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2025 Supreme(Telangana) 542

IN THE HIGH COURT FOR THE STATE OF TELANGANA AT HYDERABAD
T. VINOD KUMAR, P. SREE SUDHA, JJ.
M/s. Suyosha Health Care Pvt. Ltd. - Appellant
Vs.
Sri.D. Muralidhar Rao and others - Respondent
Civil Miscellaneous Appeal No.560 of 2022
Decided On : 22-04-2025


Advocates:
Advocate Appeared:
For the Appellant : P KANTHI KIRAN
For the Respondent: D MADHAVA RAO

Timing and proper execution are crucial for invoking arbitration under Section 8 of the Arbitration and Conciliation Act; delayed applications or disputes lacking validity are not admissible.

Headnote:(A) Arbitration and Conciliation Act, 1996 - Section 8 - Dismissal of interlocutory application for arbitration - 3rd defendant claimed dispute resolution under lease deed with plaintiff - Court found no valid arbitration claim due to improper execution and timing of application - Delay in filing application cited as significant - Dismissal upheld. (Paras 11, 12, 19, 27)

(B) Judicial authority's power to refer parties to arbitration must be invoked at the earliest opportunity, as per Section 8. The right to compel arbitration can be waived if not asserted promptly. (Paras 10, 20, 23)

Facts of the case:
The 3rd defendant leased property from the plaintiff for 15 years under a lease deed that included an arbitration clause. The plaintiff contested the validity of this deed due to non-registration and improper stamp duty, and sought arrears and a declaration of tenancy. (Paras 4-6)

Findings of Court:
The Court confirmed that the 3rd defendant failed to establish a valid dispute eligible for arbitration due to the timing and nature of its application, thus supporting the lower Court's dismissal. (Paras 27, 29)

Issues: Whether the lower Court was justified in rejecting the 3rd defendant's application to refer the matter to arbitration based on the lease deed's terms. (Para 11)

Ratio Decidendi: The Court ruled that the 3rd defendant's delay in filing the application and the lack of a dispute under the lease terms rendered the application invalid. Proper execution and timely action are critical for invoking arbitration. (Paras 12, 19, 20)

Result: Civil Miscellaneous Appeal dismissed.

Table of Content
1. basic details of the case and parties involved. (Para 1 , 2 , 3)
2. arguments regarding lease validity and arbitration clause. (Para 4 , 6 , 8)
3. court's analysis of lease validity impacting arbitration. (Para 10 , 11 , 12 , 13)
4. court's reasoning on dispute resolution via arbitration. (Para 14 , 15 , 18)
5. importance of presenting arbitration disputes promptly. (Para 17 , 21)
6. final conclusions on appeal dismissal. (Para 20 , 29)
7. final outcome in the dismissal of the appeal. (Para 30)

JUDGMENT :

(T. Vinod Kumar, J.)

This Civil Miscellaneous Appeal is filed aggrieved by the order dt.26.02.2019 passed in I.A.No.1399 of 2018 in O.S.No.575 of 2016 on the file of XV Additional District and Sessions Judge-cum-XV Additional Metropolitan Sessions Judge-cum-II Additional Family Judge, Ranga Reddy District, Kukatpally (for short, ‘the Court below’).

2. The appellant herein is the petitioner in the underlying interlocutory application and defendant No.3 in the suit, vide O.S.No.575 of 2016. The 1st respondent herein has filed the subject suit, vide O.S.No.575 of 2016 as plaintiff, for the relief of declaration, injunction and recovery of arrears of rent in respect of suit schedule property.

3. For ease of reference, the parties herein are referred to as per their position in the suit.

4. Briefly stated the case of the 3rd defendant is that he had taken the suit schedule property admeasuring 34,000 square feet consisting of small + ground + four upper floors constructed on Plot No.7 admeasuring 1136 square yards situated in Sy.No.64, Sector II of HMDA, Techno Enclave, Madhapur Village, Serilingampally Mandal, Ranga Reddy District, on lease, from the plaintiff and the 2nd defendant in the suit under a deed of lease dt.08.08.2015 for a period of 15 years commencing from 01.10.2015; that the aforesaid deed of lease provides for resolving the disputes between the parties through mutual negotiations, failing which, such disputes are to be finally settled by arbitration in accordance with Arbitration and Conciliation Act, 1996 (for short, ‘the Act,’); that for the aforesaid reason, the 3rd defendant has filed the underlying interlocutory application before the Court below under Section 8 of the Act; and that the Court below, without considering the subject application in correct and proper perspective and without taking into account the existence of arbitration clause in the lease agreement, has erroneously dismissed the same.

5. In support of its contention, the 3rd defendant has relied upon the decision of the Apex Court in Vinay Eknath Lad v/s. Chiu Mao Chen , [ (2019) 20 SCC 182 ].

6. Per contra, on behalf of the plaintiff, it is contended that he is the owner of Plot of land admeasuring 1100 square yards having purchased the same for valuable consideration; that the plaintiff had entered into a development agreement with defendant Nos.1 and 2 for constructing the suit schedule property i.e. commercial complex; that certain disputes have arisen in relation to the agreement entered into by the plaintiff with defendant Nos.1 and 2, in relation to sharing of the suit schedule property; that the aforesaid suit schedule property was agreed to be let out to the 3rd defendant as a tenant under a deed of lease dt.08.08.2015; that inasmuch the said lease deed had not been registered, the same is not a validly executed deed; and that since, the 3rd defendant is not paying rent in respect of the suit schedule property to the plaintiff, a declaration had been sought against that the 3rd defendant being the tenant of the plaintiff, while seeking the main relief of permanent injunction against defendant Nos.1 and 2 restraining them from interfering with the suit schedule property and from executing any nature of documents in respect of the suit property.

7. On behalf of plaintiff, it is also contended that there is no dispute with the 3rd defendant in relation to implementation or enforcement of deed of lease dt.08.08.2015 which is not val

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