SHAILA MATHIAS Vs. NITESH ESTATES LIMITED

JUDGEMENT

(1.) In this petition under Article 227 of the Constitution of India, the petitioners have assailed the validity of the order dated 30.08.2018 passed by the Trial Court, by which memo filed by the respondent is allowed and the petitioners have been directed to pay stamp duty as prescribed under Article 11 of the Karnataka Stamp Act 1957 (hereinafter referred to as 'the Stamp Act') on the order dated 28.11.2017 passed by the Arbitrator under Section 17 of The Arbitration and Conciliation Act 1996 (hereinafter referred to as 'the Act'. On admitted facts, the issue which arises for consideration in this case is whether the expression 'award' as used by the legislature in Article 11 of 'the Stamp Act' would include an order passed by the arbitrator under Section 17 of 'the Act'.

(2.) Background facts leading to filing of this petition in nutshell are that the petitioners are owners of the plot in question. The petitioners entered into a Joint Development Agreement with respondent and executed a Power of Attorney in favour of respondent on 29.03.2011. In terms of the Joint Development Agreement, the respondent was required to complete the construction of the project and allot 5 flats to the claimant. The respondent delayed the execution of the project. As per authorization, till handing over of the schedule property, the respondent was required to pay a sum of Rs.2 Lakhs per month to the petitioners from 01.10.2014 till date. The respondent committed breach of the terms and conditions of the Joint Development Agreement as well as the Power of Attorney, which led to dispute between the parties. The petitioners issued a notice invoking the arbitration clause. Thereafter, the petitioners filed an application under Section 11(6) of 'the Act' before this Court. A bench of this Court by an order dated 22.09.2017 appointed an Arbitrator to adjudicate the dispute between the parties.

(3.) The petitioners filed an application under Section 17 of the Act on 07.07.2017 before the Arbitrator seeking an injunction against the respondent restraining the respondent, its employees, men, representatives, agents or anybody claiming through it from alienating, encumbering/entering into agreements to sell with third parties or in any manner dealing with or creating third party rights over the schedule property and from restraining them from entering the schedule property. The respondent filed a reply to the aforesaid application. The Arbitrator after hearing the parties by an order dated 28.11.2017, directed the respondent to pay outstanding dues for a period from 01.10.2014 till 30.11.2017 to the petitioners subject to the result of the arbitration proceedings. The respondent was required to pay the outstanding amount on or before 24.12.2017 and to continue to make payment of the amount with effect from 01.12.2017 till final disposal of the Arbitration proceeding. Being aggrieved, the respondent filed an appeal under Section 37 of the Act in the Court of XXXVIII Additional City Civil and Sessions Judge in which no interim order has been passed till date.