This application as per provisions of Section 11 of the Arbitration and Conciliation Act, 1996 (hereinafter referred to as 'the Act of 1996') is preferred for appointment of arbitrators in consonance to clause 31 of the lease deed dated 5.4.2000 executed between Nakoda Granite & Marmo Pvt. Ltd. and respondent Shri Yogendra Singhvi, Director, Rajputana Granite & Marmo Pvt. Ltd.

As per conditions of the lease deed, property of the applicant company was on lease with the respondent for a period of five years w.e.f. 5.4.2000 against payment of lease money @ Rs.1,91,000/-per month. A security in a tune of Rs.15,00,000/- was furnished by the respondent.

The lease deed came to an end on 31.3.2005 and as per the applicant, the respondent was supposed to hand over possession of the property on 31.3.2005 itself, but that was actually done on 30.4.2005. No lease money was paid nor any account was given by the respondent while handing over possession of the leased property. Beside the above, as per the applicant, certain other disputes relating to sales tax recovery, machinery work, repairing work and quantum of interest accrued were existing between the parties.

Clause 31 of the lease deed dated 5.4.2000 provides that in the event of failure to resolve mutually, the disputes arising between the parties to the deed as to its interpretation, operation or effect of any clause and also other differences arising between the parties shall be referred to the arbitration having Shri R.S.Tambi, Madhusudan Vyas and Giriraj Sanadhya as arbitrators.

In view of the provision aforesaid the disputes were forwarded by the applicant to the arbitrators but the arbitrators failed to coordinate and as such Shri R.S.Tambi and Shri Madhusudan Vyas did not participate in the arbitral proceedings. Arbitrator Shri Giriraj Sanadhya independently passed an award dated 13.1.2006 and an application for execution of that was filed by the applicant before learned District Judge, Rajsamand. Learned District Judge, Rajsamand by order dated 18.2.2008 dismissed the application by holding the award non executable being not passed in accordance with law.

A petition for writ preferred by the petitioner to challenge the order passed by learned District Judge also came to be rejected by this Court on 9.1.2009 with observation that “since the petitioner was pursuing the remedy and obtained the award in the year 2006 and tried to execute it, then he found that the award is nullity, then those facts may be considered while considering the petitioner's prayer for appointing arbitrator in the proceedings under Section 11 sympathetically”.

By a notice dated 20.3.2009 the applicant while proposing an arbitrator of his choice called upon the respondent to appoint second arbitrator of his choice. The notice said to be sent by registered post was not accepted by the respondent, hence this application is preferred.

Beside certain other objections this application is contested by the respondent with a preliminary objection that the instrument dated 5.4.2000 is a lease as defined under Section 105 of the Transfer of Property Act, 1882, thus, is chargeable with stamp duty as per provisions of the Rajasthan Stamp Duty Act and the same being not duly stamped is neither executable nor is a document admissible, hence, the request for appointment of arbitrator on basis of that cannot be accepted.

While meeting with the objection advanced, it is urged by counsel for the applicant that the document is written on a stamp of Rs.100/-, thus, i.e. sufficiently stamped for invoking the arbitration clause. As per learned counsel, Section 16 of the Act of 1996 takes necessary care of such eventuality as that provides that an arbitration clause which forms part of a contract is required to be treated as an agreement independent to other terms of the contract.

Heard learned counsels and considered the rival submissions.

Before coming to the core issue, it shall be appropriate to mention that the proc