma & Others (in COMAP 190/2024)
Smt. Shamalamma & Others (in COMAP 137/2024); M/S Fortuna Constructions (India) Pvt. Ltd. & Mr. Padmaiah Vuppu (in COMAP 190/2024)
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Nature of Litigation
Appeals under Section 37 of the Arbitration and Conciliation Act, 1996 against order of Commercial Court dismissing petitions under Section 34 challenging an arbitral award which cancelled a Joint Development Agreement and awarded compensation.
Remedy Sought
FCIPL (appellant in COMAP 137/2024) seeks to set aside the arbitral award and the Commercial Court judgment; the landowners (appellants in COMAP 190/2024) challenge the award of Rs.65,00,000 to FCIPL.
Filing Reason
The Commercial Court dismissed the Section 34 petitions, aggrieving both parties.
Previous Decisions
Arbitral award dated 12.06.2023; common judgment of Commercial Court dated 30.01.2024 in COM.A.P No.98/2023 and COM.A.P No.128/2023 dismissing the petitions.
Judgment Excerpts
These appeals have been preferred under Section 37(1)(c) of the Arbitration and Conciliation Act, 1996 [the A&C Act] read with Section 13(1A) of the Commercial Courts Act, 2015, assailing a common judgment dated 30.01.2024 [‘the Impugned Judgment’] passed by the learned LXXXIX Additional City Civil and Sessions Judge, Bengaluru [‘the Commercial Court’], in two connected petitions under Section 34 of the Act, being COM.A.P No.98/2023 and COM.A.P No.128/2023.
The learned Commercial Court found no grounds to interfere with the impugned award and, accordingly, dismissed the appeals by the impugned order.
The dispositive part of the Impugned Award: a) The Claim of the Claimants is partly allowed b) The Counter-Claim of the Respondent is partly - allowed A. Ex. P1 Joint Development Agreement and Ex.R.5 General Power of Attorney stand cancelled as prayed for subject to payment of Rs.65,00,000/- awarded as counter-claim by the Claimants to the Respondent B. The Respondent or their agents or anybody claiming under or through the Respondent, are permanently restrained from interfering with the possession and enjoyment of the Schedule Property by the Claimants. C. The Claimants shall pay Rs.65,00,000/- to the Respondent within a period of three months from the date of award - failing which, the Respondent is at liberty to recover the same in accordance with law.
Procedural History
On 04.03.2013, MOU executed; on 26.05.2014, JDA and GPA executed; disputes arose over delays and buffer zone requirements; landowners terminated JDA on 26.03.2018; FCIPL disputed termination; landowners filed C.M.P.No.134/2020 under Section 11, sole arbitrator appointed on 15.01.2021; arbitral proceedings held, award passed on 12.06.2023; parties filed Section 34 petitions before Commercial Court; Commercial Court dismissed both petitions on 30.01.2024; present appeals filed under Section 37.
Acts & Sections
- Arbitration and Conciliation Act, 1996: Section 11, Section 33, Section 34, Section 37(1)(c)
- Commercial Courts Act, 2015: Section 13(1A)
- Code of Civil Procedure, 1908: Order XXVI Rule 9
- Karnataka Stamp Act:
