The main legal point established in the judgment is the jurisdiction of the High Court to entertain a petition under Section 9 of the Arbitration and Conciliation Act, 1996 in relation to immovable properties situated outside its original jurisdiction.

R. BANUMATHI.,J.

1. These two appeals arise out of the order dated 3.12.2010 made in O.A.Nos.40 and 41 of 2010 on the file of this Court, whereby the learned single Judge has allowed application - O.A.No.40 of 2010 filed under Section 9 of Arbitration and Conciliation Act, 1996 and also the other application - O.A.No.41 of 2010 granting interim injunction restraining the appellants from in any manner alienating, encumbering or otherwise dealing with the schedule properties situated at Kondappanaickenpatti village, Salem Taluk.

2. The brief facts are that the appellants are the owners of the lands measuring 4.62 acres (S.Nos.175/3B, 177/1, 178, 180/2A); 12.44 acres (S.Nos.177/3, 179, 180/8) and 1.26 acres of land (S.Nos.177/2, 180/7) situated in Kondappanaickenpatti village, Salem Taluk. The appellants and respondent - Akash Housing represented by its Partner Suresh Kumar entered into a joint development agreement dated 17.5.2006 under which the respondent undertook development activities such as levelling/filling/clearing/cutting of trees and erection of compound wall in the lands measuring 18.32 acres. The Managing Director of M/s.Vijay Shanthi Builders represented by its Managing Director had entered into an independent and separate agreement dated 17.5.2006 with the appellants and the said Company has undertaken to develop the integrated township/gated community by forming a lay out and constructing row houses for the purpose of sale of houses to third parties. In both the agreements, parties are stated to have agreed to share the profits in the ratio of 65:35.

3. Certain modifications to the joint development were considered necessary, which culminated in the execution of supplementary agreement on 11.6.2008. Total consideration for the works to be done by the respondent/Akash Housing was earlier fixed at Rs.25,00,000/- per acre and by the said supplementary agreement, the same was modified. The case of respondent is that in terms of clause 5 of the supplementary agreement dated 11.6.2008, the appellants shall pay the entire consideration of Rs.4,91,17,500/- within 24 months from the date of supplementary agreement. There arose certain disputes and difference of opinion between the parties and the parties resorted to resolve their disputes through conciliation and a Memorandum of Understanding (MOU) came to be entered into between the appellants and the respondents in the presence of Senior Counsel Mr.K.M.Vijayan on 22.8.2009.

4. Case of respondent is that in pursuance of the said MOU dated 22.8.2009 they proceeded to undertake the work in the schedule mentioned property. On 5.1.2010 the respondent came to know that the appellants have cancelled the power of attorney executed by them on 13.10.2009 in favour of Vijay Shanthi Builders and that the appellants are attempting to sell the properties directly to third parties to get rid off the obligations to pay the amount of a sum of Rs.5 Crores owned by them under the supplementary agreement dated 11.6.2008. As per the development agreement dated 17.5.2006, in the event of any disagreement between the parties, the same shall be settled by arbitration as per the Arbitration and Conciliation Act, 1996. Alleging that the appellants are taking steps to alienate the property in favour of the third parties and that the respondent is contemplating arbitration proceedings, the respondent had filed Petition under Section 9 of the Arbitration and Conciliation Act, 1996, (hereinafter referred to as "1996 Act"). In the said petition, the respondent had sought for injunction restraining the appellants from alienating the property.

5. The appellants have filed counter stating that the respondent having filed application under Section 9 of the 1996 Act, M/s.Vijay Shanthi Builders has also filed Civil Suit in C.S.No.36 of 2010 on the very same cause of action. It is averred that the appellants had already sent communications to invoke arbitration and conciliation proceedings and witho