VELUGUBANTI HARI BABU versus PARVATHINI NARASIMHA RAO & ANR.

Citation: [2016] 3 S.C.R. 228 · Decided: 13-07-2016 · Supreme Court of India · Bench: JASTI CHELAMESWAR · Disposal: Appeal(s) allowed
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Judgment (excerpt)

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[2016] 3 S.C.R. 228 
VELUGUBANTI HARi BABU 
v. 
PARVATHINI NARASIMHA RAO & ANR. 
(Civi I Appeal No.6198 of 20 I 6) 
JULY 13,2016 
[J. CHELAMESWAR AND ABI-IAY MANOHAR SAPRE, JJ.) 
Arbitration and Conciliation Act, 1996: s. 11 - When an 
application u/s. 11 is filed, it is for the Chief Justice or his designate 
to decide whether there is an arbitration agreement and whether 
the party who has made u request before him is a party to such an 
agreement - In the instant case, High Court ought to have decided 
the questions itse(f and given a finding as to whether the MoU 
dated 27.05.2013 was a vu/id and genuine document or it was a 
forged and fabricated document and then depending upon the 
findings, appropriate directions, if necessary, should have been 
passed for disposal of the application finally - U11fortunutely. it 
was not done - Matter remitted to High Court to decide the question 
of legality, validity and genuineness of agreement/Mou in question. 
Allowing the appeal and remitting the matter to High Court, 
the Court 
HELD: The impugned order directing the arbitrator to decide 
the question of legality and validity of the agreement/Mou is set 
aside. The appellant in reply to the respondents' petition filed 
under Section 9 of the Act specifically denied having signed or/ 
and executed such agreement/(MoU). He also contended therein 
that it is a bogus and fabricated MoU. The appellant again in 
his reply to application filed by the respondents under Section 
11 of the Act denied the very existence of MoU. This was 
sufficient for joining issue on the validity and genuineness of 
the MoU which was raised timely in appropriate proceedings 
by the appellant. [Paras 25, 28, 29) [236-A, E-F) 
SBP & Co. v. Patel Engg. Ltd. 2005 (4) Suppl. SCR 
688 : (2005) 8 SCC 618; National Insurance Co. Ltd. 
v. Boghara Poly/ab (P) Ltd. 2008 (13) SCR 638: (2009) 
228 
VELUGUBANTI HARi BABU v. PARVATHINI NARASIMHA 
229 
RAO 
1 sec 267; Bharat Rasiklal Ashra V. Gautam Rasiklal 
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Ashra & Am: 2011 (10) SCR 685 : (2012) 2 SCC 144 
- relied on. 
Case Law Reference 
2005 (4) Suppl. SCR 688 
relied on 
2008 (13) SCR 638 
relied on 
2011 (10) SCR 685 
relied on 
Para 16 
Para 16 
Para 16 
CIVIL APPELLATE JURISDICTION: Civil Appeal No. 6198 of 
2016. 
From the Judgment and Order dated 13.02.2015 of the High Com1 
of Judicature at Andhra Pradesh for the State of Telangana and the 
State of Andhra Pradesh in Arbitration Application No. 79 of2014. 
V. V. S. Rao, B. Adinarayana Rao, Sr. Advs., Guntur Pramod Kumar, 
Ms. Prerna Singh, Guntur Prabhakar, Ms. Vijayshree PattnaikAdvs. for 
the Appellant. 
Basant R., Sr. Adv., M. Rambabu, N. Eswara Rao, B. V. Rama 
Rao, Mis. M. Rambabu& Co., Advs. for the Respondents. 
The Judgment of the Court was delivered by 
ABBAY MANOHAR SAPRE, J. 1. Leave granted. 
2. This appeal is filed by the appellant against the final judgment 
and order dated 13.02.2015 passed by the High Court of Judicature at 
Hyderabad for the State ofTelangana and the State of Andhra Pradesh 
in Arbitration Application No. 79of2014 whereby the High Court allowed 
the application filed by the respondents herein under Section 11 (5) & (6) 
of the Arbitration and Conciliation Act, 1996 (hereinafter referred to as 
"the Act") and appointed the sole arbitrator to decide the disputes alleged 
to have arisen between the parties in relation to MoU dated 27.05.2013 
and further directed the arbitrator to decide the legality and validity of 
the MoU by taking evidence. 
3. Facts of the case lie in a narrow compass. They, however, need 
mention in brief to appreciate the short controversy involved in the appeal. 
4. The appellant (who was respondent before the High Court) is 
the owner of the plot of land measuring 15.53 acres situated in Sy. No. 
416/282 having come into possession of it in the year 1990 by way of a 
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SUPREME COURT REPORTS 
[2016] 3 S.C.R. 
registered gift deed. He is since then enjoying peaceful possession of 
the said land. 
5. According to the respondents, the appellant and the respondents 
entered into Memorandum of Understanding (MoU) dated 27.05.2013. 
The MoU, inter alia. provided that the respondents will resolve certain 
disputes that are pending between the appellant and certain other persons, 
namely, Mattaparthi Sivayya, Mattaparthi Satyanarayana and Mattaparthi 
Srinu, sons of late Appa Rao and another dispsute with Kanchumarthi 
Venkata
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