SAUMYA MINING LIMITED Vs. SREI EQUIPMENT FINANCE LIMITED

JUDGEMENT

(1.) This appeal under Sec. 37(1)(a) of the Arbitration and Conciliation Act, 1996 (hereinafter referred to as 'the Arbitration Act') arises from an order dated 24th September, 2015, passed by the Hon'ble Single Judge in an application under Sec. 9 of the Arbitration Act, filed by the respondent (Srei Equipment Finance Ltd.) being A.P. No. 1974 of 2014 (Srei Equipment Finance Ltd. - v/s. - Saumya Mining Ltd.). While considering the respondent's application under Sec. 9 of the Arbitration Act an objection was raised by the appellant herein that if an arbitration agreement contains a clause for hypothecation the same could not be relied upon unless stamped as per Article 40(b) of Schedule IA of the Indian Stamp Act, 1899. The Hon'ble Single Judge answered in the negative and held that -

(2.) It is the contention of the appellant that the Hon'ble Single Judge ought not to have invoked jurisdiction under Sec. 9 of the Arbitration Act since the arbitration agreement could not have been relied upon, the same not being sufficiently stamped. It is the contention of the appellant that the clause in the agreement is in the nature of mortgage and the agreement should have been treated to be a mortgage deed and required proper stamping in accordance with Article 40(b) of the Stamp Act. Rather the same ought to have been impounded and dealt with by the Hon'ble Single Judge in accordance with Ss. 35 and 38 of the Stamp Act. It is the contention of the appellant that -

(3.) In support of his submission learned counsel for the appellant has placed reliance on the provisions of Sec. 2(17) of Indian Stamp Act, 1899 to show the definition of 'mortgage deed'. He has also placed reliance on Article 40(b) of Schedule IA of the Stamp Act. Both the aforesaid provisions are reproduced below :