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2024 Supreme(Telangana) 147
IN THE HIGH COURT FOR THE STATE OF TELANGANA AT HYDERABAD
P. SAM KOSHY, SAMBASIVARAO NAIDU, JJ.
Sri Parvez Adi Debara - Appellant
Versus
M/s. Innovation Builders - Respondent
CIVIL MISCELLANEOUS APPEAL No.289 of 2023
Decided On : 24-07-2024
For the Appellant : Mrs. Manjari S. Ganu.
For the Respondent: Mr. Vedula Srinivas, learned Senior Counsel representing Ms. Vedula Chitralekha.
IMPORTANT POINT
An arbitration agreement is enforceable by legal representatives of a deceased party, allowing disputes to be resolved through arbitration even if the representative was not a direct party to the original agreement.
Headnote:
Arbitration - Appeal - Arbitration and Conciliation Act, 1996 - Sections 2(1)(g), 8, 40 - The court interpreted the provisions regarding arbitration agreements and legal representatives, concluding that the appellant could invoke arbitration despite not being a direct party to the original agreement.
Fact of the Case:
The appellant filed an appeal against the rejection of his application to refer a dispute to arbitration concerning a flat, claiming to be the legal heir of the deceased owner, while the respondent sought recovery of possession.
Finding of the Court:
The court found that the appellant, as a legal representative, could invoke the arbitration clause despite not being a direct party to the original agreement, emphasizing the enforceability of arbitration agreements post-death of a party.
Issues: Whether the appellant, as a legal heir, could invoke the arbitration clause in the agreement of sale despite not being a direct party to it.
Ratio Decidendi: The court held that the arbitration agreement remains enforceable by or against legal representatives, and the definition of 'legal representative' includes those who intermeddle with the estate of the deceased.
Result: The appeal is allowed, and the order rejecting the arbitration application is set aside.
JUDGMENT:
(P. Sam Koshy, J.)
The present is an appeal under Section 37 of the Arbitration and Conciliation Act, 1996 (hereinafter, the ‘Act of 1996’) preferred by the appellant/defendant assailing the order dated 28.03.2023 in I.A.No.2474 of 2023 in O.S.No.105 of 2019 passed by the I Additional Chief Judge, City Civil Court, Secunderabad.
2. Heard Mrs. Manjari S Ganu, learned counsel for the appellant/defendant and Mr. Vedula Srinivas, learned Senior Counsel representing Ms. Vedula Chitralekha, learned counsel for the respondent/plaintiff.
3. Vide the impugned order; the Court below has rejected an application filed by the appellant/defendant under Section 8 of the Act of 1996 and refused to refer the dispute to be resolved by way of arbitration.
4. The dispute revolves around a Flat i.e. Flat No.305 in an apartment known as Innovation Residency constructed by the respondent/plaintiff M/s. Innovation Builders. The appellant/defendant had filed the Original Suit i.e. O.S.No.105 of 2009 for recovery of possession and damages in respect of the aforementioned Flat No.305 in the apartment Innovation Residency located at premises bearing No.142/C, Prenderghast Road, Secunderabad.
5. The case of the respondent/plaintiff was that the appellant/defendant has illegally barged into the property claiming himself to be the owner in the capacity of legal heir of one Sri Rashid H.Debara. According to the respondent/plaintiff their firm was earlier managed by one Sri T.N.Khambati who died on 12.10.2017 and it is only after the death of Sri T.N.Khambati on verification of the records they found the said Flat No.305 having left unsold. That upon further verification they also found that the appellant/defendant having illegally occupied the same. The respondent/plaintiff immediately issued a legal notice on 26.02.2019 calling upon the appellant/defendant to handover possession of the said flat and only on refusal of the same, the Suit had to be filed seeking for recovery of possession. The appellant/defendant entered appearance before the Court below and immediately filed a petition under Section 8 of the Act of 1996 seeking to direct the dispute to be resolved by way of arbitration in terms of clause 10 of the agreement of sale dated 20.07.1998. According to the appellant/defendant, he is the legal heir of late Sri Rashid H.Debara.
6. According to the appellant/defendant, his uncle Rashid H.Debara had entered into an agreement of sale dated 20.07.1988 for purchase of the said flat in its sale consideration of Rs.2,20,000/- of which Rs.11,000/- was paid as advance and the balance amount was agreed to be paid by 10.08.1988. That Rashid H.Debara had paid sale consideration for the said flat and had also taken possession of the said flat since then. According to the appellant/defendant Rashid H.Debara was his paternal uncle who was issueless and who died in the year 1996. That since he was issueless, the appellant/defendant being the nephew of Rashid H.Debara has inherited the property and he continues to be in occupation of the said property since long.
7. According to the appellant/defendant the name of Rashid H.Debara stood mutated in the revenue records and was also there in the records of GHMC. All the taxes were being paid to GHMC by the then Rashid H.Debara and since his death, the appellant/defendant has been paying all the regular charges. According to the appellant/defendant the agreement of sale dated 12.07.1988 itself had clause 10 which specifically envisages resolution of the dispute by arbitration of one Sri L.N.Prasad and the decision of the Arbitrator shall be final and binding to all. It was in this context that Section 8 petition was filed highlighting that the jurisdiction in the instant case vests with the Arbitrator and not with the civil Court, accordingly, the same be disposed of directing the dispute to be resolved by way of arbitration as agreed upon. In clause 10 of that agreement of sale, there was a dispute redressal m
