TaxTMI 
TaxTMI 
2018 (11) TMI 1867
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....application. Some of the relevant facts for the purpose of deciding this application are as under:- 2. By the said agreement dated 7th December 2006 entered into between the respondent no. 1 and 2 and Mr. Ravindra Satish Trasikar, husband of the respondent no. 3 who subsequently expired as vendors, the respondent no. 4 as confirming party and the applicant as a purchaser, those vendors agreed to sell and transfer the suit property for a total consideration of Rs. 14 crore in favour of the purchaser. 3. It is the case of the applicant that under the said agreement, the applicant paid certain amounts to the vendors. The said agreement contains arbitration clause 8 which is extracted as under:- "8. In the event of any disputes and differences between the parties herein, the same shall be referred to the arbitration of the Arbitrators to be appointed by each parties and the decision of such Arbitrator/Umpire shall be final and binding and the same shall be governed as per the Indian Arbitration and Reconciliation Act, 1996 and the same shall take place in Mumbai." 4. The dispute arose between the parties. It is the case of the applicant that on 24th June 2013, the res....
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....On 3rd November 2014, the adjudicating authority under the Maharashtra Stamp Act i.e. the Collector of Stamps, Andheri, Mumbai directed the applicant to pay a sum of Rs. 70,00,000/- as stamp duty and Rs. 1,17,60,000/- as penalty thereon. The applicant preferred an appeal against the said order dated 3rd November 2014 before the appellate authority which appeal came to be rejected by an order dated 23rd October 2015. The applicant took some time to pay the said amount. On 18th January 2017, the said Arbitration Petition No. 741 of 2013 filed by the applicant under Section 9 of the Arbitration Act came to be dismissed on account of non-payment of stamp duty. 9. The applicant filed an appeal bearing (L) No. 262 of 2017 before the Division Bench of this Court. The said appeal came to be disposed of finally on 15th December 2017 thereby setting aside the order dated 18th January 2017 passed by this Court dismissing the said Arbitration Petition No. 741 of 2013 and restoring the said arbitration petition on file. This Court permitted the applicant to pay the stamp amount and penalty within a period of one week from the date of the said order dated 15th December 2017. The applicant dep....
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....t admittedly the said notice was received by the respondents prior to 6th August 2013. It is submitted that the arbitral proceedings in this case had commenced prior to 23rd October 2015 i.e. the date on which Section 11(5) and various subsection of Section 11 were amended by Act 3 of 2016 and the expression "the Chief Justice" was substituted by the expression "the Supreme Court or, as the case may be, the High Court or any person or institution designated by such Court." 13. It is submitted that since the arbitral proceedings had already commenced prior to 23rd October 2015, a right had vested in the applicant to the effect that these proceedings could not be filed before the Chief Justice of this Court as a persona designata and not before the Court and thus the provisions of the Limitation Act are not applicable to the proceedings under Section 11(6) of the Arbitration Act. He submits that merely because the arbitration application under Section 11(6) was filed after 23rd October 2015 in view of the said agreement having been impounded and referred to the Collector of Stamps for adjudication of stamp duty by the orders passed by this Court in the proceedings filed under Sect....
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....pursuant to the orders passed by the learned Collector of Stamps. It is submitted by the learned senior counsel that the arbitral proceedings in this case had already commenced prior to 6th August 2013. The respondent no. 3 has refused to agree to the name suggested by the applicant by letter dated 31st August 2013. By an order dated 16th September 2013 passed by this Court in arbitration petition filed by the applicant under Section 9 of the Arbitration Act, this Court had passed an order of impounding the said agreement. The said document was pending for adjudication before the learned Collector till 3rd November 2014. 18. It is submitted that an appeal preferred by the applicant before the Appellate Authority i.e. the Chief Controlling Revenue Authority, Maharashtra State, Pune came to be dismissed only on 23rd October 2015. The arbitration petition filed by the applicant came to be dismissed for non-payment of stamp duty. The said order dated 18th January 2017 came to be set aside by the Division Bench of this Court on 15th December 2017. The stamp duty and penalty was paid by the applicant on 21st December 2017. The additional amount of Rs. 35,00,000/- demanded by the Colle....
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....Courts Act, 2015 and would submit that since the immovable property which is the subject matter of the said agreement is not used exclusively in the trade and commerce, the dispute between the parties being not a commercial dispute and thus this application filed under Section 11(6) of the Arbitration Act is not within the jurisdiction of the Commercial Court under Section 6 of the Commercial Courts Act, 2015. 22. The next submission of the learned counsel for the respondent no. 3 is that the application filed by the applicant under Section 11(6) is barred by law of limitation prescribed under Article 137 to the Schedule of the Limitation Act, 1963. It is submitted that the applicant had invoked the arbitration clause 8 on 23rd July 2013 followed by a letter dated 5th August 2013 whereas this arbitration application has been filed on 11th February 2018 and thus the arbitration application is barred by law of limitation. He placed reliance on the judgment of the Vasu Healthcare Private Limited Vs. Gujarat Akruti TCG Biotech Limited & Anr., AIR 2017 Gujrat 153 and in particular paragraphs 7.3, 7.4 and 7.6 in support of his submission. 23. Mr. Anturkar, learned senior counsel fo....
