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Bombay High Court

Vivek Mehta And Shikha Mehta vs Karrs Designs And Developments And 2 Ors on 26 November, 2019

Author: G. S. Patel

Bench: G.S. Patel

                                                             3-ARBAP101-16.DOC




 Arun


      IN THE HIGH COURT OF JUDICATURE AT BOMBAY
           ORDINARY ORIGINAL CIVIL JURISDICTION
          ARBITRATION APPLICATION NO. 101 OF 2016


 Vivek Mehta And Anr                                               ...Petitioners
       Versus
 Karrs Designs And Developments And Ors                         ...Respondents


Mr Karan Halai, with Ravina Rajpal & Shruti K, i/b Singh & Singh
     for the Petitioners.
Mr Kevick Setalvad, Senior Advocate, with Cyrus Ardeshir, Rahul
     D, Neveille Mukerji & Asim T, i/b Veritas Legal, for Respondents
     Nos. 1 to 3..


                                CORAM:           G.S. PATEL, J.

                                DATED:           26th November 2019
 PC:-

1. The arbitration application invokes arbitration under clause 17 of a Memorandum of Understanding ("MoU") dated 29th August 2019. Under this the respondents was supposed to contract for the petitioners a villa in Alibag and deliver to them the completed construction and also convey title to the plot on which that construction was to be built. Clause 17 of the MoU reads thus:

"17. All disputes and/or diferences of whatsoever nature or kind which may arise between the parties hereto at anytime concerning the construction or interpretation and/or the implementation of any term or provision Page 1 of 4 26th November 2019 ::: Uploaded on - 27/11/2019 ::: Downloaded on - 28/11/2019 00:20:57 ::: 3-ARBAP101-16.DOC contained herein and/or the rights, obligations, and/or responsibilities of the respective parties and/or any act, matter or thing arising out of or in any manner touching or concerning this Memorandum of Understanding, shall be referred to arbitration under the provisions of the Indian Arbitration & Reconciliation Act, 1996, or the law relating to arbitration for the time being in force in India and such arbitration shall be conducted in accordance with the said Act/Law. The award of the Arbitrator/Arbitral Tribunal shall be final and binding on both the parties."

2. A preceding clause 15 also says that all stamp duty and registration charges "in respect of this agreement" were to be borne paid by the purchasers, viz., the applicants.

3. An attempt to bring the parties to a settlement on the previous occasion has not succeeded.

4. The execution of the MoU is not disputed. However, citing the decision of the Supreme Court in Garware Wall Ropes Limited vs Coastal Marine Constructions & Engineering Ltd.,1 Mr Setalwad submits that the agreement will required to be stamped and in any case the responsibility to pay stamp is that of the applicants. It may also require registration but that is a separate matter and, as Garware Wall Ropes itself says may not impede an order Section 11. Want of complete stamp duty on a document that is otherwise assessable to stamp, will, however, disentitle a Court from making an order under Section 11 unless that stamp duty is fully paid with all penalty. In this the Supreme Court in Garware Wall Ropes also 1 (2019) 9 SCC 209.

26th November 2019 ::: Uploaded on - 27/11/2019 ::: Downloaded on - 28/11/2019 00:20:57 ::: 3-ARBAP101-16.DOC relied on the previous decision of the Supreme Court in SMS Tea Estates Private Limited v Chandmari Tea Company Private Limited (P).2

5. The response on behalf of the applicant is that the agreement itself contemplates a later conveyance and does not in itself require stamp. That is not a decision I can or am even inclined to make. That is a matter squarely within the purview of the collector of stamps.

6. In the ordinary course I would have had to impound the original which is in the custody of the applicants and send it to the collector of stamps for adjudication. However, I will note the statement made on instructions on behalf of the applicants one of whom is present in Court that the document will be submitted to the collector of stamps accompanied by an authenticated copy of this order for adjudication as to appropriate stamp and this will be done within a period of four weeks from today.

7. It goes without saying that all the contentions of the applicants are kept open for being taken before the Collector of Stamps including that no stamp duty at all is payable on such an instrument.

8. The collector of stamps is requested to decide the matter at his earliest convenience on merits at the earliest possible, and, in any event, before 24th January 2019.

2 (2011) 14 SCC 66.

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9. The further remedies of the applicants, should the Collector hold that there is stamp and penalty, are payable are also kept open.

10. It is however made clear that it is only after the document is either stamped fully as required by the collector or is found not to require stamp that the applicant will be entitled to apply to this Court for under Section 11.

11. For the present, the matter is stood over to 28th January 2019, for directions.

(G. S. PATEL, J) Page 4 of 4 26th November 2019 ::: Uploaded on - 27/11/2019 ::: Downloaded on - 28/11/2019 00:20:57 :::