LIFETIME REALTY P LTD Vs. PODDAR UDYOG LIMITED

JUDGEMENT

(1.) This Arbitration Request has been fi led under section 11 of the Arbitration and Conciliation Act, 1996 (hereinafter referred to as the 'Act' for short), seeking the appointment of an Arbitrator to resolve the disputes between the applicant and the respondents, arising out of Annexure A agreement. When the matter was heard, counsel for the first respondent contended that the agreement was not duly stamped as required under the Kerala Stamp Act. This contention is therefore considered as a preliminary issue. Annexure A is the notarised copy of the agreement for sale dated 18th March 2008 between the applicant and the 1st respondent and its original is engrossed on stamp paper of 100, only. Clauses 1 and 2 of the agreement, being relevant, are extracted below for reference;

(2.) Both sides are in agreement that by Annexure I order, the scheme of demerger has been confirmed by the High Court of Calcutta. Therefore, the performance of the agreement requires transfer of shares of the demerged company, the second respondent herein, to the Applicant and the question is whether such an agreement is a duly stamped one

(3.) This question has to be answered with reference to the provisions of the Kerala Stamp Act. Section 3 of the Act provides that every instrument mentioned in the schedule to the Act executed after the commencement of the Act, shall be chargeable with duty of the extent indicated in the schedule. Serial No. 5 to the Schedule provides as follows: <p><table class = tablestyle width="90%" border="1" align="center" cellpadding="1" cellspacing="1"> <tr> <td><strong>Sl.No.</strong></td> <td><strong>Description of Instrument Proper Stamp Duty Agreement or memorandum of an agreement</strong></td> <td><strong>One rupee</strong></td> </tr> <tr> <td>a)</td> <td>if relating to the sale of a bill of exchange</td> <td>One rupee for every (1000) or part</td> </tr> <tr> <td>b)</td> <td>if relating to the sale of Government security or share in an incorporated company or other body corporate</td> <td>thereof of the value of the security or share</td> </tr> </table>