Full Judgment
ORDER
SHEET AP No.412 of 2016 IN THE HIGH COURT AT CALCUTTA Original Civil Jurisdiction ORIGINAL SIDE GODREJ PROJECTS DEVELOPMENT PVT.LTD.Versus SIMOCO TELECOMMUNICATIONS (SOUTH ASIA) LTD.& ANR.
BEFORE: The Hon’ble JUSTICE SOUMEN SEN Date : 19th July, 2016 Ms.Sanchari Chakraborty, Adv., For the petitioner.
Mr.Arindam Mukherjee, Adv., Mr.Avirup Chatterjee, Adv., For the respondent.
The Court: The petitioner has filed an application for appointment of an Arbitrator in view of the failure on the part of the respondents to respond to the notice dated 15th April, 2016 by which the petitioner has invoked the arbitration clause contained in a development agreement dated 28th December, 2007.
The preliminary objection to the appointment of an Arbitrator orally raised by the respondents is that the development agreement is insufficiently stamped and in view thereof, the arbitration clause in the said agreement cannot be looked into and/or relied upon by the respondents.
The learned Counsel appearing on behalf of the petitioner, however, submits that the development agreement does not require any fixed stamp duty to be paid at the relevant point of time when the said agreement was entered into.
Moreover, the subsequent document executed by and between the parties on 30th March, 2009 has been sufficiently stamped and registered.
The agreement dated 30th March, 2009 is between the same parties in the recital it has referred to the manner in which the parties have taken steps for developing the land by Godrej.
In the recital, the agreement dated 28th December, 2007 was referred to and as well as the necessity to enter into the agreement dated 30th March, 2009.
The agreement dated 30th March, 2009 is for commencement of construction of the project on the land in accordance with the provisions of the agreement dated 28th December, 2007.
The agreement dated 30th March, 2009 record the following clause:“1.
The parties hereto have signed the Agreement dated the 28th day of December, 2007 recited aforesaid, the original whereof is annexed hereto and made part of this agreement.” Mr.Arindam Mukherjee, learned Counsel appearing on behalf of the respondents although is not disputing that the subsequent document is sufficiently stamped but it is argued that if the development agreement is not sufficiently stamped, the arbitration clause mentioned in the said agreement cannot be looked into and/or relied upon although it may form part of the subsequent agreement which is a registered agreement.
According to the learned Counsel, the former agreement has to be sufficiently stamped in respect of the fact that the later agreement has been sufficiently stamped.
In this regard, he has relied upon a Division Bench judgment of the Madras High Court reported in AIR1963 Madras 1 (P.A.J.
Seetharama Raju & ORS.versus M/S.Lala Gopikrishna Gokuldoss Agency Department).In P.A.J.
Seetharama Raju & ORS.(supra).the appellants constitute a firm of partnership carrying on business under the name and style of Srinivasa Mining Co.They were the defendants to the suit.
The firm owns certain manganese mines in Srikakulam District.
The plaintiff had agreed to finance the venture undertaken by the firm and the question in the appeal relates to registrability of that financing agreement dated 30th June, 1956 entered into between the parties.
The fiRs.appellant Seetharamaraju was originally a partner in a firm known as Ramkrishna Mining Co.By a document dated 19th November, 1955 the respondent had agreed to advance certain sums of money for the purpose of that partnership, and in pursuance thereof he had advanced about Rs.3,80,000.
Ramkrishna Mining Co.was subsequently dissolved and as a result of an arrangement between the partners Seetharama Raju became solely entitled to the mines and he also became responsible to pay the monies due to the respondent.
On 16th May, 1956 Rajeswari and Bapiraju who were originally the only partners of Srinivasa Mining Co.entered into a similar financing arrangement with the respondent for their own firm.
The respondent advanced certain sum to the partnership firm under the agreement.
Subsequently the two partners of Srinivasa Mining Co.admitted Seetharama Raju the fiRs.appellant as the third partner.
It was stipulated between them that the assets and the liabilities of Ramakrishna Mining Co., as well as Srinivasa Mining Co., should be pooled together and treated as belonging to the new firm.
On 30th June, 1956 a revised agreement superseding the earlier financing agreements were entered into between the appellants and the respondent.
Under the new agreement the appellants offered the two sets of mines as security for the amounts due to the financier; schedules A and B thereto respectively set out mines originally owned by the Ramakrishna Mining Co.and the Srinivasa Mining Co.The relevant covenants embodied in Ex.
P.4 states: “This agreement is to be read along with the agreement dated 16-51956 entered into between the financing agents and Srinivasa Mining Co.and as supplement thereto.
