Karnataka High Court
Zamil Steel Buldings India Pvt.Ltd vs Promac Engineering Industries Limited on 20 October, 2020
Author: S R.Krishna Kumar
Bench: S.R.Krishna Kumar
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IN THE HIGH COURT OF KARNATAKA, BENGALURU
DATED THIS THE 20TH DAY OF OCTOBER, 2020
BEFORE
THE HON'BLE MR.JUSTICE S.R.KRISHNA KUMAR
CIVIL MISCELLANEOUS PETITION NO.273 OF 2019
BETWEEN:
ZAMIL STEEL BULDINGS INDIA PVT.LTD.
OFFICE NO. 101,
FIRST FLOOR, PLOT NO.2, S.NO.8,
ALMONTE SOFTWARE PARK,
KHARADI-411014,
PUNE MAHARASHTRA.
REP.BY ITS AUTHORIZED REPRESENTATIVE
SHRI.ANOOPAM RAJANNA)
ALSO AT:
ZAMIL STEEL BUILDINGS INDIA PVT.LTD.
#6, 2ND FLOOR, ASHA TOWERS, 35/13,
LANFORD ROAD CROSS, BANGALORE-560025.
...PETITIONER
(BY SRI.MRINAL BERI., ADVOCATE)
AND:
PROMAC ENGINEERING INDUSTRIES LIMITED
OFF KANAKAPURA ROAD, ALAHALLI,
ANJANAPURA POST, BANGALORE-560062,
KARNATAKA
REP.BY ITS CHAIRMAN & MANAGING DIRECTOR
...RESPONDENT
(BY SRI.P.USMAN, ADV.,FOR RESPONDENT)
THIS C.M.P. IS FILED UNDER SECTION 11(6) OF THE
ARBITRATION AND CONCILIATION ACT 1996, PRAYING TO A. TO
APPOINT AN INDEPENDENT UMPIRE IN THE SUBJECT MATTER
IN TERMS OF CLAUSE 18 OF ANNEXURE-II TO THE PURCHASE
ORDER NO. 1617 DATED:11/02/2016 OR IN ALTERNATIVE
APPOINT AN SOLE ARITRATIOR IN THE SUBJECT MATTER, TO
ADJUDICATE ALL THE DISPUTES BETWEEN THE PETITIONER
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AND RESPONDENT ARISING OUT OF OR IN CONNECTION WITH
THE LETTER OF INTENT DATED:26/11/2014, WHICH WAS ISSUED
BY THE RESPONDENT TO THE PETITIONER COMPANY, ORDER
DATED:18/01/2016, WHICH WAS PLACED UPON THE PETITIONER
BY THE RESPONDENT COMPANY FOR THE PROJECT IN
QUESTION, THE PURCHASE ORDER DATED:11/02/2016 ISSUED
VIDE P.O.NO.1617 & THE AMENDED PURCHASE ORDER
DATED:03/11/2016, ISSUED VIDE AMEND NO.424, ISSUED TO
THE PETITIONER BY THE RESPONDENT, VIDE ANNEXURE-E
AND F RESPECTIVELY; AND/OR. AND ETC.,
THIS C.M.P. COMING ON FOR ADMISSION, THIS DAY, THE
COURT MADE THE FOLLOWING:-
ORDER
Heard learned counsel for the petitioner and learned counsel for the respondent and perused the material on record.
2. The present petition under Section 11 of the Arbitration and Conciliation Act, 1996 (for short "the Act") has been filed by the petitioner-Zamil Steel Buildings India Pvt. Ltd., against the respondent- Promac Engineering Industries Limited and others seeking an appointment of the Sole Arbitrator in pursuance of Clause-18 of the Purchase Order vide Annexure-F dated 11.02.2016.
3. Clause-18 of the said Purchase Order, which is an Arbitration clause reads as under:-
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"18. Arbitration:
In the event of any question, dispute or difference arising between us regarding the due observance of terms & conditions laid down in this order or any other matter touching the right duties and liabilities of the parties, the same shall be referred in Bangalore for determination by two arbitrators, one to be chosen by each party and in the event of disagreement, by an umpire to be appointed by such arbitrators before proceedings on the reference in accordance with the provision of the Indian Arbitration Act, 1996 or any other amendment or modification thereof for the time being in force. Either party shall carry out during the course of the arbitration as may be practicable, their respective responsibility under this order or no payment shall be withheld on account of such proceeds unless the same is subject matter of the arbitration proceedings"
4. Learned counsel for the petitioner submits that the said document i.e., Purchase Order is exempted from payment of stamp duty.
5. Learned counsel for the respondent submits that the stamp duty and penalty is liable to be paid on the said document in accordance with the Article 5(g) of the 4 Karnataka Stamp Act, 1957. It is also contended that the document at Annexure-D (LOI) dated 18.01.2016 is also a part and parcel of Annexure-E and as such, the stamp duty is payable by the petitioner on the document at Annexure-E.
6. After hearing learned counsel for the petitioner as well as learned counsel for the respondent, the material on record indicates that there is a dispute with regard to payment of stamp duty on the document at Annexure-E styled as "purchase order" containing the aforesaid arbitration clause. Though there are rival contentions with regard to payment of stamp duty of Annexure-E as stated supra, since both parties have even otherwise agreed to get the dispute resolved by reference to arbitration de-hors the agreement as can be seen from the correspondence at Annexures-G to Q, in the light of the provisions contained in Section 7(4)(b) and (c) of the Act, keeping open the question of admissibility of the document at Annexure-E, including the rival contentions with regard to payment or otherwise of stamp duty on the said document, I deem it fit 5 and appropriate to refer the matter to the Arbitration Centre, Bengaluru.
7. Both the learned counsel have fairly agreed to the appointment of Sri.Justice K.N.Keshavanarayana, Former Judge of this Court, to act as the sole Arbitrator to resolve the dispute between the parties under the provisions of the Arbitration and Conciliation Act, 1996, as per the Rules governing the Arbitration Centre at Bengaluru.
8. Accordingly, this petition under Section 11 of the Arbitration and Conciliation Act, 1996 is disposed of by appointing Sri.Justice K.N.Keshavanarayana, Former Judge of this Court to enter into the said reference of Arbitration and act as the Sole Arbitrator in the present case in the Arbitration Centre, Bengaluru, as per the Rules governing in the said Arbitration Centre.
(i) All claims and contentions of any of the parties including admissibility and stamp duty, if payable on the document at Annexure-E, as well as jurisdiction, limitation, 6 etc., are left/kept open to be decided by the Arbitral Tribunal.
(ii) A copy of this order be sent forthwith to the aforesaid Sole Arbitrator, Sri.Justice K.N.Keshavanarayana Former Judge of this Court, for proceeding further in the matter.
(iii) Registry is directed to return all original documents produced by any of the parties after obtaining Photostat copies of the same.
Sd/-
JUDGE Bmc/-