M/S DHARMARATNAKARA RAI BAHADUR ARCOT NARAINSWAMY MUDALIAR CHATTRAM & OTHER CHARITIES & ORS.versusM/S BHASKAR RAJU & BROTHERS & ORS.

798                      [2020]REPORTS
               SUPREME COURT    3 S.C.R. 798               [2020] 3 S.C.R.


A          M/S DHARMARATNAKARA RAI BAHADUR ARCOT
           NARAINSWAMY MUDALIAR CHATTRAM & OTHER
                      CHARITIES & ORS.
                                        v.
                M/S BHASKAR RAJU & BROTHERS & ORS.
B
                         (Civil Appeal No. 1599 of 2020)
                             FEBRUARY 14, 2020
        [S. A. BOBDE, CJI, B. R. GAVAI AND SURYA KANT, JJ.]
             Karnataka Stamp Act, 1957: ss.33 and 34 – If a lease deed is
C
      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.
D
            Equity: Equitable relief, entitlement – Respondents taking self-
      contradictory stand – Held: Not entitled to any relief.
            Allowing the appeal, the Court
            HELD: 1. Admittedly, both the lease deeds are neither
E     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
F     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.
G     [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
H
                                       798
M/S DHARMARATNAKARA RAI BAHADUR ARCOT NARAINSWAMY                       799
  MUDALIAR CHATTRAM v. M/S BHASKAR RAJU & BROTHERS

tenants was evicted in the year 2010, nothing was placed on             A
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
                                                                        B
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      C
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
                                                                        D
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      E
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
                                                                        F
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.        G
[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.
                                                                        H
800               SUPREME COURT REPORTS                         [2020] 3 S.C.R.


A                               Case Law Reference
      (2011) 14 SCC 66                  relied on              Para 19
            CIVIL APPELLATE JURISDICTION: Civil Appeal No. 1599
      of 2020.
B           From the Judgment and Order dated 01.12.2014 of the High Court
      of Karnataka at Bangalore in Civil Miscellaneous Petition No. 167/2013.
            Nikhil Nayyar, Sr. Adv., Ms. Pritha Srikumar, Ms. Vasudha Sharma
      and Divyanshu Rai, Advs. for the Appellants.
            Balaji Srinivasan, Ms. Pallavi Sengupta, Arindam Ghosh, Ms.
C     Shruta Gopala, Ms. Garima Jain, Aishwarya Choudhary, Ms. Lakshmi
      Rao, Akash Chatterjee and Ms. Anini Debbarman, Advs. for the
      Respondents.
               The following Judgment of the Court was delivered:
                                    JUDGMENT
D
               1. Leave granted.
               2. Heard the learned counsel for the parties.
            3. By way of present appeal, the appellants challenge the judgment
      and order dated 1.12.2014, passed by the single judge of the High Court
E     of Karnataka at Bangalore in Civil Miscellaneous Petition No. 167 of
      2013 whereby, Justice L. Sreenivasa Reddy, former judge of the High
      Court of Karnataka, was appointed as Arbitrator to conduct arbitration
      proceedings at the Arbitration Centre, Bangalore, as per the Arbitration
      and Conciliation Act, 1996 (hereinafter referred to as “the Arbitration
F     Act”) read with the Arbitration Central Rules.
               4. The facts, in brief, giving rise to the present appeal are as
      under:
            5. The appellant No.1 is a registered Charitable Trust. Rest of the
      appellants are Trustees of the appellant No.1 – Trust. The appellant
G     No.1 – Trust desired to develop the land owned by it and construct a
      multi-purpose community hall with office complex.
             6. As such, the respondent No.1 offered to develop the said
      property and also to renovate the Samadhi of the founder of the Trust
      existing on the said piece of land. Negotiations were held between the
H     appellant No.1 – Trust and the respondent No.1.
M/S DHARMARATNAKARA RAI BAHADUR ARCOT NARAINSWAMY                               801
  MUDALIAR CHATTRAM v. M/S BHASKAR RAJU & BROTHERS

