ARBAPPL/12/2025 of Mr. Teegala Vikram Reddy Vs M/ s. Ridge Homes LLP. on 14 August 2026

ORDER:

Heard Mr. K Raghava Ramana, leamed counsel 1br the appticant and Ms. M. Tejaswnini, learned counsel appearing lor the respondent. Perused the record.

2. The oresent Arbitration Application has been pr.efen.ed under Section Il(6) of the Arbitration and conciriation Acr, 1996 seeking appointment of a Sole Arbitrator for adjudication o1' t re disputes that have arisen bet\4,een the parties under the Agreemen of Sale dated 12.08.2022 executed between them.

3. Learned counsel for the applicanl submits that tf.e applicant and the respondent entered into the aforesaid Agreement o1'Sale in respect of the subject propeny measuring about Ac.ll_00 guntas rut of Ac.23_00

- Page2ofll guntas. According to the applicant, the respondent failed to comply with the terms and conditions agreed upon between the parties, resulting in disputes and differences. It is further submitted that despite repeated requests and exchange of communications, the disputes could not be amicably resolved, compelling the applicant to invoke the arbitration clause contained in the agreement and thereafter file the present application for appointment of an Arbitrator'

4. Itisfurthercontendedon'behalfoftheapplicantthatthe agreement contains a valid and binding arbitration clause governing the rights and liabilities of the parties lt fs submitted that the disputes raised by the applicant arise directly out of the said agreement and are therefore arbitrable. Since there was no consensus between the parties regarding appointment of an Arbitrator pursuant to invocation of the arbitration agreement, the applicant seeks intervention of this Court under Section I 1(6) of the Act.

5. 'fhe respondent has entered appearance and filed a counter affidavit opposing the application Leamed counsel for the respondent submits that it is the applicant who committed breach of the terms of the Agreement of Sale and that the respondent has always been ready and -- Page3olll willing to perform its contractual obligations. It is furtr-rer. contended that the claims made by the applicant are disputed on 1'acts and that the respondent has substantial defences available in law. The respondent has accordingly prayed for dismissal of the present applicarion.

6. Learned counsel for the respondent at the first instance referred to the Memorandum of Understanding dated 11.09.20 lg (for short, ,the Mou') and contended that the said MoU, the first rvhich was entered into between the parties, does not have an arbitration clause. He further contended that since the said MoU does not have an arritration clause, the application under Section ll(6) ol the Arbitration and conciliation Act, I 996 itself is unsusrainable. He further submitted tJrat though there was a subsequent agreement lor sale with possession which had an arbitration clause, but that agreement is not part of the or:ginal MOU and that it is an altogether independent cause ofaction and tht:refore the same cannot be linked with the first MOU for the purpose of invoking clause and also for pressing upon the application under Secticn ll(6) of the Arbitration and Conciliation Act, 1996. l

7. This Court has carefully considered the rir al submissions advanced by,the learned counsel appearing for the respe<,tive parties and !- Page 4 of ll has also penrsed the pleadings and documents placed on record' The execution of the Agreement of Sale dated l2'08'2022 between the parties is not in dispute. Equally, the existence of an arbitration clause incorporated in the said agreement has not been seriously disputed'

8. The scope ofenquiry while exercising powers under Section l1 of the Arbitration and Conciliation Act, 1996 is extremely limited At this stage, the Court is only required to satisfo itself regarding the existence of a valid arbitration agreement and whether disputes have arisen between the parties requiring reference to arbitration The correctness of the rival allegations, the question as tp which party committed breach of the agreement and the entitlement ol either party to the reliefs claimed are matters falling exclusively within the jurisdiction of the Arbitral Tribunal. g. The objections raised by the respondent in the counter affrdavit essentially pertain to disputed questions of fact touching upon the performance of reciprocal obligations under the Agreement of Sale' Such disputed issues require appreciation of oral and documentary evidence and cannot be adjudicated in proceedings under Section 11 of the Act'

-l l']age 5 ol'I I Those issues are accordingly left open lor consideration by the leamed Arbitrator.

