Bombay High Court
K. K. Mishtra vs Manish Prakash Mutha And 5 Ors on 18 June, 2019
Author: G.S.Kulkarni
Bench: G.S. Kulkarni
pvr 1 29carapl156-19.doc
IN THE HIGH COURT OF JUDICATURE AT BOMBAY
ORDINARY ORIGINAL CIVIL JURISDICTION
COMMERCIAL ARBITRATION APPLICATION (LODG)NO.156 OF 2019
K.K.Mishra ...Applicant
Versus
1.Manish Prakash Mutha & Ors. ...Respondents
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Mr.Alok Mishra with Sushil Upadhyay I/b. Kavita A. Gandhi, for the
Applicant.
Mr.Ativ Patel I/b. AVP Partners, for Respondent nos.1, 3 to 6.
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CORAM : G.S. KULKARNI, J.
DATE : 18 June 2019
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P.C.
1. Heard learned Counsel for the applicant and the learned Counsel for the respondents.
2. This is an application filed under Section 11 of the Arbitration and Conciliation Act,1996 (for short 'the Act') whereby the applicant has prayed for appointment of an arbitral tribunal to adjudicate the disputes and differences between the parties which have arisen under the agreement dated 7 July 2013 being Agreement for Project Management Consultancy. Clause 11 of the agreement provides for arbitration agreement between the parties which reads thus:-
"11. Arbitration:
In the event of there being any dispute or differences relating to the interpretation or implementation of any of the terms and conditions of this Agreement that may arise between the parties hereto or their ::: Uploaded on - 05/07/2019 ::: Downloaded on - 14/07/2019 04:45:57 ::: pvr 2 29carapl156-19.doc respective legal heirs then in such event dispute shall be referred to a Arbitration, consisting of six persons to be named as arbitrator- 1. Architect, 2. RCC Consultant, 3.Advocate, 4.Mr.Piyush Chhajed, Chartered Accountant, 5.Contract Manager to he headed by retired high court judge, to be appointed by the parties jointly, which Arbitrator shall not be of a standing less than a retired High Court Judge and if the parties do not concur in the appointment, then the Arbitrator & Conciliation Act,1996 or statutory modifications thereof. The arbitration proceedings shall be conducted as per Indian Contract Law in Mumbai and the same shall be conducted in English language."
3. The respondents have appeared and have raised an objection to this application contending that the prayers as made in the petition ought not to be granted considering the law laid down by the Supreme Court in "GARWARE Wall Ropes Ltd. Vs. Coastal Marine Constructions & Engineering Ltd."1 inasmuch as the document in question, according to the respondents, is not sufficiently stamped. To make good this argument, the learned Counsel for the respondents has referred to the various terms and conditions as contained in the said agreement and the schedules which are annexed to the agreement. Learned Counsel for the respondents has referred to the provisions of Article 63 of Schedule I under the Maharashtra Stamp Act,1958, to contend that the agreement in question is stamped at Rs.100/- and considering the provisions of the said Article 63, it would be required to be held that the document is not sufficiently stamped and till appropriate stamp duty on the document is paid, the 1 Civil Appeal no.3631 of 2019 Order dt.10/4/2019 ::: Uploaded on - 05/07/2019 ::: Downloaded on - 14/07/2019 04:45:57 ::: pvr 3 29carapl156-19.doc disputes cannot be referred to arbitration by appointing an arbitral tribunal as clearly held by the Supreme Court in GARWARE Wall Ropes Ltd.(supra). Article 63 of Schedule I under the Maharashtra Stamp Act,1958 reads thus:-
Description of Instrument Proper Stamp Duty (1) (2) Art.63. Works Contract: that is to say, a contract for works and labour or services involving transfer of property in goods (whether as goods or in some other form) in its execution and includes a sub-
contract.
(a) where the amount or value set forth in (Five hundred rupees) such contract does not exceed rupees ten lakh.