        7. As an outcome of the negotiations, a lease deed was executed         A
between the appellant No.1 -Trust and the respondent No.1 – lessee for
a period of 38 years. As per the said lease deed, the respondent No.1 –
lessee was required to pay an amount of Rs.55,00,000/- (Rupees Fifty
five lakh only) as an interest free deposit, which was to be refunded to it
at the end of the period of 38 years, if the lease was not extended between
                                                                                B
the parties. As per the terms of the said lease deed, a certain monthly
ground rent was also required to be paid by the respondent No.1 – lessee
to the appellant No. 1 -Trust. As per the said lease deed, the respondent
No.1 – lessee was to construct a multi-purpose auditorium with minimum
seating capacity of one thousand persons. The said auditorium was to
be used for marriages, etc. together with dining hall, kitchen, guest rooms,    C
etc. The respondent No.1 – lessee had also undertaken to obtain vacant
possession of property mentioned in Schedule ‘B’ subject to all co-
operations being extended to it, by the lessor for ejectment of the existing
tenants of the lessor. The said lease deed was executed on 31.5.1996 on
the basis of the resolution of the appellant No.1 – Trust dated 30.4.1996.
                                                                                D
       8. A subsequent lease deed dated 12.3.1997 came to be executed
between the appellant No.1 and the respondent No. 1. Most of the terms
and conditions in the subsequent/fresh lease deed dated 12.3.1997 are
identical with the terms and conditions as are found in the first lease
deed dated 31.5.1996.
                                                                                E
       9. It appears, that during the period between 1997 till 2000, there
was not much progress in the development of the said project. It further
appears that in the year 2008 certain re-negotiations took place between
the appellants and the respondents. However, the same failed to
materialize. It is the case of the appellants, that except paying initial
amount of Rs. 25 lakhs towards the security deposit, the balance amount         F
towards the security deposit was not paid by the respondents. It was
also the case of the appellants that the respondents were trying to interfere
with the possession of the trust property in collusion with one of the
trustees. In this background, the appellant – Trust filed Original Suit
being O.S. No. 8952 of 2010 before the City Civil Court at Bangalore.           G
In the said suit, it was also contended on behalf of the appellants that the
respondent No. 1 – lessee had also desecrated the Samadhi of the founder
of the Trust and had damaged part of it. It was further contended that,
the respondent No. 1 – lessee, in collusion with the respondent No.4,
was trying to get a fresh lease deed executed illegally. The following
prayers were made in the said suit:                                             H
802               SUPREME COURT REPORTS                        [2020] 3 S.C.R.


