IN THE HIGH COURT AT CALCUTTA
SABYASACHI BHATTACHARYYA, J.
Chandan Chatterjee and Others – Petitioners
Versus
Gita Sundararaman and Others – Respondents
AP NO.186 OF 2023
Decided On : 08-06-2023
Limitation Act, 1963 - Article 54 of the Schedule I - Arbitration and Conciliation Act, 1996 - Sections 9,11 and Section 11, sub-sections (4), (5) or (6) - Registration Act, 1908 - Section 17(1)(a) and 49 - West Bengal Premises Tenancy Act, 1997 - Section 5(6) - Specific Relief Act, 1963 - Section 11(2) - Indian Trust Act, 1882 - Section 36 - Indian Contract Act, 1872 - Section 73 - Evidence Act - Section 41 - Public Charitable Trust - Scheme for Appointment of Arbitrators - Debars specific performance of contracts - Deed of partnership was entered into, altering profit-sharing ratio of partners deed of trust was executed by the respondents/partners, constituting Public Charitable Trust which would run secondary section of School, which is an educational institution – Held, There is no scope of refusal to refer matter to arbitration, admittedly there is the existence of an arbitral clause in MOU-in-question entered into between parties - execution of the same and/or the physical - AP No.186 of 2023 is allowed
JUDGMENT :
1. The Court: The respondents entered into a partnership on June 1, 1979 to carry on business under the name and style of “Swarna School” with effect from July 1, 1979.
2. On September 15, 1992, a further deed of partnership was entered into, altering the profit-sharing ratio of the partners. On April 12, 1998, the deed of trust was executed by the respondents/partners, constituting the Public Charitable Trust which would run the secondary section of the Swarna School, which is an educational institution. The respondents themselves remained as trustees, retaining absolute right to appoint further trustees or trustees in lieu of themselves as well as to appoint an attorney who would be entitled to have all the powers of the trustees.
3. On April 1, 2003, a further deed of partnership was entered into, incorporating certain alterations in respect of remuneration etc.
4. A supplementary deed of trust was also executed, which entitles a Managing Committing to be formed to run the school.
5. On June 8, 2012, the respondent/partners and trustees entered into a Memorandum of Understanding (MOU) for the petitioners to take over control of Swarna School and for transfer of the partnership business and the trust.
6. Clause 2.5 thereof provides that the respondents shall assign the tenancy of the ground floor of the premises to the petitioners.
7. Clause 17 of the MOU provides for arbitration in case of disputes.
8. Subsequently, upon a dispute arising in June, 2021, the petitioners filed an application under Section 9 of the Arbitration and Conciliation Act, 1996 (in brief, “the 1996 Act”). The arbitration clause was invoked by a letter dated August 4, 2022, to which the petitioners allegedly did not respond, leading to the filing of the present application under Section 11 of the 1996 Act.
9. The respondents contest the proceeding on several grounds.
10. First, it is argued that the arbitration agreement annexed with the present application under Section 11 is a mere photocopy and neither the original nor a certified copy of the MOU dated June 8, 2012.
11. Learned counsel for the respondents relies on Clause 3(a) of the Scheme for Appointment of Arbitrators by the Chief Justice of this Court, 1996, which was notified on January 21, 1997, which provides that the original arbitration agreement or a duly certified copy thereof has to accompany an application under Section 11, sub-sections (4), (5) or (6) of the 1996 Act.
12. Clause 7 of the same also provides for rejection of the request if the application is not in conformity with the Scheme. It is argued that Clause 3(a) of the said Scheme is mandatory in nature. For such proposition, learned counsel for the respondent places reliance on paragraph no.122 of the N.N. Global Mercantile Private Limited Vs. Indo Unique Flame Ltd. And others, reported at 2023 SCC OnLine SC 495.
13. It is next argued by the respondents that the MOU containing the purported arbitration clause is neither registered nor sufficiently stamped. In the said document, the petitioners described themselves as “purchasers”. The objective of the MOU was to take over the entire tenancy of the ground floor of premises no.126 A, Rashbehari Avenue, Kolkata – 700 029. The recitals in the same page indicate that the first and second parties shall ‘transfer’ to the petitioners and the petitioners would acquire complete management, control, right, title and interest in the partnership firm and the registered trust. The tenancy was also assigned. Hence, the agreement was to be compulsorily registered in terms of Section 17(1)(a) of the Registration Act, 1908 (for short, “the 1908 Act”), since the same purports or operates to create, declare, assign, limit or extinguish, whether in present or in future, any right, title or interest, whether vested or contingent, of the value of one hundred rupees and upwards, to or in immovable property.
14. By placing reliance on N.N. Global (supra), learned counsel for the respondents
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The sufficiency of stamp duty payment rendered the document admissible, and the named arbitrator was disqualified, leading to the appointment of Hon’ble Shri Justice K. K. Lahoti as Arbitrator.
The referral court's scope under Section 11(6-A) is limited to the prima facie existence of an arbitration agreement. A formal notice under Section 21 is not mandatory if the respondent has prior kno....
The main legal point established in the judgment is the principle of minimal judicial intervention in the arbitral process, emphasizing the competence of the arbitrator to decide all preliminary issu....
The main legal point established in the judgment is the validity and enforceability of the arbitration agreement, the arbitrability of the disputes, and the jurisdiction of the court to appoint an ar....
Parties are bound by an arbitration agreement even if they claim to have not read or understood the terms of the agreement.
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Court has limited jurisdiction under Section 11 of Arbitration and Conciliation Act, 1996.
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