HONOURABLE SRI JUSTICE V.ESWARAIAH AND HONOURABLE SRI JUSTICE NOUSHAD ALI C.R.P.NOs.4499, 4500 & 4501 of 2006 Dt.30-06-2010 C.R.P.No.4499 of 2006: M/s.Kamadhenu & Co. Erragadda, Hyderabad. …………Petitioner and M.Narasimha …………….Respondent C.R.P.No.4500 of 2006: M/s.Kamadhenu & Co. Erragadda, Hyderabad. …………Petitioner and D.Kasinath …………….Respondent C.R.P.No.4501 of 2006: M/s.Kamadhenu & Co. Erragadda, Hyderabad. …………Petitioner and K.Lingappa …………….Respondent HONOURABLE SRI JUSTICE V.ESWARAIAH AND HONOURABLE SRI JUSTICE NOUSHAD ALI C.R.P.NOs.4499, 4500 & 4501 of 2006 COMMON ORDER: (Per VE,J) All these three revision petitions arise against the orders dated 15-06-2006 in O.P.Nos.2076, 2077 and 2078 of 2004, respectively, on the file of the Chief Judge, City Civil Courts, Hyderabad. 2. The petitioner in all these revisions is one and the same, but the respondents are different. 3. Since the issue involved in all these revisions is common, they are being heard together and disposed of by this common order. 4. It is stated that the petitioner-company is a builder and developer and the respondents are the owners of the different properties, situated at Ameerpet and all of them entered into memorandum of agreements, dated 06-02-1998, respectively. It is stated that as per the memorandum of agreement, the property has to be developed subject to several necessary terms and conditions said to have been mutually agreed by both of them. Clause 18 of the Memorandum of Agreement reads as follows: “18. It is mutually agreed by both the parties that all the matters/problems if any touching on this agreement shall be mutually discussed and sorted out or shall be referred to an arbitrator who is well- versed in this subject. The arbitrator shall be identified the builder/developer and accepted by the owner.” However, according to the petitioner, the respondents have not fulfilled their obligations. 5. But according to the respondents, the petitioner failed to obtain municipal permission even after four years and ultimately, the respondents have cancelled the said memorandum of agreement through notice dated 30- 05-2001 and as such there is no agreement for invocation of clause 18 of the agreement and therefore, the question of invocation of clause 18 of the agreement does not arise. It is further stated that the agreement is hit by Section 17 of the Registration Act and Sections 35 and 36 of the Stamp Act. Therefore, the agreement is not enforceable at all. It is further stated that the respondents also filed civil suit for mandatory injunction for return of their original title deeds and the petitioner herein also filed different suits seeking declaration that the cancellation notice dated 30-05-2001 issued by the respondents is null and void. Ultimately the suits filed by the petitioner were withdrawn and the matter was settled out of Court and therefore, the applications filed under Section 11 of the Arbitration Act are not maintainable and all the said O.Ps. filed by the petitioner seeking appointment of arbitrator are hit by Order 2 Rule 2 CPC. 6. The petitioner filed the aforesaid three O.Ps for the appointment of arbitrator under Section 11 of the Arbitration and Conciliation Act (for brevity ‘the Act’). During consideration of the O.Ps., the petitioner has placed reliance on the judgment of the Hon'ble Supreme Court in the case of M/s. SBP and Company Vs. M/s. Patel Engineering Limited and another[1], wherein the Supreme Court, while considering Section 11 (6) of the Act, held that as per the scheme of the Act, the Chief Justice cannot designate the District Judge to perform the functions under Section 11 (6) of the Act and accordingly, while summoning up the conclusion in paras v and xi, held as follows: “(v) Designation of a District Judge has the authority under Section 11 (6) of the Act by the Chief Justice of the High Court is not warranted on the scheme of the Act. (xi) Where District Judges had been designated by the Chief Justice of the High Court under Section 11 (6) of the Act, the appointment orders thus, far made by them will be treated as valid; but applications if any pending before them as on this date, will stand transferred, to be dealt with by the Chief Justice of the High Court concerned or a Jude of that Court designated by the Chief Justice.” 7. Though the said judgment was cited before the Court below, the Court below erroneously came to the conclusion that the said judgment applies in respect of the applications entertained under Section 11 of the Arbitration Act from 26-10-2005 onwards only, but not in respect of the cases pending long prior to the date of the judgment of the Supreme Court and further held that the District Judge has got inherent jurisdiction to entertain the application. 8. In the circumstances, We are of the opinion that the learned District Judge has not correctly relied on the judgment of the Hon'ble Supreme Court as the Hon'ble Supreme Court specifically and unambiguously held that the applications if any pending before the District Judges as on 26-10-2005, the date on which the Hon'ble Supreme Court delivered the judgment, will stand transferred to be dealt with by the Chief Justice of High Court concerned or a Judge of the Court designated by the Hon'ble the Chief Justice. 9. Therefore, we are of the considered opinion that the Court below ought not to have gone into the merits of the case and decided the matters as it cannot be said that the District Judge continues to have the inherent jurisdiction to entertain the application even after the judgment of the Hon'ble Supreme Court. 10. Accordingly, we, without going into the merits of the case, while keeping open the respective parties to advance all the legal and factual contentions before the Hon'ble Chief Justice of the High Court or a Judge concerned designated by the Hon'ble Chief Justice for the appointment of arbitrator under Section 11 of the Act, set aside all the impugned orders under revision and all the said O.Ps are restored and stand transferred to the Court designated by the Hon'ble Chief Justice of the High Court of A.P. as the arbitral dispute is only below Rs.5.00 lakhs i.e. much below the one crore. 11. In the result, all the revisions are accordingly disposed of. There shall be no order as to costs. ________________________ JUSTICE V.ESWARAIAH Date: 30-06-2010 ________________________ JUSTICE NOUSHAD ALI kvr [1] 2005 (8) S.C.C. 618 = 2005 (9) Scale 1