ORDER :

Arup Kumar Goswami, J.

1. Heard Mr. Tarlada Rajasekhar Rao, learned counsel for the applicants. Also heard Mr. A.K. Kishore Reddy, learned counsel for the respondent.

2. This is an application filed by the applicants under Section 11(5) & (6) of the Arbitration and Conciliation Act, 1996 read with the Scheme for appointment of Arbitrator, 1996 (for short "the Act, 1996"), for appointment of an Arbitrator.

3. The case of the applicants is that the 2nd applicant is the wife of the 1st applicant and 3rd and 4th applicants are the children of the 1st and 2nd applicants. They are the owners of land admeasuring 226.2 sq. yards (222.56 sq. mts.,) in old Sy. No. 57/1 part, new survey no. 23/2 and land admeasuring 513.99 sq. yards (429.74 sq. mts.) in old survey No. 57/1 part, New survey No. 23/2, Patha Srikakulam Rural, Killipalem Panchayat, Patha Srikakulam village, Srikakulam Mandal, totalling 780.19 sq. yards (652.316 sq. mts.). The lands are contiguous and they purchased the same vide Document No. 6711/2011 from one Sabbella Adinarayana Reddy and since the date of purchase, they are in possession.

4. A Development Agreement dated 14.12.2011 was entered into with the respondent, who is a Developer, for construction of residential units. It is not necessary to dilate on various terms and conditions of the Development Agreement for the purpose of this case. Suffice it is to say that the Development Agreement visualizes that the Developer will construct 15 dwelling units with a total super built-up area of 16200 sq.ft. in each dwelling unit. After completion of 15 units, 6 units were to be for the applicants and balance 9 units would fall in the share of the Developer. The development work relating to the share of the owners was to be completed within one year three months from the date of the Development Agreement with a grace period of six months, failing which the applicants are entitled to prevailing local rent for each flat till handing over of the respective flats by the respondent. The Development Agreement also recites that the Developer shall not assign its right of development to any other person, though a sub-contractor could be appointed by the Developer for specific works on his own responsibility.

5. The respondent, it is alleged, by violating the terms of the Development Agreement, entered into an agreement with one Gurugubelli Raju, who issued a notice dated 08.06.2016 to the applicants, demanding a certain amount. Stating that the Developer had completed construction of 9 flats falling into his share, however, with deviation from the agreed specifications, and made the same ready for sale, the flats which are allocated to the applicants were left unfinished by not laying down flooring, electrical lines, plumbing and wood work etc., a legal notice dated 23.08.2016 was issued by the applicants, calling upon him to complete the construction of 6 flats according to the agreed specifications, to restore common electrical connection and plumbing work as per agreed specifications and to deliver the same to them after releasing the same from the mortgage which was fraudulently created by the respondent and to pay rent in terms of the Development Agreement.

6. The aforesaid notice was refused to be received by the respondent and as disputes and differences had arisen, a legal notice dated 06.09.2016 was issued by the applicants nominating one Thota Bhaskara Rao, District Judge (Retired), as the sole arbitrator and requesting to intimate as to whether the respondent had any objections for the above nomination within a period of five days. In the same notice, it is stated that the first applicant personally and through elders had approached the respondent as the respondent had not performed in terms of Development Agreement before the period of one year nine months expired and also thereafter, but the respondent did not accede to the demands and had not allowed further negotiations.

7. A reply notice dated 17.09.2016 was issued