High Court · 2025

I3.Kolan Srinivas Reddy. S/o. Late K. Veera Reddy Aged about 62 years, Occ: Agriculture R/o. Plot No.28, Vertex previlage, Nizampet Road, Kukatp ally, Hy d-7 2. l4.Kolan Rajasekhar Reddy, S/o. Late K. Veera Reddy Aged about 60 years, Occ: Agricrflture R/o. Plot No.28, Vertex previlage, Nizampet Road, Kukatp ally, I1y d-7 2. l5.I(olan Jagan Mohan Reddy, S/o. I(. Venkatram Reddy Aged about 48 years. Occ: Businc-ss R/o. Plot No.35. Verlex previlage, Nizampet Road, Kukatp ally, Hy d-7 2

16.Kolan Satyanarayana Reddy, S/o. K. Bala Krishna Reddy Aged about 48 years, Occ: Business R/o. Plot No.36, Vertex previlage, Nizampet Road, Kukatpally, Hyd-72 _/

17.Kolan Sunit Rcddy, S/o. K. Bala Krishna Redd| Aged about 46 years, Occ: Business R/o. Plot No.44, Verlex previlage Nizampet Road, K ukar p ally, Hy d-7 2 I8.S. Karnala Kumari, Wo. S. Radha Krishna /_,/ Aged about 65 years, Occ: Business R/o. H.No.7-1-644163D, Sri Sai Sadan Apartmentsl Sunder Nagar Colony, Hyderabad. ... l9.Sukhavasi Radha Krishna, S/o. I.laendram ,/ \ Aged about 68 years, Occ: Business R/o. H.No.7-i -64416318, Sri Sai Sadan Aparrments, Sunder Nagar Colony, Hyderabad I I ..RESPONDENTS CLAMiANT/ RESPONDENTNos.2 to 16, 18 & 19 f i' tL t t $ It I g t f, o !I g i I I E q { i \ : (14 -IIIII lA NO: 1 OF 2024. Petilion undr:r lj:-.ction 151 CPC praying that in the ;ircr mstitnces stated in the affidavit file,l n :, L Iport of the petition, the High court ray be rleased to stay all further proce r:r:it c:, ln Arbitration Application No 1 c'f 2023 cefore the Ld' Arbitrator till dispo:;a r'the Revision Petition' Counsel for the Petit oner SRI A,VENKATESH, SR.COUI!SEL REP.SRI NARESH REDDY CI.lINNOL.LA Counsel for the lle-s lrondents SRI A.RAVINDER REDDY, SR.COL,INSEL REP. P INDRA PRAKASH The Court made the bllowing: ORDER HON'BLE SRI JUSTICE LAXMT NARAYANA ALISHETTY CIVIL REVTSIONP ETITION NO.8O2 OF 2024 ORDER: This Civil Revision Petition is filed aggrieved by the order and decree, dated 15.02.2024 in I.A.No.2 of 2024 in Arb.Appl.No.l of 2023, passed by the learned Sole Arbitrator, at Hyderabad.

2. Heard Sri A.Venkatesh, leamed Senior Counsel representing Sri Naresh Reddy Chinnollal leamed counsel for the petitioner on record and Sri A.RaVinder Reddy, leamed Senior Counsel representing Sri P.Indra Prakash, leamed counsel for respondent No. I on record.

3. The briel factual matrix of the case is that respondent Nos.l to 1 6 herein are parties to an agreement, dated 24.07 .lggg, which was entered among four branches of a lamily for settlement - demarcation - alienation of the properties to a total extent of Acs.154.02 gts in Sy.Nos.150 to 155 and 162 to 166 of Bachupally Village, Ranga Reddy District. In the said agreement, the parties have agreed that in case of any dispute between the said groups and individual members r-- 2 /. \"1. / CR, \'o lt): ot 2 )21 regardinll thr: leaning and interpretation of varit'tts :latr;es in the agrcernol'rt 1l ( same has to be referred to the S rle A'rbi rator, Sri P.S.N.Prastd, '\dvocate, for resolving the d isput'':s/is ; ue s Initially, respondenl I'l,r t herein filed claim petition under Sectior 23 ol the Arbitrati:,n iur,i Conciliation Act, 1996, (Act 1996, ''lcrr brevity") before tLLc r irmed Sole Arbitrator, Sri P.S.N.I'rasad, llyderabad seeking parlr:it,n of the suit schedule properties by rrlloLr'inrt [/4'1' share to each ol' tl't co-owners by demarcating the same b1' nctes and bouncls rnd rlso putting him in possession of his 3/'10" share ie', approxinate v Acs.2.16 gts in the suit schedule ploperly a nd also to declare thc agrrement, daled 24.07 -1989, as null ar d vc id a ; the same was against lt t' ceiling statute existing as on the sa d di'te tr tcl also for cancella'.ic-n rIsale deeds and Will deeds 4 L):rinr1 pendency of the arbitration application, rcspotrdent No'l herein 1iled i A.No.l of 2023 in Arb.App.No. I ol l02J and the leamed []olr. , \rbitrato r vide order dated 29 .07 .2')23 qrar ted an ex parte ati int:'im injunction restraining respondents the'rein from changing tlre nature of the lands admeasuring to arL extent of Acs.l54.,J.l rLls LNA, J CRP No.802 of2024

