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SUPREME COURT OF INDIA
Dipak Misra, R. Banumathi, Mohan M. Shantanagoudar, JJ.
BLACK PEARL HOTELS (PVT) LTD – Appellant(s)
VERSUS
M/S PLANET M RETAIL LTD – Respondent(s)
CIVIL APPEAL NOS. 2973-2974 OF 2017 (Arising out of SLP (C) Nos.10635-10636 of 2014)
Decided On : 17-02-2017
(B) Arbitration and Conciliation Act, 1996 – Section 11 – Indian Stamp Act, 1899 – Section 38 – Karnataka Stamp Act, 1957 – Sections 33 and 37 – Appointment of Arbitrator – Conducting Agreement – There is a written instrument and there is dispute as regards nature and character of document – Section 33 empowers Judge of High Court to delegate duty of examination and impounding instrument to such officer as Court appoints in that behalf – However, delegation by a Judge of High Court will not clothe the officer jurisdiction of determining nature and character of the instrument inasmuch as such fact needs to be determined by Judge while exercising judicial function – What is delegated under the proviso (b) of sub-section (2) of Section 33 is only to examine instrument for the purpose of determining as to whether instrument is duly stamped or not and for impounding the same – Delegated power has to be restricted to cover the area, that is, whether instrument bears proper stamp and complies with requirement of being “duly stamped” and stamp duty payable on the same must be determined only with reference to terms of instrument – Duty of determination of an instrument when there is a contest a particular document to be of specific nature, adjudication has to be done by Judge after hearing counsel for parties – It is a part of judicial function and same cannot be delegated – Impugned orders set aside and matter remitted to High Court requiring Single Judge to determine nature and character of document and thereafter proceed with matter in accordance with law. (Paras 9, 12, 14 to 18)
Facts of Case:
Arbitration matter. As respondent failed to concur in appointment proposed by appellant or to appoint an Arbitrator as required under the contract, appellant filed a petition under Section 11 of 1996 Act. Present appeals, by special leave, call in question legal propriety of order passed by Single Judge of High Court of Karnataka and order passed in review.
Findings of Court:
What is delegated under proviso (b) of sub-section (2) of Section 33 is only to examine instrument for the purpose of determining as to whether instrument is duly stamped or not and for impounding the same. We are disposed to think that Section 33(2)(b) does not contemplate or permit any adjudication as regards the nature and character of instrument. Delegated power has to be restricted to cover area, that is, whether instrument bears the proper stamp and thus complies with requirement of being “duly stamped” and stamp duty payable on the same must be determined only with reference to terms of the instrument. Proviso (b) to sub-section 33(2) does not empower Judge of High Court to direct officer of High Court to enquire and to find out nature and character of the document. Word “examination” used in proviso (b) to Section 33(2) of the Act cannot be allowed to have such wide amplitude as context does not so envisage. It has to be conferred restricted meaning which is in consonance with provision and scheme of 1957 Act.
Result : Appeals allowed.
JUDGMENT
Dipak Misra, J.
Delay condoned.
2. Leave granted.
3. The present appeals, by special leave, call in question the legal propriety of the order dated 11.1.2013 passed by the learned Single Judge of the High Court of Karnataka at Bangalore in CMP No.122 of 2012 and the order dated 17.12.2013 passed in review, i.e., I.A. No.1 of 2013.
4. The facts which are necessary to be stated for adjudication of these appeals are that the appellant had entered into an agreement, which is called a “Conducting Agreement”, with the respondent on 01.02.2008. In terms of the agreement, the appellant was required to enable the respondent to conduct its business from the premises and to extend to it the benefit of permissions and licences granted to the appellant. The appellant was further required to secure an extension of its own lease in the premises in order to enable the respondent to conduct the retail shop from the premises and in return, the respondent was to pay a fixed percentage of its net sales proceeds subject to a minimum guaranteed sum of Rs. 11,00,000/-per month. Additionally, the respondent was also liable to furnish the appellant with an interest free refundable security deposit in a sum of Rs. 99,00,000/-. The said agreement stipulated that all disputes between the parties shall be referred to arbitration. As the appellant felt certain breaches were committed by the respondent, correspondences were made between the parties and ultimately, the appellant filed a petition under the Arbitration and Conciliation Act, 1996 (for brevity, “the 1996 Act”) before the City Civil Court, Bangalore, inter alia, seeking for an order of temporary injunction restraining the respondent from interfering with the peaceful possession of the appellant in respect of the premises pending conclusion of the arbitration proceedings. Thereafter the appellant issued a notice on 13.06.2012 calling upon the respondent to concur in the appointment of his nominated arbitrator as the sole arbitrator to adjudicate the disputes between the parties. The said notice was replied to by the respondent asserting, inter alia, that the arbitration proceedings were required to be held in Mumbai and not at Bangalore and refused to concur with the appointment proposed by the appellant. That apart, it did not propose to nominate any other arbitrator.
5. As the respondent failed to concur in the appointment proposed by the appellant or to appoint an arbitrator as required under the contract, the appellant filed a petition under Section 11 of the 1996 Act. The Judge designated by the Chief Justice took up the matter and issued notice on C.M.P. No. 122 of 2012. On 11.01.2013 the learned Judge prima facie was of the view that the “conducting agreement” may be a lease of the immovable property. Learned counsel for the appellant, as the impugned order would reflect, contended that it was not so and sought time to canvas argument that it was a licence. Thereafter, the learned Judge passed the following order:-
“Therefore, the matter shall be placed before the Registrar (Judicial), who shall determine whether the transaction is in the nature of lease or licence and stamp duty that is attracted, since whether it is lease or licence, the agreement is apparently not duly stamped. Therefore, he after determining whether lease or licence, recover the duty and penalty and take further steps and thereafter remit the matter for further consideration.”
6. The appellant filed an application seeking review of the aforesaid order and the learned Single Judge vide order dated 17.12.2013 declined to entertain the same and in that context held thus:-
“The matter having been referred to the Registrar, notwithstanding the application in I.A. 1/13, having been filed, the matter ought not to have been listed before this Court. Hence, the office is directed to place the matter before the Registrar, who shall, in accordance with the earlier direction, determine the stamp duty payable on the document
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