M/S Avinash Hitech City 2 Society vs Boddu Manikya Malini

3. The facts leading to the present appeals in nutshell are as under:

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.

5.3 Making the above submissions, it is prayed to dismiss the present appeals.

and the venue of arbitration shall be in Hyderabad, India.

(f) The Parties are debarred from exercising any right or filing any application to any court or tribunal having jurisdiction in connection with matters involving substantial questions of law arising during any arbitration.

(g) The Parties here by submit to the Arbitrator’s award and the award shall be enforceable in any competent court of law.” 7.1 On reading Clause 19 of the Addendum as a whole, it appears that in the event of dispute or difference among the parties out of, in connection with or relating to the agreement, the same shall be referred to arbitration. However, sub­clauses

7.2 As observed hereinabove, Clause 19 shall be applicable in the event of any dispute and difference arising among the parties out of, in connection with or relating to the agreement. As observed hereinabove, the developers, owners, societies and the original owners and even subsequent societies formed are parties to the agreement and the Addendum. It is also required to be noted and, as observed hereinabove, the dispute is with respect to sharing of the rent of the leased space and it can be said that 17 the respondents are also claiming the share relying upon the Development Agreements; Supplementary Development Agreements and the Addendum. Therefore, the dispute can be said to in connection with or relating to the Agreements also. 7.3 Considering the above facts and circumstances, 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. We are of the opinion that Clause 19 of the Addendum to the Supplementary Development Agreement shall be squarely 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.

8. In view of the above and for the reasons stated above, all these appeals are allowed. The impugned common judgment and order dated 22.11.2018 passed by the High Court in C.M.A. Nos. 1257, 1379 and 1380 of 2017 is hereby quashed and set aside. 18 The order passed by the learned District Judge rejecting the applications submitted by the appellants under Section 8 of the Arbitration and Conciliation Act, 1996 are also hereby quashed and set aside. Consequently, the applications submitted by the appellants under Section 8 of the Arbitration and Conciliation Act, 1996 are hereby allowed and the disputes between the respondents and the appellants are hereby directed to be referred to the Arbitration. No costs.