Sri A Jagal Reddy Reddy v. Namani Ashok,

IN THE HIGH COURT FOR THE STATE OF TELANGANA

AT HYDERABAD l\/ONDAY ,THE SEVENTEENTH DAY OF AUGUST TWO THOUSAND AND TWENTY PRESENT THE HONOURABLE SRI JUSTICE A,RAJASHEKER REDDY ARBITRATION APPLICATION NO: 33 OF 2020 Between:

A. Jagal Reddy, S/o Ram Reddy, aged 54 years, R/o Plot No 11, Chaitanyanagar, Opp: B N Reddy Nagar, Karmanghat, Saroonagar, Ranga Reddy District ...APPLICANT AND Namani Ashok, Age 46 years, Occ: Business R/o H,No 7-730, lbrahimpatnam Village and lVandal, Ranga Reddy District.

...RESPONDENT Arbitration Application under Section 1 1(5) & (6) of the Arbitration and Conciliation Act, 1996, read with Scheme for Appointment of Arbitrators 2006 praying that in the circumstances stated in accompanying affidavit, the High Court may be pleased lo:

i) Appoint an arbitrator to adjudicate the claims and disputes between the Applicant and the Respondents; and ii) Award the costs of the present applications. Counsel for the Applicant:SRl KIRAN PALAKURTHI Counsel for the Respondent : SRI VANAM VISHWANATHAM The Court made the following ORDER:

HON'BLE SRI JUSTICE A,RAJASHEKER REDDY Arbitration Aoolication No.33 of 2O2O ORDER:

This Arbitration Application is filed under Section 1 1(5) &

(6) of the Arbitration & Conciliation Act, 1996 (for short 'the Act') for appointment of an arbitrator for adjudicating the claims and disputes betu,een the parties.

2.

It is the case of the applicant that the respondent is the orn,ner and possessor of the house bearing No.7-104(old) and 7730 (ne."r,) admeasuring 316 sq.yds situated at Ibrahimpatnam Village and Mandal, Ranga Redd_y District (subject propertv). The respondent approached the applicant for sale of the property and that the subject property is under mortgage, as such, he requested the applicant to make payment directly to the financier. He entered into an agreement of sale dated 06.11.2019 with the applicant for sale of the subject property. During the course of transaction, disputes arose between the parties in payment of the consideration in respect of the subject property.

There was exchange of notices between the applicant and respondent ancl ultimately, applicant got issued notice under Section 21 of the Act dated 05'O2'2O2O invoking arbitration clause contained in the Agreement of Sale dated 06.1 1.2019 calling upon the respondent to give consent for appointment of sole arbitrator suggested in the notice' As there is no response from the respondent, the present application is filed.

3.

Counter affidavit is filed by the respondent denying the averments in the affidavit filed in support of this Application disputing the claim of the applicant on merits as well as execution of alleged agreement of sale dated 06. 11.2019. Though the signatures of the respondent are admitted, but it is asserted that the respondent was under the impression that it was a loan agreement. Though a complaint was lodged with the police, Ibrahimpatnam regarding fraudulent intention of applicant, the police closed the same on 29.O7.2O2O stating that the complaint is civil in nature. It is also asserted that the respondent got issued legal notice dated 24.O7 .2020 cancelling the unregistered agreement of sale dated 06.1 1.20 19. 4.

Heard Sri l{iran Palakurthi, learned counsel for the applicant and Sri Vanam Vishwanatham, learned counsel for the respondent.

5.

Learned counsel for the applicant submits that existence of arbitration clause in the agreement of sale dated 06.11".2019 and invocation of the same by issuing legal notice dated 05.02.2020 is not disputed, as such, the application is to be allowed.

6.

Learned counsel for the respondent while reiterating the averments in the counter affidavit vehemently argued that the agreement of sale itself is fabricated one, as the signatures of the respondent u,ere obtained b_v petitioner giving an impression that it is a loan agreement. He submits that the signatures of the respondent u,ere obtained by playing fraud. He submits

that since there is no arbitral dispute between the parties, the question of appointment of sole arbitrator does not arise, AS such, this application is liable to be dismissed. 7.

In this case, it is to be seen that the respondent does not dispute his signatures on the agreement of sale dated 06.11.2019, but onl,v states that he signed the same under the impression that the same is a loan agreement and the document is a fabricated one. Hou,ever, it is a fact that the agreement of sale dated 06. 1 I .2019 contains an arbitration clause 13, which reads as fo11ou,s:

"That all or any disputes and questions rn connections with or referable to or arising from the transaction, this deed its interpretation, and or any matter arising out of or related to its implementation, howsoever remote and arising between the parties or between any of them and the 1egal representatives of the other or others or between their respective 1ega1 representatives whether during or after the period specified in this agreement shall be referred to arbitration at the hands of sole nominee of the Vendee alone, which person shall be either a retired Judge or an Adrrocate nominated at the unilateral discretion of the vendee in u'hich nomination of the Vendor has no sar'." A perusal of the above clause goes to show' that there exists an arbitration clause.

The question as to lr'hether the signatures of the respondent were obtained in agreement of sale or loan agreement, itself is an arbitrable dispute, apart from the disputes arising out of the alleged agreement of sale betu'een the parties, which has to be necessarily to be decided by the arbitrator.

+ 23.1O.2O15, this Court is required to see the existence of arbitration clause and its invocation and nothing more and nothing less. Since the applicant invoked the arbitration clause contained in the agreement of sale by issuing legal notice dated O5.O2.2O2O, this Court is of the considered opinion that this application needs to be ailowed.

Accordingly, this Arbitration Application is allowed nominating Sri Koka Raghava Rao, learned Senior Advocate, for resolving the disputes betu,een the parties.

As a sequel thereto, miscellaneous applications, if any, pending in this Arbitration Application, shall stand closed. Sd/.B.S.CHIRANJEEVI JOINT REGISTRAR ,TRUE COPY'

SECTION OFFICER To, '1 . Sri Koka Raghava Rao, Senior Counsel, H.No 3-6-312/1, Saraswati Nilayam Adjacent lane to HDFC House, Hyderguda, Hyderabad 500029 (by Special It4essenger) (along with a copy of Arbitration Application, affidavit and material papers filed with A.A.)

2. One CC to SRl. KIRAN PALAKURTHI, Advocate [OPUC]

3. One CC to SRl. VANAM V|SHWANATHA|I,,4, Advocate IOPUCI

4. Two CD Copies

\ HIGH COURT ARR,J DATED:1710812020 Ig:

e h ( oo 02 SEPzUo a i ,+ * *

ORDER

ARB. APPL.No.33 of 2020 ALLOWINC THE ARBITRATION APPEAL I \