NAINA THAKKAR Vs. ANNAPURNA BUILDERS

JUDGEMENT

(1.) We have heard Mr. Abhinav Mukerji, Learned Counsel for the Petitioner, and Ms. Prabha Swami. Learned Counsel for the Respondent. Learned Counsel for the Petitioner places reliance upon a decision of this Court in M/s SMS Tea Estates Pvt. Ltd. v. M/s Chandmari Tea Company Pvt. Limited, 2011 7 Scale 747 and submits that the 2nd Additional Chief Judge, City Civil Court at Hyderabad in his order dated July 20, 2010 in the application made by the Petitioner under Section 8 of the Arbitration and Conciliation Act. 1996 (for short, 'the Act') having held that the lease deed dated December 19, 2005 is insufficiently stamped ought to have impounded the said lease deed and followed the procedure prescribed under Sections 35 and 38 of the Indian Stamp Act, 1899 and, if the document was found to be not duly stamped, should have given an opportunity to the Petitioner to make up the deficit stamp duty and pay penalty if directed by the Collector. Having not followed the above procedure, the said court committed serious illegality in rejecting Petitioner's application under Section 8 of the Act and the High Court was in error in not interfering with such illegal order.

(2.) Admittedly, the lease deed dated December 19, 2005 entered between the Petitioner and the Respondent is an unregistered document prepared on a non-judicial stamp paper of Rs. 100/-. This is also an admitted position that the period of lease as per the lease deed dated December 19, 2005 is five years. Having regard to this, it is also an admitted position that the lease deed was required to be registered and it suffers from deficit stamp duty.

(3.) In M/s SMS Tea Estates Pvt. Ltd. case , this Court was concerned with, inter alia, two questions - (i) Whether an arbitration agreement contained in an unregistered (but compulsorily registrable) instrument is valid and enforceable , and (ii) Whether an arbitration agreement in an unregistered instrument which is not duly stamped, is valid and enforceable