5. The petitioner herein, who is a subsequent purchaser and third party, was also made a party to the claim and on receipt of notice, the petitioner filed an applicarion i.e., I.A.No.2 of 2024 in Arb.App.No.l of 2023 under Section 16 of the Arbitration and Conciliation Act, 1996 with a prayer to disrniss Arbitration Applicarion No.1 of 2023, as it is not maintainable on the ground that the Arbitrator does not have jurisdiction to entertain and adjudicate the claim of respondent No. I herein. However, the said application was dismissed by the leamed Sole Arbitrator vide ocder datcd 15.02.2024. Aggrieved by the same, this Civil Revision Petirion is filed by the petitioner.

6. Leamed Senior Counsel lor the petitioner submitted that as per Section 16 of the Arbitration and Conciliation Acr, any issue/dispute is referred to the Arbitrator lor adjudication and if he has personal interest in the said matter, the Arbitrator cannot adjudicate the matter. In the present matter, the Arbitrator has been appointed as GpA holder by one of the owners of the property i.e., Smt K.sitamahalakshmi, and therefore, the Arbitrator cannot adjudicate the issue between the parties. Despite specific objection, the Arbitrator has dismissed the application without considering the objection raised by the petitioner. 4 1 \,1, J CttI'\a E0. of)A21

1. Lear:ed Senior Counsel for the petition(rr hirs :e fered to the Genelal I'cr,er of Attorney, dated 05'03 2018, a' per wh ch one of the land L,\vn!'r' of the property by name Smt'K Sitanrall tlakshmi has execr led ;rrid GPA appointing the Arbitrat rr' :'s h s Power of Attorney I'hat the said property is subject n-atte belore the Arbitrator',rherefore,theArbitratorisdirectlyir.tereltellinthesubject propetlv rtirice he is representing one of thc parLies ..() lhe Arbitration' and e:; such. the Arbitrator is disquatified from acljt dir:ating the issue in vic* ol' Section 12 of Act, 1996. Thus, he firrally pra'zed this Court allov' the, (, ivil Revision Petition and set-aside the irlrpug'ned order' Le.t:rred Senior Counsel appearing for rt:spo rdt:rrt No' 1 would

8. subrrLit tl,i.l the Arbitrator has been appointed rs C Pl' by one of the lanc'l owtl,)'s, however, he neither has persolal interr:st nor is the ownor oJ'llie property. Therefore, appointmerrt ol the Arbitrator as GP,,l by )nc of the land owners does not disentitle the 1'rbitrator lrom aclju,licari.rg the dispute between the parties' Leamcd S enior Counsel appearin: lbr respondent No.I funher submits that nr grounds are macl: ou . t,r interfere with the impugned order- passt:d b ' tlie arbitrator 5 LNA. J CRP No.802 of2024 and the Civil Revision Petition is devoid of merits and therefore, it is liable to be dismissed.

9. It is apt to refer to Section I 2 of Act, I 996, as per which when a person is approached in connection with his possiblc appointment, as an Arbitrator, he shall disclose in writing any circumstances: "a) such as the existencc either direct or indirect, of any past or present relationship with or interest in any of the parlies or in relation to the subject matter in dispute, whether financial, business, professional or other kind, which is likely to give'rise to justifiable doubts as to his independence or impartiality; and b) which are likely to affect his ability to devote sufficient time to the arbitration and in particular his abiliq, to complete the entire arbitration within a pcriod of twelve months."

