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2023 Supreme(Cal) 544

IN THE HIGH COURT AT CALCUTTA
SABYASACHI BHATTACHARYYA, J.
M/s. East End Developers – Appellant
Versus
Priyanath Neogy – Respondents
A.P. No.84 of 2023
Decided on : 24-04-2023

Advocates:
Advocate Appeared:
For the Appellant : Mr. Satadeep Bhattacharyya, Adv., Mr. Saptarshi Dutta, Adv., Ms. Srijita Ghosh, Adv., Mr. Pourush Kanti Pal, Adv.
For the Respondent: Mr. Ashim Kumar Roy, Adv., Mr. Sutanu Chakrabarti, Adv., Mr. Ashok Roy, Adv.

Headnote:

Arbitration and Conciliation Act, 1996 Act - Sections 11,8 and 11(6A) - Consumer Protection Act, 1986 - Section 3 - Stamp Act, 1899 - Section 35 and 100 - Agreement containing the arbitration clause - Non-existent in law and unenforceable - Matter was accordingly referred to arbitration - Judgment runs counter to case of present respondent, a special leave petition has been filed against same, upon which, Supreme Court - Arbitration agreement contained in such an instrument, which is not chargeable to payment of stamp duty, as being non-existent – Held, Arbitrator leaving all issues, including the issue of deficiency of stamp duty, open to be decided by Arbitrator - Dispute between the parties falls within scope of arbitration clause and the issues involved are inherently arbitrable - AP 84 of 2023 is allowed

JUDGMENT :

1. The application under Section 11 of the Arbitration and Conciliation Act, 1996 Act (hereinafter referred to as, “the 1996 Act”) has been opposed by the respondent primarily on two grounds.

2. First, it is argued that since a prior proceeding has been filed with regard to the same dispute before the concerned Consumer Forum, the subsequent reference to arbitration under the 1996 Act is barred.

3. Secondly, it is contended that the agreement containing the arbitration clause, out of which the dispute has arisen, is insufficiently stamped, for which the application under Section 11 ought not to be entertained.

4. Learned counsel appearing for the respondent cites Ireo Grace Realtech Private Limited Vs. Abhishek Khanna and others, reported at (2021) 3 SCC 241, where it was held that the existence of an arbitration clause was not a ground to restrain the consumer fora from proceeding with the consumer complaint.

5. The respondent next cites a judgment of the Orissa High Court dated February 5, 2021 in M/s. Srikrishna Estates and Constructions Pvt. Ltd. Vs. Pradipt Ku. Ray, wherein the Chief Justice of the said High Court observed that the contention that the arbitral proceedings would be simultaneous with the one under the Consumer Protection Act, 1986 (for short, “the C.P. Act”) and therefore, not maintainable, was without merit. It was recorded that Section 3 of the C.P. Act makes it abundantly clear that provisions of that Act “shall be in addition to and not in derogation of the provisions of any other law”. The matter was accordingly referred to arbitration. However, although the said judgment runs counter to the case of the present respondent, a special leave petition has been filed against the same, upon which, the Supreme Court, vide Order dated December 5, 2022, adjourned the SLP and directed that till the next date of hearing, let no further steps be taken in the arbitration proceedings. Hence, it is contended that such proposition of the Orissa High Court is now sub judice before the Supreme Court and cannot be conclusively relied on.

6. Learned counsel for the respondent also places reliance on N.N. Global Mercantile Private Limited Vs. Indo Unique Flame Limited and others, reported at (2021) 4 SCC 379, in paragraph 58 of which the three-Judge Bench of the Supreme Court referred the matter to a Constitution Bench of Five Judges on the question whether the statutory bar contained in Section 35 of the Stamp Act, 1899 applicable to instruments chargeable to stamp duty under Section 3, read with the Schedule to the Act, would also render the arbitration agreement contained in such an instrument, which is not chargeable to payment of stamp duty, as being non-existent, unenforceable, or invalid, pending payment of stamp duty on the substantive contract/instrument.

7. The Supreme Court, while so referring, relied on Vidya Drolia Vs. Durga Trading Corporation, reported at (2021) 2 SCC 1 and distinguished SMS Tea Estates (P) Ltd. Vs. Chandmari Tea Co. (P) Ltd., reported at (2011) 14 SCC 66 as well as Garware Wall Ropes Ltd. Vs. Coastal Marine Constructions and Engineering Ltd., reported at (2019) 9 SCC 209.

8. The respondent further submits that the Five-Judge Bench of the Supreme Court has accordingly been constituted and on January 25, 2023, the matter was conclusively heard and judgment reserved by the Supreme Court.

9. Hence, it is submitted that it would be premature to refer the matter to arbitration under Section 11 of the 1996 Act in the present case.

10. Learned counsel next cites Emaar MGF Land Limited Vs. Aftab Singh, reported at (2019) 12 SCC 751, wherein it was observed that even if there exists an arbitration clause in an agreement and a complaint is made by the consumer in relation to a certain deficiency of service, the existence of an arbitration clause will not be a bar to the entertainment of the complaint by the Redressal Agency constituted under the Consumer Protection Act, since the remedy provided unde

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