IN THE HIGH COURT OF KARNATAKA AT BENGALURU ON THE 18TH DAY OF DECEMBER 2019 BEFORE THE HON'BLE MR. JUSTICE RAVI MALIMATH AND THE HON'BLE MR. JUSTICE ASHOK S. KINAGI WRIT PETITION NO.29930 OF 2009(GM-RES) BETWEEN:
DR. A VENKATESH SON OF SRI ANNAYAPPA AGED ABOUT 56 YEARS RESIDING AT NO.467 39TH ‘A’ CROSS 5TH BLOCK, JAYANAGAR BENGALURU-560 041. PETITIONER (BY SMT M D ANURADHA URS FOR SRI. C V SUDHINDRA, ADVOCATES) AND:
1. SMT VIJAYAKUMARI BAI WIFE OF LATE B R AMAR SINGH AGED MAJOR RESIDING AT NO 9/1A, 9TH CROSS 3RD MAIN, CHAMARAJPET BENGALURU-560 018.
2. SRI ASHOK KUMAR SINGH SON OF LATE B R AMAR SINGH AGED MAJOR RESIDING AT NO 9/1A, 9TH CROSS 3RD MAIN, CHAMARAJPET, BENGALURU-560 018.
3. SRI B R A CHANDRASHEKAR SINGH SON OF LATE B R AMAR SINGH AGED MAJOR RESIDING AT NO 9/ 1A, 9TH CROSS 3RD MAIN, CHAMARAJPET BENGALURU-560 018.
4. SMT JNANESHWARI SINGH DAUGHTER OF LATE B R AMAR SINGH AGED MAJOR RESIDING AT NO 9/1A, 9TH CROSS 3RD MAIN, CHAMARAJPET BENGALURU- 560 018.
5. SMT RAJESHWARI SINGH DAUGHTER OF LATE B R AMAR SINGH AGED MAJOR NO 9/1A, 9TH CROSS 3RD MAIN, CHAMARAJPET BENGALURU.
6. M/S MATHA MINERALS REPRESENTED BY ITS MANAGING DIRECTOR, SRI B S PUTTARAJU AGED MAJOR NO 13, 60 FEET ROAD VIJAYANAGAR BENGALURU-560 040. … RESPONDENTS (BY MS. ANJANA FOR SMT B V VIDYULATHA - ADVOCATES FOR R1 TO R4;
- R5 AND R6 ARE SERVED AND UNREPRESENTED) THIS WRIT PETITION IS FILED UNDER ARTICLES 226 AND 227 OF THE CONSTITUTION OF INDIA PRAYING TO QUASH THE ORDER DATED 10.08.2009 AS PER ANNEXURE-M AND DISMISS THE APPLICATION OF THE RESPONDENTS FILED AS PER THE ANNEXURE.
THIS WRIT PETITION HAVING BEEN HEARD AND RESERVED FOR ORDERS ON 10.10.2019, COMING ON FOR PRONOUNCEMENT THIS DAY, ASHOK S. KINAGI J, MADE THE FOLLOWING:
O R D E R Being aggrieved by the order dated 10.8.2009 passed by the learned Arbitrator in Civil Miscellaneous Petition No.91 of 2006, this writ petition is filed by the claimant/petitioner.
2. Brief facts leading to the present case are as follows :-
The petitioner had filed an application under Section 11 of the Arbitration and Conciliation Act, 1996 for appointment of Arbitrator to resolve the dispute between the parties which was registered as CMP No.91 of 2006. This Court was pleased to allow the said petition and appointed the Arbitrator to resolve the disputes that arose between the parties vide order dated 23.10.2007.
That the petitioner has filed a claim petition before the Arbitrator seeking relief of declaration that the agreements dated 11.12.1995 and 9.3.2003 are binding on respondent Nos.1 to 6 and their successors; sought recovery of a sum of Rs.12,70,48,937/- under claim Nos.1 and 2 and also for appointment of the petitioner as a consignment agent till 2025 or expiry of lease which ever is later etc.
