Bombay High Court
Ashadevi Rajendrakumar Gupta vs Atul Projects India Private Limited And ... on 25 June, 2019
Author: G.S.Kulkarni
Bench: G.S.Kulkarni
5.CARBP29_2016.doc
Vidya Amin
IN THE HIGH COURT OF JUDICATURE AT BOMBAY
ORDINARY ORIGINAL CIVIL JURISDICTION
COMMERCIAL ARBITRATION APPLICATION NO. 18 OF 2016
WITH
COMMERCIAL ARBITRATION PETITION NO. 29 OF 2016
Atul Projects India Private Ltd. ... Applicant/
Petitioner
V/s.
Smt. Ashadevi Rajendrakumar Gupta& Anr. ... Respondents
WITH
PERJURY PETITION NO. 2 OF 2019
IN
COMMERCIAL ARBITRATION APPLICATION NO. 18 OF 2016
Smt. Ashadevi Rajendrakumar Gupta ... Petitioner
V/s.
Atul Projects India Private Ltd. ... Respondents
WITH
PERJURY PETITION NO. 3 OF 2019
IN
COMMERCIAL ARBITRATION PETITION NO. 29 OF 2016
Smt. Ashadevi Rajendrakumar Gupta ... Petitioner
V/s.
Atul Projects India Private Ltd. ... Respondents
----------------
Mr. Piyush Raheja a/w. Savita Suryawanshi, Ashish
Suryawanshi, Ankur Kalal i/b. Markand Gandhi & Co. for the
Petitioner/Applicant.
Mr. Uday Bobde with Jaikumar Shirdhonkar, for respondent no.
1.
----------------
CORAM : G.S.KULKARNI, J.
DATE : 25th June, 2019 1/11 ::: Uploaded on - 01/07/2019 ::: Downloaded on - 15/07/2019 02:46:47 :::
5.CARBP29_2016.doc P.C.:
1. Heard learned counsel for the parties on this Application filed under section 11 of the Arbitration and Conciliation Act, 1996, whereby the applicant has prayed for appointment of an Arbitral Tribunal to adjudicate the disputes and differences which have arisen between the parties under the Memorandum of Understanding (for short "the MOU") dated 2nd November, 2010. In clause 26 of the MOU, the parties have agreed for the disputes and differences arising between the parties under the MOU, to be referred for adjudication by an arbitral tribunal as per the provisions of the Arbitration and Conciliation Act.
2. This Petition is pending for quite sometime as it was to be heard along with Petition filed by the petitioner under section 9 of the Arbitration and Conciliation Act.
3. By an order dated 6th May, 2016 passed by this Court (Coram: S.J. Kathawalla, J.), respondent no. 2, who was appointed as escrow agent, was directed to deposit the original MOU dated 2nd November, 2010 with the Prothonotary 2/11 ::: Uploaded on - 01/07/2019 ::: Downloaded on - 15/07/2019 02:46:47 :::
5.CARBP29_2016.doc and Senior Master. The said order reads thus:
The learned Advocate appearing for Respondent no. 1 states that till date no third party rights are created in respect of the suit plot or the structures standing thereon. He further states that until further orders, the Respondent No. 1 shall not sell, alienate, encumber, part with possession and/or create third party rights in respect of the suit plot and/or the structures standing thereon and shall not allow any change of tenancies, without the permission of this Court. He also states that if any permission is given for warehousing for a period exceeding 90 days, prior permission of the Court shall be obtained. The statements are accepted. The Respondent no. 2 is directed to deposit the original MOU dated 2nd November, 2010 with the Prothonotary and Senior Master within a period of two weeks from today."
4. The Application thereafter has been listed before this Court from time to time. On 24th November, 2018 this Court passed the following order:
"The learned counsel for the parties were heard on the issue of impounding the MOU dated 2 nd November, 2010 entered between the parties and which is stated to be already deposited in this Court in pursuance of the order passed in Section 9 petition (CARBP No. 29 of 2016). To enable the learned counsel for the parties to appraise the Court all the orders which are passed in the Section 9 Petition, stand over to 29 th November, 2018."
