THE HONOURABLE SRI JUSTICE K. LAKSHMAN ARBITRATION APPLICATION No.296 OF 2024

ORDER:

On 06.12.2024, this Court ordered notice to respondents. In compliance with the said order and learned counsel for the applicant has filed proof of service vide Memo U.S.R.No.36 of 2025 wherein, notice sent to respondent No.1 was un-served with an endorsement ‘unclaimed’. Unclaimed amounts to service. Sri T.Balamohan Reddy, learned counsel entered appearance on behalf of respondent No.2.

2. Heard learned counsel for the petitioner and learned counsel appearing for respondent No.2.

3. Applicant and respondents have entered into an agreement of sale on 04.06.2022 with regard to purchase of the Scheduled property i.e., Commercial space, Unit No.1110 in 11^th Floor in Sahiti’s Commercial Space Project with built-up area of 1000 Square Feet including one car parking (1) inclusive of common areas along with undivided share of land in an extent of 15 Square Yards under proposed construction in “Sahiti’s Commercial Project” in the land admeasuring Ac.3509 Sq.yds in Sy.No.116 of Nanakramguda Village Serilingampally Mandal within GHMC limits.

4. According to the applicant, respondent No.2 had entered Memo of Understanding, dated 12.12.2019 with respondent No.1 for sale of open land admeasuring 3509 Sy.yds in Sy.No.116 of Nanakramguda Village, Serilingampally Mandal within the GHMC limits.

5. Pursuant to the said agreement of sale, dated 04.06.2022, applicant has paid an amount of Rs.77,14,606/- to respondent No.1 i.e., total sale consideration and even then respondents are not proceeding with the construction and delivered physical possession of the aforesaid flat in terms of the said agreement of sale. Therefore, respondent No.2 has already lodged a complaint with police, who in turn registered a case and thereafter the same was transferred to CCS. Therefore, invoking the arbitration clause, applicant has issued notice, dated

21.10.2023 to respondents. Despite receiving and acknowledging the said notice, there was no response from respondents. Therefore, he has filed the present application to appoint arbitrator to adjudicate the disputes between the applicant and respondents.

6. Whereas, Sri T. Bala Mohan Reddy, learned counsel appearing for respondent No.2, on instructions, would submit that the sole proprietor of respondent No.2 is the owner of Ac.0.29 guntas or 3509 square yards in Sy.No.116 of Nanakramguda Village, Serilingampally Mandal, Ranga Reddy District. The sole proprietor of respondent No.2 was the author of the agreement of sale, dated 04.06.2022 and Memorandum of Understanding dated 12.12.2019. Notice, dated 21.10.2023 is not in accordance with Section 21 of the Arbitration and Conciliation Act, 1996 and on the said ground, respondent No.2 opposing the present application.

7. As discussed supra, there are disputes between applicant and respondents with regard to the execution of agreement of sale, dated 04.06.2022. The same are arbitrable in nature

8. In Similar circumstances, vide order, dated 27.09.2022 in ARB.A.No.130 of 2024, this Court, having allowed the arbitration application appointing an arbitrator, granted liberty to respondent No.2 to raise the aforesaid two contentions before the sole arbitrator and arbitrator shall decide the same as preliminary issue. In the light of the same, this Court is of the considered view that there are disputes between the applicant and respondents. The same are arbitrable in nature.

9. Clause 18 of the said agreement of sale deals with arbitration clause. It is relevant and extracted below”

“18. In case of any dispute arise between the parties, have to settle amicable in the event of any failure to settle the dispute or difference shall be referred to the arbitrator and the arbitration proceedings will be conducted according to the provisions of the Indian Arbitration and Conciliation Act, 1996. The arbitration award will be binding upon the both the parties and final. The place of the arbitration will be a