Disputes regarding the terms and construction of an agreement necessitate arbitration, reinforcing the binding nature of arbitration clauses even in the presence of non-signatories.

JUDGMENT :

Gautam Kumar Choudhary, J.

Heard, learned counsel for the parties.

1. The order passed in Original Suit No. 816/2024 to refer the matter for arbitration under Section 8 of the Arbitration and Conciliation Act, 1996 is under-challenge by the plaintiff/ petitioner in the instant Civil Miscellaneous Petition.

2. Plaintiff is the land owner, whereas defendants-Opp. Parties are the builders and the other co-owner(s) of the land. Plaintiff entered into a development agreement with respondent no. 1 and 2 on 19.11.2022 for development of the land by respondent nos. 1 and 2 as per the terms of agreement of the land fully detailed in the schedule of the agreement.

3. The dispute arose with respect to the claim of the plaintiff/ petitioner for one shop to be constructed by the developer for the plaintiff on the front side as per the understanding between the parties. It is contended that Clause 4 in the agreement is to the extent that before plan/map was to be presented for sanction to the Ranchi Municipal Corporation (O.P. No.20). The developer will present the same with the land owner for his written approval.

4. The cause of action arose when the defendants without getting the approval presented the map for sanctioning before Ranchi Municipal Corporation [Opp. Party No.20].

5. Plaintiff filed the suit, inter alia, for the relief of mandatory injunction on the ongoing construction of the building on account of breach of the terms of the agreement.

6. The learned Trial Court vide impugned order referred the dispute for arbitration which is under challenge before this Court.

7. The relevant arbitral clause is extracted below:

“The any dispute or difference between the parties arising out of the meaning constitute or impart of this agreement or the right and liabilities hereunder shall be referred to the Arbitration of two independent Arbitrators one to be appointed by the LAND OWNERS and other by the BUILDER who shall appoint an umpire at the commencement of the reference, and award of the arbitrator/umpire shall be final and conclusive specially as between the parties and this clause shall be deemed to be the submissions within the meaning of the Arbitration and Conciliation Act, 1996 and its statutory modification thereof from time to time. In the event of breach of this Development Agreement and or Abuse/misuse of General Power of Attorney, either by the BUILDERS or the LAND OWNERS the defaulting party will be decided by the Arbitrator or Competent Court under the terms and conditions of this agreement within Ranchi the Capital of Jharkhand State.”

8. It is argued by the learned counsel on behalf of the petitioner that there are two parts of the above mentioned arbitral clause. The first is with regard to the construction of the term of agreement, which is to be referred the matter for arbitration, and then there is second part which is with regard to breach of terms of the agreement. Here, there was no dispute with regard to the terms of agreement, so there was no requirement to refer to arbitration. As it was involving breach of the development agreement, therefore it was not mandatorily to be referred for arbitration, which will be evident from use of the expression “and or Abuse/misuse of General power of Attorney either by the builder or the land owner, the dispute was decided by the Arbitrator” in the said agreement.

9. It is submitted by learned counsel that in view of the use of word ‘OR’ in this clause, the power of the Trial Court to adjudicate the dispute was not foreclosed. It is argued that all the parties have not been made party to the arbitral agreement, and therefore arbitrator cannot decide the