Usha Gupta vs Aerens Goldsouk International Limited

Arbitration Case No. 63 of 2012 (O&M) -1- Arbitration Case No. 64 of 2012 (O&M) Arbitration Case No. 65 of 2012 (O&M) Arbitration Case No. 66 of 2012 (O&M) Arbitration Case No. 67 of 2012 (O&M)

IN THE HIGH COURT OF PUNJAB AND HARYANA AT CHANDIGARH

Arbitration Case No. 63 of 2012 (O&M) Date of Decision : 11.02.2013

Usha Gupta ...Petitioner Versus Aerens Goldsouk International Limited ...Respondent

Arbitration Case No. 64 of 2012 (O&M)

Usha Gupta ...Petitioner Versus Aerens Goldsouk International Limited ...Respondent

Arbitration Case No. 65 of 2012 (O&M)

Usha Gupta ...Petitioner Versus Aerens Goldsouk International Limited ...Respondent

Arbitration Case No. 66 of 2012 (O&M)

Usha Gupta ...Petitioner Versus Aerens Goldsouk International Limited ...Respondent Arbitration Case No. 67 of 2012 (O&M)

Usha Gupta ...Petitioner Versus Aerens Goldsouk International Limited ...Respondent Arbitration Case No. 63 of 2012 (O&M) -2- Arbitration Case No. 64 of 2012 (O&M) Arbitration Case No. 65 of 2012 (O&M) Arbitration Case No. 66 of 2012 (O&M) Arbitration Case No. 67 of 2012 (O&M)

CORAM: HON'BLE MR. JUSTICE A.K. SIKRI, CHIEF JUSTICE

Present: Mr. H.L. Tikku, Senior Advocate, with Mr. Sumeet Goel, Advocate, and Ms. Yashmeet, Advocate, for the petitioner.

Mr. Sachin Puri, Advocate, with Ms. Namitha Mathews, Advocate, Mr. Vinay Dubey, Advocate, Mr. Uday Joshi, Advocate, Mr. Sourabh Goel, Advocate, and Mr. Aman Pal, Advocate, for the respondent. **** A.K. SIKRI, C.J.

In all these five petitions filed under Section 11 of the

Arbitration and Conciliation Act, 1996 (hereinafter referred to as the

Act), not only the parties are common, but even the subject matter is

common. The reason for filing five cases is that there were five

agreements to sell between the same parties, all dated 06.11.2009. By

these agreements, the petitioner had agreed to purchase different

areas of the commercial complex known as 'Gold Souk' situated at

C-Block, Sushant Lok, Phase-I, Gurgaon, Haryana. According to the

petitioner, entire sale consideration payable under these agreements

was duly paid on the execution of the agreement deeds and symbolic

possession of the premises was handed over by the respondents to

the petitioner. The petitioner contends that inspite of receiving the

entire consideration, the respondent has failed to execute the sale

deed of the areas covered by these sale agreements. As these

agreements provide arbitration clause, which is identically worded, Arbitration Case No. 63 of 2012 (O&M) -3- Arbitration Case No. 64 of 2012 (O&M) Arbitration Case No. 65 of 2012 (O&M) Arbitration Case No. 66 of 2012 (O&M) Arbitration Case No. 67 of 2012 (O&M)

that is the reason for filing the present petitions seeking constitution

of Arbitral Tribunal.

2. For the purpose of clarity, it would be necessary to take

note of some more facts having regard to the position that in all these

cases identical developments have taken place after entering into the

agreements dated 06.11.2009. These facts are recorded from

Arbitration Case No. 63 of 2012.

3. In this case, vide agreement to sell dated 06.11.2009, the

respondent had agreed to sell property being GF 2, on the ground

floor, having super area of 942 sq. ft. in the aforesaid 'Gold Souk'

building. Total consideration agreed to was `1,31,88,000/-, which

was paid simultaneously with the entering into the agreement. The

respondent also gave symbolic possession, inasmuch as the premises

were in the possession of M/s AGS Retail Private Limited as tenant,

which is stated to be the sister concern of the respondent herein.

