Arbitration Lawyer: Sec 8 under Arbitration Act was allowed in a petition filed under Society Act; SC.

Supreme Court of India

Justice M R Shah and Justice Arun Mishra

The SC {M/s Avinash Hitech City 2 Society & Ors. v. Boddu Manikya Malini & Anr. Etc.} sets aside the concurrent judgments of courts below and referred the matter for arbitration by allowing the application under Sec 8 of the Act of the appellant. In present case, the respondents filed  a   petition  under Section  23   of  the   Andhra   Pradesh   Societies Registration  Act, 2001  before   the Principal   District   Judge,   Ranga   Reddy   District   making   an allegation   that   their  purported   share   in  the   rentals   were   not being paid to them and prayed for a direction to appellant no. 1 Society to produce the entire accounts for the rental amounts received by it from the tenants along with audit reports and minute books from 2011 to 2015.

It was held by the SC that Clause 19 of the  agreement 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.     It was held that, the developers, owners, societies and the original owners and even subsequent societies formed are parties to the agreement and the Addendum.   It is also held that the dispute is with respect to sharing of the rent of the leased space. And it can be said that 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 - which contain arbitration clause.

It was held by the  SC 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. Accordingly, the appeal was allowed and the matter stands referred to arbitration.