5. On 15th January, 2019, as the legal issues arising on inadequate payment of stamp duty and its effect on the 3/11 ::: Uploaded on - 01/07/2019 ::: Downloaded on - 15/07/2019 02:46:47 :::
5.CARBP29_2016.doc Section 9 and Section 11 proceedings were pending consideration of the Larger Bench, the proceedings were adjourned. On 16th April, 2019, this Court passed the following order:
"After hearing the learned Counsel for the parties and considering the fact that the original document, which is in escrow, is deposited with the Prothonotary & Senior Master of this Court in a sealed envelope, the office is directed to place the document before the Court on the adjourned date of hearing. In view of the submission of Mr. Bobde that a copy of the document which is annexed to the petition is required to be verified with the agreement kept in escrow, stand over to 23 rd April, 2019 (HOB)."
6. On 18th June, 2019, respondent no. 1 wanted to inspect the original document which was deposited with the Prothonotary and Senior Master of this Court. The Court then passed the following order:
"1. Stand over to 25 June 2019 as a last chance, as the respondent wants to inspect the document which is deposited with the Prothonotary and Senior Master of this Court.
2. Parties who intend to take inspection shall remain present on the adjourned date of hearing."
7. It is on the above background that the parties are before the Court today. The Associate of this Court has opened the sealed envelope deposited in the Court by 4/11 ::: Uploaded on - 01/07/2019 ::: Downloaded on - 15/07/2019 02:46:47 :::
5.CARBP29_2016.doc respondent no. 2 containing the original document. The original document was accordingly given to Mr. Bobde, learned counsel for respondent no. 2 for inspection. Mr. Bobde has perused the document and the learned counsel for the applicant has also inspected the document. Copy of the document is already on record annexed at Exhibit B Page 19 of the Application. On completion of the inspection, the document is again kept in the envelope and re-sealed, so as to remain with the Prothonotary and Senior Master.
8. Learned counsel for the applicant, at the outset, has submitted that the document in question is in the nature of a conveyance and it would attract payment of stamp duty as per Article 25 falling under the Schedule to the Maharashtra Stamp Act, 1958. It is submitted that the document would, therefore, be required to be impounded, as it is not sufficiently stamped being stamped at Rs.200/-, and not as per the provisions of the said Article.
9. Learned counsel for the applicant drew my attention to the following clause as contained in the document: 5/11 ::: Uploaded on - 01/07/2019 ::: Downloaded on - 15/07/2019 02:46:47 :::
5.CARBP29_2016.doc "AND WHEREAS pursuant to mutual negotiations ensued between the parties hereto, the Party of the First Part has agreed to sell, transfer and assign the said property to the Party the Second Part and the Party of the Second Part have agreed to acquire and purchase from the Party of the First Part all her ownership and other right, title and interest in respect of the said property more particularly described in the Third Schedule hereunder written at or for the consideration and on the terms and conditions as mutually agreed upon between them."
10. It is his contention that part consideration of Rs. 15 crores as agreed in the agreement is already paid by the Applicant to respondent no. 1 and there is no dispute on this. It is his contention that further amount of Rs.2 crores is paid, which is disputed on behalf of respondent no. 1. It is submitted that Article 25(b) of the Maharashtra Stamp Act, which pertains to conveyance in relation to the immovable property, is attracted and as the subject land is situated within the limits of the Mumbai Municipal Corporation would attract 5% of the market value of the property. It is his submission that in view of stamping of document only at Rs.200/-, it is certainly insufficiently stamped and would require impounding of the said document. 6/11 ::: Uploaded on - 01/07/2019 ::: Downloaded on - 15/07/2019 02:46:47 :::
5.CARBP29_2016.doc
11. On the other hand, Mr. Bobde, learned counsel for respondent no. 1 would contend that the Agreement in question would not create any rights in favour of the Applicant. It is his submission referring to clause 2(c) that the entire payment is not made under the said Agreement by the Applicant to the respondent no. 1. No rights in the said document is created in favour of the applicant.