Since the petitioner had paid the entire consideration, according to

her, the only next requirement was registration of the sale deed. For

this purpose, the petitioner repeatedly requested the respondent to

appear before the Sub Registrar, but the respondent failed to do so.

Ultimately, the petitioner served legal notice dated 17.01.2012,

calling upon the respondent to confirm within a period of 10 days

from the receipt of the said notice, the date, when it shall appear

before the Sub Registrar for execution and registration of the sale Arbitration Case No. 63 of 2012 (O&M) -4- Arbitration Case No. 64 of 2012 (O&M) Arbitration Case No. 65 of 2012 (O&M) Arbitration Case No. 66 of 2012 (O&M) Arbitration Case No. 67 of 2012 (O&M)

deed in favour of the petitioner. Inspite of this notice having been

duly served upon the respondent, the respondent failed to comply

with the requisition contained therein. Left with no other alternative,

vide letter dated 18.02.2012, the petitioner invoked the arbitration

clause in the agreement. This clause reads as under:-

"14. That in case of any dispute(s) and difference

(s) arising between the parties in relation to this Agreement to Sell, then the matter will be referred to the arbitration under the provisions of the Arbitration and Conciliation Act, 1996. The venue of the arbitration shall be at Gurgaon, Haryana."

4. Inspite of this legal notice having been served upon the

respondent, the respondent did not respond. In the meantime, the

tenant, namely, M/s AGS Retail Private Limited also stopped paying

the rent which forced the petitioner to terminate the tenancy vide

notice dated 07.12.2011. The said tenant has sent reply dated

04.02.2012 to the petitioner alleging that it has handed over the

possession of the suit property to the respondent herein, which

according to the petitioner, is self-serving untenable statement, as the

tenant and respondent are sisters concern and the only purpose is to

defeat the claim of the petitioner for possession as well as rent and

mesne profits. In any case, that is not the subject matter of the

present petition. Since the petitioner wants sale deed to be executed

and disputes have arisen in this behalf, by means of present petition,

prayer is made for appointing Sole Arbitrator in terms of the Arbitration Case No. 63 of 2012 (O&M) -5- Arbitration Case No. 64 of 2012 (O&M) Arbitration Case No. 65 of 2012 (O&M) Arbitration Case No. 66 of 2012 (O&M) Arbitration Case No. 67 of 2012 (O&M)

aforesaid arbitration clause.

5. The respondent has put in appearance through counsel and

has also filed reply contesting the petition. The execution of

agreements to sell dated 06.11.2009 or receiving entire consideration

under these agreements is admitted. Arbitration clause contained

therein also remains undisputed. The respondent has also not denied

the receipt of various notices pointed out above. It is also not

disputed that the sale deed has not been executed so far. The

respondent had his own version for not executing the sale deed

which need not be gone into in these proceedings, as I am not

concerned with the merits of the dispute but the issue as to whether

Arbitrator is to be appointed or not. However, since maintainability

of the petition is questioned, it is that issue which needs to be

adjudicated upon.

6. On this issue, it is contended that arbitration clause is

contained in an unregistered agreement to sell of which part

performance has been effected. These agreements to sell do not bear

proper stamp duty as well. It is stated that since possession of the

premises in question was given at the time of the execution of the

agreements to sell, the agreements should have been on a stamp duty

which is required for sale deed and the agreements needed to be

registered as well, having regard to the provisions of Section 53A of

the Transfer of Property Act. Maintainability is also challenged on Arbitration Case No. 63 of 2012 (O&M) -6- Arbitration Case No. 64 of 2012 (O&M) Arbitration Case No. 65 of 2012 (O&M) Arbitration Case No. 66 of 2012 (O&M) Arbitration Case No. 67 of 2012 (O&M)

the ground that husband of the petitioner has filed CS (OS) No.

2442 of 2011 titled as Shri M.L. Gupta Vs M/s Aerens Goldsouk

International Limited and others in the High Court of Delhi,

which is inextricably linked with the present cases but non-

maintainability predicated on filing of the civil suit in Delhi was not

argued.

