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1975 Supreme(J&K) 2

IN THE HIGH COURT OF JAMMU AND KASHMIR AT JAMMU
D.D. Thakur, J.
Gupta Pvt. Loan - Appellant
Versus
Ganesh Dass Committee, Kudyar And Sons - Respondent
Appeal No. Not Available
Decided On : 10 January, 1975

Advocates Appeared:
Advocate For Appellant: Ram Nath Bhalgotra
Advocate For Respondent: Kuldeep Raj Gupta

(1) The respondent herein instituted an application under section 33 of the Arbitration Act against the petitioner in the court of the Sub Judge, Jammu challenging the existence and the validity of an arbitration agreement alleged to have been entered into between the parties on 23-10-1969. In the course of the trial of this application the agreement aforesaid was produced in the court. An objection was raised by the respondent herein regarding the admissibility of the document on the ground that it was a bond and was not sufficiently stamped as such. The trial court vide its order dated 15-1-1974 held that the document in question was a bond within the meaning of Section 2(5) of the stamp Act and was chargeable as such, It was, therefore, directed by the trial court that the petitioner shall make up the deficiency in stamps and pay a penalty in addition to the deficient stamp duty, whereby alone the document would stand admitted in evidence. The Petitioner disputes the correctness of this order by means of this revision application.

(2) I have perused the order of the court below and heard the counsel for the parties in regard thereto. The contents of the document in question have also been examined by me In view of the order which I propose to pass, it is not necessary to determine as to whether the document read as a whole does or does not fall within the definition of the word bond occurring In Section 2(5) of the Stamp Act of the State. In my opinion that question does not strictly fall for consideration.

Admittedly the court below trying an application under Section 33 of the Arbitration Act, is concerned only with the existence or the validity of the arbitration clause contained in the aforesaid document. The other terms of the document are wholly irrelevant for purposes of the said application. The admissibility of the document in the proceedings under Section 33 of the Arbitration Act has to be confined only to the arbitration clause contained in the aforesaid document. The document bears a stamp of a rupee and a half which is the duty chargeable on an arbitration agreement. If the document in question would not have contained any other clause there could possibly be no dispute as to the sufficiency of the stamp duty paid by the petitioner. The dispute arises only because the, document in question contained clauses other than the one relating to arbitration. In a case of this nature therefore the court below was in error in holding the document in question not sufficiently stamped on the ground that it contains clause other than the one relating to arbitration which made the document a bond within the meaning of Section 2(5) of the Stamp Ace. The court below while determining the sufficiency of the stamp duty should have taken into account only that part of the agreement which related to arbitration. Judged from that view there could be no difficulty in holding that the document was sufficiently stamped. The document in question was not required to be admitted to provide an evidence of the liability of the petitioner to pay the amount undertaken to be paid by the said document but was intended to prove the existence and the validity of the arbitration agreement. Under these circumstances therefore the portion of the document unconnected with the arbitration clause had to be excluded from the consideration. The question of admissibility of a document and the sufficiency of the stamp duty chargeable must necessarily depend upon the scope of the trial or the enquiry as the case may be which a court proposes to hold in a particular cause.

(3) I am supported in this view by a judgment of the Supreme Court in M/s. R. N. Ganekar & Co., Vs. M/s Hindustan Wires Ltd, reported as A. I. R. 1974 S C 303. In para 11 of the aforesaid judgment Palekar J who spoke on behalf of the Court observed as under: -

"Section 33 contemplates an application for three purposes, viz (i) when it is desired to challenge the existence of an arbitration






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