Facts of the Case

M/s Ayyanna Infra Private Limited filed Arbitration Application No. 127 of 2022 before the Telangana High Court under Section 11(5) and (6) of the Arbitration and Conciliation Act, 1996, seeking appointment of an arbitrator to resolve disputes with Sri Chava Hanumantharao arising out of a development agreement-cum-General Power of Attorney dated 29.04.2015, read with a supplementary deed dated 31.10.2015, relating to construction on land owned by the respondent's late father. Among the disputes flagged for arbitration was whether a CESTAT ruling on GST/service tax (cited as "GST-2018 TIOL-1611-CESTAT Hyderabad," in the case of Vasantha Green Projects) applied to the parties' dispute — a question the Court left entirely to the arbitrator, without expressing any view.

Issues Involved

  1. Whether the applicant was entitled to appointment of an arbitrator under Section 11(6) of the Arbitration and Conciliation Act, 1996, to adjudicate the disputes arising from the development agreement.

Petitioner's Arguments

  • The applicant sought appointment of an arbitrator to resolve disputes arising out of the development agreement-cum-GPA and the supplementary deed with the respondent.

Respondent's Arguments

  • The order does not record a detailed opposition to arbitration itself; the respondent's counsel appeared and the application proceeded to appointment of an arbitrator.

Court Order / Findings

  • Justice B. Vijaysen Reddy allowed the arbitration application and appointed Sri Mangari Rajender, District Judge (Retired), as the sole arbitrator to adjudicate the claims and disputes between the parties and pass an award in accordance with law.
  • The Court left open, for the arbitrator's determination, the question of whether the CESTAT ruling in the Vasantha Green Projects case (concerning GST/service tax) applied to the dispute between the parties.
  • The arbitrator's fees were fixed as per the Fourth Schedule to the Arbitration and Conciliation Act, 1996, to be borne equally by both parties.

Important Clarification

The High Court decided only the procedural question of appointing an arbitrator — it expressed no view on the applicability of the GST/service tax precedent mentioned in the case, leaving that entirely to the arbitrator to decide. This order therefore offers no GST-law guidance of its own.

Sections Involved

  • Arbitration and Conciliation Act, 1996 — Section 11(5) and (6) (appointment of arbitrator), Fourth Schedule (arbitrator's fees).
  • A CESTAT ruling touching GST/service tax (Vasantha Green Projects v. CCT, Rangareddy) was flagged as a disputed issue for the arbitrator, not decided by the High Court.

Decision – In Favour of

Decided in favour of the applicant on the narrow question of arbitrator appointment; the arbitration application was allowed and an arbitrator appointed — no GST-law issue was decided by the High Court itself.

Case Details

Court: High Court for the State of Telangana at Hyderabad
Case No.: Arbitration Application No. 127 of 2022
Coram: Justice B. Vijaysen Reddy
Date: 07.08.2023
Parties: M/s Ayyanna Infra Private Limited vs. Sri Chava Hanumantharao

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