A           “a.     Decree of permanent injunction restraining the Defendants
                    1 to 3, their agents, servants from interfering with the
                    peaceful possession and enjoyment of the 1 st Plaintiff Trust
                    over the A schedule property.
            b.      Permanent injunction restraining the Defendants 1 to 4 from
B                   entering into, executing or registering any lease deed or
                    other document transaction concerning the A schedule
                    property or any portion of it.
            c.      Decree granting of costs of the case and such other relief/
                    reliefs as the Court may deem fit in the circumstances.”
C            10. The City Civil Court at Bangalore, granted an interim order by
      directing maintaining of status quo over the Schedule property in the
      said suit. The suit was contested by the respondent Nos. 1 and 2 by
      filing written statement.
             11. Respondent Nos. 1 and 2, after participating in the suit
D     proceedings for almost a period of about two years and three months,
      issued a notice to the appellants on 6.9.2013 thereby, invoking arbitration
      clause in the lease deed dated 31.5.1996 and 12.3.1997. On 11.10.2013,
      the respondent Nos. 1 and 2 filed a petition under Section 11(6) of the
      Arbitration Act before the High Court of Karnataka. On being served
E     with the notice, the appellants entered their appearance and filed their
      statement of objections on 2.6.2014 thereby, praying for dismissal of the
      petition on various grounds.
             12. Since it was the basic contention of the appellants, that the
      lease deed dated 12.3.1997 being insufficiently stamped had to be
F     mandatorily impounded under Section 33 of the Karnataka Stamp Act,
      1957 and it could not be relied upon unless proper duty and penalty was
      paid, the single judge of the Karnataka High Court referred the matter
      to the Registrar (Judicial) for determination of the said issue. The
      Registrar (Judicial) of the High Court of Karnataka by a detailed report
      dated 25.9.2014 held, that the document in question was lease deed and
G     not an agreement to lease and therefore, directed the respondent Nos. 1
      and 2 to pay deficit stamp duty and penalty of Rs. 1,01,56,388 /- (Rupees
      One crore One lakh Fifty-Six thousand Three hundred and Eighty-Eight
      only).
            13. The respondent Nos. 1 and 2 filed their objections to the report
H     of the Registrar (Judicial). The High Court of Karnataka without
M/S DHARMARATNAKARA RAI BAHADUR ARCOT NARAINSWAMY                              803
  MUDALIAR CHATTRAM v. M/S BHASKAR RAJU & BROTHERS

consideration of the report of the Registrar (Judicial) passed the impugned    A
order thereby, allowing the petition filed by the respondent Nos. 1 and 2
and invoking power under Section 11(6) of the Arbitration Act, appointed
an Arbitrator to decide the dispute between the appellants and the
respondents. Being aggrieved thereby, the appellants are before this Court.
      14. We have heard Shri Nikhil Nayyar, learned Senior Counsel             B
appearing on behalf of the appellants and Shri Balaji Srinivasan, learned
counsel appearing for the respondents.
        15. Shri Nikhil Nayyar, learned Senior Counsel, submits, that though
clause 36 of the lease deed dated 12.3.1997 provides for arbitration
between the parties, since the said lease deed was insufficiently stamped,     C
the same could not have been relied upon by the High Court for appointing
Arbitrator. It is further submitted, that the respondent Nos. 1 and 2 had
failed to take any steps in furtherance of the lease deed dated 12.3.1997
and belatedly, after a period of almost 16 years and only when the suit
filed by the appellants was in the final stages, had invoked the arbitration
clause. Learned Senior Counsel submits, that as a matter of fact, the          D
suit filed by the appellants already stands decreed by a judgment and
decree dated 2.3.2015.
      16. Shri Balaji Srinivasan, learned counsel appearing for the
respondents, on the contrary submits, that the agreement was in effect,
an agreement to lease the property which was required to be stamped            E
only after all the tenants were evicted and the permission to start the
construction was granted by the Corporation. It is submitted, that the
respondents were, all the while, trying to negotiate with the various
tenants and as such, the High Court was right in holding, that the
agreement was for developing the property immediately after the property       F
was made vacant by evicting the tenants.
     17. It will be apposite to reproduce Sections 33 and 34 of the
Karnataka Stamp Act, 1957, which are as under:
      “33. Examination and impounding of instruments.- (1) Every
      person having by law or consent of parties authority to receive          G
      evidence, and every person in charge of a public office, except an
      officer of police, before whom any instrument, chargeable in his
      opinion, with duty, is produced or comes in the performance of his
      functions, shall, if it appears to him that such instrument is not
      duly stamped, impound the same.
                                                                               H
804      SUPREME COURT REPORTS                         [2020] 3 S.C.R.