7. I would like to repeat that at the time of making oral

submissions, learned counsel for the respondent Mr. Sachin Puri,

confined his arguments to the inadmissibility of the agreements to

sell and the argument was that the arbitration clause contained

therein cannot be acted upon. Therefore, only question which needs

to be answered is as to whether the agreements to sell suffer from the

aforesaid infirmity, namely, deficiency in the stamp duty and non-

registration thereof and for this reason whether the petitions are not

maintainable.

8. Submission of Mr. Tikku, learned senior counsel appearing

for the petitioner on this aspect was two fold:-

(i) It was only the symbolic possession which was given and

in the absence of actual possession, it cannot be said that the

agreement was partly acted upon and, therefore, the agreements did

not require full stamp duty or compulsory registration.

(ii) In any case, the issue as to whether agreement was

sufficiently stamped or not could be adjudicated upon by the Arbitration Case No. 63 of 2012 (O&M) -7- Arbitration Case No. 64 of 2012 (O&M) Arbitration Case No. 65 of 2012 (O&M) Arbitration Case No. 66 of 2012 (O&M) Arbitration Case No. 67 of 2012 (O&M)

Arbitrator and it was not necessary for this Court to go into that issue

in proceedings under Section 11 of the Act.

9. In so far as the second argument of Mr. Tikku, as noted

above is concerned, the same is squarely answered by the Supreme

Court in M/s SMS Tea Estates Private Limited Vs

M/s Chandmari Tea Co. Pvt. Ltd., 2011(7) Scale 747. That was a

case, where lease deed was executed between the parties, under

which the respondent had granted a lease to the appellant for a period

of 30 years in regard to two tea estates. Clause 35 of the said lease

deed provided for settlement of disputes between the parties by

means of arbitration. The respondent evacuated the appellant from

the two tea estates and took over their management. The appellant

filed petition under Section 11 of the Act for appointment of the

Arbitrator. The respondent took the objection that since the lease was

for a period of 30 years, it was compulsorily registrable. As that was

not done and was not also duly stamped, such an un-registered lease

deed was invalid. The High Court accepted this argument and

dismissed the petition. Against this order, the appellant went to the

Supreme Court. The Supreme Court set aside the order of the High

Court allowing the appeal and remitted the case back to the High

Court for deciding the matter afresh in the light of the principles laid

down by the Supreme Court in the said judgement.

10. The perusal of this judgement shows that the Court had Arbitration Case No. 63 of 2012 (O&M) -8- Arbitration Case No. 64 of 2012 (O&M) Arbitration Case No. 65 of 2012 (O&M) Arbitration Case No. 66 of 2012 (O&M) Arbitration Case No. 67 of 2012 (O&M)

framed three questions which had arisen for consideration and these

are as under:-

(i) Whether an arbitration agreement contained in an unregistered (but compulsorily registrable) instrument is valid and enforceable?

(ii) Whether an arbitration agreement in an unregistered instrument which is not duly stamped, is valid and enforceable?

(iii)Whether there is an arbitration agreement between the appellant and respondent and whether an Arbitrator should be appointed?

11. In so far as the first question is concerned, the Apex Court

took the view that when a contract contains an arbitration agreement,

it is a collateral term relating to the resolution of disputes, unrelated

to the performance of the contract. It is as if two contracts - one in

regard to the substantive terms of the main contract and the other

relating to resolution of disputes - had been rolled into one, for

purposes of convenience. The arbitration clause in the said

agreement was, therefore, an independent agreement. On that

analogy, the Court was of the opinion that even if a deed of transfer

of immovable property is challenged as not valid and not

enforceable, the arbitration agreement would remain unaffected for

the purpose of resolution of disputes arising with reference to the

deed of transfer. The Court referred to the provision of Section 16 of

the Act observing that these principles were given the statutory

recognition in Sub Section 1 of Section 16 thereof, as per which, "an Arbitration Case No. 63 of 2012 (O&M) -9- Arbitration Case No. 64 of 2012 (O&M) Arbitration Case No. 65 of 2012 (O&M) Arbitration Case No. 66 of 2012 (O&M) Arbitration Case No. 67 of 2012 (O&M)

arbitration clause, which forms part of a contract, shall be treated as

an agreement independent of the other terms of the contract".

