A. RAGHUNANDAN RAJ Vs. FORTUNE MONARCH ASSOCIATES

JUDGEMENT

(1.) This Arbitration Application is filed under Section 11(5) & (6) of the Arbitration & Conciliation Act, 1996, for appointment of an arbitrator.

(2.) It is the case of the applicant that he is the owner and possessor of the plot bearing No.708, admeasuring 1210 sq.yds (before road widening) and 1050 sq.yds (after road widening) bearing municipal No.8-2-293/82/A/708 in Old Survey No.403/1 and New Sy.No.120 of Shaikpet village, forming part of Jubilee Hills Co-operative House Building Society, Hyderabad situated at Road No.36, Jubilee Hills, Hyderabad, having purchased the same from Jubilee Hills Cooperative House Building Society vide registered sale deed bearing No.559/1986 dated 05.03.1986. Out of 1050 sq.yds of land, he sold 350 sq.yds to the respondents and retained 700 sq.yds with him. The 1st respondent is a partnership firm and the respondents 2 to 6 are its partners. The applicant entered into registered Development Agreementcum-General Power of Attorney with the respondents on 06.09.2008 vide document No.3536/2008. As the respondents failed to complete the project within the time agreed upon, the applicant suffered losses due to the negligence of the respondents. The applicant got issued legal notice dated 11.07.2014 to the respondents to complete the construction, but there is no reply from the respondents. The applicant once again got issued legal notice on 25.08.2014 invoking arbitration clause to nominate the arbitrator of their choice, but the respondents have not acted upon. Hence, this application.

(3.) Counter affidavit is filed by the respondents denying the averments in the affidavit filed in support of this application admitting about the execution of Development Agreementcum-GPA dated 06.09.2008 between the parties. There is no violation of any conditions of the development agreement and that there is no liability cast upon the respondents, to pay damages, as alleged by the applicant. That issuance of legal notice dated 11.07.2014 followed by second notice dated 25.08.2014 is not disputed, but it is stated that the said notice is an inappropriate notice without any cause of action. It is asserted that after execution of the development agreement and after obtaining necessary permissions/sanctions from the concerned authorities, they have proceeded for development of the property, but due to various exigencies and circumstances that arose during such development, a supplementary agreement bearing No.1392 of 2009, dated 04.05.2009 was entered into between the applicant and the respondents, which fact has been suppressed by the applicant in this application. Subsequent thereto, as per mutual understanding arrived at after incorporating appropriate changes in the building plan etc., an agreement dated 09.01.2014 was executed between the parties which is styled as Rectification Deed relating to the supplementary agreement bearing document No.650/2014. As per clause (g) of the development agreement dated 06.09.2008, the respondents had paid a total sum of Rs.1,80,00,000/- towards interest free refundable deposit to the applicant, which was agreed to be refunded by the applicant on completion of the construction of super structure as and when the super structure is fit for occupation or from the first sale of owners share. That after completion of construction and after incorporation of necessary changes, an understanding was arrived at between the applicant and the respondents specifically as to completion of the project and it is in the said circumstances a Rectification deed relating to the supplementary agreement dated 09.01.2014 was executed between the applicant and the respondents and clauses (2), (3) & (4) of the said agreement deals with the same. It is specifically agreed that he will have no further claim of whatsoever nature about the area allotted to him or entitlement by him under the original development agreement or under the supplementary agreement. The respective areas allotted to the applicant stood delivered to him as per clause 3 of the agreement, there is a specific acknowledgment by the applicant that the party of the second part i.e. respondents have fulfilled their part of obligation as per the terms and conditions of the development agreement and that they are absolved of all their obligations under the development agreement, supplementary agreement and rectification deed relating to the supplementary agreement, as such, the applicant is estopped from raising any contrary claims and that the applicant having acknowledged complete performance of the contract by the respondents and having absolved the respondents from any liability, the applicant is not entitled to raise any contrary claims. That the applicant has not given the details of the alleged efforts made for amicable settlement of dispute by mutual consultation and failure thereof which is a precondition to be satisfied before filing this application, as such, the present application is premature. That the applicant has not nominated any sole arbitrator either in the notice dated 11.07.2014 or in the subsequent notice dated 25.08.2014, as such, the basic requirement for proceeding under Section 11(5) of the Act has not been complied with, as such, he sought for dismissal of the application.