Research › Search › Judgment

Delhi High Court · body

2015 DIGILAW 445 (DEL)

Axis Ispat Pvt. Ltd. v. Sadhna Mines Pvt. Ltd.

2015-02-09

S.MURALIDHAR

body2015
JUDGMENT : 1. The dispute between the parties at this stage in the present petition under Section 11 of the Arbitration and Conciliation Act, 1996 (‘Act’) seeking the appointment of an Arbitrator, is whether the agreement dated 28th January 2010 is an agreement to lease as contended by the Respondent or a licence deed as contended by the Petitioner, 2. Relying on the decision of the Supreme Court in SMS Tea Estates Pvt. Ltd. v. Chandmari Tea Co. Pvt. Ltd. v (2011) SLT 617 : (2011) 3 CLT 217 (SC) : 2011 (7) SCALE 747, the Respondent contends that since the agreement entered into with the Petitioner is a mining lease deed, which is not duly stamped and registered, it should be impounded by the Court and the Petitioner should be asked to pay the requisite stamp duty and registration charges before the arbitration clause in the agreement can be acted upon. 3. On the other hand, the contention of the Petitioner is that what has been granted to the Petitioner is a only right to extract the minerals from the land. It is pointed that in the first instance a license was granted by the Government of Rajasthan in favour of the predecessor-in-interest of the Respondent for extracting minerals from the land in question and this right was later transferred to the Respondent. It is this licence that has been further granted to the Petitioner under the Agreement dated 28th January 2010. It is submitted that although the word “lease” has been used in the agreement, the intention of the parties has to be ascertained on reading of the entire agreement. 4. Learned Counsel for the Respondents has produced before the Court the copy of the conveyance deed (‘Hastnataran Sanvida’) whereby the right to extract minerals from the in question was granted to the predecessor-in-interest of the Respondent, Inexcel Minerals Pvt. Ltd. On the reverse of document there is an endorsement concerning the further transfer of the mining lease from Inexcel Minerals Pvt. Ltd to the Respondent. This is followed by the agreement between the parties which at places is referred to as a ‘lease’. 5. This is followed by the agreement between the parties which at places is referred to as a ‘lease’. 5. The question that arises is whether the agreement which gives the right to the transferee “to search for, win and work mines and minerals in respect of the mines in the lands described in Schedule thereto” could be treated on the same footing as a regular lease of immovable property? Clause 12 states that “the party of the FIRST PART have clearly understood and agreed that these mining right are conferred upon the SECOND PART perpetually and irrevocably.” The consideration has not described as ‘rent’. It is stated that the Respondent is entitled to receive a sum of Rs. 1.25 lakh per month for the first six months and thereafter Rs. 1.25 lakh per month. 6. Learned Counsel for the Petitioner referred to the decision of this Court in Kartar Singh v. Mirkana Engineering Pvt. Ltd. (2013) 200 DLT 121 : 2013 (5) RAJ 742 (Del), where the question whether the unregistered document containing arbitration clause was a lease agreement, which required registration as well as stamping, was also referred to the Arbitrator for adjudication. The Court noted that an arbitration agreement per se did not require registration. The Court observed in para 11 as under: “Learned Counsel for the Respondent has not denied the fact that the arbitration agreement does not require for any registration. He has also not denied the fact that the lease agreement between the parties is in writing and there is an arbitration clause. The said agreement is also signed by the parties. In view of the above, in case the lease deed is unregistered, the same can be looked into for collateral purposes. Even otherwise, assumed the same cannot be looked into at the stage of evidence or other purpose, the arbitration agreement can still be segregated and treated as independent agreement in writing duly signed by both the parties. In view of the above, in case the lease deed is unregistered, the same can be looked into for collateral purposes. Even otherwise, assumed the same cannot be looked into at the stage of evidence or other purpose, the arbitration agreement can still be segregated and treated as independent agreement in writing duly signed by both the parties. The fact whether the objection raised by the Respondent that the lease deed is an unregistered document which requires registration as well as stamping or as to whether it can be considered by the arbitrator for collateral purposes or cannot be considered at all for the purpose of evidence, the said issue is to be considered at the stage of evidence which is solely the domain of Arbitrator, however, the arbitration agreement would still remain intact for the purpose of disputes resolution.” 7. The Court is accordingly of the view that even in the instant case, the dispute regarding the nature of the agreement can also be examined by the learned Arbitrator. In the event the learned Arbitrator agrees with the Respondent then he can proceed in accordance with law and impound the agreement, get the stamp duty determined by the Collector of Stamps and get the Petitioner to pay the requisite stamp duty and registration charges before proceeding with the arbitration. If not, the arbitration will nevertheless proceed. 8. Although the agreement envisages the appointment of an Arbitral Tribunal, both parties agree that this Court can appoint a Sole Arbitrator. Accordingly, the Court appoints Justice R.C. Chopra, former-Judge of this Court residing at N-7, Greater Kailash-I, New Delhi - 110 048 as sole Arbitrator to adjudicate the disputes between the parties, including the above question which will be decided first, and thereafter the claims and counter claims, if any. The arbitration shall take place under the aegis of the Delhi International Arbitration Centre (“DAC”). The fees of the learned Arbitrator will be in terms of the Delhi International Arbitration Centre Arbitration Proceedings (Arbitrators’ Fees) Rules. The petition is disposed of. A copy of this order be communicated to the learned Arbitrator as well as Additional Coordinator, DAC forthwith. Ordered accordingly.