R.NATESAN Vs. R.PADMANABAN

JUDGEMENT

(1.) The appellant/petitioner has preferred this appeal challenging the order dated 05.06.2013 passed in Arbitration O.P.No.3 of 2012 on the file of the Principal District Court, Tiruchirappalli.

(2.) The respondent purchased a vacant land measuring 1125 sq.ft from the appellant on 09.7.1992 for a sum of Rs.37,125/-. They entered into a construction agreement dated 13.3.1994 for construction of residential building in the said vacant land. The cost of construction was fixed at Rs.2,71,827/-. The schedule of payment was also mentioned in the construction agreement. As per the construction agreement, the appellant agreed to complete the entire construction on or before 20.06.1994. The respondent paid a total sum of Rs.2,10,375/- as on 06.07.1994 including cost of land. According to the respondent, the appellant did not adhere to the schedule of construction as mentioned in the construction agreement. As per the construction agreement, the appellant has to complete mosaic, sanitary, electric and plumbing work etc., on or before 30.5.1994 and within a week from the date of completion of the same, a sum of Rs.47,612/- shall be paid. Further, after completion of the entire building on or before 20.6.1994, the respondent has to pay the last installment of Rs.47,612/- and the sanctioned loan would be released only on completion of each stage of construction. On 05.09.1994, one Jayalakshmi, the sister of the respondent inspected the construction and it was agreed between the appellant and sister of the respondent that 30% of the total construction has to be completed and both of them signed a letter to that effect. The officials of the bank inspected the construction on 20.9.1996 and informed the respondent that major work has not been completed and therefore, they refused to release the last two installments of Rs.47,612/- each.

(3.) According to the appellant, he has completed the construction as agreed upon, but the respondent committed breech of terms of construction agreement by not paying last two installments and statutory charges like electricity charge etc. Further, according to the appellant, the respondent failed to pay a total sum of Rs.1,40,577/- and therefore, the appellant did not hand over the possession of the house to the respondent. The respondent, his brother and his sister assaulted the appellant and he gave a complaint to the police. An FIR was registered in Cr.No.330 of 1997 and they were prosecuted in C.C.No.13 of 1998 but they were acquitted by criminal court. The respondent without paying balance amounts approached Consumer Forum alleging deficiency of service by the appellant. The said complaint was dismissed by the Consumer F orum. In the circumstances, the respondent filed O.S.No.651 of 1999 on the file of II Additional Subordinate Judge, Tiruchirappalli for recovery of possession of the building with all construction and for damages. An arbitration clause was incorporated as clause 9 in the construction agreement. Therefore, the appellant filed application in I.A.No.335 of 2000 in the said suit alleging that suit is not maintainable in view of arbitration clause. On 20.10.2005, the said application was allowed.