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.... the respondents on 23rd July 2013. The present application filed under Section 11(6) of the Arbitration Act on 9th February 2018 is barred by law of limitation under the provisions of the Limitation Act, 1963. 26. It is submitted by the learned senior counsel that in the judgment of Board of Control for Cricket in India (supra), the question raised before the Hon'ble Supreme Court was not only in respect of the petition under Section 34 but was also in respect of all the provisions of the Arbitration Act interpreting the provisions of Section 26 of the Arbitration and Conciliation (Amendment) Act, 2015 which were brought into force on 23rd October 2015. 27. In so far as the delay of 536 days caused in filing the arbitration application is concerned, learned senior counsel for the respondent no. 3 invited my attention to clause 6 of the said agreement which provides that with regard to the payment of stamp duty and registration fees, the same shall be borne and paid by the purchaser alone. He submits that it was thus an obligation on the part of the applicant to pay the stamp duty and registration fees exclusively. He submits that it is not the case of the applicant that ....
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....ning of "commercial dispute" under Section 2(1)(c)(vii) of the Commercial Courts Act, 2015 is concerned, learned senior counsel invited my attention to some of the provisions of the said agreement and would submit that the said property has to be developed under the said agreement for commercial purposes and thus the dispute arising out of such agreement would be a "commercial dispute" within the meaning of Section 2(1)(c)(vii) of the Commercial Courts Act, 2015. 32. It is submitted that in any event, all arbitration applications filed under Section 11(6) of the Arbitration Act including the arbitration applications falling under the provisions of the Commercial Courts Act, 2015 are assigned to this Court. He submits that if this Court comes to the conclusion that the applicant has inadvertently filed the application before the Commercial Division of this Court, this Court has ample power to grant leave to amend to the applicant and to treat this commercial arbitration application as an arbitration application under the provisions of the Arbitration and Conciliation Act, 1996. 33. In so far as the reliance placed by the learned senior counsel for the respondent nos. 1, 2 and ....
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....e submission, he submits that even if this Court comes to the conclusion that Article 137 to the Schedule of the Limitation Act, 1963 is applicable to this application filed under Section 11(6) of the Arbitration Act, the applicant has made out sufficient cause for condonation of delay of 536 days in filing this arbitration application and thus be condoned under Section 5 of the Limitation Act, 1963 and the notice of motion filed by the applicant be made absolute. REASONS AND CONCLUSIONS:- 37. There is no dispute that clause 8 of the said agreement i.e. "Memorandum of Agreed Terms" dated 7th December 2006 entered into between the parties records an arbitration agreement. 38. The following questions that arise for consideration of this Court in this arbitration application are: (i) Whether unamended provisions of Section 11 of the Arbitration Act prior to 23rd October 2015 would apply to the facts of this case or the amended provision of Section 11 after 23rd October 2015 would apply though the notice invoking arbitration agreement was issued by the applicant on 23rd July 2013 read with notice dated 5th August 2013 under clause 8 of the said agreement and the arbit....
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....thus not inclined to accept the submission of Mr. Joshi, learned senior counsel for the applicant that though the notices invoking arbitration agreement in this case were issued on 23rd July 2013 and 5th August 2013 i.e. prior to Amendment Act 2015, the applicant could have filed the application under Section 11(6) of the Arbitration Act before the Hon'ble Chief Justice of this Court and thus the Hon'ble Chief Justice or any person or institution designated by him would still appoint an arbitrator in this application though filed after 23rd October 2015. 41. By virtue of the amendment as on 23rd October 2015, there was no persona designata available for hearing the applications under Section 11(6) of the Arbitration Act even in respect of the arbitration proceedings having commenced prior to 23rd October 2015 by virtue of notice invoking the arbitration agreement issued prior to the date of the amendment. 42. In my view, since the proceedings under Section 11(6) of the Arbitration Act are required to be filed before the High Court, Article 137 of the Schedule to the Limitation Act, 1963 would apply to such application filed under Section 11 (6) of the Arbitration Act.....
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....tration agreement. The Hon'ble Supreme Court held that when parties are in dialogue and are corresponding to negotiate the matter, the right to apply under Section 20 accrues when the dispute in fact arises between them i.e. when they fail to resolve that matter themselves. 46. It is not in dispute that under Section 20 of the Arbitration Act, 1940, an application was required for taking the arbitration agreement on record and for appointment of an arbitrator in accordance with the arbitration agreement before a Court. Since the said proceedings under Section 20 were required to be filed before an appropriate Court, the provisions of Article 137 of the Limitation Act, 1963 were applicable to such proceedings filed before such appropriate Court. In my view, since the proceedings under Section 11(6) or Section 11(9) of the Arbitration Act for seeking appointment of arbitral tribunal are also now required to be filed before the High Court or the Hon'ble Supreme Court, as the case may be. Article 137 of the Schedule to the Limitation Act, 1963 would apply. It is not in dispute that no other Article of Schedule to the Limitation Act, 1963 provides for any other period of limi....