12. Since arbitration clause is treated as independent agreement

and that does not require registration, as a fortiorari, the Court

further held that an arbitration agreement in an unregistered but

compulsorily registrable document can still be acted upon and

enforced for the purpose of dispute resolution by arbitration.

13. For answering the second question, the Court referred to

the provisions of Section 33 of the Stamp Act, which deals with

examination and impounding of instruments where unregistered but

compulsorily registrable instrument is not duly stamped. Further,

Section 35 of the Stamp Act provides that instrument not duly

stamped is inadmissible in evidence and cannot be acted upon.

Having regard to this provision, the Supreme Court was of the

following opinion:-

"Having regard to Section 35 of Stamp Act, unless the stamp duty and penalty due in respect of the instrument is paid, the Court cannot act upon the instrument, which means that it cannot act upon the arbitration agreement also which is part of the instrument. Section 35 of Stamp Act is distinct and different from Section 49 of Registration Act in regard to an unregistered document. Section 35 of Stamp Act, does not contain a proviso like to Section 49 of Registration Act enabling the instrument to be used to establish a collateral transaction."

14. The Court then laid down the guidelines as to how Arbitration Case No. 63 of 2012 (O&M) -10- Arbitration Case No. 64 of 2012 (O&M) Arbitration Case No. 65 of 2012 (O&M) Arbitration Case No. 66 of 2012 (O&M) Arbitration Case No. 67 of 2012 (O&M)

application under Section 11 of the Act is to be dealt with when it is

accompanied by original arbitration agreement or a duly certified

copy thereof and pointed out that having regard to Section 33 of the

Stamp Act, a duty is cast upon every Court to examine the

instrument in order to ascertain whether it is duly stamped. The

detailed and exhaustive procedure, which is to be adopted, is

contained in para 12, which is reproduced hereinbelow:-

"We may therefore sum up the procedure to be adopted where the arbitration clause is contained in a document which is not registered (but compulsorily registrable) and which is not duly stamped :

(i) The court should, before admitting any document into evidence or acting upon such document, examine whether the instrument/document is duly stamped and whether it is an instrument which is compulsorily registrable.

(ii) If the document is found to be not duly stamped, Section 35 of Stamp Act bars the said document being acted upon.

Consequently, even the arbitration clause therein cannot be acted upon. The court should then proceed to impound the document under section 33 of the Stamp Act and follow the procedure under section 35 and 38 of the Stamp Act.

(iii) If the document is found to be duly stamped, or if the deficit stamp duty and penalty is paid, either before the Court or before the Collector (as contemplated in section 35 or 40 of the Stamp Act), and the defect with reference to deficit stamp is cured, the court may treat the document as duly stamped.

(iv) Once the document is found to be duly Arbitration Case No. 63 of 2012 (O&M) -11- Arbitration Case No. 64 of 2012 (O&M) Arbitration Case No. 65 of 2012 (O&M) Arbitration Case No. 66 of 2012 (O&M) Arbitration Case No. 67 of 2012 (O&M)

stamped, the court shall proceed to consider whether the document is compulsorily registrable. If the document is found to be not compulsorily registrable, the court can act upon the arbitration agreement, without any impediment.

(v) If the document is not registered, but is compulsorily registrable, having regard to section 16(1)(a) of the Act, the court can de-link the arbitration agreement from the main document, as an agreement independent of the other terms of the document, even if the document itself cannot in any way affect the property or cannot be received as evidence of any transaction affecting such property. The only exception is where the respondent in the application demonstrates that the arbitration agreement is also void and unenforceable, as pointed out in para 8 above. If the respondent raises any objection that the arbitration agreement was invalid, the court will consider the said objection before proceeding to appoint an arbitrator.

(vi) Where the document is compulsorily registrable, but is not registered, but the arbitration agreement is valid and separable, what is required to be borne in mind is that the Arbitrator appointed in such a matter cannot rely upon the unregistered instrument except for two purposes, that is (a) as evidence of contract in a claim for specific performance and (b) as evidence of any collateral transaction which does not require registration."

