THE HON’BLE SRI JUSTICE B.SESHASAYANA REDDY A.A.NO.35 OF 2011 ORDER This application has been taken out under Section 11 (6) the of Arbitration & Conciliation Act, 1996 read with Rule 2 (b) of the Scheme for appointment of arbitrators for resolution of the disputes, which have arisen relatable to development agreement- cum-General Power of Attorney dated 10-2-2005 and supplementary agreement dated 1-3-2005. The application averments in brief are: The applicants 1 and 2 are the absolute owners and possessors of the first floor of a house bearing H.No. 1-2-234/36/1, Mega City No.705, admeasuring 1094.58 square feet situated at New SBH Colony, Domalguda, Hyderabad. They acquired the property by virtue of gift settlement deed executed by their maternal grand mother Smt Tirumala Sudarshan Syamala @ T.Syamala dated 26-3-2004. The applicants 3 and 4 are the absolute owners and possessors of ground floor of a house bearing No.1-2-234/36, Mega City No.705, admeasuring 1165 square feet along with undivided share of land in an area of 154 square yards out of 314 square yards. They acquired the property by virtue of gift settlement deed made executed by their maternal grand mother Smt Tirumala Sudarshan Syamala @ T.Syamala dated 26- 3-2004. The applicants 3 and 4 being minors they are represented by their mother and natural guardian Smt T.Rajani. All the applicants entered into development agreement cum General Power of Attorney dated 10-2-2005 with the respondent-company for the purpose of developing the applicants house bearing MCH.No.1-2-234/36 and 1-2-234/36/1 into a multi-storied residential complex. The applicants also entered into supplementary agreement on 1-3-2005 specifying the shares in the constructed area. As per Clause 3 of the supplementary agreement dated 1-3-2005, if the first respondent makes any further constructions in the third floor/terrace above the permitted floors, the applicants will be entitled to 35% share in such construction or their market value prevailing. The respondents executed registered sale deeds in respect of the additional constructed area without informing the applicants. The applicants demanded the first respondent for settlement of 35% share in the pent house and also to settle the final accounts relating to additional constructed area. The first respondent promised to settle the accounts shortly but failed to do so. The applicants came to know that the respondent-company represented by K.Satish Kumar as Managing Partner alienated the pent house to M.Kasi Viswanadha Reddy and Smt M.Vijayalaxmi under sale deed dated 27-7-2010. The respondents neither informed nor obtained consent prior to execution of sale deed dated 27-7-2010. The applicants issued notice dated 28-2-2011 invoking the arbitration clause of the development agreement dated 10-2- 2005 and proposing the name of Sri N.Vidya Prasad, retired District Judge as arbitrator on their behalf. The respondents did not choose to issue reply to the notice. Hence this application by the applicants, who are four in number, with the prayer stated supra. Notice to the respondents came to be ordered on 21-4-2011. Notice sent to the respondents has been returned un- served with an endorsement “addressee not claimed”. In view of the said endorsement, it shall be treated as deemed service. Heard the learned counsel appearing on behalf of the applicants and perused the material brought on record. Learned counsel appearing on behalf of the applicants submits that respondents 1 and 2 proceeded with the construction of additional floors without obtaining permission from the applicants and as per the supplementary agreement, the applicants are entitled to 35% share in additional constructed are or its market value. A further submission has been made that the respondents executed a sale deed in respect of additional constructed area in favour of M.Kasi Viswanadha Reddy and Smt M.Vijayalaxmi, in which case the applicants are entitled to claim 35% share in the sale consideration. Learned counsel also submits that the applicants invoked arbitration clause in the development agreement and proposed the name of the arbitrator on their behalf. But, the respondents neither consented for nor nominated the arbitrator on their behalf. Therefore, the applicants are constrained to approach this Court seeking the relief stated supra. Learned counsel refers to Clause 19 of the development agreement in support of his submissions. Clause 19 of the development agreement reads as hereunder: “In case any disputes arise between the parties hereto touching these presents, the matter shall be referred to the Arbitrators, one chosen by each party and in case of difference of opinion between such arbitrators, they shall nominate an arbitrator and their award shall be final and binding on both parties and the relevant provisions of the Arbitration Act, 1996.” The applicants invoked the above referred arbitration clause under notice dated 28-2-2011. But, the respondents did not choose to issue reply. In that view of the matter, I find that the applicants made out a valid ground for appointment of arbitrator for resolution of the disputes relatable to development agreement dated 10-2- 2005 and supplementary agreement dated 1-3-2005. Accordingly, this application is allowed. Sri P.Ananthsena Rao, retired District Judge (H.No.1-1-651/A/1/301, Tirumala Vaishnavi Aparments, Gandhi Nagar, Hyderabad) is appointed as sole arbitrator for resolution of the disputes between the parties relatable to development agreement and supplementary agreement. He shall fix his fees. __________________________ B.SESHASAYANA REDDY,J rkk Dated: 13-6-2011