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TMI Blog2019 (9) TMI 321X X X X Extracts X X X X X X X X Extracts X X X X ..... applicable and therefore the disputes between the respondents and the appellants for which the respondents initiated proceedings under the Societies Registration Act, are required to be referred to the Arbitration and/or to the Arbitral Tribunal - both the High Court and the learned District Judge have committed grave error in not referring the dispute between the appellants and the respondents to the arbitration. - CIVIL APPEAL NOS. 7047-7049 OF 2019 [Arising out of SLP (Civil) Nos. 4213-4215 of 2019] - - - Dated:- 6-9-2019 - ARUN MISHRA And M. R. SHAH, JJ. JUDGMENT M. R. Shah, J. 1. Leave granted. 2. Feeling aggrieved and dissatisfied with the impugned common judgment and order dated 22.11.2018 passed by the High Court of Judicature at Hyderabad for the State of Telangana and the State of Andhra Pradesh in C.M.A. Nos. 1257, 1379 and 1380 of 2017 by which the High Court has dismissed the said appeals and has confirmed the order passed by the learned Principal District Judge, Ranga Reddy rejecting applications under Section 8 of the Arbitration and Conciliation Act, 1996 filed by the appellants herein and ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... to pay the proportionate share of common expenses for upkeep and maintenance to the societies. 3.2 A cold shell of building H1B was completed by the developer and appellant no. 1 Society converted the same to warm shell by setting up the air conditioning facilities, backup generators and backup power implementation, building management system implementation, electrical works and civil works and the funds for the same were raised by appellant no. 1 Society by way of bank loans. Thereafter, various spaces in building H1B were leased out to HCL Technologies Ltd. and the rents were collected by appellant no. 1 Society. 3.3 That, thereafter, the respondents filed a petition under Section 23 of the Andhra Pradesh Societies Registration Act, 2001 (for short the Societies Registration Act ) before the Principal District Judge, Ranga Reddy District making an allegation that their purported share in the rentals were not being paid to them and prayed for a direction to appellant no. 1 Society to produce the entire accounts for the rental amounts received by it from the tenants along with audit reports and minute books from 2011 to 2015. The respondents also pr ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... llants under Section 8 of the Arbitration and Conciliation Act, 1996. 4.1 It is vehemently submitted by the learned Senior Advocate appearing on behalf of the appellants that the dispute between the appellants and the respondents is the quantum of the share claimed by the respondents in the lease rents collected by appellant no. 1 Society. It is submitted that the respondents are claiming their share in the rent collected by appellant no. 1 Society relying upon the relevant provisions of the Development Agreements and the Supplementary Development Agreements and the Addendum. It is submitted that, therefore, the dispute can be said to be arising out of the agreements executed between the parties and the Addendum. It is submitted that, therefore, Clause 19 of the Addendum shall be squarely applicable. It is further submitted that Clause 19 of the Addendum is very clear and, as per Clause 19, any dispute between the owners, including the dispute relating to the Addendum and all questions relating to its interpretation shall be construed in accordance with the laws of India. It further provides that, except as otherwise specifically provided in the Agreement, in the ev ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... y the High Court. 5.1 It is vehemently submitted by the learned Senior Advocate appearing on behalf of the respondents that, in the facts and circumstances of the case and considering the relevant sub-clauses of Clause 19 of the Addendum, the High Court has rightly not interfered with the order passed by the learned District Judge while not referring the dispute to Arbitration and not appointing the Arbitrator. 5.2 It is vehemently submitted by learned Senior Advocate appearing on behalf of the respondents that on fair reading of Clause 19 of the Addendum, only the disputes and differences arising between the Owners [Sub-clause (c) of Clause 19]; the dispute which involves two or more societies or owners who are the members of the different societies [Sub-clause (d) of Clause 19]; or the dispute which involves two or more owners of the space in the same building [Sub-clause (e) of Clause 19], are required to be referred to Arbitration and to the Arbitral Tribunal comprising of the sole arbitrator. It is submitted that, in the present case, the dispute between the respondents and the appellants cannot be said to be between the owners or between the tw ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ellants with respect to the sharing of the rent with respect to the leased space can be said to be related to the Addendum and/or in connection with or relating to the Addendum. 7. Clause 19 of the Addendum, which is the arbitration clause and provides how to settle the dispute between the parties, reads as under: The owners agree that any dispute between the Owners, including the dispute relating to this Addendum and all questions relating to its interpretation shall be construed in accordance with the laws of India, without reference to its principles of conflicts of law. Except as otherwise specifically provided in this Agreement, the following provisions apply in the event of any dispute or difference arising among the Parties out of, in connection with or relating to the Agreement (The Dispute ). (a) The Dispute shall be deemed to have occurred, when one Party serves on the other Party/ies a notice stating the nature of the Dispute ( Notice of Dispute ). (b) The Parties hereto agree that they will use all reasonable efforts to resolve among themselves, any Dispute between them through negotiations. ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... the same building. Sub-clause (c) of Clause 19 provides that any disputes or differences whatsoever arising between owners, which could not be resolved by the parties through negotiations, within a period of 30 days from the service of the notice of dispute, the same shall be referred to and shall finally be settled by the arbitration in accordance with the (Indian) Arbitration and Conciliation Act, 1996. Sub-clause (d) of Clause 19 provides that in the event of any dispute which involves two or more societies or owners who are the members of two different societies, the arbitral tribunal shall comprise of three or more arbitrators. It further provides, who shall be appointed as a presiding arbitrator; who shall be the Chairman of the arbitral tribunal and the venue of the arbitration . Sub-clause (e) of Clause 19 provides that in the event of any dispute which involves two or more owners of the space in the same building, the arbitral tribunal shall comprise of the sole arbitrator and, in such a situation, each party to the dispute shall refer the matter to the office bearers of their respective Society which shall be the arbitral tribunal and the venue of arbitration shall be in ..... X X X X Extracts X X X X X X X X Extracts X X X X
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