15. In so far as third question is concerned, that pertained to the

facts of the case before the Supreme Court and, therefore, need not

be referred to here. However, general principle laid down in para 13

needs to be taken note of and is, therefore, reproduced as under:- Arbitration Case No. 63 of 2012 (O&M) -12-

Arbitration Case No. 64 of 2012 (O&M) Arbitration Case No. 65 of 2012 (O&M) Arbitration Case No. 66 of 2012 (O&M) Arbitration Case No. 67 of 2012 (O&M)

"Where a lease deed is for a term of thirty years and is unregistered, the terms of such a deed cannot be relied upon to claim or enforce any right under or in respect of such lease. It can be relied upon for the limited purposes of showing that the possession of the lessee is lawful possession or as evidence of some collateral transaction. Even if an arbitrator is appointed, he cannot rely upon or enforce any term of the unregistered lease deed. Where the arbitration agreement is not wide and does not provide for arbitration in regard to all and whatsoever disputes, but provides only for settlement of disputes and differences arising in relation to the lease deed, the arbitration clause though available in theory is of little practical assistance, as it cannot be used for deciding any dispute or difference with reference to the unregistered deed."

16. It is, thus, clear from the reading of this judgement that

arbitration clause contained in this agreement to sell constitutes an

independent agreement. Even if agreement to sell was compulsorily

registrable and is not registered and duly stamped, the arbitration

agreement in that document can be acted upon and enforced for the

purpose of dispute resolution by arbitration. At the same time, no

dispute, which arises out of the said agreement to sell, can be

considered by the Arbitrator, if this agreement was compulsorily

registrable and is not registered and duly stamped because of the

reason that the said agreement to sell cannot be used for deciding any

disputes or differences with reference to the unregistered deed.

Therefore, arbitration clause, though available in theory, is of little Arbitration Case No. 63 of 2012 (O&M) -13- Arbitration Case No. 64 of 2012 (O&M) Arbitration Case No. 65 of 2012 (O&M) Arbitration Case No. 66 of 2012 (O&M) Arbitration Case No. 67 of 2012 (O&M)

practical assistance in that eventuality.

17. Keeping in view the aforesaid principles in mind, I take

note of the arbitration clause 14. It clearly stipulates that the scope of

this arbitration agreement, as per that clause, is to refer the matter to

arbitration i.e. "disputes or differences arising between the parties in

relation to this agreement to sell". Since the Arbitrator, who is to be

eventually appointed is to consider those disputes and differences,

which arise out of the agreement to sell, it becomes important to find

out as to whether agreement to sell was compulsorily registrable and

whether proper stamp duty is paid or not.

18. The argument of learned senior counsel for the petitioner

that the issue as to whether agreement is sufficiently stamped or not

is to be left to the Arbitrator, has to be rejected in view of clear law

laid down by the Supreme Court in M/s SMS Tea Estates Pvt. Ltd.

(supra), which mandates such an issue to be decided in the

application under Section 11 of the Act.

19. This brings me to the issue as to whether agreement in

question compulsorily required registration. Mr. Tikku, learned

senior counsel appearing for the petitioner has submitted that there

was no performance of the agreements as the actual possession of the

premises was not handed over to the petitioner. This submission does

not appear to be correct. The premises in question were given on

lease at the time of entering into sale agreement. Therefore, only Arbitration Case No. 63 of 2012 (O&M) -14- Arbitration Case No. 64 of 2012 (O&M) Arbitration Case No. 65 of 2012 (O&M) Arbitration Case No. 66 of 2012 (O&M) Arbitration Case No. 67 of 2012 (O&M)

symbolic possession could be given, which was in fact given. What

is more important is that the tenant attorned in favour of the

petitioner herein and even started paying rent to the petitioner. Only

because the tenant stopped paying the rent thereafter would be of no

consequence even if it happened at the instance of the respondent or

the respondent and the tenant all sister concerns. Therefore,

provisions of Section 53A of the Transfer of Property Act would

apply in the given case.

20. Notwithstanding the same, this petition cannot be thrown

out on the ground of non-registration of the agreements to sell. By

inserting sub section 1(A) in Section 17 of the Registration Act,

1908, registration of even such a document is made compulsory.

