VIVEK MEHTA Vs. KARRS DESIGNS & DEVELOPMENTS

JUDGEMENT

(1.) This application filed under Sec. 11 of the Arbitration and Conciliation Act, 1996, seeks appointment of a Sole Arbitrator to adjudicate upon disputes that have arisen under a Memorandum of Understanding (MOU) dtd. 29/8/2009. The application filed in 2016 remains pending for numerous reasons. Initially, the parties were referred to mediation since they were in negotiations and meetings have been held prior to 2017. These meetings did not yield results and on 18/4/2019 the respondents raised objections to the maintainability of the petition since the MOU was not sufficiently stamped. This is found to be recorded in an order dtd. 18/4/2019. Eventually mediation having failed, the matter was taken up for hearing on 26/11/2019. After noting that clause 17 of the MOU contained an arbitration clause, the court noted that stamp duty in respect of the MOU was payable by the applicants.

(2.) In view of the objections to stamping, the court in its order dated 26 th November, 2019 considered the nature of the MOU and observed that unless stamp duty is fully paid with penalty, the court could not proceed with appointing an arbitrator, in view of the decisions of the Supreme Court in Garware Wall Ropes Limited v/s. Coastal Marine Constructions and Engineering Ltd. (2019) 9 SCC 209 and SMS Tea Estates Private Limited v/s. Chandmari Tea Company Private Limited(P).2 The court did not venture to consider the nature of the document and recorded a statement on behalf of the applicants Advocates that they would submit the document of the Collector of Stamps along with a copy of the order so as to enable the Collector to adjudicate the correct duty payable. The matter was thereafter adjourned with a request to the Collector to decide the matter at his earliest convenience preferably before 24/1/2019. The matter has remained pending since then. On 25/2/2020 time was taken for parties to attempt a settlement.

(3.) On 3/1/2022 when the matter was listed before this court, a statement was made that no settlement had been arrived at. The matter therefore came to be listed for dismissal on 10/1/2022, counsel informed the court that pursuant to the order of 26/11/2019 the Collector had heard the applicants. The original instrument had been presented to the Collector and it was only now awaiting adjudication on the quantum of duty payable. The Collector was directed then to do so within one week.