[Cites 2, Cited by 0]
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.
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
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
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
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.
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
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