This amendment was made by Act 48 of 2001, which came into

effect from 24.09.2001. However, the effect of non-registration is

also provided in that very provision. To find out that, let me

reproduce provisions of sub section 1(A) of Section 17 hereunder:-

1(A) The documents containing contracts to transfer for consideration, any immovable property for the purpose of Section 53A of the Transfer of Property Act, 1882 (4 of 1882) shall be registered if they have been executed on or after the commencement of the Registration and Other Related Laws (Amendment) Act, 2001 and if such documents are not registered on or after such commencement, then, they shall have no effect for the purposes of the said section 53A."

21. It is clear from the above that if such documents are not Arbitration Case No. 63 of 2012 (O&M) -15- Arbitration Case No. 64 of 2012 (O&M) Arbitration Case No. 65 of 2012 (O&M) Arbitration Case No. 66 of 2012 (O&M) Arbitration Case No. 67 of 2012 (O&M)

registered, then they have no effect for the purposes of Section 53A

of the Transfer of Property Act. That is limited purpose for which

this document will not have effect. In the present case, the petitioner

is not enforcing her right under Section 53A of the Transfer of

Property Act. Instead, she wants specific performance of these very

agreements, as according to her, the respondent is not coming

forward to execute the sale deed and registration thereof. In essence,

the petitioner seeks to do the same in respect of which the respondent

is rasing preliminary objection, namely, registration of this document

by way of proper sale deed.

22. To give complete effect to the provisions of Section 1(A),

the Legislature also added proviso to Section 49 of the Registration

Act, 1908. Section 49 of the Registration Act deals with the effect of

non-registration of the documents required to be registered which,

inter alia, provides that such a document would not be received as

evidence of any transaction affecting such property or conferring

such power. At the same time, this proviso amply clarifies that such a

document would still be admissible as evidence of a contract in a suit

for specific performance, as is clear from the reading of this proviso.

23. Since there is an arbitration clause in the agreement to sell,

which is independent agreement and because of that arbitration

clause the petitioner wants the relief of specific performance through

means of arbitration and cannot file the suit, it is that claim which is Arbitration Case No. 63 of 2012 (O&M) -16- Arbitration Case No. 64 of 2012 (O&M) Arbitration Case No. 65 of 2012 (O&M) Arbitration Case No. 66 of 2012 (O&M) Arbitration Case No. 67 of 2012 (O&M)

made by the petitioner of which she wants adjudication through the

Arbitral Tribunal.

24. The aforesaid provision has received the attention of

various High Courts and is interpreted in the manner indicated

above. In A. Rama Rao and others Vs Raghunath Patnaik and

others, AIR 2002 Orissa 77, a Division Bench of the Orissa High

Court precisely dealt with the said issue in the following manner:-

"Mr. Mukherjee referred to Section 35 of the Stamp Act and stated that no instrument chargeable with duty shall be admitted in evidence for any purpose by any person having by law or consent of parties authority to receive evidence, unless such instrument is duly stamped.

The document Ext-1 is an unregistered agreement for sale. On the basis of the said document, no right or liability is created and/or transferred, limited, extended, extinguished or recorded. Thus, Ext-1 in our conscious opinion does not satisfy the definition of "instrument" which required to be stamped.

Section 17 of the Registration Act enumerates the category of documents which require registration. Section 17(1)(b) of the Act provides for registration of non- testamentary instruments which purports or operate to create, declare, assign, limit or extinguish, whether in present or in future, any right, title or interest, whether vested or contingent, of the value of one hundred rupees and upwards, to or in immoveable property. Section 17(2)(v) of the Act stipulates that nothing in Clauses (b) and