A     (2) For that purpose every such person shall examine every
      instrument so chargeable and so produced or coming before him,
      in order to ascertain whether it is stamped with a stamp of the
      value and description required by the law in force in the State of
      Karnataka when such instrument was executed or first executed:
B     Provided that,—
      (a) nothing herein contained shall be deemed to require any
      Magistrate or Judge of a Criminal Court to examine or impound,
      if he does not think fit so to do, any instrument coming before him
      in the course of any proceeding other than a proceeding under
C     Chapter XII or Chapter XXXVI of the Code of Criminal
      Procedure, 1898;
      (b) in the case of a Judge of the High Court, the duty of examining
      and impounding any instrument under this section may be delegated
      to such officer as the Court appoints in this behalf.
D     (3) For the purposes of this section, in cases of doubt, the
      Government may determine,—
      (a) what offices shall be deemed to be public offices; and
      (b) who shall be deemed to be persons in charge of public offices.
E     34. Instruments not duly stamped inadmissible in evidence,
      etc.- No instrument chargeable with duty shall be admitted in
      evidence for any purpose by any person having by law or consent
      of parties authority to receive evidence, or shall be acted upon,
      registered or authenticated by any such person or by any public
      officer, unless such instrument is duly stamped:
F
      Provided that,—
      (a) any such instrument not being an instrument chargeable with
      a duty not exceeding fifteen naye paise only, or a mortgage of
      crop Article 35 (a) of the Schedule chargeable under clauses (a)
G     and (b) of section 3 with a duty of twenty-five naye paise shall,
      subject to all just exceptions, be admitted in evidence on payment
      of the duty with which the same is chargeable, or, in the case of
      an instrument insufficiently stamped, or the amount required to
      make up such duty, together with a penalty of five rupees, or,
      when ten times the amount of the proper duty or deficient portion
H
M/S DHARMARATNAKARA RAI BAHADUR ARCOT NARAINSWAMY                                805
  MUDALIAR CHATTRAM v. M/S BHASKAR RAJU & BROTHERS

         thereof exceeds five rupees, of a sum equal to ten times such           A
         duty or portion;
         (b) where a contract or agreement of any kind is effected by
         correspondence consisting of two or more letters and any one of
         the letters bears the proper stamp, the contract or agreement shall
         be deemed to be duly stamped;                                           B
         (c) nothing herein contained shall prevent the admission of any
         instrument in evidence in any proceeding in a Criminal Court, other
         than a proceeding under Chapter XII or Chapter XXXVI of the
         Code of Criminal Procedure, 1898;
         (d) nothing herein contained shall prevent the admission of any         C
         instrument in any Court when such instrument has been executed
         by or on behalf of the Government, or where it bears the certificate
         of the Deputy Commissioner as provided by section 32 or any
         other provision of this Act and such certificate has not been revised
         in exercise of the powers conferred by the provisions of Chapter        D
         VI.”
       18. 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          E
1997 executed/entered into between the parties was a lease deed and
not an agreement to lease and passed an order directing the respondent
Nos. 1 and 2 to pay deficit stamp duty and penalty of Rs. 1,01,56,388 /-
(Rupees One crore One lakh Fifty-Six thousand Three hundred and
Eighty-Eight only). It is also an admitted fact, that the respondent Nos. 1
and 2 have not complied with the said directions and have not paid the           F
deficit stamp duty and penalty. In this background, a question that would
arise for consideration is, as to whether clause 36 in the lease deed
dated 12.3.1997 could be acted upon to enforce the arbitration clause
contained therein.
      19. The issue is no longer res integra. This Court in the case of          G
SMS Tea Estates Private Limited vs. Chandmari Tea Company
Private Limited1 had occasion to consider the provisions which are in
pari materia with the provisions of the Karnataka Stamp Act, 1957. The
relevant paragraphs are as under:
1
    (2011) 14 SCC 66                                                             H
806      SUPREME COURT REPORTS                          [2020] 3 S.C.R.


