Case Background and Dispute Overview
The dispute originated from an agreement dated September 27, 2010, between the applicant and the deceased respondent for the sale of a property in Ranchi. Clause 18 of this agreement incorporated an arbitration clause. The applicant alleged that additional construction work was undertaken at the behest of the respondent, for which a balance payment of ₹8,32,400 remained unpaid. Despite handing over possession in April 2011, the applicant refrained from executing the registered sale deed until the outstanding amount was settled. Invoking the arbitration clause, the applicant issued a notice on October 10, 2023, seeking the appointment of an arbitrator.
Respondent's Defense and Legal Proceedings
The respondent countered by referencing an order dated January 29, 2018, issued by the Chief Executive Officer of the Ranchi Municipal Corporation under Sections 21(2) and 21(3) of the 2011 Act. This order mandated certain payments, against which the respondent had filed an appeal that was still pending. The respondent argued that this ongoing proceeding precluded the initiation of arbitration.
Court's Analysis and Determination
The Jharkhand High Court meticulously examined the nature and scope of the 'Competent Authority' under the 2011 Act. It concluded that this authority operates as an executive body, lacking the judicial or quasi-judicial capacity to adjudicate disputes in a manner akin to courts or tribunals. Therefore, the pendency of proceedings before such an authority does not constitute a valid ground to obstruct arbitration proceedings, especially when a valid arbitration agreement exists between the parties.
Implications of the Ruling
This judgment reinforces the autonomy and primacy of arbitration as a dispute resolution mechanism. It clarifies that executive proceedings under the 2011 Act cannot supersede or stall arbitration processes agreed upon by contracting parties. The ruling serves as a precedent, ensuring that arbitration clauses are honored and that the jurisdiction of executive authorities is not misconstrued to encompass judicial functions.
Conclusion
The Jharkhand High Court's decision delineates the distinct roles of executive and judicial bodies in the context of property disputes under the Jharkhand Apartment (Flat) Ownership Act, 2011. By affirming that the Competent Authority is not a judicial entity, the court has upheld the enforceability of arbitration agreements, thereby promoting efficient and contractually agreed-upon dispute resolution mechanisms.
 Ownership Act, 2011){kind=link}
0 Comments
Thank you for your response. It will help us to improve in the future.