IMPORTANT POINT
The arbitrator's decision is final, and interference by the Court is limited. The Court cannot re-assess evidence or substitute its own evaluation of the conclusion of law or fact.

JUDGMENT :

N.V. SHRAVAN KUMAR, J.

1. This Commercial Court Appeal filed under Section 13 of Commercial Courts, Commercial Division and Commercial Appellate Division of High Courts Act, 2015 r/w Section 37 of the Arbitration and Conciliation Act, 1996 (in short ‘the Act’ hereinafter) arises out of the petition filed under Section 34 of the Arbitration and Conciliation Act, 1996 in C.O.P. No. 21 of 2016 on the file of XXIV Addl. Chief Judge, City Civil Court which was filed challenging the award passed by the sole arbitrator dated 15.02.2012.

BRIEF FACTS:

2. The facts in brief are that respondent No. 1 is a proprietary firm and respondent No. 2 is the proprietor of respondent No. 1/Constructions (hereinafter referred as respondents). The appellant herein had entered into a development agreement originally on 15.05.1996 with respondents for developing land admeasuring 350 sq. yds. in plot bearing No. 44, situated at Methodist Colony, Kundanbagh, Begumpet, Hyderabad.

3. In the said development agreement, there was an understanding to share built up area in the ratio of 32% to the appellant and 68% to the builders i.e. respondent Nos.1 and 2. Thereafter, certain disputes arose among the partners of respondents and a fresh development agreement dated 11.10.1997 was entered into between the parties which was thereafter cancelled unilaterally by the appellant vide letter dated 19.07.1999. Subsequently, there were inter se disputes between the respondent partnership firm and respondent No. 1 which was reduced into proprietary concern and thereafter respondent No. 1 raised one flat in second floor and partly two other flats and proceeded with the construction of outer walls of the super structure and the said structures on the subject land was found to be defective.

4. Thereafter, respondent No. 2 shifted to the flat which was developed in the second floor of the building under construction in the subject property and was residing in the said flat. The appellant had filed a complaint before the Municipal Corporation Hyderabad vide letters dated 05.05.2001 and 29.05.2001 requesting the authorities to demolish the structures raised by the respondents by stating it as ‘not fit for human habitation’. The respondents in view of the arbitration clause in the development agreement, have approached the then Hon’ble High Court of Andhra Pradesh for appointment of arbitrator. The then Hon’ble High Court of Andhra Pradesh vide orders in Arbitration Application No. 51 of 2003 appointed sole arbitrator to adjudicate the disputes between the parties and the arbitrator by an order dated 15.02.2012 has rejected the application filed by the applicants therein and they were further directed to deliver possession of the vacant site to respondents after pulling down the building and clearing the debris within two (2) months.

5. The applicants/respondents therein challenged the award dated 15.02.2011 of the sole arbitrator before the XXIV Addl. Chief Judge, City Civil Court, Hyderabad vide C.O.P. No. 21 of 2016 under Section 34 of the Act. The petitioners before the Tribunal submitted that sole arbitrator found a new case for respondent which was not pleaded and that the findings of the arbitrator are perverse in nature and he has no jurisdiction to pass an award directing the petitioners to deliver the possession of the vacant site to respondent No. 1 after pulling down the constructions and clearing the debris which does not found part of the terms of the reference and was not supported by any pleadings.

6. In the award, the learned arbitrator observed that the respondents have committed breach of the development agreement dated 11.10.1997 and it is an undisputed fact that building was not constructed as per the agreement and the construction was stopped in the middle and structures raised are not sound and safe and the life of the constructed building would not be more than two decades. It was further observed that the respondents therein would acquire right to