THE HONOURABLE SRI JUSTI CE P.SAM KOSHY AND THE HONOURABLE SRI JUSTI CE N.TUKARAMJI CI VI L MI SCELLANEOUS APPEAL No.692 of 2023

JUDGMENT

(per the Hon’ble Sri Justice P.Sam Koshy)

The instant is an appeal under Section 37 of the Arbitration and Conciliation Act, 1996 (briefly the ‘A&C Act’ hereinafter). The challenge is to the order dated 06.11.2023, in I.A.No.134 of 2022 in O.S.No.603 of 2022, passed by the IX Additional District Judge, R.R. District at L.B. Nagar.

2. Heard Mr. S.Vivek Reddy, learned Senior Counsel, representing Mr. Kailash Nath P S S, learned counsel for the appellants, and Mr. B.Chandrasen Reddy, learned Senior Counsel, representing M/s. Chandrasen Law Offices for the respondents.

3. Vide the impugned order, the Trial Court dismissed a petition filed by the appellants herein under Section 8 of the A&C Act read with Order VII Rule 11 of Civil Procedure Code, 1908 (for short, ‘CPC’) seeking to refer the parties to resolve the dispute by resorting to arbitration clause.

4. The brief facts which led to filing of the instant appeal are that the respondents herein preferred a suit in O.S.No.603 of 2022 for specific performance seeking relief of a direction to the appellants to execute and register sale deed in favour of the respondents in respect of the suit schedule ‘B’ property after receiving balance sale consideration of Rs.1,12,00,000/-.

5. The contention of the respondents in the suit was that the appellants had offered to sell the suit schedule property which was accepted by the respondents and on negotiations the sale consideration was arrived at Rs.1,85,00,000/- inclusive of stamp duty, registration charges, amenities, corpus funds and advance maintenance charges for two years. In terms of the agreement, the respondents paid some amount in advance and the balance was to be paid at the time of registration of the sale deed. However, since the appellants, the owners, were not showing keen interest in executing the sale deed, the respondents have filed the suit for specific performance which was registered as O.S.No.603 of 2022. Notices were issued and the appellants entered appearance and filed a petition under Section 8 of the A&C Act read with Order VII Rule 11 of CPC seeking to refer the dispute to be resolved by way of arbitration.

6. The Trial Court was of the view that whether there was a valid draft sale deed executed between the parties with an arbitration clause, is a matter which needs to be decided after recording of the evidence and after framing of issues and, until and unless the same is not decided, the question of referring the matter to arbitration does not arise.

7. It is this order passed by the Trial Court which is under challenge in the instant appeal.

8. According to the learned Senior Counsel for the appellants, the very basis for insistence on the part of the respondents seeking for specific performance was based on various draft agreements that were sent on e-mail between the appellants and respondents and invariably these draft agreements had a dispute resolution clause to settle the disputes by way of arbitration. Therefore, it has to be construed that there was a valid agreement between the parties and the agreement also had an arbitration clause as a means to settle the disputes between the parties. Thus, the Section 8 petition ought to have been allowed by the Trial Court.

9. Learned Senior Counsel for the appellants in support of his contentions relied upon the following decisions:

a) Trimex I nternational FZE Limited, Dubai vs. Vedanta Aluminium Limited, I ndia b) Enercon (I ndia) Limited and Others vs. Enercon GMBH and Another c) Cox and Kings Limited vs. SAP I ndia Private Limited and Another

10. Per contra, the learned Senior Counsel for the respondents opposing the appeal contended that there was firstly no valid agreement between the parties, much less an arbitration agreement; therefore, at the threshold itself the Section 8 petition has rightly been dismissed. It was also conte