10. Leamed Senior Counsel for the petitioner has relied upon the judgment of Hon'ble Supreme Court in Centrol Organisation for Railway Electrification Vs. ECI SPIC SMO MCML (Jt) A Joint Venture Companyt , wherein, it is observed that the categories mentioned under the Seventh Schedule arc such that it is difficult to distinguish the interest of an Arbitrator frorn those of a party to which 1 2024 SCC Online SC 3219 6 : \;1 J CRP \o 8n) al )t )1 an arbitrirl'trr it connected. In such cases, the isstle is u'h ether the outconle ol llt arbitration witl realistically affect th(r ,/\rbitrator's interests, I'hr: [;ru. prioritizes the objective criteriorr of inclc pendence over the l;ub.ir'crive criterion of impartialiry' Once it is e:rtabl shed that an Arbit'rrto: 1a[ls under any of the categories rnentionr:d in the Seventh lichi:Crrle, he would automatically be disquirlifiecl \v thout any investigai;on i rto whether or not there is really any likeJihot'd of bias' Since the ine,i5 ibitity envisaged under Section 12(li) goes t I the root of the appoirtrlrent, an application may be filed under Sec ion 16 ol Act. 1996 to tf e Court to decide on the aspect of tem inat on ol the Arbitratcr's t ranclate. It is appropriate to refer to Se;tiorr liZt 5) olAct' 1996, r.r,f ich 't:rtds as follows: ''S. l: Grounds for challenge: tl) r,, ,1) xxx i5) \ j, rtwithstanding any prior agreement to th{ corl rarv iin\ l)ilrson whose relationship, with the parties tr coLlt.tsc r,r the subiect-matter ofthe dispute, falls under lny r'l tht LatlLrorics specified in the Seventh Schedule shal bt ine ig blc to be appointed as an arbitrator."

11. [1. is al:ur relevant to refer to Schedule VII of rlle '\ct, 1996, under rv['ir:h Ihe categories of relationship of the arbitlatcr rvith the pifti"s r,, c,.rrrnsel or subject matter which give raise to jtrstifiable 7 LN/, J CRP L'o.802 of2021 doubts as to the independence or impartiality of Arbitrator have been specified.

12. A perusal of the record would disclose that there is no dispute with regard to execution of GpA, dated 05.03.201g, by one of the land owners in favour of the Arbitrator to act on her behalf including entering into agreement ofsale, in respect of part of property, which is subject matter before the Arbitrator. Therefore, this Court is of the considered view that the relatibnship of Arbitrator bcing GpA holder of one of the parties to the arbitration is one of the grounds specified under Schedule VII of the Act, 1996, he cannot adjudicate the dispute raised by respondent No. l.

13. Following the principles laid down by the Flon,ble Supreme Court in Central Organisation for Railway ElectriJicotion Kranti Associates (l supra), and in the light of the Arbitrator being appointed as one of the GPA holder by one of the land owner to act on her behalf in respect of property which is subject matter of Arbitration, this court is of the considered view that Arbitrator is inerigibte to act and adjudicate the matter as an Arbitrator. 8 \1/ cRP \b 8t).' )l )0 'J

14. In vi er^ rf the above discussion, Civil Re risicn P :tition is allowed, irnpr- s.tred order is set aside. Consequently, I A Nc' il of 2024 - in Arb.Appca \lo.1 of 2023 stands allowed' Howevt:r, it is n ade clear that resp(,ndc1: No.1 is at liberty to avail all the rt'nrecies. available under la,r. llrl appointment of Arbitrator by du ly lbllo.llirrg the procedurc 'flrer': shall be no order as to costs' Pcndinlt Iniscellaneous applications, if any, shall sland closed' //TRUE COPYII sd/- P. OHr EPU]'Y REGISTRAR ,tq NAG,\BHUSHAMBA ' SECITION OFFICER To,

1. Sri P.S N Prasad, The Sole Arbitrator, at Hyderabad 2 One CC l,: Sri l'Jaresh Reddy Chinnolla, Advocate (C)PUO) 3. One CC t: Sri I'.lrdra Pfakash.Advocate (OPUC) 4. Two CD Oop,e s Ks/gh HtGH COr"'R-r DATED:0310t1t2025 ORDER CRP.No.802 of 2024 Allowing the C.R.P Without costr;. ,4, Ii-it ir /l T (-) o-, J ,. :j ((1 7W ;a * \i a^.-

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