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2020 Supreme(Telangana) 105
IN THE HIGH COURT OF TELANGANA
A. RAJASHEKER REDDY, J.
Cyberabad Hitech Integrated Township Development Corporation Private Limited - Appellant
Versus
Telangana Housing Board - Respondent
Arbitration Application No.88 of 2019
Decided On : 09-06-2020
Point of Law :
As there cannot be appointment of even arbitrators, the above said Arbitrators, will in turn nominate a Presiding Arbitrator. The Arbitrators, so nominated, shall pass an award in accordance with law
Headnote:
Arbitration and Conciliation Act, 1996 - Section 11(5) and (6) - Application is filed read with Scheme for Appointment of Arbitrator, 1996, seeking to appoint an arbitrator on behalf of the respondent under Clause 20.2 of the Development Agreement cum GPA, who would in turn appoint the presiding arbitrator along with the arbitrator nominated by the applicant, to resolve the disputes between the applicant and the respondent arising out of the agreement -
Finding of the Court:
As it is stated in the counter affidavit, and also agreed by learned Special Government Pleader appearing for respondent, the matter is pending before Government for taking decision - This matter was heard and reserved for orders, but even when the matter was again listed subsequently for further hearing, time was sought and no information was furnished with regard to the decision taken by the Government - As such, no useful purpose would be served in keeping the matter pending and more so, if any decision is taken by Government, the same can be placed before arbitrator - Interlocutory applications pending, if any, shall stand closed.
Result: Arbitration application allowed
ORDER :
This application is filed under Section 11(5) and (6) of the Arbitration and Conciliation Act, 1996 read with Scheme for Appointment of Arbitrator, 1996, seeking to appoint an arbitrator on behalf of the respondent under Clause 20.2 of the Development Agreement cum GPA, who would in turn appoint the presiding arbitrator along with the arbitrator nominated by the applicant, to resolve the disputes between the applicant and the respondent arising out of the agreement dated 28.11.2005.
2. As per the averments made in the affidavit filed in support of the arbitration application, the case of the applicant is that the respondent – Telangana Housing Board, (Formerly the Andhra Pradesh Housing Board), called for tenders for the development of a residential and commercial project, and the applicant through its holding company – M/s Indu Projects Ltd., submitted bids and the said firm became the successful bidder. The respondent entered into development agreement cum- GPA dated 28.11.2005, with the applicant, for development of residential and commercial project, in a total extent of Acs.65.00, situated at KPHB colony in Sy.No.1009 of Kukatpally village, Balanagar mandal, Hyderabad, on various terms and conditions.
3. As per the development agreement dated 28.11.2005, the applicant is required to complete the construction and development of the project within 24 months from the date of signing of the agreement i.e., it is required to complete the project by 27.11.2007. The applicant could not complete the project within the time stipulated and by virtue of the supplementary development agreement dated 02.12.2009, time for completion of the project was extended till 31.05.2011.
4. The case of the applicant is that it could complete 90% of the project within time, but due to failure on the part of the respondent in discharging its reciprocal contractual obligations, it could not complete the execution of the entire project within time.
5. In the affidavit, the applicant has mentioned the issues which the respondent failed to resolve timely, and which made it impossible for the applicant to proceed with the completion of the project. As the said issues pertain to merits of the claim, and are in the nature of disputed questions of fact, need not be gone into while deciding this arbitration application. Hence, the said issues mentioned in the affidavit, are not being reproduced.
6. The further case of the applicant is that though it made several representations to the respondent, seeking its co-operation for resolution of pending works, extension of time for completion of project, and best efforts to hold negotiations, as there is no co-operation from the respondent for amicable solution, it was constrained to issue notice dated 28.03.2019 invoking the arbitration clause No.20.2 under the agreement and nominating Sri Justice K.C.Bhanu, retired Judge of the High Court as arbitrator on its behalf, and calling upon the respondent to nominate an arbitrator on its part, who would then jointly choose the presiding arbitrator. The case of the applicant is that on receipt of the said arbitration notice, the respondent issued reply notice dated 16.04.2019 with untenable allegations, and failed to nominate arbitrator on its behalf. In these circumstances, the present arbitration application came to be filed.
7. Counter affidavit is filed on behalf of the respondent. The awarding of the contract and the execution of the agreement dated 28.11.2005 and the supplementary agreement dated 02.12.2009 for extension of time till 31.05.2011 for completion of project, are not denied. It is stated that in the supplementary agreement dated 02.12.2009, under Clause 6, the applicant has specifically accepted that there is no fault on the part of the respondent for the delay, and under Clause 9 of the said agreement, the applicant, which is the developer company, has agreed to indemnify the respondent any loss due to delay on the part of the developer company in no
