Nikhil Thard vs Hanumakka

S. Abdul Nazeer, J.—The petitioner has filed this civil miscellaneous petition u/s 11(6) of the Arbitration and Conciliation Act, 1996, for resolution of the dispute which has arisen in relation to the Memorandum of Understanding at Annexure A dated 16.07.2012.

The petitioner contends that he had entered into the aforesaid MOU with the respondents for the development of land in Sy. No. 77/3 (77/3A and 77/3B) measuring 2 acres 18 guntas situated at Nagawara Village, Kasaba Hobli, Bangalore North Taluk, Bangalore Urban District and construct residential apartments thereon. The built up area has to be divided between the petitioner and the respondents in the ratio of 58:42. The petitioner has paid a sum of Rs. 1 crore as non-refundable deposit to the respondents. It is contended that the respondents have failed to perform their obligations under the aforesaid MOU. Therefore, the petitioner issued a notice as per Annexure-B dated 16.4.2013 calling upon the respondents to appoint an arbitrator for the resolution of the dispute. The respondents have failed to respond to the said notice.

The respondents have filed statement of objections.

Learned counsel for the petitioner would contend that the power of attorney executed by the petitioner herein in favour of Miss. Bharathi M., authorizes her to engage or appoint any solicitor, counsel, advocate pleader or lawyer. It has also authorized Miss. Bharathi M., to sign vakalaths, affidavit, plaints, applications, petitions or documents before the Civil Courts, Criminal Courts, High Court of Karnataka and Supreme Court of India and all other Quasi Judicial Authorities, Tribunals, etc. Under the power of attorney, the petitioner has authorized Miss. Bharathi M. to file the above CMP before this Court. It is further argued that if this Court comes to a conclusion that there is deficit payment of stamp duty, the petitioner is ready to deposit duty and penalty in this Court.

Learned counsel for the respondents submits that the petition has not been properly instituted. The petitioner is represented by his power of attorney holder Miss. Bharathi M. The power of attorney does not authorize Miss. Bharathi M. to institute the aforesaid proceedings. Secondly, the petitioner has not paid necessary stamp duty on the power of attorney. The respondents have also denied the averments in the petition.

I have carefully considered the arguments of the learned counsel made at the bar and perused the materials on record.

There is no dispute as to the execution of the Memorandum of Understanding at Annexure-A dated 16.7.2012, whereby the petitioner has agreed to develop the property bearing Sy. No. 77/3 (77/3A and 77/3B) with the respondents. The said agreement contains an arbitration clause, which is as under:

"28. All disputes and differences arising between the Parties herein, shall be referred to Arbitration, as per the provisions of the Indian Arbitration and Conciliation Act, 1996 and the place of the Arbitration Proceedings shall be at Bangalore. Each of the Parties shall nominate one Arbitrator each and the Arbitrators so appointed will nominate a third Arbitrator. The decision of the Arbitrators will be final and binding on all the Parties to this Memorandum of Understanding."

The petitioner got issued a notice through his lawyer at Annexure-B calling upon the respondents to appoint an arbitrator. The respondents have not responded to the said notice. They have not appointed an arbitrator till filing of the civil miscellaneous petition or even thereafter. Thus, the respondents have forfeited their right to appoint an arbitrator (See:- Deep Trading Company Vs. Indian Oil Corporation and Others, ).

I have perused the power of attorney. Under this power of attorney, the petitioner has authorized Miss. Bharathi M., to engage or appoint any solicitor, counsel, advocate pleader or lawyer. He has also authorized Miss. Bharathi M. to sign vakalaths, affidavit, plaints, applications, petitions or documents before the Civil Courts, Criminal Courts, High Court of Karnataka and Supreme Court of India and all Quasi Judicial Authorities, Tribunal and to sign the pleadings and to file cases and defend cases and to deposit, withdraw and receive documents and any money or monies from the Courts or from the defendant either in execution of the decree or otherwise and sign and deliver proper receipts on his behalf. A reading of this power of attorney as a whole would clearly indicate that the petitioner has authorized Miss. Bharathi M., to file this civil miscellaneous petition before this Court.

As rightly submitted by the learned counsel for the respondents, proper stamp duty has not been paid on this document. The petitioner ought to have paid stamp duty under Article 41(h) of the Schedule of the Karnataka Stamp Act, 1957. Under this Article, stamp duty payable is Rs. 200/-. The petitioner paid a sum of Rs. 100/- on this document. The petitioner has to deposit balance of stamp duty of Rs. 100/- and 10 times the balance of duty towards penalty. Thus, the petitioner is liable to pay a sum of Rs. 1,100/- towards duty and penalty. The petitioner is directed to deposit the said amount before this Court within a period of one week from today.

From the discussions made above, it is clear that the MOU at Annexure-A contains an arbitration clause. Dispute has arisen between the parties in relation to the aforesaid MOU. Therefore, it is just and proper to appoint an arbitrator for the resolution of the dispute.

In the result, civil miscellaneous petition succeeds and it is accordingly allowed-in-part. Hon''ble Sri. Justice Chandrashekaraiah, a former Judge of this Court, is requested to enter upon the reference and arbitrate over the dispute and conduct arbitration proceedings at Arbitration Centre in terms of the Arbitration Centre-Karnataka (Domestic and International) Rules, 2012.

Registry is directed to send a copy of this order to the Arbitration Centre, Bangalore, forthwith.