Uttarakhand High Court
ARBAP/70/2018 on 9 September, 2022
IN THE HIGH COURT OF UTTARAKHAND
AT NAINITAL
HON'BLE THE CHIEF JUSTICE SRI VIPIN SANGHI
09TH SEPTEMBER, 2022
ARBITRATION APPLICATION No. 70 OF 2018
Between:
Yukti Construction Pvt. Ltd.
...Applicant
and
Mrs. Asha Sharma and another.
...Respondents
Counsel for the applicant. : Mr. Siddhartha Sah, the learned
counsel.
Counsel for the respondents. : Mr. Avtar Singh Rawat, the learned
Senior Counsel assisted by Mr.
Raveendra Singh Bisht, the learned
counsel.
JUDGMENT :
The applicant has preferred the present
Arbitration Application, under Section 11(6) of the
Arbitration and Conciliation Act, 1996 (the Act), to seek
appointment of a sole arbitrator in terms of the
Agreement dated 05.01.2016 entered into between the
parties. A copy of the said agreement has been placed
on record.
2. The said agreement dated 05.01.2016 is an
agreement to sell an immovable property, whereunder
the applicant was the agreement purchaser, and the
respondents were the agreement seller. The said
agreement contains an arbitration clause in Clause 12,
which reads as follows :-
3. The applicant claims that disputes have arisen
between the parties, as the respondents have failed to
adhere to, and comply with the terms and conditions of
the agreement. Consequently, the applicant invoked the
arbitration agreement vide notice dated 20.08.2018.
Since the parties could not mutually agree upon the
arbitrator, the present application was preferred.
4. Upon service, the respondents have filed their
reply.
5. The respondents do not dispute the factum of
the parties having entered into an agreement itself. The
respondents have, however, raised two objections. The
first objection relates to the agreement not being duly
stamped, and the second relates to the agreement not
being registered, even though, the same is compulsorily
registrable.
6. So far as the first objection is concerned, the
applicant has filed a supplementary affidavit dated
25.09.2019. The applicant has stated that the applicant,
on its own volition, submitted the Agreement to Sell,
dated 05.01.2016, before the Sub-Registrar (II),
Dehradun for the purpose of stamping. The Sub-
Registrar (II), Dehradun placed the matter before the
Collector Stamp/Additional District Magistrate (Finance
and Revenue), Dehradun, who vide order dated
18.09.2019, found that the Agreement to Sell with
possession would attract Stamp Duty @ 5% of the total
consideration, which was Rs. 1,50,00,000/-. Thus,
Stamp Duty of Rs. 7,50,000/- was payable on the
document. The applicant was also subjected to penalty
of Rs. 50,000/-. The applicant has, consequently,
deposited Rs. 8,00,000/- in the Government Treasury
vide Challan dated 23.09.2019, copy whereof has also
been placed on record.
7. Consequently, the aforesaid objection
regarding the agreement not being stamped does not
survive.
8. So far as the other objection, with regard to
the Agreement to Sell not being registered, is
concerned, the learned counsel for the applicant has
placed reliance on the judgment of the Supreme Court in
SMS Tea Estates Private Limited v. Chandmari Tea
Company Private Limited, (2011) 14 SCC 66, and,
in particular, on paragraph no. 16 thereof, which reads
as follows :-
"16. An arbitration agreement does not require
registration under the Registration Act. Even if it is
found as one of the clauses in a contract or
instrument, it is an independent agreement to refer
the disputes to arbitration, which is independent of
the main contract or instrument. Therefore having
regard to the proviso to Section 49 of Registration Act
read with Section 16(1)(a) of the Act, an arbitration
agreement in an unregistered but compulsorily
registrable document can be acted upon and enforced
for the purpose of dispute resolution by arbitration."
9. On the other hand, the submission of the
learned Senior Counsel for the respondents is that in the
same judgment, the Supreme Court observed that, even
though the applicant may be entitled to seek reference
of disputes to arbitration under the arbitration
agreement, since the Agreement to Sell is not
registered, as required by law, the applicant cannot seek
to enforce its rights under the said agreement. He has
also sought to raise other issues with regard to the
agreement having come to an end, and the land in
question not being transferable.
10. In the light of the aforesaid judgment in SMS
Tea Estates (supra), I reject the submission of the
learned Senior Counsel for the respondents that the
disputes cannot be referred to arbitration. In fact, even
in the said case, the Supreme Court remanded the
matter back to the Chief Justice of the Gauhati High
Court to make the appointment of the Arbitrator after
deciding the issue of stamping. So far as the other
issues raised by the respondents are concerned, they
relate to the merits of the dispute, which can only be
gone into by the Arbitrator, and not by me while
deciding the present Application under Section 11(6) of
the Act. Therefore, it would be open to the respondents
to raise all its defenses before the Arbitral Tribunal.
11. In the light of the aforesaid, I am inclined to
allow this application. Accordingly, I appoint Mr. Justice
V.K. Bist, Retd. Chief Justice, High Court of Sikkim, to
act as the sole Arbitrator to adjudicate all the disputes,
which have arisen between the parties under the
aforesaid agreement.
12. The present Arbitration Application stands
disposed of in the aforesaid terms.
________________
VIPIN SANGHI, C.J.
Dt: 09th September, 2022
Rahul
