The Telangana High Court has affirmed a sole arbitrator's decision to demolish a building, deeming it unfit for human habitation. Chief Justice Alok Aradhe and Justice N. Tukaramji upheld the arbitrator's award, citing non-compliance with the construction agreement, structural concerns, and a limited lifespan of the building.
The case traces back to a 1996 development agreement between the appellant and respondents, involving a plot in Hyderabad. The agreement stipulated a 32% share for the appellant and 68% for the builders in the developed area. Disputes arose, leading to a 1997 agreement unilaterally canceled by the appellant in 1999. Subsequent conflicts resulted in defective construction on the land, with Respondent No. 2 occupying one of the partially built flats.
In 2001, the appellant lodged a complaint with the Municipal Corporation, seeking the demolition of the unsafe structures. Respondents, guided by an arbitration clause, sought the appointment of an arbitrator from the High Court in 2012. The arbitrator, noting breaches in the 1997 agreement, declared the building unsafe and ordered its demolition, directing the appellant to deliver possession of the vacant site.
Respondents contested the award in 2016, arguing that the arbitrator overstepped jurisdiction by ordering demolition, a remedy unsupported by the pleadings. The arbitrator had justified the decision, citing the building's non-compliance with the terms, safety concerns, and the appellant's inability to register the share without completing the complex.
The trial court annulled the award, claiming the arbitrator exceeded the contract's terms. The appellant appealed under Section 37 of the Act, criticizing the trial court's narrow interpretation and failure to consider detailed reasons provided by the arbitrator.
The High Court criticized the trial court for prematurely deeming the arbitrator's award beyond the arbitral proceedings' scope. It emphasized the court's oversight in acknowledging that respondents possessed the property per the development agreement despite unfulfilled obligations.
The High Court recognized the undisputed fact that the building was incomplete and unsafe. It affirmed the tribunal's decision that the semi-finished structure required demolition for the construction of a safe building.
Finding the trial court's order prejudicial to the appellant's long possession rights, the High Court concluded that the arbitrator's decision was reasonable and within the arbitration proceedings' scope. Consequently, the court set aside the impugned order and upheld the arbitral award. It directed respondents to vacate the property and hand it over to the appellant within two months of receiving the order. This legal saga underscores the importance of upholding arbitration decisions within their intended scope and considering the overall context of the disputes.
TAGS: Telangana High Court Arbitral Award Building Demolition Human Habitation Chief Justice Alok Aradhe Justice N. Tukaramji
