Calcutta High Court
M/S Akvik Barmecha Properties Llp vs Air Plaza Retail Holdings Private ... on 10 May, 2023
OD 5
ORDER SHEET
AP No. 114 of 2023
IN THE HIGH COURT AT CALCUTTA
ORIGINAL CIVIL JURISDICTION
M/s AKVIK BARMECHA PROPERTIES LLP
VERSUS
AIR PLAZA RETAIL HOLDINGS PRIVATE LIMITED
BEFORE:
The Hon'ble JUSTICE SABYASACHI BHATTACHARYYA
Date : 10th May, 2023.
Appearance:
Mr. Rajarshi Dutta, Adv.
Mr. Ishan Saha, Adv.
Mr. Nilay Sengupta, Adv.
Mr. Sujit Banerjee, Adv.
For the petitioner.
Mr. Amit Kumar Nag, Adv.
Ms. Sudeshna Mazumdar, Adv.
Mr. Maharnab Roy, Adv.
For the respondent.
The Court: Learned Counsel for the petitioner places reliance
on an arbitration clause, being Clause 17 of lease agreement between
the parties dated May 21, 2018, for the purpose of seeking reference to
arbitration. The dispute,, which has arisen between the parties in the
present application,, has been enumerated in a notice under Section 21
which was issued to the respondent, which is also annexed to the
present application.
Learned counsel for the respondent raises three objections to
the maintainability of the present application for reference.
The first objection is that the lease deed, as per law, was
compulsorily to be stamped and the stamp duty of the said document is
ex facie deficient. Hence, as per the latest five-Judges Bench judgment in
N. N. Global's case, reported at 2023 SCC OnLine SC 495, the Court,
while hearing the application under Section 11 of the Arbitration and
Conciliation Act, 1996, cannot look into the document prior to the same
being impounded.
It is next argued that the petitioner was not a signatory to the
lease agreement containing the arbitration clause, which was executed
between the respondent, as the lessee, and the erstwhile lessor, and as
such the arbitration clause cannot be invoked by the petitioner; more so,
since there was no attornment of the lease in favour of the present
petitioner.
The third objection raised is that an application under Section
8 of the Arbitration and Conciliation Act, 1996 is pending since prior to
the present application at the behest of the present petitioner, in a suit
instituted by the respondent.
Hence, since the same question is in issue in the said
proceedings as well, it is submitted that a reference at this stage would
operate as a decision on the issue involved therein.
As regards the question of the petitioner not being a signatory
to the agreement, the same cannot be a valid objection in view of the
admitted position that the petitioner has substantially become the owner
of the property.
Although the respondent has sought to argue that the
petitioner itself did not admit the respondent to be a lessee in respect of
the property, the said question cannot be decided within the limited
scope of a Section 11 application.
Irrespective of the question of attornment, the transfer of
ownership in the property automatically vests rights as a lessor on the
petitioner since the petitioner, in the invocation, has asserted such legal
capacity by asking for arrears of rent. It cannot be said that the
petitioner, only because of not being a signatory to the agreement-in-
question, would be precluded from seeking a reference before an
arbitrator. In fact, since the petitioner has stepped into the shoes of the
erstwhile lessor, such contention is not a valid objection to a reference
under Section 11 of the 1996 Act.
In so far as the pendency of an application under Section 8 is
concerned, it is also well-settled and prescribed in sub-Section (3) of
Section 8 of the 1996 Act itself that notwithstanding an application
having been made under Section 8 (1) and the issue being pending
before the judicial authority, an arbitration may be commenced or
continued and an arbitral award made.
If the legislature contemplates that an arbitral proceeding can
be carried on and concluded irrespective of pendency of an application
under Section 8, there cannot be any conceivable reason for this Court
not to look into a prayer for reference under Section 11 of the Arbitration
Act, 1996. Hence, the pendency of the said issue before the suit court in
connection with an application under Section 8 cannot be a deterrent for
the Court to refer the matter to arbitration otherwise.
However, the objection taken by the petitioner is justified as
regards there being deficiency in the stamp duty paid on the lease
agreement containing the arbitration clause.
It has been rightly contended by the respondent that in view of
N.N.Global (supra) the question is no longer res integra that in order
even to look into the arbitration clause in an agreement the court is to
ascertain as to whether the agreement is sufficiently stamped, within the
contemplation of Sections 33 and 35 of the Indian Stamp Act.
The argument of the petitioner regarding the lease agreement
being a collateral document cannot be accepted, as the petitioner relies
specifically on the liabilities arising out of the said agreement to invoke
the arbitration clause. Thus, it will only be prudent to refer the
document in question to the Collector for the purpose of impoundment.
Accordingly, the petitioner is directed to produce the original,
alternatively, a duly certified copy, of the deed of lease dated May 21,
2018, which is annexed as Annexure-D at page 30 of the present
application under Section 11 of the 1996 Act, before the Collector for the
purpose of ascertaining the correct stamp duty payable on such
document. Upon such assessment being made, the petitioner shall
deposit the deficit stamp duty, upon which the Collector shall duly
impound the document and revert the same back to this Court.
For such purpose, the petitioner shall produce the original or a
duly certified copy of the said deed before the Collector by May 12, 2023.
Upon such document being produced before the Collector, the
Collector shall complete the exercise as directed above within three
weeks thereafter. Immediately after impoundment, the document will be
sent back, to be tagged along with the file of the present application, and
be placed before this Court on June 7, 2023, when it will be listed for
passing further orders.
(SABYASACHI BHATTACHARYYA, J.)
snn.
