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2025 Supreme(Ori) 245
IN THE HIGH COURT OF ORISSA AT CUTTACK
S.K. PANIGRAHI, J.
M/s Hotel Sea Point Pvt. Ltd., Puri – Petitioner
Versus
M/s Blueline Resorts Pvt. Ltd. – Respondent
W.P.(C) No. 32426 of 2022
Decided on : 11-04-2025
For the Petitioner: Mr. Surendra Routray, Adv.
For the Opposite Party : Mr. D.P. Nanda, Sr. Adv. along with Mr. Avijit Pal, Adv.
The High Court may intervene in arbitral awards in exceptional circumstances, particularly if the underlying agreement is insufficiently stamped and thus not enforceable.
Headnote:(A) Arbitration and Conciliation Act, 1996 - Section 5 - Indian Stamp Act, 1899 - Writ against arbitral award - Petitioner challenges an award for insufficiency of stamp duty on lease agreement - Arbitrator's award set aside due to lack of jurisdiction as the lease was unstamped and unregistered. (Paras 1, 62)
(B) Writ Jurisdiction - High Court retains jurisdiction to review arbitral awards only in cases of manifest errors or lack of jurisdiction - Such intervention should be rare and grounded in exceptional circumstances. (Paras 23, 62)
(C) Agreement - An unstamped agreement is not enforceable - The High Court criticized the non-disclosure of material facts by the parties in the arbitral process. (Paras 47, 58)
(D) Courts and Tribunals - Distinction emphasized between arbitral tribunals and judicial courts - Courts have supervisory powers but should limit interference in arbitral matters to prevent derailing arbitration objectives. (Paras 24, 43)
| Table of Content |
|---|
| 1. lease agreement and jurisdictional issues (Para 1 , 2 , 3 , 4 , 5 , 6 , 7 , 10 , 11 , 12) |
| 2. petitioner's arguments against arbitrator's order (Para 19 , 20 , 21) |
| 3. writ jurisdiction and its limits (Para 22 , 23 , 24) |
| 4. judicial interference minimized per arbitration act (Para 25 , 26 , 27 , 28 , 29) |
| 5. nature of arbitration and high court's role (Para 34 , 36 , 39) |
| 6. scope of high court's intervention in arbitration matters (Para 44 , 46) |
| 7. admissibility of unstamped agreements (Para 47 , 49 , 50 , 52) |
| 8. jurisdiction and enforcement issues with stamp act (Para 54 , 56 , 60) |
| 9. grounds for interference with arbitral award (Para 62 , 63) |
| 10. conclusion and order of the court (Para 64) |
JUDGMENT :
S.K. PANIGRAHI, J.
1. This Writ Petition is preferred by the Petitioner against order dated 1.8.2022 passed by the Ld. Sole Arbitrator purporting the same to be an award wherein the Petitioner was directed to pay a sum of Rs.4,31,94,711/- along with cost of Rs.15,00,00/- within two months from the date of the award to the Respondent on the basis of breach of the Lease Agreement dated 01.05.2012.
I. FACTUAL MATRIX OF THE CASE:
2. The Petitioner is a company which has taken on lease the land from one, Mr. Durga Charan Rautray on which the hotel premises are located. The Opposite Party was desirous of taking the hotel premises on lease and therefore, Lease Agreement dated 1.5.2012 was entered into between the Petitioner and the Opposite Party. The Agreement dated 1.5.2012 was valid for a period of 10 years, further extendable by 10 years which would commence from 1.5.2012. Accordingly, monthly rental was provided for in the Agreement dated 1.5.2012 itself which was payable during the entire duration of the lease period. It is pertinent to mention here that the Lease Agreement was signed by the parties on a Rs.100 stamp paper, and was not registered.
3. Disputes arose over non-payment of the rent as prescribed in the Agreement and therefore, the Petitioner approached this Court for appointment of an Arbitrator u/s 11 of the Arbitration and Conciliation Act.
4. During the pendency of the Section 11 application, the Opposite Party filed C.S No. 598/2015 before the Civil Judge at Puri claiming specific performance and damages with respect to alleged breach of Agreement dated 1.5.2012.
5. Meanwhile, vide order dated 5.11.2015, this Court was pleased to appoint the Ld. Sole Arbitrator for adjudication of the dispute between the parties. Accordingly, the parties appeared before the Ld. Arbitrator and filed their respective claim and counter claim.
6. At this juncture, the Petitioner filed an application before the Ld.Arbitrator praying for impound of the Agreement dated 1.5.2012 and abeyance of proceedings as the said Agreement was not sufficiently stamped nor registered as required in law.
7. The Ld. Arbitrator vide order dated 13.4.2017, rejected the prayer of impounding the Agreement as prayed for by the Petitioner. Aggrieved, the Petitioner approached this Court in W.P.(C) No. 7893/2017 challenging the refusal order of the Ld. Arbitrator. This Court vide order dated 8.5.2017 in W.P.(C) No. 7893/2017 was pleased to direct the Ld. Arbitrator to impound the Agreement in line with the Supreme Court’s judgment in SMS Tea Estates (P) Ltd. v. Chandmari Tea Co. (P) Ltd, (2011) 14 SCC 66
8. In compliance with this Court’s order dated 8.5.2017 in W.P.(C) No.7893/2017, the Ld. Arbitrator vide order dated 20.7.2017 was pleased to impound the Agreement. However, the order was passed ex-parte without hearing the Petitioner and the onus of payment of the deficit stamp duty was placed on the Petitioner. This was challenged by the Petitioner before this Court, where it was prayed that the onus be shifted to the Respondent who was liable to bear the same in terms of the Agreement.
9. Here, now, the litigation gets even more chequered. The Opposite Party did not bring the orders of this Court with regards to the impounding to the attention of this Court and
