The Supreme Court clarified that unregistered arbitration agreements are not void and emphasized the Referral Court's limited role regarding the enforceability of such agreements.

JUDGMENT :

Ajit Kumar, J.

1. Heard Sri Prakhar Saran Srivastava, learned counsel for the petitioners and Sri A.P. Srivastava, learned counsel for the respondents landlord.

2. The petitioner as well as respondents entered a lease agreement styled as ‘Memorandum of Understanding’ on 06th February, 2017 for a period of 9 years on an agreed rent as per Clause 1 of the agreement, with a right reserved with the landlord/lessor vide clause 9 to terminate the lease upon default in payment of rent.

3. Clause 21 of the Memorandum of Understanding prescribed for arbitration under the Arbitration and Conciliation Act, 1996 in the event of any dispute or deference arising out of Memorandum of Understanding. Taking recourse to the Clause 9 of the Memorandum of Understanding lessor/landlord issued a notice to the petitioner to vacate the premises in question. The petitioner upon not being paid rent and taking it to be a case of month to month tenancy instituted a suit for recovery of rent and eviction under Section 15 of The Provincial Small Cause Courts Act, 1887. Petitioner filed miscellaneous application questioning forum on the ground that as per Clause 21 of the Memorandum of Understanding reached between the parties, the matter was referrable to arbitration and no suit would lie. The point was considered as to the maintainability of suit by Judge, Small Causes in view of Section 8 of the Arbitration and Conciliation Act, 1996 and said application was rejected chiefly on the ground that Memorandum of Understanding reached between the parties was an unregistered document and it being unregistered and not duly stamped was inadmissible in evidence and hence not enforceable in law. This order is challenged before this Court in this revision petition.

4. Submission advanced on behalf of the petitioner is that legal position as was held in the case of Garware Wall Ropes Ltd. v. Coastal Marine Constructions & Engg. Ltd. (2019) 9 SCC 209 has come to be reversed by a seven judges’ constitution Bench in a latest authority of the Supreme Court in the case of Interplay Between Arbitration Agreements Under Arbitration and Conciliation Act, 1996 and Stamp Act, 1899, In Re: (Curative Petition C No. 44 of 2023 in Review Petition (C) 704 of 2021 reported in (2024) 6 SCC 1 .

5. In the judgment delivered on 13th December, 2023 adjudicating upon Interplay Between Arbitration Agreements Under Arbitration and conciliation Act,1996 and Stamp Act, 1899 for which matter was registered to be decided, the Court held vide paragraph 229 that "when a party produces an arbitration agreement or its certified copy, the Referral Court only has to examine whether an arbitration agreement exists in terms of Section 7 of Arbitration Act. The Referral Court under Section 11 is not required to examine whether a certified copy of the agreement/instrument/ contract discloses the payment of stamp duty on the original.” Accordingly judgment delivered in the SMS Tea Estates (P) Ltd. v. Chandmari Tea Co. (P) Ltd. (2011) 14 SCC 66 and in the matter of N.N. Global Mercantile (P) Ltd. vs. Indo Unique Flame Ltd. (2023) 7 SCC 1 were held to be no longer good law.

6. In the matter of Garware Wall Ropes Ltd. (supra), it was earlier held that if an instrument was invalid in law for being unregistered, it would not confer any right to be enforceable in law. This view was doubted by a coordinate bench of three judges bench in case of Vidya Drolia v. Durga Trading Corporation , (2021) 2 SCC 1 and it is by way of such reference that 7 judges bench came to be held that judgment of Garware Wall Ropes Ltd (Supra) was not a good law and hence overr