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2016 Supreme(All) 1637

ALLAHABAD HIGH COURT
BEFORE : SURYA PRAKASH KESARWANI, J.
SHREE VAKRATUNDA DEVELOPER PVT. LTD. AND ANOTHER ....Applicants
Versus
JAN SEVA SEHKARI AVAS SAMITI LIMITED AND OTHERS ....Respondents
(Arbitration and Conciliation Application No. 112 of 2016, decided on 21st December, 2016)

Advocates:
Counsel :
Ramendra Asthana for the Applicants; S.C. for the Respondents.

Headnote:Arbitration and Conciliation Act, 1996—Sections 11(6), 2(3), 7(3), 7(4)—(Indian) Stamp Act, 1899—Sections 35, 33—Appointment—Arbitrator—Arbitration clause—Unregistered agreement to sell—Scope—Agreement in question requires to be duly stamped—Admittedly instrument in question is not duly stamped—Therefore, arbitration application dismissed—Direction issued. [Paras 11 to 16]

       Result; Application Dismissed.

       

JUDGMENT

Hon’ble Surya Prakash Kesarwani, J.—Heard Sri Ramendra Asthana, learned counsel for the applicants and Sri Nimai Das, learned Amicus Curiae.

2. This application was heard at length on 3.11.2016, 7.12.2016 and 15.12.2016.

3. This application has been filed invoking the provision of Section 11(6) of the Arbitration and Conciliation Act, 1996, for appointment of an Arbitrator on the allegation that as per agreement dated 10.8.2016 filed as Annexure 2, there arose a dispute between parties and the agreement contains an Arbitration Clause.

4. Perusal of the agreement, as filed by the applicants, prima facie shows that it is an unregistered agreement to sell land of Khasra plot No. 288 and 289 M Village-Dehtora, District -Agra, shown to have been entered between Jan Sewa Sahkari Samiti Ltd. and another and the applicants.

5. The notice dated 17.10.2016 alleges the agreement to be an agreement for development of a colony.

6. Sri Asthana submits that Section 2(b) of the Arbitration and Conciliation Act, 1996 defines the words “Arbitration Agreement” to mean an agreement referred to in Section 7 of the Act. He submits that Section 7(3)/(4) of the Act provides for necessary requirements of a document to constitute an arbitration agreement and all those conditions as provided in the said provision does exist in the document in question and as such the document in question is an arbitration agreement within the meaning of Section 7 read with Section 2(b) of the Act. He submits that the document in question is not an agreement to sell of immovable property but is merely a partnership agreement which contains arbitration clause and therefore, it neither needs registration nor payment of stamp duty under the Indian Stamp Act, 1899. He further submits that the proceeding before the Court is not a judicial proceeding and therefore, the document cannot be examined to find out whether it requires payment of stamp duty or registration.

7. Sri Nimai Das, learned Amicus Curiae submits that the proceeding before this Court under Section 11 of the Act is a judicial proceeding in view of the law laid down by Hon’ble Supreme Court in the case of M/s. SBP & Co. v. M/s. Patel Engineering Ltd. and another, (2005) 8 SCC 618. Section 35 of the Indian Stamp Act provides that no instrument chargeable with duty shall be admitted in evidence for any purpose by any person having by law or consent by parties authority to receive evidence, or shall be acted upon, registered or authenticated by any such person or by any public officer unless the instrument is duly stamped. He submits that document in question is clearly an agreement to sale with possession and therefore, it cannot be looked into unless the stamp duty is paid. He submits that in the case of M/s. SMS Tea Estates (P) Ltd. v. M/s. Chandmari Tea Co. (P) Ltd., 2001 (5) AWC 5013 (SC), Hon’ble Supreme Court having regard to Section 35 of the Stamp Act held that unless the stamp duty and penalty in respect to the instrument is paid, the Court cannot act upon such agreement which means that it cannot act upon the arbitration agreement also which is part of the instrument. He submits that the law laid down in the case of M/s. SMS Tea Estates (P) Ltd. (supra) clearly attracts on the facts of the present case. He submits that in the case of Omprakash v. Laxminarayan and others, 2014 (1) AWC 325 (SC), Hon’ble Supreme Court held that an authority to receive evidence shall not admit any instrument unless it is duly stamped. An instrument not duly stamped shall be admitted in evidence on payment of duty with which the same is chargeable and in the case of an instrument insufficiently stamped on the amount required to make up such duty together with penalty. The deed of agreement having been insufficiently stamped, the same is inadmissible in evidence. The Court being an authority to receive a document in evidence to give effect thereto, requires payment of stamp duty applicable to a deed of conveyance. Refe
































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