A     “17. What if an arbitration agreement is contained in an
      unregistered (but compulsorily registerable) instrument which is
      not duly stamped? To find an answer, it may be necessary to
      refer to the provisions of the Stamp Act, 1899 (“the Stamp Act”,
      for short). Section 33 of the Stamp Act relates to examination and
      impounding of instruments. The relevant portion thereof is extracted
B
      below:
      ‘33. Examination and impounding of instruments.—(1) Every
      person having by law or consent of parties authority to receive
      evidence, and every person in charge of a public office, except an
      officer of police, before whom any instrument, chargeable, in his
C     opinion, with duty, is produced or comes in the performance of his
      functions, shall, if it appears to him that such instrument is not
      duly stamped, impound the same.
      (2) For that purpose every such person shall examine every
      instrument so chargeable and so produced or coming before him,
D     in order to ascertain whether it is stamped with a stamp of the
      value and description required by the law in force in India when
      such instrument was executed or first executed:’
      18. Section 35 of the Stamp Act provides that instruments not
      duly stamped are inadmissible in evidence and cannot be acted
E     upon. The relevant portion of the said section is extracted below:
      ‘35. Instruments not duly stamped inadmissible in evidence,
      etc.—No instrument chargeable with duty shall be admitted in
      evidence for any purpose by any person having by law or consent
      of parties authority to receive evidence, or shall be acted upon,
F     registered or authenticated by any such person or by any public
      officer, unless such instrument is duly stamped:
      Provided that—
      (a) any such instrument shall be admitted in evidence on payment
      of the duty with which the same is chargeable or, in the case of an
G
      instrument insufficiently stamped, of the amount required to make
      up such duty, together with a penalty of five rupees, or, when ten
      times the amount of the proper duty or deficient portion thereof
      exceeds five rupees, of a sum equal to ten times such duty or
      portion;’
H
M/S DHARMARATNAKARA RAI BAHADUR ARCOT NARAINSWAMY                              807
  MUDALIAR CHATTRAM v. M/S BHASKAR RAJU & BROTHERS

      19. Having regard to Section 35 of the Stamp Act, unless the             A
      stamp duty and penalty due in respect of the instrument is paid,
      the court cannot act upon the instrument, which means that it
      cannot act upon the arbitration agreement also which is part of
      the instrument. Section 35 of the Stamp Act is distinct and different
      from Section 49 of the Registration Act in regard to an unregistered
                                                                               B
      document. Section 35 of the Stamp Act, does not contain a proviso
      like Section 49 of the Registration Act enabling the instrument to
      be used to establish a collateral transaction.
      20. The Scheme for Appointment of Arbitrators by the Chief
      Justice of Gauhati High Court, 1996 requires an application under
      Section 11 of the Act to be accompanied by the original arbitration      C
      agreement or a duly certified copy thereof. In fact, such a
      requirement is found in the scheme/rules of almost all the High
      Courts. If what is produced is a certified copy of the agreement/
      contract/instrument containing the arbitration clause, it should
      disclose the stamp duty that has been paid on the original. Section      D
      33 casts a duty upon every court, that is, a person having by law
      authority to receive evidence (as also every arbitrator who is a
      person having by consent of parties, authority to receive evidence)
      before whom an unregistered instrument chargeable with duty is
      produced, to examine the instrument in order to ascertain whether
      it is duly stamped. If the court comes to the conclusion that the        E
      instrument is not duly stamped, it has to impound the document
      and deal with it as per Section 38 of the Stamp Act.
      21. Therefore, when a lease deed or any other instrument is relied
      upon as contending the arbitration agreement, the court should
      consider at the outset, whether an objection in that behalf is raised    F
      or not, whether the document is properly stamped. If it comes to
      the conclusion that it is not properly stamped, it should be
      impounded and dealt with in the manner specified in Section 38 of
      the Stamp Act. The court cannot act upon such a document or
      the arbitration clause therein. But if the deficit duty and penalty is   G
      paid in the manner set out in Section 35 or Section 40 of the
      Stamp Act, the document can be acted upon or admitted in
      evidence.”
      20. It can thus clearly be seen, that this Court has in unequivocal
terms held, that when a lease deed or any other instrument is relied upon      H
808            SUPREME COURT REPORTS                           [2020] 3 S.C.R.