The mining owners agree that they will be liable also to repay the sum of Rs.3,80,000 due from P.A.J.
Seetharama Raju traceable to the liability of Ramakrishna Mining Co.to the financing agents and this liability shall be in addition to the sum of Rs.79,099-10-0 already due to the financing agents from Srinivasa Mining Co.as per certificate of balance issued dated 27-6-1956….
The mining owners hereby offer the entire assets of the mines owner inclusive of all the mines and the ore raised therefrom and goodwill in respect of all the mines described in schedules A and B as security for the amounts due to the financing agents……….” Another clause in the agreement reiterated that the conditions embodied in Ex.
P.1 if not contrary to those in Ex.P.4 would also govern the latter.
The agreement proper, that is the portion excluding schedules, covers four pages of typed matter and they have been signed on behalf of the respondent and also by the three partners of the appellant firm.
Schedules A and B which cover the fifth page have been signed only by Seetharama Raju.
The earlier document, Ex.
P.1 is not a registered one.
When Ex.
P.4 was presented for registration, the joint Sub Registrar of Madras who was exercising the power of the District Registrar declined to grant registration on the ground that although the document had been executed by the appellants, it was complete as the schedules attached thereto had not been signed by all the executants and as the earlier document and the certificate of balance had not been produced along with it.
In that context it was held that where a document which requires registration is not presented for registration within the time prescribed, it would not be open to the parties to have it registered in an indirect manner by simply adopting the device of referring to it or making it a part of a later document which could be presented for registration.
In the instant case, it is not being contended that due to lack of registration, the document cannot be looked into.
The objection is with regard to the sufficiency of stamp duty payable in respect of the earlier agreement.
Section 4 of the Indian Stamp Act, 1899 as amended by the West Bengal Amendment Act reads:“S.4(1).Where, in the case of any sale, mortgage or settlement, several instruments are employed for completing the transaction, the principal instrument only shall be chargeable with the duty prescribed in Schedule I or in Schedule I-A, as the case may be, for the conveyance, mortgage or settlement and each of the other instruments shall be chargeable with a duty of one rupee if the principal instrument be chargeable with the duty prescribed in Schedule I, or with a duty of two rupees, if the principal instrument be chargeable with the duty prescribed in Schedule I-A, instead of the duty (if any).prescribed for such other instrument in Schedule I, or Schedule I-A, as the case may be.” - Bengal Acts III of 1922 and XII of 1935.
(2).The parties may determine for themselves which of the instrument so employed shall, for the purposes of sub-section (1).be deemed to be the principal instrument: Provided that the duty chargeable on the instrument so determined shall be the highest duty which would be chargeable in respect of any of the said instruments employed.” The argument of Mr.Mukherjee with regard to the chargeability of the said instrument comes close to Schedule I-A(f) of the Stamp Duty on Instrument in West Bengal.
The said clause is inserted on 1st April, 2012 much after the development agreement and the subsequent agreement was entered into between the parties.
The development agreement at the relevant point of time was not required to be stamped.
It is not the contention of the plaintiff that the agreement dated 30th March, 2009 is insufficiently stamped.
In fact, in paragraph 5 of the said agreement records that the petitioner has paid a sum of Rs.3,40,71,034/towards stamp duty.
Moreover, having regard to the fact that the development agreement forms part of the agreement dated 30th March, 2009 which contains an arbitration clause, in my view, the petitioner is entitled to invoke Clause 28 of the agreement dated 28th December, 2007 for appointment of an Arbitrator.
In the instant case, the agreement dated 28th December, 2007 is incorporated in the agreement dated 30th March, 2009 and forms part of the later agreement.
It is clear that the parties intend to incorporate the referred document, that is the agreement dated 28th December, 2007 in its entirety into the contract which contains the arbitration clause.
Under such circumstances, the objection with regard to the absence of an arbitration clause in the later agreement dated 30th March, 2009 is unsustainable.
Under such circumstances, the objection with regard to the enforcement of the arbitration clause is rejected.
Mr.Hirak Kr.
Mitra, Senior Advocate, member of Bar Library Club, is appointed as an Arbitrator at a consolidated remuneration in accordance with the Fourth Schedule of the Amended Act of 1996 to be shared by the parties in equal measure at the fiRs.instance subject to the direction as to costs as may be contained in the final Award.
The Arbitrator is requested to conclude the reference within a period of 12 months of the statement of claim being lodged before him.
The application is disposed of.
Urgent Photostat certified copy of this order, if applied for, be supplied to the parties subject to compliance with all requisite formalities.
(SOUMEN SEN, J.) sd/