Sahidullah Munshi, J. - (1.) This appeal under Sec. 37(1)(a) of the Arbitration and Conciliation Act, 1996 (hereinafter referred to as 'the Arbitration Act') arises from an order dated 24th September, 2015, passed by the Hon'ble Single Judge in an application under Sec. 9 of the Arbitration Act, filed by the respondent (Srei Equipment Finance Ltd.) being A.P. No. 1974 of 2014 (Srei Equipment Finance Ltd. - v/s. - Saumya Mining Ltd.). While considering the respondent's application under Sec. 9 of the Arbitration Act an objection was raised by the appellant herein that if an arbitration agreement contains a clause for hypothecation the same could not be relied upon unless stamped as per Article 40(b) of Schedule IA of the Indian Stamp Act, 1899. The Hon'ble Single Judge answered in the negative and held that - "Ordinarily such aspect of the matter does not detain an interlocutory application as Sec. 35 of the Stamp Act applies when a document is tendered in evidence. None -the -less, the objection and the desirability of an adjudication thereon can wait till appropriate measures are taken. There is no dispute that the agreement covers 48 assets, of which two have been surrendered by the borrower. The finance company claims that a sum in excess of Rs. 14.59 crore is due only on account of defaulted instalments. It is necessary that receivers be immediately appointed to take possession of the assets since a huge amount remains due and the respondent's response on such issue is the insufficiency of the stamp affixed to the relevant agreement. Mr. Debdutta Basu, Adv., Mr. Aritra Ghose, Adv., Mr. Siddhyajyoti Biswas, Adv., Mr. Tapas Samaddar, Adv. Are appointed receivers to act severally and not jointly to take possession of the 46 assets. The receivers will meet upon the whereabouts of the assets being disclosed by the respondent to advocate for the petitioner within a week from date, whereat the receivers will decide, based on the location of the assets, which of the receivers will proceed to take possession of which asset. The receivers will not embark on their journey to take possession of the assets for a period of a fortnight from date. If the respondent pays a sum of Rs. 7.5 crore within a fortnight from date, the receivers will proceed to make an inventory of the 46 assets but not take possession thereof. If the respondent pays a sum of Rs. 3.75 crore within a fortnight from date, the receivers will take possession of 23 of the 46 assets, the choice of which assets to take possession of being left to the finance company."
(2.) It is the contention of the appellant that the Hon'ble Single Judge ought not to have invoked jurisdiction under Sec. 9 of the Arbitration Act since the arbitration agreement could not have been relied upon, the same not being sufficiently stamped. It is the contention of the appellant that the clause in the agreement is in the nature of mortgage and the agreement should have been treated to be a mortgage deed and required proper stamping in accordance with Article 40(b) of the Stamp Act. Rather the same ought to have been impounded and dealt with by the Hon'ble Single Judge in accordance with Ss. 35 and 38 of the Stamp Act. It is the contention of the appellant that - "a) Hypothecation deed or an instrument consisting of an express hypothecation clause ought to be treated as a mortgage deed as defined under Sec. 2(17) of the Stamp Act; b) The document should have been stamped within the meaning of Article 40(b) of Schedule IA under Bengal Stamp (Amendment) Act, 1922 and the Indian Stamp (Bengal Amendment) Act 1935 read with Ss. 3 and 2(17) of the Stamp Act; c) Sec. 35 of the Stamp Act provides that no instrument chargeable with duty shall be admitted in evidence for any purpose by any person having by law or consent of party 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; d) Hon'ble Single Bench has committed an error by not examining, impounding and forwarding the agreement to the Collector in terms of Ss. 33, 35 and 38 of the Stamp Act; e) Payment of stamp duty of Rs. 80/ - (Rupees Eighty) only, is insufficient stamp on the said agreement."
(3.) In support of his submission learned counsel for the appellant has placed reliance on the provisions of Sec. 2(17) of Indian Stamp Act, 1899 to show the definition of 'mortgage deed'. He has also placed reliance on Article 40(b) of Schedule IA of the Stamp Act. Both the aforesaid provisions are reproduced below : ;