A     as containing the arbitration agreement, the Court is required to consider
      at the outset, whether the document is properly stamped or not. It has
      been held, that even when an objection in that behalf is not raised, it is
      the duty of the Court to consider the issue. It has further been held, that
      if the Court comes to the conclusion, that the instrument is not properly
      stamped, it should be impounded and dealt with, in the manner specified
B
      in Section 38 of the Stamp Act, 1899. It has also been held, that the
      Court cannot act upon such a document or the arbitration clause therein.
      However, if the deficit duty and penalty is paid in the manner set out in
      Section 35 or Section 40 of the Stamp Act, 1899, the document can be
      acted upon or admitted in evidence. It is needless to state, that the
C     provisions that fell for consideration before this Court are analogous
      with the provisions of Sections 33 and 34 of the Karnataka Stamp Act,
      1957. In this view of the matter, we are of the considered view, that in
      view of the law laid down in the case of SMS Tea Estates Private
      Limited (supra), that the lease deed containing the arbitration clause
      which is required to be duly stamped, was not sufficiently stamped and
D
      though the Registrar (Judicial) had directed the respondent Nos. 1 and 2
      to pay deficit stamp duty and penalty of Rs. 1,01,56,388/- (Rupees One
      crore One lakh fifty-six thousand Three hundred and Eighty-eight only),
      the respondents failed to do so, the High Court has erred in relying on
      the said lease dated 12.3.1997.
E            21. Though the appellants deserve to succeed only on the aforesaid
      question of law, we find, that even on equity the respondents are not
      entitled to any relief.
              22. After lease deed was executed in the year 1996-1997, though
      the respondent Nos. 1 and 2 have placed on record some settlement
F     deeds with tenants executed in 1998, except one bald statement, that
      last of the tenants was evicted in the year 2010, nothing has been 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
G     after participating in the suit proceedings for a period of about 2 years
      and 3 months, filed the present application before the High Court under
      Section 11(6) of the Arbitration Act. It is further to be noted, that 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

H
M/S DHARMARATNAKARA RAI BAHADUR ARCOT NARAINSWAMY                               809
  MUDALIAR CHATTRAM v. M/S BHASKAR RAJU & BROTHERS

arbitration in view of clause 36 thereof, nothing precluded them from           A
filing an application under Section 8 of the Arbitration Act before the
City Civil Court at Bangalore in O.S. No. 8952 of 2010 at the earliest
opportunity available. It appears, that the 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
                                                                                B
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. It will be
relevant to refer to clause 5 of the lease deed dated 12.3.1997, which
reads thus:                                                                     C
       “5. The tenure of the lease shall be 38 years commencing from
       the date of signing of this lease deed.”
      23. It can thus clearly be seen, that the tenure of the lease deed
was to be 38 years from the date of signing of the lease deed.
                                                                                D
       24. 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      E
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.
       25. In that view of the matter, the submission made by Shri Balaji
Srinivasan, learned counsel for the respondents, that the agreement was         F
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.
       26. In that view of the matter, we find, that the High Court has
totally erred in relying on the lease deed dated 12.3.1997, which was           G
found to be insufficiently stamped and brushing aside the report of the
Registrar (Judicial), when the respondents had failed to pay the insufficient
stamp duty and penalty as determined by the Registrar (Judicial) of the
High Court of Karnataka.
                                                                                H
810              SUPREME COURT REPORTS                           [2020] 3 S.C.R.


A            27. In the result, the appeal is allowed. The impugned judgment
      and order dated 1.12.2014 passed by the High Court of Karnataka in
      CMP No.167 of 2013 is quashed and set aside. The petition/application
      filed by the respondents under Section 11 of the Arbitration Act is rejected.
      There shall be no order as to costs.
B
      Devika Gujral                                                  Appeal allowed




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