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....s. 1 and 4 calling upon those respondents to comply with the notice dated 23rd July 2013. The respondent no. 3 filed her advocate's reply dated 31st August 2013 and did not agree with the name suggested by the applicant's advocate and suggested the name of a former Judge of the Hon'ble Supreme Court. The other respondents did not give response to the notice invoking arbitration agreement issued by the applicant. The arbitral proceedings thus commenced in so far as the respondent nos. 1, 2 and 4 are concerned, after expiry of 30 days from the date of receipt of notice invoking arbitration agreement. In so far as the respondent no. 3 is concerned, the arbitral proceedings commenced after expiry of 30 days from the date of receipt of notice invoking arbitration agreement and in any event with effect from 31st August 2013 when the respondent no. 3 refused to accept the name suggested by the applicant and suggested another name. The applicant, however, lodged this commercial arbitration application on 9th February 2018. The applicant has admittedly filed this arbitration application after expiry of three years from the date of receipt of notice issued by the applicant invoki....
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....im relief before this Court or not and whether such proceedings can be considered to have been prosecuted by the applicant in good faith and due diligence. 55. A perusal of the record referred to aforesaid clearly indicates that the petition filed by the applicant under Section 9 of the Arbitration Act inter alia praying for interim measures was pending before this Court from 7th August 2013 till 18th January 2017 and thereafter the Appeal (L) No. 262 of 2017 filed by the applicant arising out of the said order dated 18th January 2017 was pending till 15th December 2017. Division bench of this Court had granted time to the applicant to pay stamp duty and penalty within one week from the date of the said order dated 15th December 2017 with costs quantified at Rs. 50,000/-. The applicant was returned with the original document duly stamped by the office of the Collector of Stamps only after payment of stamp duty and penalty was made by the applicant pursuant to the extension of time granted by the Division Bench of this Court. The order passed by the Division Bench has not been impugned by the respondents. 56. A perusal of the order dated 16th September 2013 passed by this Cour....
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....reof was on the applicant alone and thus the applicant cannot be allowed to exclude the time taken in prosecuting the proceedings under Section 9 of the Arbitration Act under Section 14 of the Schedule to the Limitation Act, 1963 is concerned, in my view, there is no merit in this submission of the learned senior counsel. There was serious dispute raised by the applicant whether any payment of stamp duty and registration fees was attracted to the said agreement or not. This Court passed an order of impounding the said document only on 16th September 2013 and directing the Prothonotary and Senior Master to send the said document for stamping and adjudication before the Collector of Stamps thereafter. The payment of stamp duty and penalty was paid after adjudication of stamp pursuant to the extension of time granted by the Division bench of this Court. 60. In so far as the judgment of the Hon'ble Supreme Court in the case of M/s. Duro Felgeura, SA (supra) relied upon by the learned senior counsel for the applicant in support of the submission that in view of Section 11 (6-A) of the Arbitration Act, the jurisdiction of this Court is confined only to the examination of existence....
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....le Supreme Court in the case of M/s. Duro Felgeura, SA (supra) has been distinguished by the Hon'ble Supreme Court in the later judgment is concerned, in my view, reliance placed by the learned senior counsel on the said judgment in the case of United India Insurance Co. Ltd. (supra) is misplaced. There is no dispute between the parties in this case that the arbitration agreement exists. 63. In so far as the judgment of the Hon'ble Supreme Court in the case of Board of Control for Cricket in India (supra) relied upon by Mr. Anturkar, learned senior counsel for the respondent nos. 1, 2 and 4 in support of his submission that the amended provisions of Section 11 would apply also to the arbitral proceedings commenced prior to the date of the amendment and that these proceedings filed under Section 11(6) of the Arbitration Act or that the proceedings before the Court are within the expression "arbitral proceedings" referred in Section 26 of the Arbitration and Conciliation (Amendment) Act, 2015 is concerned, a perusal of the said judgment of the Hon'ble Supreme Court clearly indicates that the issue before the Hon'ble Supreme Court in that judgment was whether Sectio....
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....mmercial arbitration application has been wrongly placed before the commercial Court, it is submitted that this Court has been specifically assigned the petitions under Section 11(6) of the Arbitration and Conciliation Act, 1996 and also the Commercial Arbitration Application. If this Court comes to the conclusion that the commercial arbitration application is not maintainable in view of the objection raised by the respondent no. 3 before the Commercial Court, this Court has ample power to grant leave to amend to the applicant to convert the said commercial arbitration application into the arbitration application under Section 11(6) of the Arbitration and Conciliation Act, 1996. 67. A perusal of the 'Memorandum of Agreed Terms' annexed to the arbitration application clearly indicates that the property in question was to be developed and thereafter to be sold under the said agreement. The property was to be dealt with according to the commercial terms agreed by and between the parties in the Memorandum of Agreed Terms for commercial purposes. I am thus not inclined to accept the submission of the learned senior counsel for the respondent no. 3 that the property in questio....