R.V.RAVEENDRAN,J. - (1.) Leave granted. Heard.
(2.) The Appellant filed an application under Section 11 of the Arbitration and Conciliation Act, 1996 ('Act' for short) for appointment of an arbitrator. The averments made in the said application in brief were as under: 2.1) On 7.10.2006 the Appellant requested the Respondent to grant a long term lease in respect of two Tea estates (Chandmari Tea Estate and Burahapahar Tea Estate). A lease deed dated 21.12.2006 was executed between the Respondent and Appellant under which Respondent granted a lease to the Appellant for a term of 30 years in regard to the said two Tea estates with all appurtenances. Clause 35 of the said lease deed provided for settlement of disputes between the parties by arbitration. As the estates were hypothecated to United Bank of India, on 27.12.2006, the Respondent requested the said bank for issue of a no objection certificate for entering into a long term lease. The Bank sent a reply dated 17.7.2007, stating that it would issue a no objection certificate for the lease, if the entire balance amount due to it was deposited by 14.8.2007. 2.2) Prior to the execution of the said lease deed, on 29.11.2006 the Respondent had offered to sell the two Tea estates to the Appellant for a consideration of Rupees four crores. The Appellant agreed to purchase them subject to detailed verification. The Appellant wrote a letter dated 27.6.2007 to the Respondent agreeing to purchase the said two Tea estates. 2.3) The Appellant invested huge sums of money for improving the tea estates in the expectation that it would either be purchasing the said estates or have a lease for 30 years. The Respondent however abruptly and illegally evicted the Appellant from the two estates and took over their management in January 2008. The Appellant thereafter wrote a letter dated 28.3.2008 to the Respondent expressing its willingness to purchase the said two estates for a mutually agreed upon consideration and also discharge the liability towards the bank. 2.4) The Appellant issued a notice dated 5.5.2008 calling upon the Respondent to refer the matter to arbitration under Section 35 of the lease deed. The Respondent failed to comply. According to Appellant the dispute between the parties related to the claim of the Appellant that the Respondent should either sell the estates to the Appellant, or permit the Appellant to continue in occupation of the estates for 30 years as lessees or reimburse the amounts invested by it in the two estates and the payments made to the Bank.
(3.) The Respondents opposed the said application. The Respondents contended that the unregistered lease deed dated 21.12.2006 for thirty years was invalid, unenforceable and not binding upon the parties, having regard to Section 107 of Transfer of Property Act 1882 ('TP Act' for short) and Section 17 and Section 49 of the Registration Act, 1908 ('Registration Act' for short); that the said lease deed was also not duly stamped and was therefore invalid, unenforceable and not binding, having regard to Section 35 of Indian Stamp Act, 1899; that Clause 35 providing for arbitration, being part of the said lease deed, was also invalid and unenforceable. The Respondent denied that they had agreed to sell the two tea estates to the Respondent for a consideration of Rupees four crores. The Appellant also denied that the Respondent had invested any amount in the tea estates. It contended that as the lease deed itself was invalid, the Appellant could not claim appointment of an arbitrator under the arbitration agreement forming part of the said deed.;