Calcutta High Court
Poddar Projects Ltd vs Magic Deal India Pvt. Ltd on 27 August, 2014
Author: Soumen Sen
Bench: Soumen Sen
ORDER SHEET
GA No.2704 of 2014
With
CS No.222 of 2014
IN THE HIGH COURT AT CALCUTTA
Ordinary Original Civil Jurisdiction
ORIGINAL SIDE
PODDAR PROJECTS LTD.
Versus
MAGIC DEAL INDIA PVT. LTD.
BEFORE:
The Hon'ble JUSTICE SOUMEN SEN
Date : 27th August, 2014.
Appearance:
Mr. Ranjan Kr. Deb, Sr. Adv.
Mr. Nirmalya Dasgupta, Adv.
Mr. Dibanath Dey, Adv.
Mr. A. Basu, Adv.
The Court : This is an application for stay of suit under
Section 8 of the Arbitration and Conciliation Act, 1996.
The plaintiff has filed a suit for eviction against the
defendant. The reading of plaint would show that the plaintiff
asserts its right of eviction in view of the failure on the part
of the defendant to comply with the terms and the agreement dated
7th October, 2009. The execution of the agreement is not in
dispute. Prayer (b) of the releifs in the plaint stated:
"b) A Decree for mandatory injunction directing the defendant
to make over khas possession of the space measuring 4681 square
2
feet more or less as specified and demarcated in the second
schedule of the agreement dated 7th October, 2009 of the 5th floor,
Gate No.4 of Premises No.18, Rabindra Sarani, Poddar Court,
Kolkata - 700 001, to the plaintiff;"
The plaintiff, in fact, is seeking enforcement of right under
the agreement dated 7th October, 2009. Mr. Ranjan Deb, learned
senior counsel appearing on behalf of the plaintiff submits that
in deciding an application under Section 8 of the Arbitration and
Conciliation Act, 1996, the Court has to form an opinion about the
arbitrability of the dispute. The senior counsel has relied upon
a decision of the Supreme Court in 'Boozallen and Hamilton Inc.
vs. SBI Home Finance Limited and Others' reported at (2011)5 SCC
532. The said decision was cited for the purpose that a dispute
of the present nature cannot be decided by the arbitrator.
Reference has been made to paragraph 36 of the report which
specifies the grounds on which the Court retained its jurisdiction
and the dispute to be held as non-arbitrable which includes
"eviction or tenancy matters governed by special statues where the
tenant enjoys statutory protection against eviction and only the
specified courts are conferred jurisdiction to grant eviction or
decide the disputes." However, in the instant case the eviction
is not coming within the exception mentioned in paragraph 36 of
the said report.
Mr. Deb, learned senior counsel, referred to a decision of
the Hon'ble Supreme Court in 'SMS Tea Estates Private Limited vs.
3
Chandmari Tea Company Private Limited' reported at (2011)14 SCC 66
in support of his contention that the agreement for sale being
unregistered cannot be looked into and relied upon for the purpose
of enforcement and/or relied upon by the defendant to claim
arbitration in terms of Clause (z) of the Memorandum of
Understanding . The learned senior counsel has referred to the
questions that have arisen before the Hon'ble Court for
consideration, namely, (i) Whether an arbitration agreement
contained in an unregistered (but compulsorily registerable)
instrument is valid and enforceable ? (ii) Whether an arbitration
agreement in an unregistered instrument which is not duly stamped,
is valied and enforceable ? (iii) Whether there is an arbitration
agreement between the appellant and the respondent and whether an
arbitration should be appointed ? Of all the questions raised the question that may be relevant for consideration in the present case would be the answer given in relation to question no.2. The Hon'ble Supreme Court held that if the document is found to be not duly stamped, Section 35 of the Stamp Act bars the said document being acted upon. Consequently, even the arbitration clause therein cannot be acted upon. The Court should then proceed to impound the document under Section 33 of the Stamp Act and follow the procedure under Section 35 and 38 of the Stamp Act.
The plaintiff having relied upon the said document and the dispute being inextricably connected with the adjudication to be arrived at on the basis of said document, the argument made on 4 behalf of the plaintiff that the said document first required to be impounded and the procedure under Section 35 and 38 of the Stamp Act is to be followed would be self-defeating as the plaintiff would be unable to lead any evidence in the suit. Since the plaintiff has relied upon the said document and adjudication is called for on the said document it is incumbent upon the plaintiff to pay the requisite stamp duty and penalty. The plaintiff if wants to rely upon the said document, the plaintiff would be required to pay stamp duty and penalty to be adjudicated by the collector and on completion of such adjudication order, the entire dispute shall be referred to arbitration.
Accordingly, the said document is impounded. The suit shall remain stayed. The contention of the defendant that the dispute is arbitrable, is answered in affirmative. However, in view of the fact that the document is unregistered, the procedure prescribed in Clause 22.2 in SMS Tea Estates Private Limited (supra) is required to be followed. The matter may be referred to arbitration after on impounding of the said document and adjudication made by the collector on the said document. Stamp duty and penalties are paid. The memorandum of agreement be sent to the collector for adjudication. All proceedings in CS No.222 of 2014 shall remain stayed.
At this stage, the parties have agreed to refer the dispute to Mr. Hirak Kr. Mitra, a senior Advocate and member of the Bar Library Club. Accordingly the dispute forming the subject matter 5 of the suit is referred to Mr. Hirak Kr. Mitra, learned Senior Advocate to arbitrate with a request to conclude the proceeding within a period of six months from the date of completion of pleadings.
The plaintiff shall pay the stamp duty and the penalty. The plaintiff shall be entitled to claim the stamp duty and the other charges paid for registration of the said agreement if an award is passed in favour of the plaintiff. The interim order, however, shall continue till the learned arbitrator enters reference. It would be open to the parties to approach the learned arbitrator for extension of the order of injunction passed in the suit on 18th July, 2014.
The learned arbitrator shall decide his remuneration. The cost, charges and expenses of the arbitration shall be borne by the parties equally.
The application stands disposed of.
Certified website copies of this order, if applied for, be urgently supplied to the parties subject to compliance with all requisite formalities.
(SOUMEN SEN, J.) B.Pal