10. A plain reading of the MOU first execured on 11.09.201g would establish that it is between the same parties and in respr:ct of the same property and the said MOU though contained a clause of settlement of dispute, but the recourse was approaching the competent court of law. However, in between the same parties and in respec.t of the same property there was yet another agreement termed as ,,abs,tlute agreement of sale" along with possession entered into on 12.0g.202 1. Clause l2 of the said absolute agreement of sale specifically enunrerates that the subsequent absolute agreement of sale is to be trearec as part of the MO[, entered into between the applicant and the non-applicants on l l .09.201 8

11. For ready reference, Clause l2 olthe Absolute ,{p reement of Sale with Possession. dated 12.08.2022 is extracred hereunder viz., " 1 2. This ap;reemenl is part of alreadl, cot,enar ted MOU bchteen both parties ol this Agreem(nl "

12. In addition to the aforesaid clause, crause l 1 of thr-' said agreement also en'isages settlement of dispute bv resorting to the provisions of E Page6ofll Arbitration and Conciliation Act, 1996. For ready reference, Clause 11 of the said agreement is also reproduced hereunder, viz., " t 1. That in case of an.,- dispule behveen the parties of this Agreemenl of Sale, the matter shall be resolved by arbitration under the provisions of Arbitration and Conciliation Act, 1996- The place of arbitration and jurisdiction shall be at Hyderabad, Telongana. "

13. On a conjoint reading of the above two clauses would make it emphaticatly clear that the parties with wide open eyes have entered into the subsequent Absolute Agreement of Sale on \2.08.2022, and in the said agreement itself the pafties have made the said agreement to be part and parcel ol the earlier MOU and in the subsequent agreement in splte of earlier MOU reflecting to resolve the dispute by approaching the competent Court of Law have this time decided to resolve the disputes by resorting to the provisions olArbitration and Conciliation Act, 1996'

14. In NBCC (India) Limited vs. Zillion Infraprojects Private Limitedr, the Hon'bte Supreme Court held at paragraph Nos' 15 to l7 as under, viz., l5.Sub-section (5) of Section 7 olthe Arbitration Act reads thus: "7. Arbitration Agreement.-( l )-(4) ' lzozll t scc ttl ,/

- Page7ol'll

(5) The relerence in a contract to a document containing an arbitration clause constitutes an arbitration agreement ilthe contract is in writing and the reference is such as to make that arbitration ilause part of the contract.'

16. The issue is no more res integra. fhe provisions olsLrb- sec ion (5) of Section 7 of the Arbitration Act have been considt.red bv this Court in the case ol M.R. Engineers and Contracror,. After considering the relevant passages from Russell on Arbitration and various English judgmenrs. rhis Courr held thus: (iCC p. '7 07 . para 24) "21. The scope and inrent ofsecrion 7(5) olrhe Acr ma1 therrlcrre be summarized th us:

(i) An arbitration clause in another document, w.oLrld get incorporated into a contract by reference. if the lollowing conclitirns are t'u I ll lled:

(l) the contract should contain a clear relerence to the rlocumenrs con tain ing arbitration c Iause,

(2) the ref'erence to rhe other documenf should clearly, irrdicate an intention to incorporate the arbitration clause into the contract.

(3) the arbitration clause should be appropriate. that is capable of application in respect ofdisputes under the contract anc should not be repugnant to any term of the contract.

(ii) When the parties enter into a contract. making a general rt,ference to another contract, such general reference rvould not have the effect of incorporating the arbitration claLrse fiom the referred document into the contract between the parties. The albitration claLrse fiom another contract can be incorporated into the contract (where such reference is madel. only b; a specific reference to arbitration c lause.

