ARBAPPL/222/2024 of Narsi Reddy Komatireddy Vs Mr. Susai Manickam Chellappa on 12 March 2026

ORDER:

The instant Arbitration Application under Section I I (5) & (6) of the Arbitration and Conciliation Act, 1996 (for short the 'Act') has been filed by the applicant praying the Coun to appoint an Arbitrator for the purpose of adjudication of the disputes that have arisen between the applicant and the respondents in respect of the Memorandum of Understanding (for short 'N{OU') dated I I .04.2022, 09.07 .2022,

10. 1 I .2022 and 28.02.2023.

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2. Hea.rd Mr. Y.Shreyas Reddy, learned counsel representing M/s. lndur; Law Firm lor the applicant; and Mr. Gopal Rao Amancharla V., leame<l counsel for respondent Nos.3 to 5

3. It is the case of the applicant that the respondent No. I is in possession of the land admeasuring 5 acres 00 guntas situated at survey Nos./A/l , 4, and 4AA in Alijapur Village, falling within the jurisdiction of Manikonda Municipality, Gandipet Mandal, Ranga Reddy District. Respondent No.l offered to sell the said property to the applicant flor a total con:;ideration of Rs.90,00,00,000/-. Accordingly first MoU was executed on 11.04.2022 and the applicant commenced initial work. However, due to delays in obtaining No Objection Certificates (for short 'NOC') f:om the authorities concemed, the applicant could not complete the contr,lct within the timeline stipulated in the first MoU leading to executror ol' second and third MoUs between the applicant and respondent No.l. Finally, after regular follow-ups and negotiations with the authorities concemed, the applicant was able to obtain NOC.

4. It is the further case of the applicant that subsequently the applicant and respondent No.l including the respondent Nos.2, 3, and 4

mutually agreed to jointly develop the said propefty and entered into an fourth MoU dated 28.02.2023 outlining the work to be completed by 15.05.2023. Pursuant to the said MoU dated 28.02.2A23 the applicant paid Rs.10,00,00,000/- which was duly acknowledged by respondent No.1 and the remaining balance of Rs.24,00,00,000/- was to be paid by agreement holders including applicant and respondent No.2 to respondent No.l .

5. It is the further case of the applicant that on t3.04.2023 the respondent No.l issued a notice stating cancellation of the three MoUs without any reference to the fourth MoU. According to the applicant, in the said notice respondent No.l undertook to repay a sum of Rs.15,00,04,0001-. However, only Rs.4,95,04,000/- was paid and the rest of the amount was withheld. tt is further said that on 09.05.2023, the respondent No.l issued another letter stating that respondent No.3 approached respondent No.1 dernanding Rs.10,00,00,000/- which according to respondent No.l was lent by the applicant.

6. The applicant contended that the respondent No.l has no right whatsoever to retain the aforementioned amounts or to cancel the three

MoUs. Ttre applicant also contended that since the foufth MoU contains an arbitralion clause i.e. clause 10, he had invoked the same. However, durintg the pendency of the proceedings before the concerned Court, the responderrt No.l had entered into a new Development Agreement-cum- General l)ower of Attorney dated 28.06.2023, which was executed in favour of respondent No.5. The respondent No.l also executed a deed of simple mortgage, dated 29.02.2024 in the favour of HMDA in order to obtain construction permissions.

7. [t was the contention of the applicant that although notice was issued to the respondents, none of them appeared which resulted in initiation of arbitration proceeding with the help of a former Judge of the Andhra F'radesh High Court as Arbitrator. However, the respondents did not respond to the notice issued by the Arbitrator as well. Therefore, the applicant was leflt with no other option but to approach this Court seeking the appointment of an Arbitrator to resolve the inter se disputes between the parlies herein

8. Orr the other hand, the respondents submit that the MoUs relied upon by the applicant were validly terminated. It is further contended that the amounts received from the applicant were dealt with strictly in accordance with the agreements entered into between the parties, and that no amount is illegally retained. tt is further contended that the invocation of arbitration clause by the applicant is untenable, as the disputes raised are not arbitrable.

