M/S Next Builders and Developers v. Balkrishna Suvarna Yermala

IN THE HIGH COURT OF KARNATAKA AT BENGALURU DATED THIS THE 27TH DAY OF APRIL, 2026 BEFORE THE HON'BLE MR. JUSTICE SACHIN SHANKAR MAGADUM WRIT PETITION NO. 13436 OF 2026 (GM-RES)

BETWEEN:

¶1M/S NEXT BUILDERS AND DEVELOPERS A REGISTERED PARTNERSHIP FIRM HAVING ITS OFFICE NO.4-182A-22, P.H COMPLEX, NEAR BADRIYA JUMMA MASJID, MOODABIDRI, MOODABIDRI TALUK - 574 227. REP BY ITS PARTNERS NO. 2 TO 4 REGISTERED UNDER PARTNERSHIP ACT, 1932

2. MR. MUHAMMED SHARIF AGED ABOUT 68 YEARS, S/O ABDUL KARIM

3. MR. AFTAB MOHAMMED SHARIF AGED ABOUT 37 YEARS, S/O MUHAMMED SHARIF

4. NAZMA YASHMEEN AGED ABOUT 52 YEARS, W/O MUHAMMED SHARIF

PETITIONER NO.2 TO 4 ARE R/AT BAIT ABDUL KARIM, MOHALLA, MOODABIDRI POST, MOODABIDRI TALUK - 574 227.

PETITIONER NO.2 AND 4 ARE

Location: HIGH COURT OF KARNATAKA NC:(2026:KHC:23305( WP(No.(13436(of(2026( ( , ,,HC-KAR( ( ( REPRESENTED,THROUGH,THEIR,, GPA,HOLDER,, PETITIONER,NO.3, , …PETITIONERS, (BY,SRI.,SACHIN,B,S,,ADVOCATE), , AND:( (

1., BALKRISHNA,SUVARNA,YERMALA, S/O,JINAPPA,POOJARY, AGED,41,YEARS, R/AT,DOOR,NO.25-4-305., JHENKAR,BUILDING, ND2 ,FLOOR,,COCONUT,GARDEN, KULASHEKAR,POST,,, MANGALORE,-,575,005., ,

2., SURJIT,KUMAR, ADVOCATE,AND,ARBITRATOR, NDOFFICE,AT,,2 ,FLOOR,,, SHREE,KRISHNA,COMPLEX, MG,ROAD,,KODIALBAIL,, MANGALORE,-,575,003., , …RESPONDENTS, , (BY,SRI.,ASHWINI,JOYSTON,KUTINHA,,ADVOCATE,FOR,R1-, ,,,,,,,(CP,8839/2026)), , , THIS, WP, IS, FILED, UNDER, ARTICLES, 226, AND, 227, OF, THE,CONSTITUTION,OF,INDIA,PRAYING,TO,ISSUE,A,WRIT,OF, CERTIORARI,OR,ANY,OTHER,APPROPRIATE,WRIT,,ORDER,OR, DIRECTION,,QUASHING,THE,NOTICE,OF,ENQUIRY,ISSUED,IN, A.P., NO.1, OF, 2026, AND, ALL, PROCEEDINGS, INITIATED, AGAINST, THE, PETITIONERS, PURSUANT, THERETO, AS, PER, ANNEXURE-A,AND,ETC.,, , , THIS, PETITION,, COMING, ON, FOR, PRELIMINARY, HEARING,,THIS,DAY,,ORDER,WAS,MADE,THEREIN,AS,UNDER:, ,

CORAM: HON'BLE MR. JUSTICE SACHIN SHANKAR MAGADUM

ORAL ORDER

The petitioners, in the captioned writ petition, are assailing the Notice of enquiry issued in A.P.No.1/2026 and also seeking quashing of the proceedings initiated against the petitioners.

¶2Heard learned counsel appearing for the petitioners and learned counsel appearing for respondent No.1.

¶3Notice to respondent No.2 is dispensed with.

¶4The short point that arises for consideration before this Court is as to whether in a case where the very execution and existence of the underlying partnership agreement containing an arbitration clause is seriously disputed by one of the parties, the named Arbitrator therein can assume jurisdiction and proceed with the arbitral process at the instance of the opposite party.

¶5Learned counsel for the petitioners would vehemently contend that the petitioners have not merely disputed the invocation of the arbitration clause, but have gone to the root of the matter by specifically denying the very execution of the partnership agreement itself. It is his submission that when the foundational document, from which the arbitration clause emanates, is under serious cloud and is alleged to be non est in the eye of law, the arbitration clause embedded therein cannot be pressed into service in a unilateral manner.

¶6Per-contra, the respondents seek to justify initiation of arbitral proceedings on the premise that the agreement contains a clause naming an Arbitrator and that a notice under Section 21 of the Arbitration and Conciliation Act, 1996 (for short 'Act, 1996') has been issued.

¶7This Court, on a careful consideration of the rival submissions and on perusal of the material on record, is of

the considered view that the very edifice of the arbitral process in the present case is rendered disputed in view of the categorical and substantive challenge to the execution of the partnership agreement itself. When the existence of the agreement is not admitted and is, in fact, seriously disputed, the arbitration clause contained therein cannot be treated as an admitted or undisputed covenant so as to enable one of the parties to unilaterally trigger the arbitral mechanism or to call upon the named Arbitrator to enter upon reference.

¶8It is a settled principle of law that in cases where the very existence or validity of the arbitration agreement is in dispute, the appropriate recourse available to the party seeking arbitration is to invoke the jurisdiction of the competent Court under Section 11 of the Act, 1996. The power under Section 11 of the Act, 1996 is specifically designed to address such preliminary issues, including the existence of a valid arbitration agreement. Therefore, any unilateral attempt to appoint or activate an Arbitrator,

even if named in the disputed agreement, would be legally unsustainable.

¶9In the present case, the respondents, instead of invoking Section 11 of the Act, 1996 and seeking a judicial determination on the existence and validity of the arbitration agreement, have proceeded to initiate arbitral proceedings unilaterally. Such a course of action, in the teeth of a serious dispute regarding the very agreement, cannot be countenanced. The contention that the parties ought to mutually agree for appointment pales into insignificance in the factual matrix of the present case, where the foundational document itself is under challenge. The only permissible course open to the respondents is to approach the competent Court under Section 11 of the Act, 1996.

¶10In that view of the matter, this Court is of the considered opinion that the impugned notice and all

consequential proceedings initiated on the basis of the disputed agreement are liable to be interfered with.

¶11For the foregoing reasons, this Court proceeds to pass the following; ORDER

(i) The writ petition is allowed.

(ii) The Notice of Enquiry issued in A.P.No.1/2026 and all proceedings initiated against the petitioners pursuant thereto, as per Annexure-A, are hereby quashed.

(iii) Liberty is reserved to the respondents to avail appropriate remedy in accordance with law, including by invoking Section 11 of the Arbitration and Conciliation Act, 1996.

Sd/- (SACHIN SHANKAR MAGADUM) JUDGE

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