Karnataka Stamp Act, 1957: ss.33 and 34 – If a lease deed is neither registered nor sufficiently stamped as required under the Act then the court cannot act upon such lease deed or arbitration clause contained therein – If the instrument is not properly stamped, it should be impounded and dealt with in manner specified in Stamp Act – Arbitration.
Equity: Equitable relief, entitlement – Respondents taking selfcontradictory stand – Held: Not entitled to any relief. Allowing the appeal, the Court
HELD: 1. Admittedly, both the lease deeds are neither registered nor sufficiently stamped as required under the Karnataka Stamp Act, 1957. Admittedly, the Registrar (Judicial) of the High Court of Karnataka had submitted a report to the High Court pointing out, that the document of the year 1997 executed/entered into between the parties was a lease deed and not an agreement to lease and passed an order directing respondent Nos. 1 and 2 to pay deficit stamp duty and penalty. Respondent Nos. 1 and 2 did not comply with said directions and did not pay the deficit stamp duty and penalty. In view of the law laid down in the case of SMS Tea Estates Private Limited, the High Court erred in relying on the said lease dated 12.3.1997. [Paras 18, 20][805 D-G]
2. Even on equity the respondents are not entitled to any relief. After lease deed was executed though respondent Nos. 1 and 2 placed on record some settlement deeds with tenants executed in 1998, except one bald statement, that last of the tenants was evicted in the year 2010, nothing was placed on record. It appears, that only after the appellants had filed a suit for injunction against the respondents which was duly contested by the respondents by filing written statement on 18.6.2011, the respondents after participating in the suit proceedings for a period of about 2 years and 3 months, filed the application before the High Court under Section 11(6) of the Arbitration Act. If in the pursuit of the respondents, the lease deed dated 12.3.1997 was legal and valid document and it could be relied on for referring the dispute to arbitration in view of clause 36 thereof, nothing precluded them from filing an application under Section 8 of the Arbitration Act before the City Civil Court in the pending suit at the earliest opportunity available. Respondent Nos. 1 and 2 are taking self-contradictory stands. In the written statement before the City Civil Court at Bangalore, they have admitted, that the document was a lease deed, whereas before the High Court they have taken a stand, that the document was an agreement for developing the property after the property is made vacant by evicting the tenants. The stand is also totally contrary to the terms expressed in the lease deed. The tenure of the lease deed was to be 38 years from the date of signing of the lease deed. A perusal of the clauses of the lease deed dated 12.3.1997 would also reveal, that the lessee had undertaken all the responsibility of obtaining vacant possession of Schedule ‘B’ property and to secure vacant possession by ejecting the unauthorised occupants. Responsibility of sanctioning the building plans was also undertaken by the respondents. It would further reveal, that it was also agreed between the parties, that in the event of any of the tenants approaching a court of law, such period of litigation shall not in any manner affect the agreed tenure of the lease deed of 38 years. In that view of the matter, the submission by the respondents, that the agreement was to be registered only after all the tenants were evicted and the building plans were sanctioned is not supported by any of the terms in the lease deed dated 12.3.1997. [Pars 21-25][808 E-H; 809 E-G]
SMS Tea Estates Private Limited v. Chandmari Tea Company Private Limited (2011) 14 SCC 66 – relied on.
As published in the Supreme Court Reports, Supreme Court of India. Text from the Indian Supreme Court Judgments open data set (Dattam Labs), CC BY 4.0.
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