Arbitration Clause In An Insufficiently Stamped Agreement Cannot Be Acted Upon By Court: SC [Read Judgment]
Live LawThe Supreme Court has observed that an arbitration clause in an agreement which is required to be duly stamped, was not sufficiently stamped, cannot be acted upon by the Court. In this case, one of the parties to the agreement filed a petition under Section 11 of the Arbitration Act before the High Court of Karnataka.The other party, entered appearance and contended that the lease deed being insufficiently stamped had to be 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. Referring to SMS Tea Estates Private Limited vs. Chandmari Tea Company Private Limited., it observed thus: When a lease deed or any other instrument is relied upon as containing the arbitration agreement, the Court is required to consider at the outset, whether the document is properly stamped or not. Rejecting the application under Section 11, the bench further observed: in view of the law laid down in the case of SMS Tea Estates Private Limited, that the lease deed containing the arbitration clause which is required to be duly stamped, was not sufficiently stamped and though the Registrar had directed the respondent Nos.