THE HON’BLE SRI JUSTICE T. VINOD KUMAR ARBITRATION APPLICATION No. 20 of 2020

ORDER

The present Arbitration Application is filed under Section

11(5) & (6) of the Arbitration and Conciliation Act, 1996 (hereinafter 'the Act, 1996') for appointment of a sole arbitrator to resolve the disputes between the parties.

2. Heard Sri. D. Prakash Reddy, learned senior counsel appearing for the learned counsel for the applicant and Sri. Prabhakar Sripada, learned senior counsel appearing for the counsel for the Respondents. Perused the Record.

3. The applicant and the Respondents through one Salahuddin Afsar who is the GPA Holder of the Respondent No.1 herein entered into the following agreements for development of the property bearing Municipal No. 6-3-679 admeasuring 1,660 Sq. Yards situated at Somajiguda, Hyderabad, into a multi-storied complex:

i. Memorandum of Understanding dated 02.08.1992 – the primary document entered into between the parties. The covenants of this deed state preliminary obligations of the parties. Clause 22 of this deed contemplates that any development agreement entered into by both parties shall be treated as a part and parcel of this deed. Clause 25 thereof contains an arbitration agreement.

ii. Development Agreement dated 28.08.1992. This deed delineates the rights and duties of both parties. Among others, Clause 9 thereof contemplates the sharing ratio of the applicant and the respondents as 60:40%. Whereas, clause 15 contemplates that the construction of the complex is to be completed within 2 years from the date of obtaining municipal plans and no objection certificate. Clause 27 thereof contains an arbitration agreement iii.After completion of the building construction in 2002, the Applicant and the Respondents herein entered into a Memorandum of Understanding dated 09.02.2005. As per the MoU dated 09.02.2005, the ground and the first floor were sold out to various parties; Clause 4 thereof contemplates that the Respondents herein were the absolute owners of the second floor, whereas the third and fourth floor as per Clause 5 was to be divided among equally i.e., 50% each among the parties. Similarly, as per Clause 6 the Office area in the said complex was to be given to the K. Salahuddin Afsar. Clause 19 thereof contains arbitration agreement.

4. It is the case the case of the Applicant that disputes arose between the parties after 18.05.2017 when Surana Telecom who was the tenant of the Second Floor vacated the premises; and the respondents were thereafter refusing to open their respective locks in the second floor of the complex, thereby blocking the entrances to the Applicants share in the third and fourth floors.

5. While so, it is the case of the Applicant that the on 18.11.2016 the Respondent No. 1 herein Represented by her son i.e., the Respondent No.3 herein had issued a legal notice invoking the arbitration clauses in MoU dated 02.08.1992, Development Agreement dated 28.08.1992 and MoU dated 09.02.2005. It is contended that though the Applicant herein in their reply notice 20.12.2016 agreed for the disputes to be referred to an arbitrator and had thereby called forth the Respondent No.1 herein to name an arbitrator, the Respondents herein in contravention to their own legal notice dated 18.11.2016 had initiated proceedings before the National Consumer Dispute Resolution Commission, New Delhi (for short ‘NCDRC’) Aggrieved by the said action the present arbitration application is filed seeking appointment of an arbitrator. 6. Learned Senior Counsel for the Applicant herein contends that, the proceedings before the NCDRC are not maintainable as the Respondents herein have first invoked the arbitration clause in their legal notice dated 18.11.2016. Thus, it is contended that the disputes ought to be referred to an arbitrator for resolution.

7. Per contra, learned senior counsel for the Respondents herein contends that the disputes between the applicant and the respondents are primarily consumer disputes w