Common Order:

Moushumi Bhattacharya, J.

1. The respondents in both the Arbitration Application are the same and the disputes arise out of the Agreements of Sale dated 24.08.2021 and 22.09.2021, respectively which are identical and involve the same Housing Project where the applicants intended to purchase flats from the respondents. Hence, these Arbitration Applications are being disposed of by this Common Order.

2. The applicant in Arbitration Application No.148 of 2025 is the Purchaser and the respondents are the Vendors in the Agreement of Sale dated 22.09.2021 whereby the respondents agreed to sell and the applicants agreed to purchase a flat. The Agreement of Sale records that the applicants paid a total sale consideration of Rs.31,29,000/- to the respondents in various phases and that possession of flats will be given to the applicants within thirty six months from the date of obtaining necessary permissions. The Agreement contains an Arbitration Clause in Clause 8 which states that any issue/problem arising between parties in fulfilling the terms and conditions of the Agreement shall be settled by an arbitrator appointed by the parties.

3. Similarly, the applicant in Arbitration Application No.154 of 2025 is the Purchaser and the respondents are the Vendors in the Agreement of Sate dated 03.09.2021 whereby the respondents agreed to sell and the applicants agreed to purchase a flat. The Agreement of Sale records that the applicants paid a total sale consideration of Rs.25,29,150/- in various phases and that possession of the flats will be given to these applicants within thirty-six months from the date of obtaining necessary permissions. Clause 10 of the Agreement contains the Arbitration Clause identical to the Agreement of Sale dated 22.09.2021.

4. In both instances, the respondents resiled on their obligation to hand over possession of the flat to the applicants within the time stipulated in the Agreement. The applicants were hence constrained to issue Legal Notices to the respondents on 24.03.2025 stating, inter alia, that the applicants had paid entire sale consideration as outlined in the Agreement of Sale but that the respondents failed to commence any construction of the housing project till date and also to obtain necessary statutory permissions from the competent authorities. The applicants further state that the time stipulated in the Agreement of thirty six months + six months had expired on 02.03.2025 and 21.03.2025, respectively. The applicants accordingly demanded invocation of arbitration clause and sought for return of sale consideration along with accrued interest computed @ 24% per annum.

5. Learned counsel appearing for the applicants submits that the applicants had earlier filed Arbitration Application Nos.161 and 164 of 2024, which were disposed of by a Co-ordinate Bench on 21.02.2025 granting liberty to the applicants to issue a fresh Legal Notice to the respondents as per the Agreements of Sale. Counsel submits that the present Arbitration Applications have been filed pursuant to the leave granted by the Co-ordinate Bench.

6. These matters were listed before a Co-ordinate Bench on several occasions and before this Bench from 24.04.2026 onwards. The respondents remained unrepresented despite service of notice. Counsel appearing for the applicants was hence granted leave for substituted service by way of paper publication vide order dated 06.05.2025 and 19.06.2025. Substituted service was duly effected by publication in Eenadu Telugu Daily Newspaper on 12.05.2026 and in Telangana Today English Daily Newspaper on 26.06.2026. Despite such service, no one appears for the respondent. Further, the record shows several attempts made by the applicants to serve the respondents by Speed Post and by messages from counsel for the applicants to counsel for the respondents through whatsapp as well as several missed voice calls from the applicants to the respondents. All the communications are part of the record.

7. Thus, it is clear that the respondents chose to remain unrepresented despite the several opportunities given to them since April, 2025. The Court accordingly decided to proceed with the Applications ex parte.

8. The respondents’ failure to perform their obligations under the Agreements of Sale despite the applicants having fulfilled their obligation thereunder evidences an existing dispute which requires adjudication. The applicants have paid a total sale consideration of Rs.31,29,000/- and Rs.25,29,150/-, respectively to the respondents. The respondents however failed to perform its reciprocal obligation under the Agreement of Sale within the stipulated time therein. Legal Notices issued by the applicants on 24.03.2025 would show that the respondents failed to obtain the requisite statutory permissions from the competent authorities in order to commence construction of the project in which the flats were agreed to be sold to the applicants. In essence, the respondents/vendors retained the entirety of the sale consideration received from the applicants without refunding the same pursuant to the respondents’ breach of the terms stipulated in the Agreement of Sale.

9. Hence this Court is of the firm view that the applicants have a dispute warranting an appropriate relief against the respondents. However, the Legal Notices/Invocation Notices issued by the applicants are not in consonance with the Arbitration Clause contained in the Agreements of Sale.

10. As the first measure, the applicants should have appointed an Arbitrator and left the rest to the respondents, namely, either to agree on the nominated Arbitrator or to disagree with the same. The Legal Notices do not contain any such nomination. The Legal Notices contain only a proposal to the respondents to accept initiation of arbitration or nominate their own arbitrator. The applicants approached this Court without demonstrating that the mutually agreed appointment mechanism, contained in Clause 10 and Clause 8 of the Agreements, respectively, had failed. Hence, this Court is unable to opine that the invocation notices are in proper form or that the applicants acted in terms of the same. It is significant that the respondents also chose not to reply to the Legal Notices and remained silent throughout.

11. Although the sympathy of this Court is with the applicants, the Court is not in a position to allow the Arbitration Applications in the absence of a valid Legal Notice/Invocation Notice as required under section 11(6) of The Arbitration and Conciliation Act, 1996. The Court is hence of the view that the dispute should be adjudicated by way of a civil suit or any other proceeding which would give suitable relief to the applicants. The applicants are also granted liberty to issue fresh Invocation Notices in proper form, if so advised.

12. Arbitration Application Nos.148 and 154 of 2025, along with all connected applications are accordingly disposed of in terms of the above No costs.