(iii) \\'here a contract betlveen the parties provides that the c).ecutton or performance of that contract shall be in terms ol'anothcr contract (wh;ch contains the tcrms and conditions relrting to performance and a provision for settlement of disputes b), arbitration), then. the terms of the referr.ed contract in r:gard to execution/performance alone will apply. and not the arl)itration

PageSofll agreemenl. in the referred contract, unless there is reference to the arbitration clause also. spec ial

(iv) Where the contract provides that the standard form of terms and conditions of an independent trade or professional institution (as for example the standard terms and conditions of a trade association or architects association) will bind them or apply to the contract, such standard lorm of terms and conditions including any provision fbr arbitration in such standard terms and conditions. shall be deemed to be incorporated by reference. Sometimes the contract may also say that the parties are familiar with those terms and conditions or that the panies have read and understood the said terms and conditions.

(v) Where the contract between the pafiies stipulates that the conditions of contract of one of the parties to the contract shall form a part of their contract (as fbr example the general conditions of contract of the Government where the Covernment is a party), the arbitration clause forming part of such general conditions of contract will apply to the contract betu een the parties." l5

17. It could thus be seen that this Court has held that when the parties enter into a contract. making a general ret'erence to another contract, such general ref'erencc would noI have the effect of incorporating the arbitration clause from the referred document into the contract between the parties lt has been held that the arbitration clause from another contract can be incorporated into the contract (where such reference is made), only by a specific ret'erence to arbitration clause. It has further been held that where a contract between the parties provides that the execution or performance o{'that contract shall be in terms of another contract (which contains the terms and conditions relating to performance and a provision for settlement of disputes by arbitration), then, the terms of the referred contract in iegard to execution/performance alone will apply, and not the arbitration agreement in the referred contract, unless there is special ret'erence to the arbitration clause also' Upon an overall consideration of the material available on record, this courl is satisfied that a valid arbitration agreement exists between t.. t-"

-t Page9ofll the parties and that disputes have admittedry arisen out or the Agreement of Sale dated 12.08.2022. Consequently, the conditions necessary for exercise of jurisdiction under Section ll(6) of the Arbitration and Conciliation Act, 1996 stand fulfilled.

16. Accordingly, this Court appoints Hon'ble Jusrice Shri p Naveen Rao, former Judge of this High Courl (#3001, My lJorne Bhooja, Block_ A, Plot Nos.22-24&3 l-33, Raidurgam, K.VRanga Reddy District, Telangana Srate-500081 , Mobile No.g3740123 l 1) as rhe sore Arbirrator to adjudicate the disputes that have arisen bctween thc ;rarties under the Agreement of Sale dated 12.08.2022. The reamed Arbitrator shall enter upon the relerence and conduct the arbitral proceedings in accordance with the provisions of the Arbitrarion and conciliation Act, 1996. The venue of arbitration and the lee payabre to the learned A.-bitrator shall be detemined in consultation with the parties and the learne d Arbitrator.

17. It is made clear that this Court has not expressed any opinion on the merits of the rival claims and contentions raised b1 either party. All claims, counter claims, objections and defences available to the parties are Ieft open to be urged before the leamed Arbitrator, rvho shall decide the same independently and in accordance with law.

- Page l0 of ll i 8. Accordingly, the Arbitration Application stands allowed. As a sequel, miscellaneous applications pending, if any, shall stand closed. There shall be no order as to costs SD/- A.V.S.S.C.S.M.SARMA JOINT REGISTRAR //TRUE COPY' CTION OFFICER To, Sa,rka

1. The Hon'ble Justice Shri P Naveen Rao' former Judge of High Courtlor the State of Telangana' f+o6dr rt'rv iolb Bhogj?' Block-A' Plot Nos 22-24&31- 33, Raidurgam, X V nunga ntlOy Oittti"t .fu.l3ngana State - 500081' tr/obile No. 837401231t (gy spiciat M"""'g"'1 (Along with a Copy of affidavit and material PaPers)

2. One CC to Sri K Raghava Ramana' Advocate IOPUC]

3. One CC to Ms M Tejaswini, Advocate [OPUC]

4. Two CD CoPies @

HIGH COURT DATED: 1410812026

ORDER

ARBAPPL.No.12 ot 2025 ALLOWING THE ARBITRATION APPLICATION WITHOUT COSTS c 5TATE I \\ qf,f!J t: [\]$, 2t2f z() .> t t t,E5PA1 c)S o, ,^4