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2012 Supreme(Del) 2836

DELHI HIGH COURT
S.Muralidhar, J.
Suresh Kumar - Appellant
Versus
Satish Mehra & Anr. - Resopndent
O.M.P. No. 245 of 2003 with CCP No. 74 of 2004
Decided On : 06-08-2012

For the Petitioner/Respondents:Mr. A.P. Aggarwal, Advocate.
For the Respondent-1:Mr. Deepak Bhattacharaya , Mr. Rajesh Kumar, Advocates.
For the Respondent-3 , 4 In CCP No. 74/2004:Mr. Kirti Uppal, Sr. Advocate with Md. Amanullah, Advocate.
For the R-1/Contemnor :Mr. A.P. Aggarwal, Advocate.

Once a document is admitted in evidence, it cannot be questioned for stamping or registration. Unregistered documents can be used as evidence of collateral transactions.

Headnote:

Arbitration and Conciliation Act - Agreement to Sell - Section 34

Fact of the Case:

The case involved a dispute between the Petitioner and Respondent No.1 over the ownership of a property. The Petitioner claimed that an Agreement to Sell was signed as security for a loan, while Respondent No.1 sought specific performance of the agreement.

Finding of the Court:

The court found that the Petitioner failed to prove the loan transaction and repayment, and upheld the validity of the Agreement to Sell. The court also declared subsequent transactions involving the property as fraudulent and cancelled them.

Issues: The issues included the validity of the Agreement to Sell, admissibility of unstamped and unregistered documents, and contempt of court orders.

Ratio Decidendi: The court held that once a document is admitted in evidence, it cannot be questioned for stamping or registration. Unregistered documents can be used as evidence of collateral transactions. The court also found the parties guilty of contempt for violating court orders.

Final Decision: The court dismissed the petition, upheld the impugned Award, and declared subsequent transactions involving the property as fraudulent and cancelled them. The contemnors were directed to appear in court and show cause for their actions.

JUDGMENT :

S. Muralidhar, J.

1. Suresh Kumar has filed the present petition under Section 34 of the Arbitration and Conciliation Act, 1996 (‘Act’) challenging an Award passed by the sole Arbitrator (Respondent No.2) dated 19th April 2003 in the disputes between the Petitioner and Respondent No.1, Satish Mehra.

Background Facts

2. Respondent No. 1 was the Claimant before the learned Arbitrator. He stated that the Petitioner herein was the owner of the second floor of the property at B-123, Swasthya Vihar, Delhi – 110092. In respect of the said property the Petitioner executed an Agreement to Sell on 21st March 2002 whereby the Petitioner agreed to sell the said property to Respondent No.1 for a total consideration of Rs.5 lakhs. The case of the Petitioner was that he never agreed to sell the property but had signed the said documents only as security for a loan of Rs.5 lakhs. The case of the Petitioner further was that he had already refunded Respondent No. 1 a sum of Rs.1,50,000.

3. The original of the Agreement to Sell as produced by Respondent No. 1 before the learned Arbitrator was exhibited as Ex.CW1/3 and forms part of the arbitral record perused by this Court. Each page of the said Agreement to Sell contains the signature of the Petitioner in English. Also produced before the learned Arbitrator were the registered General Power of Attorney (‘GPA’) signed by the Petitioner (Ex.CW1/2), receipt (Ex.CW1/1), Special Power of Attorney (‘SPA’) (Ex.CW1/5), and affidavit (Ex.CW1/1). Also produced before the learned Arbitrator was the rent deed (Ex.CW1/7) executed by the parties whereby Respondent No. 1 described as the owner of the property in question gave on rent the said property to the Petitioner at a monthly rent of Rs.17,000. The lease deed was consistent with the fact that after the Respondent No.1 received symbolic possession of the property, thereafter the Petitioner continued to retain physical possession. The arbitration agreement entered into between the parties was also exhibited (Ex.CW1/6). In terms thereof “any kind of disputes” arising between the parties were to be referred to a sole Arbitrator.

4. According to Respondent No.1 the Petitioner defaulted in the payment of rent. A notice dated 27th November 2002 was sent by Respondent No. 1 terminating the tenancy and requesting the Petitioner to hand over vacant and physical possession of the premises. In the said notice the arrears of rent with effect from 31st March 2002 were demanded. The Petitioner replied to the said notice on 2nd December 2002 claiming that it was only a loan transaction in lieu of which the Petitioner executed certain documents. The title of Respondent No. 1 as landlord of the property was also denied. This was followed by a further notice dated 23rd December 2002 from Respondent No. 1 to the Petitioner invoking the arbitration clause. Thereafter, the disputes were referred to the sole Arbitrator. Proceedings before the Arbitrator

5. In the said statement of claim filed before the learned Arbitrator, Respondent No. 1 prayed that:

(a) the Petitioner be directed to execute a proper sale deed in favour of Respondent No. 1 pursuant to Agreement to Sell dated 21st March 2002;

(b) an order for eviction of the Petitioner be passed;

(c) an order for recovery of rent of Rs.1,53,000 till 20th December 2002 from the Petitioner be passed;

(d) mesne profits for the used and occupation of the tenanted premises by the Petitioner after termination of the tenancy with effect from 21st December 2002 till the date of handing over of possession of the said premises be awarded; and

(e) costs of arbitration be awarded to Respondent No.1.

6. In the reply filed by the Petitioner before the learned Arbitrator it was first contended that there was no valid arbitration agreement between the parties. Secondly, it was contended that any dispute arising out of the alleged lease deed pertaining to the property was beyond the scope of the reference of disputes to arbitration. It was rei

































































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