Authority: High Court of Karnataka at Bengaluru

Order Date: 29 June 2026

Case Overview

  • Parties: Appellant – Mr. A.R. Abdul Razak (individual landowner). Respondents – M/S. Ashritha House Building Co‑operative Society Ltd. (society) represented by President S.B. Chandre Gowda, and co‑respondents Mr. P.D. Chandrakant and Mr. Pushparaj Shetty.
  • Nature of Proceeding: Commercial Appeal No. 318 of 2025 filed under Section 37 of the Arbitration and Conciliation Act, 1996, seeking to set aside the Commercial Court judgment dated 11 March 2025 which had confirmed the arbitration award dated 31 August 2023.
  • Background: The landowners (including the appellant) entered into a Development Agreement dated 27 October 2010 with the society for formation of a residential layout at Hanchya Village, Kasaba Hobli, Mysore Taluk. The society was to obtain approvals, develop the layout, and pay consideration for the developed saleable area – initially ₹495 per sq ft, later revised to ₹620 per sq ft. A General Power of Attorney was executed in favour of the society.
  • Site Release Timeline: Mysore Urban Development Authority (MUDA) released sites in three phases – 73 sites on 01 September 2012, 23 sites on 28 February 2013, and the remaining 25 sites on 08 November 2017.
  • Payments & Deeds Executed: The society paid approximately ₹13.83 crores to the landowners and executed sale deeds for 84 sites in favour of its members.
  • Dispute: The society sought execution of sale deeds for the remaining 37 sites. The appellant objected, claiming he received lesser consideration, alleging delay by the society, and demanding additional consideration and a larger share of sites.
  • Arbitration: The arbitration clause was invoked; Sole Arbitrator in Arbitration Case No. 196/2019 awarded on 31 August 2023 in favour of the society, directing execution of the remaining sale deeds at ₹620 per sq ft and rejecting the appellant’s counter‑claim. The Arbitrator held the society had substantially performed, that the delay was due to MUDA’s final release of sites, and that the appellant’s grievance on unequal consideration was an inter‑se dispute among landowners, not affecting the society’s contractual rights.
  • Commercial Court (Section 34) Findings: The Commercial Court dismissed the appellant’s petition, holding the grounds raised were a re‑appreciation of evidence and did not fall within the limited grounds for interference under Section 34 of the A&C Act. No patent illegality, perversity, or public‑policy violation was found.
  • Legal Principles Cited: The judgment reiterated the narrow scope of Sections 34 and 37, citing Supreme Court decisions in Ssangyong Engineering & Construction Co. Ltd. v. NHAI, Delhi Airport Metro Express Pvt. Ltd. v. DMRC, and MMTC Ltd. v. Vedanta Ltd. regarding patent illegality, public policy, and the court’s non‑appellate role.
  • Limitation Issue: The appellant argued the claim was time‑barred because the society issued the first notice for execution only on 25 January 2019, after earlier site releases. The court held that the Development Agreement did not prescribe a fixed date for execution; therefore, limitation under Article 54 of the Limitation Act, 1963 commenced only when the appellant refused performance, which occurred in 2019. The court accepted the Arbitrator’s finding that the society continuously demonstrated readiness and that the appellant’s refusal was the decisive event.

Final Outcome

  • The High Court dismissed the commercial appeal, upheld the Commercial Court’s order, and consequently affirmed the arbitration award dated 31 August 2023. No interference with the award was ordered.

Topics: Arbitration, Real Estate Dispute