Madras High Court
M/S. Siver Oak Apartment Owners vs M/S. Sri Sreenivasa ... on 11 January, 2021
O.P.No.381 of 2020
IN THE HIGH COURT OF JUDICATURE AT MADRAS
DATED: 11.01.2021
CORAM
THE HONOURABLE Ms. JUSTICE P.T. ASHA
O.P.No.381 of 2020
M/s. Siver Oak Apartment Owners
Welfare Association - Selaiyur,
Represented by its Secretary,
Having Office at S.F. No.9,
Velachery Main Road,
Near Camp Road Junction,
Selaiyur, Chennai - 600 073.
... Petitioner
Vs
M/s. Sri Sreenivasa Constructions,
DSR Tranquil, Plot No.901,
#201, Ayappa Society Main Road,
Madhapur, Hyderabad - 500 081.
... Respondent
Prayer : Original Petition filed under Section 11(4) of the Arbitration
and Conciliation Act, 1996 to appoint a sole Arbitrator as per Clause 13
of the Construction Agreement between the parties, under Section 11
(4) of the Arbitration and Conciliation Act, 1996.
1/8
https://www.mhc.tn.gov.in/judis/
O.P.No.381 of 2020
For Petitioner : M/s. Mahesh Kumar
For Respondent : Mr. Kuberan for
M/s. Rank Associates
ORDER
The above Petition is filed for appointing an Arbitrator to resolve the
disputes between the petitioner association and respondent builder.
2. The case of the petitioner is that the property situated at S.F.No. 9,
Velachery Main Road, Near Camp Road Junction, Selaiyur, Chennai 600
073 was the subject matter of a Joint Development Agreement between the
respondent and the owners. The members of the petitioner Association had
purchased apartments in the said property. As per the terms of the contract
Agreement entered into between owners of the various apartments and the
respondent, it was agreed that the corpus fund collected by the respondent
from the owners of the 80 apartments would be handed over to the
https://www.mhc.tn.gov.in/judis/
O.P.No.381 of 2020
Association once it is formed after deducting therefrom any expenses
incurred by the respondent. The petitioner would further contend that
Clause 13 of the Construction Agreement had also spelt out that in the event
of a dispute between the purchaser/owner and the respondent, the parties
could jointly appoint a sole Arbitrator. The petitioner-Association would
contend that despite the Association having been constituted/formed, the
respondent was reluctant to handover the corpus fund to the Association. In
the light of this dispute, the petitioner Association had issued a notice
naming the Sole Arbitrator as per the provisions of Clause 13 of the
Construction Agreement. Despite receiving the said notice, the respondent
did not come forward to consent for the appointment of an Arbitrator and
therefore the present petition.
3. The respondent, on entering appearance, has filed a counter stating
that there is no Arbitration Agreement in existence between the petitioner
Association and the respondent. The Construction Agreement has been
entered into only with individual flat purchasers and not with the
https://www.mhc.tn.gov.in/judis/
O.P.No.381 of 2020
Association. The respondent has further submitted that there is no dispute
between the respondent and the petitioner Association and it is only the
respective flat owners who are having disputes with the respondent builder.
Therefore the OP deserves to be dismissed.
4. Ms. Rohini Ravi Kumar, learned counsel appearing for the
petitioner would submit that the petitioner Association consist of the flat
owners and its members and considering the fact that the respondent had
undertaken to handover the corpus fund to the Association, which has also
been formed, only as per the terms of the Construction Agreement, the
petition for appointment of Arbitrator was very much maintainable. She
would submit that the Association is itself only a creature of the
Construction Agreement entered into between the petitioner and the
respective flat owners. She would rely upon the judgment of this Court in
OP.No.241 of 2015 wherein in a similar dispute between the flat owners
Association and the builder, this Court has proceeded to appoint an
Arbitrator to resolve the disputes.
https://www.mhc.tn.gov.in/judis/
O.P.No.381 of 2020
5. Mr, Kuberan, learned counsel appearing for the respondent would
submit that there is no Agreement whatsoever between the petitioner
Association and the builder. That apart, the Judgment relied upon by the
petitioner was a consent order and that cannot be pressed into service in the
instant case where there is no consent. In the instant case, there is a dispute
between the original owners of the property who continued to retain 42 flats
and the other owners of the flats. In fact, the original owners are even
questioning the very formation of the petitioner Association. In these
circumstances, there can be no consent for appointing an Arbitrator. He
would contend that it is only the individual flat owners who could at best
raise the claim. He would also rely upon the judgment of the Delhi High
Court in " The Uniworld Garden Apartment Owners Association vs
Unitech Realty Private Ltd. reported in [2019 (173) DRJ 345]" where the
learned Judge has observed that the Association, which is an independent
legal entity, if it is not a party to the arbitration Agreement, cannot maintain
a Petition for appointing an Arbitral Tribunal on the basis of a Construction
Agreement entered into with each individual flat owner.
https://www.mhc.tn.gov.in/judis/
O.P.No.381 of 2020
6. Heard the counsels and perused the papers.
7. The document based upon which the petitioner seeks to have the
Arbitrator appointed is a Construction Agreement which has been entered
into between the respondent and the individual owners, who have entered
into the agreement as owners and in pursuance thereof have entered into a
sale deed with reference to their undivided share in the suit 'A' schedule
property. It is they who have entered into the Construction Agreement with
the Builder in respect of their flat which has been described in the 'C'
Schedule to the respective Construction Agreement. The petitioner
Association is not a signatory to this agreement. It is no doubt true that
under the Construction Agreement each purchaser has been directed to
become a Member of the society/association of the apartment complex and
there is also an undertaking given by the builder namely the respondent
herein that they would handover the corpus fund available with them to the
association/society so formed. However, the Agreement referring disputes
https://www.mhc.tn.gov.in/judis/
O.P.No.381 of 2020
to Arbitration has been entered into only between the individual apartment
owner and the builder. The fact of the instant case is identical to the facts of
the matter which had come up for consideration before the Delhi High
Court. I also concur with the view taken by the learned Judge of the Delhi
High Court. In the result, the OP stands dismissed.
11.01.2021
Index : Yes/No
Speaking order/non-speaking order
To
1. M/s. Siver Oak Apartment Owners
Welfare Association - Selaiyur,
Represented by its Secretary,
Having Office at S.F. No.9,
Velachery Main Road,
Near Camp Road Junction,
Selaiyur, Chennai - 600 073.
2. M/s. Sri Sreenivasa Constructions,
DSR Tranquil, Plot No.901,
#201, Ayappa Society Main Road,
Madhapur, Hyderabad - 500 081.
https://www.mhc.tn.gov.in/judis/
O.P.No.381 of 2020
P.T.ASHA, J.
mrn
O.P.No.381 of 2020
11.01.2021
https://www.mhc.tn.gov.in/judis/
