Allowed

Mrs. Imrana Afreen v. M/s Leads Construction Architects

Telangana HC7 Dec 2020ARBAPPL/74/2020

Case brief

AI extract

What is this about?

The High Court recalled that notice sent by registered post and returned with postal endorsement such as no authorized addressee deems service. The court found the existence of the arbitration clause undisputed and, upon nomination, appointed a sole arbitrator for the development agreement dispute.

What did the court decide?

Application for appointment of sole arbitrator allowed; Hon'ble Sri Justice A. Gopal Reddy nominated as Arbitrator.

Mrs. Imrana Afreen Vs M/s Leads Construction Architects — Arbitration | Telangana HC (2020)

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IN THE HIGH COURT FOR ar svorfnEa?rflE^{oF TELANGANA}

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MONDAY,,THE SEVENTH DAY OF DECEMBER TWO THOUSAND AND TWENii* "'"'''

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PRESENT

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THE HONOURABLE SRI JUSTICE A. RAJASHEKER REDDY

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ARB TI N APP ATI NNO:7 4 F 20

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Between:

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Mrs. lmrana Afreen. Housewife, R/o.H.No 4-1-5 State. y,: T#' E:ltji;,tgfif f,T fj.,?93; &?i;

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AND

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...Applicant

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1 !19-L9gds-^{construction Architects,Buirders} and Deveropers, represented by its CIVD Mr. S.H. Bilgrami, S/o. S.T.H. ,Sllgrami, Ag"dlO'o"ut sg vears,-OCi. euiiOe-,. and Developer, Office at D.No. 8-2-622"/lr, nsf ii Ai"ad".;rffi"ti":10; 6;;J"; Hills, Hyderabad-500034.

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lVr. S.H. Bilgrami, S/o. S T.H Bilgrami, Aged about 59 years, CIVD of tr//s Leads uonstruction Architects, Builders and Developers office at D.No. B-2-622t1t1, Ashra Arcade, Road No.10, Banjara Hydera6ad-500034

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...Respondents

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Arbitration Application under Section 11 (6) of the Arbitration and Conciliation Act, 1996, read with Rule 2 (b) of Scheme of Appointment of Arbitrator, praying that for the circumstances stated in the affidavit filed therewith the High Court may be please to constitute an Arbitrator Tribunal by appointing Sole Arbitrator to settle the disputes of the Applicant and the Respondent and^pass such other order or orders as this Hon'ble court may deems fit.

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This application coming on for hearing, upon^{perusing the Application and} affidavit filed in support thereof and^{upon hearingthe argumentsof Sri B.Mohan,} Advocate for the Applicant and none^{appearing for Respondents.}

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The Court made the following:^ORDER

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HON'BLE^{SRI JUSTICE A.RAJASHEKERREDDY}

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ARBITRATION^{APPLICATIONNo'74OF 2O2O}

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ORDER:

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This Arbitration^{Applicationis filed underSection1 1(6) of the} Arbitration and Conciliation^{Act, 1996 (for short 'the Act') read with} Rule 2(b) of the scheme for appointment^{of Sole Arbitratorto resolve the} disputes that arose between the^{applicant and respondent Nos.1 and} 2nd in respect of registered Development Agreement-cum-GPA dt.07.01.2019.

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It is the case of the Applicant that she is the absolute owner and possessor of the house property bearing Municipai No.13-6-429 I Al3, admeasuring 441 Sq.Yds, situated at Moghal-ka-Nala, Hyderabad, Telangana State; that she entered into a Devek;pment Agreement-cum_ G],A, dt.07.01.2019 with respondents I and 2 for development of the subject property; that as per the saicl agreement, the respondents 1 and 2 have to complete the conslruction ll,ithin 24 months 1iom the date of obtainrng municipar permission and r.rrther a six months grace period, in case of unforeseen events; that after completion of the construction the applicant is entitrecl to take 50% of the bu t up area of the Southern side and the respondents 1 ancr 2 are entitred to take 50% ol the built up area of the Northern side ol the subject property, respectively. The grievance of the applicant is that the respon<1ents 1 and 2 without obtaining municipal permission have started construction and iaid stilt + 2 floors by laying siabs and abandoned the construction work. Though the appllcant demanded the respondents ro complete the constr-uction work, they faileci to complete the construction as per the Development Agreement and also sold part of the semi finished flats to third parties without any right ttrrough

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registered sale deeds and also by w.ay of sale agreements. It is further the case of the applicant that the respondents 1 and 2 did not accrue any right in the subject property without compretion of the construction, as such, the applicant got issued notice dated 07 .O9.2O2O invoking arbitration Clause-26 contained in the Development Agreement-cum-GpA and sent the same to the address given by the respondents 1 and 2 in the Development Agreement, but, the same is returned with an endorsement *no such authorized addressee in the address,,. Thereafter, notice was sought to be served to the respondents through their counsel who is appearing in the appiication under Section 9 of the Act in Op.No.41/2O2O pending on the file of XXV Additional Chief Judge, City Civil Court, Hyderabad. Since there is no response from the respondents, the present application is filed for appointment of sole arbitrator.