(b) where it exceeds rupees ten lakh (Five hundred rupees plus 0.1 per cent] of the amount above rupees ten lakh subject to maximum of rupees twenty-five lakhs]
4. On the other hand, learned Counsel for the petitioner contesting the contention as urged on behalf of the respondent, would submit that the document is sufficiently stamped. In support of this contention, the learned Counsel for the petitioner has referred to Article 5(h)(A)(vi) and further 5B of the Maharashtra Stamp Act which reads thus:-
Description of Instrument Proper Stamp Duty (1) (2)
5. AGREEMENT OR ITS RECORDS OR MEMORANDUM OF AN AGREEMENT-
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pvr 4 29carapl156-19.doc
............
(h) (A) if relating to -
(i) ... ... ..
... ....
(vi) project under Built, Operate and
Transfer (BOT) system, whether with or
without toll or fee collection rights,-
(a) if the amount agreed does not exceed One rupees for every rupees 1,000 or part
rupees five lakhs; thereof on the amount agreed in the
contract subject to minimum of rupees
100.
(b) in any other case Two rupees for every rupees 1,000 or part
thereof on the amount agreed in the
contract.
(B) if not otherwise provided for,- One hundred rupees
Explanation- No duty shall be chargable
on agreements or its record covered under
sub-clauses (b) and (c) of this article, if
proper duty is paid under article 51A.
5. Having perused the document in question and more particularly the various clauses as contained in the agreement alongwith the Schedules, and more particularly Schedule (C) which relates to consideration, it is quite clear that the total consideration cost is net 7% plus taxes as may be applicable of the total construction cost of the project or an amount of Rs.100/- per sq.ft., plus taxes as may be applicable on the total construction area, and that total construction cost for the project shall include all the purchases made and the expenditure incurred for the construction of the building including but not limited to cement, sand, ::: Uploaded on - 05/07/2019 ::: Downloaded on - 14/07/2019 04:45:57 ::: pvr 5 29carapl156-19.doc steel, metal (aggregate), ready mix concrete, electrical, plumbing, flooring, finishing, mechanical, fire-fighting equipments, passenger and car lifts, etc. and all other related materials, all the conventional centering material, wood, plywood, props. It also includes cost of machinery and equipments like concrete mixers, lifts, generators, batching plants, concrete pumps.
6. On perusal of the document, it prima facie appears that the provisions of Article 63 are attracted and thus the document would be required to be stamped under the provisions of the said article.
7. The contention as urged on behalf of the petitioner, referring to more particularly Article 5(h)(A)(vi) and (B) cannot be accepted. This for the reason that there is a specific Article which pertains to 'works contract'.
This admittedly is not a BOT contract as clause 5(h)(A)(vi) would contemplate. Clause 5(B) also has no application inasmuch as it is not the case that there is no other article so that residuary clause becomes applicable.
8. In the aforesaid circumstances the agreement dated 7 July 2013 would be required to be impounded and be forwarded to the Collector of ::: Uploaded on - 05/07/2019 ::: Downloaded on - 14/07/2019 04:45:57 ::: pvr 6 29carapl156-19.doc Stamps for adjudication of the stamp duty payable under the said document in accordance with the provisions of Maharashtra Stamp Act.
9. Let the original agreement be deposited with the Prothonotary and Senior Master of this Court within three weeks from today. The Prothonotary and Senior Master of this Court shall forward the said document to the Collector of Stamp for adjudication of stamp duty payable in accordance with the provisions of the Maharashtra Stamp Act. All contentions in regard to all the issues which may fall for consideration of the Stamp Authorities under the Act are expressly kept open.
10. The petition is accordingly disposed of with liberty to the petitioner to revive the petition after the document is sufficiently stamped. All contentions of the parties are expressly kept open. No costs.
11. Needless to observe that it would be open to the applicant to adopt the statutory remedy of an appeal, revision and such other proceedings, if aggrieved by the orders passed by the Stamp Authority.
(G.S.Kulkarni, J.) ::: Uploaded on - 05/07/2019 ::: Downloaded on - 14/07/2019 04:45:57 :::