The central legal point established is that the distinction between a lease and a license depends on the substance and intention of the agreement, with the key factor being whether the document creates an interest in the property or merely permits its use.

1. This application has been filed under Section 11 (6) r/w Section 11 (4) of the Arbitration and Conciliation Act, 1996 seeking constitution of an Arbitral Tribunal for resolving the dispute between the parties. The application was originally filed by Dr. Om Prakash Sharma through his attorney holder and son Dr. Sandeep Sharma. However, during the pendency of this application as Shri Om Prakash Sharma has expired, his legal heirs namely his son Dr. Sandeep Sharma and his daughters have been brought on record.

2. Petitioners claim to be registered owners of a building situated in plot no. 191-A, Zone-I, M. P. Nagar, Bhopal. Respondent is a company registered under the provisions of the Indian Companies Act. Initially, a lease agreement was entered into between the petitioner and the respondent for the purpose of giving the building in question to the respondent for the purpose of establishing an Automobile Showroom and carrying out various business activities. After expiry of the lease, it was terminated and, thereafter, a fresh agreement termed as the 'Leave and License Agreement' was executed between the parties on 1st April, 2009.

Annexure P-1 is a copy of the said 'Leave and License Agreement'. This agreement was executed for a period of 5 years commencing from 1/02/2009 to 31/01/2014 and according to the petitioner, the premises was given on license to the respondent on an agreed license fee of Rs. 1.21 Lakhs per month. It is stated that in the execution of the license agreement as certain disputes have risen between the parties, the petitioner sought for resolution of the dispute by appointment of an Arbitrator in accordance with Clause 19 of the Agreement and as the Arbitrator could not be appointed, the present application has been filed.

3. Initially, this Court after hearing all concerned on 5/09/11 appointed an Arbitrator namely one Shri V. K. Saxena, a Retired District and Sessions Judge as an Arbitrator. This Arbitrator was nominated by the respondent and one Shri Mahaveer Bhatnagar was nominated as an Arbitrator by the petitioner. Both the Arbitrators were directed to proceed in accordance with law. However, when the aforesaid order was passed on 5/09/11, an application for review was filed and placing reliance on a judgment of the Supreme Court in the case of M/s SMS Tea Estates Pvt. Ltd. Vs. M/s Chandmari Tea Co. Pvt. Ltd. 2011 (7) SCALE 747, respondent came out with a case that the agreement in question Annexure P-1 is not a 'Leave and License Agreement'. It is a lease deed and as it is a lease deed, apart from the fact that it has to be compulsory registered, adequate stamp duty has not been paid and, therefore, in view of the principles laid down in the case of SMS Tea Estates (supra), in the absence of payment of appropriate stamp duty and registration, the Arbitration agreement contained in the document Annexure P-1 cannot be acted upon and as this legal question was not considered, the order passed appointing an Arbitrator on 5/09/11 was recalled and the matter was heard again.

4. Having heard learned counsel for the parties, it now transpires that the only question now warranting consideration is as to whether agreement Annexure P-1 is a lease deed or a license agreement. If it is a lease deed, then in the light of the principles laid down in the case of SMS Tea Estates (supra) in the absence of the registration and payment of stamp duty, the Arbitration Clause in the said deed cannot be given effect to. However, if it is a 'Leave and License Agreement' then objection of the respondent would be unsustainable and then an Arbitration as per the Arbitration Clause can be enforced. Accordingly, the question to be considered now in this application is with regard to the nature of the document.

5. Shri Sankalp Kochar, learned counsel for the applicants emphasized that the agreement in question is a license and not a lease. He referred to the previous agreement entered into between the parties i.e. the le