Point of law: Section 2(1)(c) of Act, 2015 defines what is meant by ‘commercial dispute’ and instances are mentioned in various clauses incorporated therein. ‘Commercial dispute’ means a dispute arising out of agreements relating to immovable property used exclusively in trade or commerce.

JUDGMENT :

P.NAVEEN RAO, J.

Heard Sri Nikunj Dugar learned counsel for the appellant and Sri Damodar Mundra learned counsel for the respondents 2 to 4.

2. The brief facts of the appeal are that the appellant is a registered partnership firm under the provisions of the Indian Partnership Act, 1932. The appellant is the owner and possessor of the property being Plot Nos.1 to 4 and 13 to 16 in Sy.Nos.322, 323 and 326 of Quthbullapur village and Mandal, Medchal-Malkajgiri district, admeasuring 4444.44 square yards. The respondents are carrying business of real estate and development of immovable properties. The appellant initially entered into registered Development Agreement-cum-General Power of Attorney vide document no.1435/2014 dated 08.09.2014 registered at Sub-Registrar at Balanagar. In terms thereof, the respondents 1 to 3 were authorized to carryon the development of the above property. Agreement envisaged 43% of the built-up and saleable area on all the floors including the stilt/cellar together with all the general amenities, facilities etc. to the appellant and 57% to the developer. The agreement also envisaged completion of the project within 27 months with a grace period of 3 months from the date of obtaining permission for construction from GHMC. The respondents 1 to 3 gave refundable security deposit without interest for a sum of Rs, 30,00,000/-. The respondents 1 to 3 obtained building permit No.52714/HO/NZ/Cir-15/2016, dated 03.12.2016.

3. During the subsistence of this agreement, respondent no.1 retired from the firm and respondent no.4 was admitted as partner of the respondent no.5. The appellant and the respondents entered into a supplementary agreement on 04.11.2017, wherein it was mutually agreed to reduce the ratio of the share of the owners from 43 % to 42% and the ratio of share of the builder increased from 57% to 58%. In accordance with new sharing ratio, the owner is entitled to 28 flats and the builder is entitled to 38 flats. Subsequently, the parties executed supplementary agreement dated 02.01.2019 to divide and distribute the constructed areas between the parties as per the ratio of 42% to owner and 58% to builder respectively. Subsequently, another supplementary agreement dated 17.01.2019 was entered into between the appellant and the respondents, whereby it was agreed to share the ground floor commercial space of 8000 square feet as per their sharing ratio of 42% and 58% respectively and it was also agreed to share the car parking in the same ratio.

4. Disputes arose between the parties on various aspects. There was exchange of correspondence between the appellant and developer. In notice dated 03.09.2021, appellant invoked Arbitration clause nominating an Arbitrator. In reply notice dated 08.09.2021 developer has not agreed to the arbitrator nominated by the appellant and proposed alternative name which was not acceptable to the appellant. Pending reference to arbitration, appellant invoking Section 9 of the Arbitration and Conciliation Act, 1996 (for short, Act, 1996) by filing Arb.O.P.No.5 of 2022 in the Court of XVI Additional District and Sessions Judge, Malkajgiri, old Ranga Redd District, presently Medchal Malkajgiri district, claiming that appellant is entitled to Rs.3,09,78,000/- as rental damages, whereas he has only Rs.1,00,00,000/- as security deposit, whereas the appellant apprehends that the respondents may walkout of the project without completing the project in all respects and in such an eventuality, it would be difficult to ensure from the developer completion of all the pending works and recovery of rental dues. He, therefore, prayed for order of attachment of suit schedule flats. He has also prayed to direct developer to complete the pending works as detailed in schedule ‘B’ and to appoint Advocate-Commissioner for local inspection to note physical features.

5. To note, a few grievances ventilated by the appellant in the Arb.O.P., are that the project was not completed by 03.04.2019