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2022 Supreme(Telangana) 730
IN THE HIGH COURT FOR THE STATE OF TELANGANA AT HYDERABAD
K.LAKSHMAN, J.
A.Gopala Krishna(died) – Appellant
Versus
M/s Urban Asia Gachibowli - Respondent
Arbitration Application No.121 of 2021 Along With I.A.Nos.4, 5 and 6 of 2022
Decided on : 28-11-2022
Advocate Appeared:
For the Appellant : Sri A.Venkatesh, Lr.Counsel,
For the Respondent: Sri Zeeshan Adnan Mahmood
Headnote:
Arbitration and Conciliation Act, 1996 - Section 11, (6), 9, 40, 2(1)(g) - Appointment of arbitrators - Resolve disputes between parties - Arbitration Application is filed for appointment of arbitrators to resolve disputes between parties – Held, Court cannot record a partial compromise between parties - A perusal of Memorandum indicates that disputes between parties have not been fully resolved - At this stage, it may not be possible to separate disputes which have been settled and ones which still exist - Court also feels that settled disputes may be related to ones which remain unsettled - Therefore, while a full and final compromise between parties may be recorded under Section 11 of Act, a partial compromise resolving only few of disputes cannot be recorded by Court - Disputes regarding payment of rental dues and its quantum exist between parties - Disputes also pertain as to who is liable under agreement to pay taxes - Court deems it appropriate to refer matter to arbitration - Application is allowed.
ORDER :
The present Arbitration Application is filed under Section 11(6) of the Arbitration and Conciliation Act, 1996 (hereinafter ‘the Act, 1996’) for appointment of arbitrators to resolve the disputes between the parties.
2. Heard Mr. A.Venkatesh, learned counsel for the Applicant, Mr. Zeeshan Adnan Mahmood, learned counsel for Respondent.
3. The Applicant claims to be the owner of property admeasuring 16000 Sq. Ft. spread over the second floor, third floor, fourth floor and the terrace in the building constructed on Plot No. 1259/A, Road No. 36, Jubilee Hills, Hyderabad (hereinafter ‘subject property’).
4. The Applicant and the Respondent entered into a lease deed dated 30.12.2017 (hereinafter ‘the agreement’) whereby the subject property was leased out to the Respondent for a period of three years. As per the terms of the agreement, the rent payable by the Respondent was Rs. 6,52,359/- per month (excluding CAM charges + GST) and the said amount was payable on or before 10th of every month. According to the Applicant, the Respondent by virtue of Clause 3 and Clause 7 was also liable to the agreed rent including the CAM + GST charges. The terms also provided that if the Respondent defaults in payment of monthly rent for a consecutive period of 3 months, it is liable to pay interest to the tune of 1.5% per month.
5. According to the Applicant, payment of the rent and CAM + GST charges before 10th of every month was the essence of the agreement. The Applicant states that the Respondent failed to pay the agreed rent and CAM + GST charges from September 2019 despite repeated requests. The Applicant terminated the agreement by issuing a notice dated 28.08.2020 and seeking possession of the subject property along with arrears of rent amounting to Rs.79,23,590/- for a period from 01.09.2019 to 30.06.2020.
6. The Respondent replied to the termination notice dated 28.08.2020 on 12.09.2020 disputing the claims of the Applicant and stated that it has been paying the rent regularly including CAM + GST charges. The Applicant then issued a rejoinder notice dated 07.10.2020 reiterating its claims. While things stood thus, the Respondent also filed a suit bearing O.S. No. 1212 of 2021 on the file of Hon’ble XXI Junior Civil Judge, City Civil Court, Hyderabad seeking perpetual injunction. The said court vide order dated 26.03.2021 passed an ex parte order directing the parties to maintain status quo.
7. According to the Applicant, despite receiving the termination notice and despite the lease deed coming to an end due to efflux of time, the Respondent is continuing to be in possession without paying the rents as per the agreement. The Applicant filed an application under Section 9 of the Act, 1996 vide A.O.P. No. 41 of 2021 in which an ex parte order dated 22.04.2021 was passed directing the Respondent to deposit the rental arrears to the tune of Rs. 1,15,31,716/- for the period of 01.09.2019 to 30.09.2020 within a period of 3 days.
8. Subsequently, the Applicant invoked Clause 24 of the agreement dated 30.12.2017 and issued an arbitration notice dated 26.04.2021. In the said arbitration notice, the Applicant nominated Sri G.Gopala Krishna Murthy, Retired District Judge, and called upon the Respondent to appoint its nominee arbitrator.
9. As no reply was received from the Respondent to the arbitration notice dated 26.04.2021, the Applicant filed the present arbitration application seeking appointment of an arbitrator on behalf of the Respondent. The Applicant claims that the Respondent is liable to pay rents to the tune of Rs. 1,15,31,716/- along with mesne profits of Rs. 10,00,000/- per month, 18% GST and Rs. 90,000/- per month towards CAM charges from 01.10.2020 till the date of vacating the subject property.
10. The Respondent filed its Counter Affidavit disputing the claims of the Applicant. The Respondent contends that it has been timely paying the rents to the tune of Rs. 7,84,794/- which includes the CAM + GST Charges without any default. Furt
