IN THE HIGH COURT OF DELHI AT NEW DELHI
Vibhu Bakhru, Amit Mahajan, JJ.
Sng Developers Limited - Appellant
Versus
Vardhman Buildtech Private Limited - Respondent
FAO(OS) (Comm) 47 of 2022 & CM Appl. 9305 of 2022 & CM Appl. 9306 of 2022
Decided On : 07-10-2022
Stamp Duty - Arbitration and Conciliation Act - 1996 - Section 34 - Summary
Fact of the Case:
The appellant filed an appeal under Section 37 of the Arbitration and Conciliation Act, 1996, challenging the dismissal of the challenge raised to the interim award. The respondent filed a Statement of Claims before the Arbitral Tribunal, claiming payment and compensation for a Collaboration Agreement. The appellant admitted to executing the Agreement to Sell but sought rejection of the claim on various grounds. The appellant raised objections regarding the insufficiency of stamp duty and non-registration of the Agreement during the arbitral proceedings.
Finding of the Court:
The court found that the arbitrator's interpretation of the document and the law was final unless found to be perverse. The court held that the appellant's admission of the document and agreement to the procedure adopted estopped them from raising objections at a later stage. The court also emphasized that the Arbitral Tribunal is not bound by the strict rules of civil procedure and evidence act, and the view taken by the arbitrator did not constitute patent illegality.
Issues: The issues revolved around the admissibility of the document due to insufficiency of stamp duty and non-registration, the appellant's admission of the document, and the estoppel arising from the agreed procedure.
Ratio Decidendi: The court held that once a document is admitted in evidence, the matter is closed, and the party cannot re-agitate the admissibility. The court also emphasized that the Arbitral Tribunal is not bound by the strict rules of civil procedure and evidence act.
Final Decision: The appeal was dismissed with costs, and the court found that the appellant had initiated unnecessary litigations to delay the proceedings before the Arbitral Tribunal.
JUDGMENT
Amit Mahajan, J. - Feeling aggrieved by the judgment dated 09.12.2021 passed by the learned Single Judge under Section 34 of the Arbitration and Conciliation Act, 1996 (hereafter 'the A&C Act') dismissing the challenge raised to the interim award dated 01.11.2021, the appellant has filed the present appeal under Section 37 of the A&C Act.
Relevant Facts
2. The respondent, Vardhman Buildtech Private Limited (hereafter 'Vardhman') filed a Statement of Claims before the Arbitral Tribunal, claiming that they had entered into a Collaboration Agreement dated 16.03.2010 for development of the appellant's land situated at P-8, Greater Noida, District Gautam-budh Nagar (U.P.). It claims that it had paid a sum of ?6.5 crores at the time of execution of the said agreement.
3. It is claimed that the appellant, thereafter, decided to sell part of the plot of the said land and entered into an Agreement to Sell dated 04.04.2011 for a total sale consideration of ?7.5 crores.
4. Certain disputes arose in relation to the transactions, which led to the arbitral proceedings.
5. Before the Arbitral Tribunal, Vardhman claimed as under:
a. Direct respondent to get registered the sale deed of 2.929 Acres of plot (as per Annexure of site plan) out of plot No. S-5001, P-8, Greater Noida, District Gautam Budh Nagar,Uttar Pradesh. In the alternative if it is not possible to transfer due to the legal restriction direct the respondent to refund sum of Rs. 7.5 crores with 18% interest from 01.06.2011 till actual payment.
b. Compensation of Rs. Two crores be awarded to claimant against respondent with interest as determined by Hon'ble Arbitrator.
c. Cost of Rs. Thirty lakhs be awarded to claimant against respondent.
d. Make any other award in favour of claimant and against respondent
6. The appellant filed its Statement of Defence and admitted to have executed the Agreement to Sell dated 04.04.2011, however, sought rejection of the claim on various grounds including that the claim was barred by limitation; Vardhman had failed to fulfil its obligation under the Agreement to Sell dated 04.04.2011; Vardhman was unable to establish its readiness and willingness for the Sale Deed to be executed in its favour; and that the Agreement to Sell dated 04.04.2011 was abandoned by Vardhman.
7. It is pertinent to mention that no objection that the Agreement to Sell dated 04.04.2011 was insufficiently stamped, was taken by the appellant.
8. The learned Arbitral Tribunal vide order dated 09.05.2019, in consultation with the parties/their counsel, fixed a schedule for conduct of arbitral proceedings and with their consent also passed certain practice directions.
9. The practice direction, relevant for the purpose of the present dispute, is stated as under:
7.8 In the Affidavits of Admission/Denial,the parties will list and describe such of the documents the existence / genuineness of which are in dispute, setting out the reasons therefor in brief. In the absence of the same, the document shall be available for being read in evidence, dispensing with the need of formal proof thereof. However, the question of evidentiary value to be attached to the document shall remain open for consideration at the final hearing.
10. The timelines were also fixed wherein the Statement of Claims was to be filed by 23.05.2019 and the Statement of Defence and rejoinder were to be filed by 20.06.2019 and 11.07.2019 respectively. The affidavits of admission and/or denial of respective documents were to be exchanged by the parties by 01.08.2019 and the proposed draft points for determination by the Arbitral Tribunal, were to be exchanged by the parties by 08.08.2019.
11. Issues were, thereafter, framed by the Arbitral Tribunal in its order dated 09.08.2019. No specific issue was either sought by the appellant or framed by the Arbitral Tribunal, in respect of improper stamping or non-registration of the Agreement dated 04.04.2011.
12. Thereafter, on 10.10.2019, when the claimant's witness was to be cross-exa
Javer Chand and Others Vs. Pukhraj Surana : AIR 1961 SC 1655
Jupudi Kesava Rao Vs. Pulavarthi Venkata Subbarao and Others: (1971) 1 SCC 545
Shyamal Kumar Roy Vs. Sushil Kumar Agarwal : (2006) 11 SCC 331
AI
The admission of an unstamped document in arbitration prevents later challenges based on its insufficiency, as established by Section 36 of the Indian Stamp Act, 1899.
The main legal point established is that the admission of an insufficiently stamped document as evidence must adhere to the provisions of the Indian Stamp Act, including impoundment and proper collec....
The enforceability of an arbitration agreement is independent of the stamping of the agreement, and objections regarding stamp duty must be resolved by the Arbitral Tribunal, not the Court.
The main legal point established in the judgment is that an arbitration agreement under an unstamped and unregistered contract is not enforceable, as per the recent law laid down by the Constitutiona....
An unstamped document is inadmissible for any purpose, including collateral purpose, as per Section 35 of the Indian Stamp Act, 1899.
Documents not duly stamped are inadmissible in evidence for any purpose under Section 35 of the Indian Stamp Act, including collateral purposes.
Unregistered documents can be admitted as evidence under specific conditions despite stamp duty issues; timely objections are crucial.
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