2019 Supreme(Bom) 473

IN THE HIGH COURT OF JUDICATURE AT BOMBAY
NARESH H. PATIL, R.D. DHANUKA, G.S. KULKARNI, JJ.
Gautam Landscapes Private Limited - Appellant
Vs.
Shailesh S Shah - Respondent
Arbitration Petition No. 466 of 2017; Arbitration Application No. 246 of 2016, 300 of 2018
Decided on : 04-04-2019

Headnote:

Arbitration and Conciliation Act, 1996 – Sections 11,11(6),9,2(b), 2(e), 2(h), 7, 8, 9, 16 - Maharashtra Stamp Act, 1958 - Sections 32A, 33, 35, 37 and 58 - Bombay Stamp Act - Section 34 - Indian Stamp Act – Section 35,38 - Whether a court, under the Arbitration and Conciliation Act, 1996, can entertain and grant any interim or ad-interim relief in an application under Section 9 of the said Act when a document containing arbitration clause is unstamped or insufficiently stamped? - whether this Court under Section 2(e) of the Act can entertain and grant any interim or ad-interim relief in an application under Section 9 of the Act when the Arbitration Agreement is contained in a document that is unstamped or insufficiently stamped, needs to be referred to a Larger Bench for determination. In my view, the Hon’ble Chief Justice can be requested by this Court to refer the said question/issue to a Larger Bench for consideration. The Registry is therefore directed to place the papers and proceedings before the Hon’ble the Chief Justice to enable the Hon’ble the Chief Justice to refer the aforesaid question/issue to a larger Bench for consideration - Whether it would be necessary for the Court before considering and passing final orders on an application under Section 11(6) of the Arbitration and Conciliation Act, 1996, to await the adjudication by the stamp authorities, in a case where the document objected, is not adequately stamped? - Whether, inter alia, in view of Section 11 (6A) of the Arbitration and Conciliation Act, 1996, inserted by Arbitration and Conciliation (Amendment) Act, 2016, it would be necessary for the Court before considering and passing final orders on an application under Section 11(6) of the Act to await the adjudication by the stamp authorities, in a case where the document objected to, is not adequately stamped? - whether the Judgment of the Division Bench of this Court in the case of Universal Enterprises (supra) is per incurium?alternatively whether the Judgment of the Division Bench of this Court in the case of Universal Enterprises (supra) is, on the face of it, bad in law as it is based on a patent misreading of binding precedents? And further, if the Judgment of the Division Bench of this Court in Universal Enterprises (supra) is bad in law? – Held, Court think it appropriate to make it clear that we are not determining whether the agreement in question is a lease or licence or an agreement simpliciter as put forth by the learned counsel for the appellant. That is required to be dwelt upon and addressed by the High Court while dealing with an application under Section 11 of the Act. It is well settled in law that while delving into the appointment of an arbitrator under Section 11, regard being had to the nature of agreement as stipulated under Section 7 of the 1996 Act, the Judge designated by the learned Chief Justice is obliged to consider the nature of agreement and whether the document requires to be stamped or not, and if so, whether requisite stamp duty has been duly paid on the same – Court are so stating as in the instant case there is a written instrument and there is dispute as regards the nature and character of the document – Court may, therefore, observe that the consequence of not granting ad-interim or interim reliefs in an application under Section 9 of the ACA pending the arbitral proceedings may be, at times, drastic and would cause severe hardship to the parties who, in the facts of the case, deserve protection under Section 9. If Court accept the argument advanced on behalf of the respondents that the court shall wait till the document is stamped and not to act upon the document for granting relief under Section 9, may lead to severe consequences which may cause irreparable damage, prejudice to the cause brought before the court. The issue relating to stamping of the document could further be dragged on before the revenue authority, which may take considerable time for its final decision or conclusion and by that time the party may suffer damage and would be without any remedy in respect of seeking protection under Section 9. While interpreting the provisions and analyzing the effect of the provisions qua the judgments of the courts cited above we keep in mind this facet of the legal position which we are called upon to address - our view, the argument of Mr. Dani, if accepted, would be in conflict with the scheme of the legislation and intent of the provisions of Section 9 of the ACA. Under the scheme of the ACA and in view of the judgments cited above and considering the submissions advanced, we are of the considered view that the legislative intent and purpose would be served by providing the efficacious and expeditious relief to a party to an arbitration agreement and that is prescribed under Section 9 of the ACA. In case the submissions of Mr. Dani is accepted, the exercise of jurisdiction under Section 9 of the ACA would be completely eclipsed and party would be deprived to approach a forum for any urgent relief of adinterim or interim nature. This obviously cannot be implication and intent of the statutory interpretation - Ordered Accordingly