9. Having gone through the pleadings in detail, contentions put forth on either side, and on perusal of records, undisputedly there is an arbitration clause in the MoU to resolve the dispute by way of arbitration. tt would be trite at this juncture to take note of the arbitration clause which is reflected in the MoU dated 28.02.2023. For ready reference, the arbitration clause i.e. clause l0 of the MoU dated 28.02.2023 is reproduced hereunder, viz., "10. If any dispute or difference arises out of or in conncctitm wilh this Memorandum of Understanding or validiy,. inlerprctcttion. implementalion or alleged breach of any of the provisions o-f this Memorandtmt of Underslanding or unylhing done or omilted lo bc done pursuant to this MOIJ shall us.far as pos.sible be rcsolved b.t' mutual consultation or negoliations. If the parlies fail to rcach any' settlcment by mutual consultation or negotiation v'ithin 30 du1's aJter commencement of the negoliations or such longer period as lhe parties moy agree in u,riting, then in that event lhe same shall be re.f:rred .for seillement hr- arbitration as per the provisions of Artiitration utul ('<tnciliution Act. I996. " A plain reading of the aforesaid clause makes it amply clear that any dispute arising out of or relating to the MoU, has to be resolved by way of nr:gotiations and still if the dispute stands unresolved, the same has to be referred to arbitration in accordance with the provisions of the Act.

10. Thr: respondents have also not disputed the fact so far as the MoU being enlered into between the parties. Alt the objections that the respondents have can be raised before the Arbitrator, which the Arbitrator is expected to take note of, and decide the same after hearing both the sides in accordance with law. MoreoveE the arbitration proceedings would be confined only between the parties who have entered irrto the Motjs dated 11.04.2022, 09.07.2022, and l0.ll .2022 and shall uot extend to any other parties. If the event of inclusion of the additiona; parties becomes necessary, the same shall be considered and decided by the Arbitrator in accordance with law.

11. In the given factual circumstances of the case, this Court is inclined to appoint an arbitrator who shall in tum decide the grievance and the claims raised by the applicant. In the course of the deliberation, leamed counsel for the parties accepted the suggestion of Hon'ble Sri Justice P.Naveen Rao, former judge of this High Court to be appointed as an Arbitrator and adjudicate the claim raised by the applicant. Accordingly, this Court appoints Hon'ble Sri Justice P.Naveen Rao, former Judge of this High Court (#3001, My Home Bhooja, Block-A, Plot Nos.22-24 & 3t-33, Rayadurgam, Ranga Reddy District, Mobile No.8374012311) to act as an Arbitrator and to pass appropriate award in terms of the provisions of the Act. The venue of the arbitration shall be decided mutually by the parties subject to the consultation and agreement of the learned Arbitrator. The fees of the learned Arbitrator also be decided mutually by the parties again in consultation and agreeffrent with the leamed Arbitrator and the arbitration proceedings shatl be governed in accordance with the provisions of the Act- Accordingly, the instant Arbitration Apptication stands a[[owed. I II

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13. As a sequel, miscellaneous petitions pending if any, shall stand closed. However, there shall be no order as to costs. SD/- K.SRINIVASA RAO OINT REGISTRAR //TRUE COPY" OFFICER

1. sri Justice P. Naveen Rao, former Judge of High court for the state of r' i"r*g"i*, (#3001, My Home Bhooja, block-A, Plot Nos. 22-24 & 31-33, nrGirr#r, R"ng" ieddy_ District, Mobile No. 8374012311) (By Special iy6;;;"r) (Along with a Copy of affidavit and material papers)

2. One CC to M/s lndus Law Firm, Advocate IOPUC]

3. One CC to Sri Jakkula Sridhar, Advocate IOPUC]

4. One CC to sriAmancharla v. Gopal Rao, Advocate [oPUC]

5. Two CD CoPies L To,

HIGH COURT DATED: 121031202G

ORDER

ARBAPPL. [.lo .222 of 2024 ALLOWING THE ARBITRATION APPLICATION ?o S THE \ .:4;.. Afl t{ 3 0 2[2[ * * o ()