Telangana High Court
M/S. Klr Industries Ltd vs M/S. Legend Estates Pvt. Limited on 1 April, 2026
Author: P. Sam Koshy
Bench: P. Sam Koshy
Page 1 of 7
IN THE HIGH COURT FOR THE STATE OF TELANGANA
AT HYDERABAD
THE HONOURABLE SRI JUSTICE P. SAM KOSHY
Arbitration Application No.13 of 2025
Date of order : 01.04.2026
BETWEEN :
M/s.KLR Industries Ltd. and 8 others
... Applicants
and
M/s.Legend Estates Pvt. Limited and another
... Respondents
ORDER :
The instant Arbitration Application has been filed by the applicants under Section 11(5) & (6)(6A) of the Arbitration and Conciliation Act, 1996 praying the Court to appoint an arbitrator on behalf of applicants and respondents to adjudicate the claims and disputes arising under the Registered Development Agreement-cum-General Power of Attorney, vide Document No.6414 of 2014, dated 14.11.2014, and to award costs of application.
2. Heard Mr. M. Sreyas Reddy, learned counsel for the applicants; and Mrs.Manjari S. Ganu, learned counsel for the respondents. Page 2 of 7
3. The brief facts leading to filing of instant arbitration application by the applicants is that applicants herein are absolute owners and possessors of land admeasuring 3296 Sq.yds. (or) 27 guntas and 29 Sq.yds., purchased by the applicants under various registered sale deeds. The said land is an extent of Acs.2.11 gts. and 57 Sq.yds. situated in Survey Nos.126/A & AA, 199/A & AA, 201, 204/AA to 206/A, AA, E, EE, U, UU, 206/P, 209 and 210, situated at Kokapet Village, Rajendranagar Mandal, Ranga Reddy District.
4. The respondent No.1, after enquiring with the applicants' title and possession over the above subject properties, had approached the applicants with an intention to develop the above subject lands. After negotiations, the applicants have agreed for the proposal put up by the respondents, and accordingly a registered Development Agreement-cum- General Power of Attorney, vide Document No.6414 / 2014, dated 12.12.2014, was entered into between the applicants and respondents for development of the subject lands. Under the said agreement, the applicants are entitled for 50% of the villas in the gated community. It was further agreed by both parties that the respondents shall handover the villas allotted to applicants within a period of 36 months from the date of obtaining sanction and permission from the Hyderabad Page 3 of 7 Metropolitan Development Authority, with a further grace period of 6 moths.
5. Learned counsel for the applicants contended that since the date of entering into development agreement, the respondents have delayed execution of the project in constructing villas; the respondents, contrary to the terms of development agreement, have alienated open plot Nos.196, 197 part, 202 part and 203 admeasuring 1,506 Sq.yds and 197 part, 198, 201 and 202 part admeasuring 1,506 Sq.yds., under two sale deeds vide Document No.781 of 2015 and 783 of 2015, dated 11.02.2015; aggrieved, the applicants lodged a police complaint dated 05.01.2020.
6. Learned counsel for the applicants further contended that the applicants have been following up with respondents for successful completion of the project; since the respondents have failed in completion of villas, the applicants decided to accept / receive the construction value as per the existing market rates from respondents so as to enable the applicants to complete the construction work on their own; despite best efforts put in by the applicants in pursuing the respondents to complete the project within time and to deliver 50% share of villas to the applicants, the respondents till date have not taken steps to complete the Page 4 of 7 project as was agreed between the parties under the said Development Agreement; accordingly, a legal notice was issued to the respondents by the applicants on 09.09.2024 calling upon the respondents to make payment towards value of the construction and damages calculated in favour of applicants along with interest @ 24% per annum within 15 days from the date of receipt of notice as per terms and conditions of the Development Agreement, dated 14.11.2014; despite receipt of the said notice by the respondents, the respondents have failed to pay the amounts, and instead given a reply notice dated 25.10.2024 with all false and frivolous allegations.
7. Learned counsel for the applicants further submitted that, left with no other option, the applicants preferred to invoke arbitration clause (20) of the said development agreement, dated 14.11.2014, wherein it was agreed by both parties that in case of any dispute arising between the parties, the matter would be referred to a sole arbitrator; and accordingly, a legal notice dated 13.11.2024, invoking Clause (20) of the Development Agreement dated 14.11.2014, was issued to the respondents calling upon the respondents to give consent for appointment of an arbitrator between the applicants and respondents for adjudicating the dispute between them; however, the respondents, after Page 5 of 7 receipt of the said notice, refused to give reply, which led to filing of the instant Arbitration Application under Section 11 of the Arbitration and Conciliation Act, 1996.
8. On 14.02.2025, notice was ordered to the respondents. Thereafter, learned counsel, appearing on behalf of the respondents, entered appearance and sought time for filing counter-affidavit in the matter.
9. Counter-affidavit has been filed by respondent No.2, i.e., the Managing Director of respondent No.1-Company, stating that the applicants have fraudulently issued a letter dated 24.08.2016 directing the respondents to stop construction work immediately till disposal of Civil Suits, viz., O.S.No.1065 of 2007 and O.S.No.1034 of 2015; on account of stay granted by the Trial Court, the respondents could not proceed with completion of project; after withdrawal of the above suits by the applicants, the respondents have resumed construction work and completed most of the works; the respondents are ready and willing to complete the construction work, but it is on account of ongoing litigation and stay orders obtained from the Trial Court by the applicants, the respondents could not complete the project; and therefore, contended that the instant arbitration application need not be entertained by the Court since respondents have agreed to complete construction work. Page 6 of 7
10. Having heard the contentions put forth on either side and on a perusal of the record, and also taking into the consideration the facts and circumstances of the case, given the nature of dispute that had been raised and canvassed by the applicants and also considering the arbitration clause (20) contained in the Development Agreement that has been entered into between applicants and respondents on 14.11.2014 and prima facie proof of service of notice on the respondents also having been filed by the applicants, this Court is inclined to allow the arbitration application.
11. Accordingly, this Court appoints Hon'ble Sri Justice Challa Kodanda Ram, retired Judge, resident of Plot No.68, Road No.71, Phase- III, Jubilee Hills, Hyderabad - 500 033, Mobile No.83310 10695, as the sole Arbitrator to resolve the dispute between the parties.
12. Needless to state that both parties are at liberty to raise all claims and counter claims before the sole arbitrator who in turn shall conduct the arbitration proceedings in accordance with provisions of the Act. The venue of arbitration shall be decided mutually by the parties subject to consultation and agreement of the learned Arbitrator. The fee payable Page 7 of 7 to the learned Arbitrator shall also be decided mutually by the parties in consultation and agreement with the learned Arbitrator.
13. Accordingly, the Arbitration Application stands allowed. No costs.
14. As a sequel, miscellaneous petitions, pending if any, shall stand closed.
___________________ P. SAM KOSHY, J Date: 01.04.2026 Note:
The Registry is directed to furnish copy of this order to the learned sole arbitrator B/o.
Ndr