IMPORTANT POINT
The court emphasized the importance of invoking arbitration within a reasonable time and held that delay in invoking the arbitration clause can render the application time-barred.

ORDER :

This application, under Section 11(5) & (6) of the Arbitration and Conciliation Act, 1996 (for short “the Act”) read with Para (3)(i)(d) of Scheme of Appointment of Arbitrators, 1996, is filed by the applicants seeking to appoint sole Arbitrator to adjudicate the differences and disputes between the applicants and the respondent.

2. Heard the submissions of Sri Prabhakar Sripada, learned Senior Counsel appearing for the applicants, Sri Vijay B.Paropakari, learned counsel for the respondents and perused the record.

3. The case of the applicants, in brief is that, the respondents entered into a development agreement-cum-General Power of Attorney with the applicants on 07.12.2012 in respect of premises bearing Municipal No.4-2-80 admeasuring 271 Sq. Yards situated at Old Bhoiguda, Secunderabad (hereinafter referred as “Schedule A property”) and the same was registered vide document No.22/2013 in the office of Sub-Registrar, Doodhbowli. The respondents also entered into another Development Agreement-cum-General Power of Attorney with the applicants and some of their relatives on the same day i.e, 07.12.2012 in respect of premises bearing Municipal Nos.4-2-75 to 77 admeasuring 585 Sq.yards situated at Old Bhoiguda, Secunderabad (hereinafter referred as “Schedule B property”) and the same was registered vide document No.23/2013 in the office of the Sub-Registrar, Doodhbowli. It is further case of the applicants that in terms of the development agreement-cum-General Power of Attorney, the respondents are supposed to complete the construction within a period of twelve (12) months subject to a grace period of six (6) months. It is the specific case of the applicants that respondents have delayed the construction of the apartment by 12 months and even after eight (8) years the respondents have not obtained the Occupancy certificate. It is further case of the applicants that the Respondents have jointly constructed both the properties and did not provide staircase and lift to the Schedule A property. Instead the respondents informed the Applicants to use the staircase provided for Schedule B property. It is further case of the applicants that the respondents used low grade tiles, local granite stone, unbranded sanitary ware, contrary to the Schedule-B specifications of the Development Agreement. Further, the Respondents failed to provide Telephone points in all bedrooms, living and drawing areas as specified and used low quality plumbing items. Therefore, in view of the deficiency in services on the part of the respondents, they have suffered financial loss and mental agony. Stating the said facts, the applicants have repeatedly requested the respondents to make good the loss but the respondents dodged the same on one pretext or the other. It is stated that as per clause No.16 of the Development Agreement-cum-General Power of Attorney, all the disputes that arise out of the development agreement have to be resolved through an Arbitrator. The applicants were constrained to issue legal notice dated 19.05.2022 to the respondents suggesting the name of Smt. Shantha Kumari, Retired District Judge, as an Arbitrator but the respondents issued reply notice dated 19.06.2022 refusing to resolve the disputes through Arbitration, which necessitated the applicants to file the present arbitration application under Section 11(5) & (6) of the Act.

4. A counter affidavit has been filed by the respondents, wherein inter alia it is stated that the respondents after entering into Development Agreements-cum-General Power of Attorney with applicants on 07.12.2012, completed the construction in all respects in the year 2014-2015 by providing all amenities and facilities as per the agreed specifications of the development agreements which includes providing of two lifts, water connection, standby generator etc., It is further stated that as per the development agreement-cum-General Power of Attorney, 50% of the construction portion was already handed over t