Prajakta Vartak IN THE HIGH COURT OF JUDICATURE AT BOMBAY ORDINARY ORIGINAL CIVIL JURISDICTION IN ITS COMMERCIAL DIVISION COMMERCIAL ARBITRATION APPLICATION (L.) NO.22197 OF 2021 B4U Broadband (India) Pvt. Ltd. ..Applicant Vs.

Affluence Movies Pvt. Ltd. ..Respondent Mr. Nitesh Bhutekar with Ms. Gargi Warunjikar for Applicant.

Mr. Rashmin Khandekar with Mr. Deepak Deshmukh and Ms. Pritha Mitra i/b. Naik Naik & Co. for Respondent.

CORAM : G.S. KULKARNI, J.

DATE : APRIL 04, 2022.

ORAL ORDER:

1. By this application filed under Section 11 of the Arbitration and Conciliation Act ,1996 (for short ‘the Act’), the applicant has prayed for appointment of an arbitral tribunal to adjudicate the disputes and differences which have arisen between the parties under a Co- Production Agreement for Television Programme dated 09 July, 2015. The arbitration agreement is contained in clause 8 of the said agreement on which there is no dispute. The parties have agreed for Mumbai to be the place of arbitration as also, the agreement in question was entered at Mumbai. Also, both the parties are from Mumbai. Thus, the seat of the arbitration as agreed between the parties is at Mumbai.

2. At the hearing of this application on behalf of the respondent, an objection is raised to the agreement in question not being sufficiently stamped. Respondent contends that in view of the decision of the Supreme Court in Garware Wall Ropes Ltd. vs. Coastal Marine Constructions & Engg. Ltd.1, the agreement needs to be impounded and only after the agreement in question is sufficiently stamped, the present application for appointment of an arbitral tribunal be entertained. In Garware Wall Ropes (supra), the Supreme Court was concerned with the effect of an arbitration clause contained in a document which was not “duly” stamped. The Court held that when an arbitration clause is contained in an agreement or conveyance, different consequences ensue depending on whether the agreement or conveyance is not registered or not duly stamped. The Court also held that the judgment in SMS Tea Estates vs. Chandmari Tea Co. (P) Ltd.2 would continue to hold the field even after the 2015 amendment to the Act and if a document was not duly stamped, then the Court under section 11 of the Act would first impound the document and only after the entire stamp duty and penalty (if any) is paid, such document would be acted upon for appointment of an arbitral tribunal.

3. A reply affidavit on behalf of the respondent dated 23 March, 2022 is placed on record, wherein the following contention has been raised in regard to the document in question not being sufficiently stamped:-

1 (2019) 9 SCC 209 2 (2011) 14 SCC 66 “e. Therefore, in the present case, the total stamp duty payable on the Agreement ought to be approximately Rs. 26,240/- (Rupees Twenty Six Thousand Two Hundred and Forty Only). However, this stamp duty is not paid by the Applicant.”

4. To the above objection as raised on behalf of the respondent, a rejoinder affidavit is placed on record on behalf of the applicant which is merely in the nature of a denial. The relevant paragraphs of the rejoinder affidavit are required to be noted which read thus:-

“4. I say that, the stamp duty of Rs.900 is paid and the said Agreement is sufficiently stamped. Thus, there is no insufficiency of stamp as alleged by the Respondent.

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9. With respect of paragraph no. 2 d, it is denied that article 5 h (A) (iv) of Schedule 1 of the Maharashtra Stamp Act, 1957 is applicable to the agreement which is subject matter of application. It is denied that the stamp duty shall be calculated at 0.2% of the amount agreed in contract.

10. As far as the averments made in paragraph no. 2 e are concerned, I deny and do not accept that the total stamp duty payable on the Agreement ought to be approximately Rs.

26,240/- and the same has not been paid by the Applicant.”

5. Thus, as seen from the pleadings, the respondent has come with a case that the document in question was required t