12. Having heard the learned counsel for the parties and having perused the document in question, there is much substance in the contentions as urged on behalf of the applicant. Admittedly, the document in question concerns an immovable property, namely, land. It is also quite clear that the substantial amount of Rs. 15 crores is paid by the Applicant to respondent no. 1. When the document is in relation to the immovable property and if it is in the form of an MOU it would they either fell under Article 5 which pertains to "Memorandum of Understanding in relation to immovable property", as the said Article deals with different categories of MOU or Article 25(b) as relied on behalf of the applicant, which pertains to Conveyance. It would be appropriate to extract both these articles under the Maharashtra Stamp Act, 7/11 ::: Uploaded on - 01/07/2019 ::: Downloaded on - 15/07/2019 02:46:47 :::
5.CARBP29_2016.doc which reads thus-
"5. AGREEMENT OR ITS RECORDS OR MEMORANDUM OF AN AGREEMENT, Description of Instrument Proper Stamp Duty (g-a)(i)] if relating to giving The same duty as is leviable on a authority or power to a promoter or Conveyance under clauses (b) or a developer, by whatever name (c), as the case may be, of Article called, for construction on, 25, on the market value of the development of or, sale or transfer property]:
(in any manner whatsoever) of, any immovable property. Provided that, the provisions of section 32A shall, mutatis mutandis, apply to such agreement, records thereof or memorandum, as they apply to an instrument under that section:
Provided further that, if the proper stamp duty is paid under clause (g) of article 48 on a power of attorney executed between the same parties in respect of the same property then, the stamp duty under this article shall be one hundred rupees.
(ii) if relating to the purchase of Same duty as is leviable on one or more units in any scheme or conveyances under clause (a),(b), project by a person from a or (c),as the case may be, of article developer : 25 on the market value of the unit] Article 25 - CONVEYANCE Description of Description of Proper Stamp Instrument Instrument Duty
(b) if relating to (i) within the limits of any 5 per cent of the immovable property Municipal Corporation or market value of the any Cantonment area property.
annexed to it or any urban area not mentioned in sub-
clause(ii).
8/11 ::: Uploaded on - 01/07/2019 ::: Downloaded on - 15/07/2019 02:46:47 :::
5.CARBP29_2016.doc
13. Having considered the various terms and conditions as set out in the document in question in the context of the above articles under the Maharashtra Stamp Act, I am of the clear opinion that the stamping of the document at Rs.200/- is certainly insufficient and thus the document would be required to be impounded.
14. The document containing an arbitration agreement is required to be sufficiently stamped before it is acted upon, even for appointment of an arbitral tribunal so as to give effect to the arbitration agreement between the parties, as laid down by the Hon'ble Supreme Court in Garware Wall Ropes Ltd. vs. Coastal Marine Constructions & Engineering Ltd., 2019 SCC Online SC 515. Thus, only after the document is sufficiently stamped, the document can be considered by this Court for the adjudication of the Application under section 11.
15. For all the above before the Section 11 Application is adjudicated as per the requirement of law, the document required to be impounded. Hence, the following order:
(i) Memorandum of Understanding dated 2nd 9/11 ::: Uploaded on - 01/07/2019 ::: Downloaded on - 15/07/2019 02:46:47 :::
5.CARBP29_2016.doc November, 2010 entered between respondent no. 1 and applicant and the original of which was deposited in this Court by respondent no. 2 in pursuance of the order dated 6th May, 2016 is impounded;
(ii) The Prothonotary and Senior Master shall forward the said MOU to the Collector of Stamps, for adjudication with regard to the payment of stamp duty on the said document;
(iii) The Collector of Stamps shall adjudicate the payment of stamp duty and pass appropriate order as expeditiously as possible in any way within 45 days from the date of receipt of the said document.
(iv) All contentions of the parties on adjudicating process which will be undertaken by the Collector of Stamps are expressly kept open.
(v) Further all contentions of the respondent no. 1 on the MOU in question to be adjudicated in Section 9 proceedings as also in any other proceedings are expressly kept open;
vi) Accordingly, stand over for six weeks to enable the Collector of Stamps to adjudicate the stamp duty. 10/11 ::: Uploaded on - 01/07/2019 ::: Downloaded on - 15/07/2019 02:46:47 :::
5.CARBP29_2016.doc
16. At this stage, Mr. Bobade, learned counsel for respondent no. 1 seeks stay of the order. In the facts and circumstances of the case, the request of Mr. Bobade for stay is rejected.
17. List the Section 9 Petition along with Perjury Petitions after two weeks. It is informed that Perjury Petition is not served. Mr. Bobde submits that Perjury Petitions will be served on the applicant during the course of the day.
(G.S.KULKARNI, J.) 11/11 ::: Uploaded on - 01/07/2019 ::: Downloaded on - 15/07/2019 02:46:47 :::