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Smt.Tasleema Fatima, learned counsel, who is appearing on behalf of the respondents in op No.41 of 2o2o before XXV Additional Chief Judge, City Civil Court, Hyderabad, appeared before this Court and submits that they have already communicated notice received by her to the respondents and also informed the respondents through Whatsapp, but, they have not received any response.

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Respondents 7 and 2 received notices in the proceedings under Section 9 of the Act pending before the XXV Additional Chief Judge, City Civil Court, Hyderabad and they have communicated to the Advocate and they are contesting the same.

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Though'attempts were made in the present application to serve the notices, but the same were returned with an endorsement "no such authorized addressee in the address" which amounts to service of

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notice as^{per the Judgment of Apex Court in N' Pd;ra;t7.estDo;tanUnniu'}

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G. Kcrnnrrnl^{wherein the Supreme Court held as follows;}

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"15. This^{Court in a catenaof cases hasheld thatwhena notice ls} sent bY^{registeredpost and is returnedwith posta-l endorsement} ;;il"Jd;;7-i.rlit"ut"^{i" ir'" no'"""or "houselocked" or "shop} closed" or^"addressee "oi^it:' "t"tiot'"'^{due servicehas to be} presumed."

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The Development^{Agreementdt'07'01'2019contains arbitration}

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clause at clause-26^{whichreads as follows;}

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"26. lf aoy^{disputeari.ses out of this Development Agreement} ..ra o. its interpretation^{the same shall be settled through} arbitration under^{the provision of the arbitrationand} ieconciliation^{Act of 1996 eachparty nominating arbitrator} who if necessary will^{appoint an umpire and awardshall be} final and binding^{on both the parties."}

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When the applicant^{invoked the said clause by issuing notice} dated 07.09.2020^{to the respondentsL and 2, the same were returned} with an endorsement as "no^{such authorized addresseein the address",} as such, the same is also deemed^{to be served. Notices sent to counsei} appearing for the respondents in OP.No.4¹ / 2020 was served and a representation is also made by the counsel stating that she has informed to the respondents but they have not responded. In view of the same notice is deemed to be served.

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The respondents 1 and 2 have neither disputed the execution of Development Agreement-cum-GPA nor disputed the existence oI arbitration clause No.26 therein, by filing counter affidavit. There is no dispute with regard to invocation ol'arbitration proceedings after 201S Amendment Act, the only requirement is to find out existence of arbitration clause for allowing the application as per the judgment of Hon'ble Supreme Court in Mayavati Trading (p) Ltd., v. pradyuat Deb Burman2 wherein it is held that the position of law that prevails

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'?izotoys^{scc zt+}

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after the jnsertion of Section 11(6-A) is that Supreme court or. as the case may be, the High Court, while considering any application under Sections 11(4) to I 1(6) is to confine itself to examination of existence of arbitration agreement, nothing more, nothing less, and ieave all other preliminary issues to be decided by arbitrator

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In view of the same, the Arbitration Application needs to be allowed and accordingly, the Arbitration Application is allowed.

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Learned Counsel for petitioner submits that since amount involved in this application is only Rs. 1 crore and odd since amount involved is not huge amount, sole arbitrator can be appointed.

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In view of the same, Hon,ble Sri Justice A.Gopal Reddy, former Judge of this Court is nominated as an .Arbitrator for resolving the dispute between the parties.

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SD/. B,S. CHIRANJEEVI JOINT REGIST R

//TRUE COPY//

SECTION OFFICER

To, 1. The Hon'ble^{Sri Justice A. Gopal Reddy,Chairmalr: High Power Committee} ^ ioHael,^{i"r.nganana State, Hyderabad, ptot No 51't' Phase lll' Road No'-86'} )roii"t^{ntrr., ilyoerauao--s-i. iAiong with a copy.ofArbitration Application affidavit} ;;;;;i";i;i^{papers filed with A A) (Bv sp^ecialMessenser)}

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Z. One CC^{to Sil Ei. Mohan, Advocate ICPUC]}

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