The Supreme Court in the case Bhaskar Raju and Brothers and Anr V. s Dharmaratnakara Rai Bahadur Arcot Narainswamy Mudaliar Chattram & Other Charities and Ors observed and has listed the curative plea moved against its 2020 ruling that had held that an arbitration clause in an insufficiently stamped agreement which cannot be acted upon by court, for open court hearing which was on August 24, 2023.
The bench comprising of Chief Justice DY Chandrachud, Justice Sanjay Kishan Kaul, Justice Sanjiv Khanna, Justice B R Gavai and Justice Surya Kant in the case observed and has issued notice in the matter.
The bench comprising of Justice N V Ramana, Justice B R Gavai and Justice Surya Kant in the case observed and has dismissed the review petition against the said judgement on July 20, 2021.
The Supreme Court in its judgement dated 14.02.2020 observed and has stated that an arbitration clause in an agreement which is required to be duly stamped, if not sufficiently stamped, the arbitration agreement cannot be acted upon by the Court.
In the present case, the plea was filed by one of the parties under Section 11(6) of the Arbitration Act before the High Court of Karnataka. It has also been contended by other party that the lease deed being insufficiently stamped had to be mandatorily impounded as it is stated under section 33 of the Karnataka Stamp Act, 1957 and the same could be relied upon unless proper duty and penalty was paid.
Therefore, the High Court invoked the power as stated under Section 11(6) of the Act, and has appointed an Arbitrator to decide the dispute between the parties.
In an appeal, the Apex Court bench comprising of then CJI SA Bobde, Justice BR Gavai and Justice Surya Kant in the case observed and has noted that admittedly, both the lease deeds are neither registered nor being sufficiently stamped as it is required under the Karnataka Stamp Act, 1957.
The bench in the case observed and has relied upon SMS Tea Estates Private Limited vs. Chandmari Tea Company Private Limited.
Further, the Constitution bench of the Supreme Court in the case observed and has held that arbitration agreement in unstamped contract is unenforceable.