(c) of Sub- section (1) of Section 17 applies to any document not itself creating, declaring, assigning, limiting or Arbitration Case No. 63 of 2012 (O&M) -17- Arbitration Case No. 64 of 2012 (O&M) Arbitration Case No. 65 of 2012 (O&M) Arbitration Case No. 66 of 2012 (O&M) Arbitration Case No. 67 of 2012 (O&M)

extinguishing any right, title or interest of the value of one hundred rupees and upwards to or in immoveable property, but merely creating a right to obtain another document which will, when executed, create, declare, assign, limit or extinguish any such right, title or interest. An agreement for sale of immoveable property is a non-testamentary instrument which does not create, declare, assign, limit or extinguish, any right, title or interest, whether vested or contingent in immoveable property. Section 17(2)(v) makes the position clear that a document not itself creating a right in immoveable property of the value of Rs. 100/- and upwards, but merely creating a right to obtain another document which will, when executed, create any such right need not be registered. It has been held in the case of Narasimhaswamy v. Venkatalingam MANU/TN/0075/1927 (FB) that a document which does not by itself convey property but merely gives a right to call for another document does not require registration. Explanation to Section 17(2) of the Act makes it clear that even an unregistered document affecting immoveable property may be received as an evidence of contract in a suit for specific performance. This explanation was added by Section 2 of the Indian Registration (Amendment) Act, 1927. The explanation states that a document purporting or operating to effect a contract for the sale of immoveable property shall not be deemed to require or ever to have required registration by reason only of the fact that such a document contains a recital of the payment of any earnest money or of the whole or of any part of the purchase money.

Therefore, the conclusion is irresistible that the suit for specific performance can be based on an unregistered agreement. Thus, a cumulative reading of Section 17(2)(v) and the proviso to Section 49 of the Arbitration Case No. 63 of 2012 (O&M) -18- Arbitration Case No. 64 of 2012 (O&M) Arbitration Case No. 65 of 2012 (O&M) Arbitration Case No. 66 of 2012 (O&M) Arbitration Case No. 67 of 2012 (O&M)

Registration Act leads to an irresistible conclusion that an agreement for sale of immoveable property even though not registered, can form the basis for specific performance. The Hon'ble Single Judge was, thus, right in holding that Ext-1 can be enforced. The decision of this Court reported in MANU/OR/0093/1964 also supports the above view.

We are, therefore, not agreeable to accede to the submissions advanced by Mr. Mukherjee and negative the argument that the agreement (Ext-1) being unregistered and unstamped, cannot be accepted nor can be enforced."

25. Same is the thinking of the Andhra Pradesh High Court

depicted in Javvadi Koteswara Rao Vs Sonti Sambasiva Rao,

2004(1) APLJ 186, as is clear from the following discussion therein:-

"11. The learned Counsel for the respondent drew the attention of this Court to a judgment of this Court in Dadi Reddi Sivanarayana Reddy v. Kasi Reddi Chinnamma, MANU/AP/0070/2001 : 2001 (1) ALD 349, wherein a learned Single Judge of this Court while considering the scope of Sections 17 and 49 of the Act categorically laid down that when there is a description in an agreement of sale that the vendor shall execute another document at the office of the Sub-Registrar as and when required, it is an indication that the document by itself did not conclusively extinguish rights in vendor, therefore, by virtue of proviso to Section 49 the said document does not require registration.

12. In the light of the provisions of the Act and the judgments referred supra, I am of the view that the agreement of sale dated 18-8-1999 does not require registration and it can be marked on behalf of the Arbitration Case No. 63 of 2012 (O&M) -19- Arbitration Case No. 64 of 2012 (O&M) Arbitration Case No. 65 of 2012 (O&M) Arbitration Case No. 66 of 2012 (O&M) Arbitration Case No. 67 of 2012 (O&M)

plaintiff in the suit which was filed for specific performance of the said agreement of sale. The Lower Court was therefore right in admitting the document for the purpose of marking on behalf of the plaintiff. I do not find any infirmity or illegality in the impugned order and it needs no interference."

26. These petitions are accordingly allowed. Since both the

parties are from Delhi, it would be convenient to both of them if the

arbitration proceedings are conducted in Delhi. Keeping in view this

consideration, I appoint justice R.C. Lahoti, Former Chief Justice of

India as the sole arbitrator who shall adjudicate upon the disputes

between the parties arising out of all these agreements. He shall

determine his own fee.

27. Petitions disposed of in the aforesaid terms.

(A.K. SIKRI) CHIEF JUSTICE 11.02.2013 Amodh