Simple allegations of fraud do not negate the validity of arbitration agreements; disputes are arbitrable unless serious fraud is established.

ORDER

Heard Sri K. Prabhakar, learned counsel for the applicant, Sri Sushant Reddy, learned counsel appearing for respondent No. 2, Sri Peri Prabhakar, learned counsel appearing for respondent Nos. 6, 7, 8 and 10, Sri Vivek Jain, learned counsel appearing for respondent Nos. 4, 5 and 12 to 16, Sri S. Sharath Kumar, learned counsel appearing for respondent No. 9 and Sri D. Bharath Reddy, learned counsel appearing for respondent Nos. 11 and 17 to 19.

2. The present Arbitration Application is filed under Section 11 of the Arbitration and Conciliation Act, 1996 (hereinafter ‘the Act, 1996’) for appointment of a sole arbitrator to resolve the disputes between the parties.

CONTENTIONS OF THE APPLICANT:-

3. A partnership deed dated 31.10.2003 was entered between Mr.Sama Narsimha Reddy/R.4 and his wife by name Smt. Sama Kalavathy Reddy, Mr. Sama Sunil Kumar Reddy/R.5, Mr. Kontam Janardhan Reddy and Late Mahender Bai Patel with an object to carry on business in real estate, acquiring lands, converting into residential plots, purchase and sale of plots, construction of building houses and sale and all types of contracts and incidental thereto in the name and style of ‘M/s Sama Constructions’. The specific terms are mentioned therein. Thereafter, since two partners were retired and they have added some more partners including applicant herein, another partnership deed dated 24.05.2004 was entered. As per the said partnership deed, the applicant’s share in the property and loss is 5%. A deed of retirement – cum - re-constitution of partnership deed dated 31.03.2007 was entered because of retirement of some of the partners and induction of new partners. The terms and conditions are specifically mentioned therein. On 18.07.2015 another deed of retirement was entered in view of retirement of some of the partners and induction of new partners.

4. Respondents 4 and 8 are Managing Partners of 1^st respondent firm. Acting on behalf of the firm, respondents 4 and 8 engaged in negotiations with land owners for acquisition of land admeasuring Ac.15.00guntas in Sy.No.9/1, adjacent to National Highway No.9 in Saroornagar Village and Mandal, Ranga Reddy District, valued at Rs.1.5 Crore per acre. All the partners including the applicant, participated in those negotiations and contributed funds in accordance with their respective share percentages outlined in clause 7 of the partnership deed.

5. Subsequently, they entered into Memorandum of Understanding (MOU) dated 25.05.2004 with the with the land owners with specific terms and conditions governing the transaction. Each partner collectively invested Rs. 5,39,90,000/- towards the partial sale consideration as per the provisions of MOU. The said collective investment drawn from the contributions made by the partners under the partnership deed, encompassed both the applicant and respondents 4 to 11. Consequently, an agreement of sale was executed in the name of the 1^st respondent firm to validate the transaction and secure the acquired land from the land owners, M/s South India Research Institute Private Limited, represented by Sri. G. Subba Raju (for short, ‘SIRIS’).

6. Respondent No.4 proposed the acquisition of 0.68cents of landed property in Sy.No.9/1 (new 9/4) shown in Schedule-B in the name of 1^st respondent firm. The said proposal was accepted by all the then partners of 1^st respondent firm and contributed funds proportionate to their shares for purchase of the same under various registered sale deeds bearing Doc.Nos. 4943/2006, 4946/2006, 4944/2006, and 4945/2