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2025:APHC:61292

APHC010033002015 IN THE HIGH COURT OF ANDHRA PRADESH Bench

Sr.No:-13

AT AMARAVATI

[3441]

ARBITRATION APPLICATION NO: 106 of 2015

Botta Naga Chiranjeevi Reddy ...Applicant

Vs.

Mohammad Jamsheed and others ...Respondents

**********

Advocate for Applicant: Mr. Shivam Kunal appearing vice

Mr. P. Shashi Kiran

Advocate for Respondents: Mr. T. N. M. Ranga Rao

CORAM : T HE CHIEF JUSTICE DHIRAJ SINGH THAKUR

DATE : 26^th December, 2025.

P C :

This is an application filed under Section 11 of the Arbitration and

Conciliation Act, 1996, seeking reference of the disputes for adjudication to an

arbitrator.

2. The applicant claims that he is a builder and is engaged in the

construction business. It is stated that he entered into a Development

Agreement, dated 08.08.2008, with the respondents to develop a commercial

complex over land belonging to them for better economic returns.

3. According to the terms and conditions of the Development Agreement

dated 08.08.2008, the parties had agreed that the applicant would deposit with

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the respondents an amount of Rupees One Crore as a refundable security

deposit which was to be refunded in two installments without interest, i.e.

Rs.50,00,000/- (Rupees Fifty Lakhs Only) within 15 days on receipt of notice

of completion of fourth slab and the remaining 50% i.e. Rs.50,00,000/-

(Rupees Fifty Lakhs Only) within 15 days on receipt of notice of the taking

over the possession from the applicant, failing which the respondents were

liable to pay interest @ 24% per annum from the date of accrual. The said

amount according to the applicant was paid through various cheques.

4. The case of the applicant is that after taking over possession of the

vacant land, a Supplementary Development Agreement-cum-General Power

of Attorney, dated 21.01.2009, was executed before the Sub-Registrar,

Patamata, Vijayawada. The project, according to the applicant, was completed

and refund of the security amount demanded was refused.

5. For facility of reference, Clause 28 of the Agreement dated 21.01.2009,

is reproduced hereunder:

“28. In case any disputes arise between the parties hereto

touching these presents the matter shall be referred to the

Arbitrators one chosen by each party and in the case of any

difference of opinion between such Arbitrators shall nominate a

common umpire and their award shall be final and abide on

both the parties and the relevant provisions of Arbitration act

shall apply.”

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It is not out of place here to mention that the arbitration clause supra

was contained in the Development Agreement-cum-G.P.A., dated 21.01.2009,

while there was no such arbitration clause in Development Agreement dated

08.08.2008.

6. A notice, dated 17.08.2013, is stated to have been served upon the

respondents, invoking the arbitration clause. Since the notice did not elicit

requisite response, the present application is filed.

7. The stand of the respondents, on the other hand, is that the Agreement

dated 08.08.2008, which contained the clause with regard to refundable

security amount with interest @ 24%, was an Agreement which did not

contain any arbitration clause, and further that the Agreement dated

21.01.2009, was not a Supplementary Agreement but an independent

Agreement, where the refundable security deposit was only to an extent of

Rupees Five Lakhs, which was to be paid in two installments i.e.

Rs.2,50,000/- (Rupees Two Lakh Fifty Thousand only) within 15 days of

receipt of notice of completion of fourth floor and the remaining 50% i.e.

Rs.2,50,000/- (Rupees Two Lakh Fifty Thousand only) within 15 days of taking

over possession from the Second Party-Applicant herein and further that it

was only upon failure to refund the security deposit within the stipulated time

that the applicant would be entitled to claim interest @ 24% per annum.

8. The existence of the arbitration clause, however, in the agreement

dated 21.01.2009, is not denied.

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