The respondents 1 to 4 and 6 appeared before the learned Arbitrator and filed statement of objections. The matter was posted for claimant’s evidence. The claimant has filed examination-in-chief. Meanwhile, respondents 1 to 4 and 6 filed two applications under Sections 33, 34, 37(2) of the Karnataka Stamp Act, 1957 seeking to impound the documents sought to be tendered in evidence by the petitioner/claimant and send the originals of the said documents to the Deputy Commissioner for correct assessment of the stamp duty and penalty to be paid on the said documents. The said applications were opposed by the petitioner. The learned Arbitrator after hearing both sides was pleased to allow the said applications and referred the matter to the Deputy Commissioner under Section 37(2) of the Karnataka Stamp Act for the purpose of payment of deficiency in stamp duty. The petitioner being aggrieved by the said order has preferred this writ petition.
3. We have heard learned counsels for the parties.
4. The contention of the petitioner is that the agreement dated 11.12.1995, which is produced as Annexure-B to the petition, is not a ‘bond’ but in fact, it is an ‘agreement’. Further that the learned Arbitrator ought to have considered the contents of the entire document as a whole and in fact, he has committed a gross error in considering only clause Nos.9 and 10 of the instrument. It is also argued that the learned Arbitrator has failed to consider that the said agreement was attested by witnesses and the said document is an ‘agreement’ and not a ‘bond’. The learned counsel for the petitioner has relied upon the judgement of this Court in SIDDANNA GOUDA VS. YALLAPPAGOUDA reported in ILR 2007 KAR 2388.
5. Learned counsel for the respondents 1 to 4 has supported the impugned order and urged that clause Nos.9 and 10 are inclusive of the definition of ‘bond’ as per Section 2(b) of the Karnataka Stamp Act and the impugned order passed by the learned Arbitrator does not call for any interference.
6. The petitioner has produced the document vide Annexure-B. The definition of ‘bond’ i.e. Section 2(ab) of the Karnataka Stamp Act, 1957 reads as under :-
“Section 2(ab) “bond” includes, -
i) any instrument whereby a person obliges himself to pay money to another, on condition that the obligation shall be void if a specified act is performed or is not performed, as the case may be;
ii) any instrument attested by a witness and not payable to order or bearer, whereby a person obliges himself to pay money to another; and iii) any instrument so attested, whereby a person obliges himself to deliver grain or other agricultural produce to another;”
7. A careful reading of the said definition would show that if a person obliges himself to pay money to another, on a condition that the obligation shall be void if a specified act is performed or is not performed, as the case may be, there should be an obligation and there should be a condition that the obligation shall be void if a specific act is performed or not performed. Courts have considered the term ‘bond’ in several judgments. The said instrument includes within the purview of Section 2(ab) of the Karnataka Stamp Act. In the case on hand, admittedly the petitioner’s case is that he was appointed as a sole consignment agent in terms of the agreement dated 11.5.1995 and the appointment is for consideration as a clear speculation was made to give 3.5% commission. Such a payment of commission shall not be less than the deemed turnover of Rs.15 lakh per month. The petitioner has also made a claim on the basis of the said document for the purpose of claim before the Arbitrator. Therefore, what is clear is that the claim is based on the instrument dated 11.12.1995 and the said agreement specifically provides a monthly commission on a minimum monthly sale of Rs.15 lakh at 3.5%. There is no obligation to pay to another in terms of the agreement by way of commission as seen from the document itself. The said document also provides the said commission if not made over, the consignment agent is at liberty to terminate consignment and seek relief against the Principal. Therefore, the two conditions in terms of the definition, in our view, are fully complied with. If the agreement is read in the light of the pleadings of the petitioner’s claim, the said document which has been stamped on Rs.100/- which is insufficient. The claim of the petitioner is based on instrument dated 11.12.1995. If the said document is not properly stamped, the same cannot be tendered in the evidence, until and unless stamp duty and penalty is paid.
8. The difference between the terms ‘bond’ and ‘agreement’ are the that the ‘bond’ is one sided detailing terms of contract to be obeyed by the executant only whereas, the ‘agreement’ is two sided contract with a condition to be abided by on the part of each party to the agreement as mutually agreed. But as per the terms and conditions of the said document, the executant i.e. the petitioner has to obey the terms and conditions of the contract. Thus the said document falls within the purview of inclusive of bond.
9. The learned counsel for the petitioner relied on the judgment of this Court in SIDDANNA GOUDA VS. YALLAPPAGOUDA reported in ILR 2007 KAR 2388. The facts of the case are different. In the said case, the respondent instituted a suit for recovery of money based on deed and the petitioner has failed to repay the amount as demanded. The petitioner has filed an application to direct the plaintiff to pay the duty and penalty treating the suit document as a bond. The trial court rejected the said application holding that the said document is not a bond, and it is a promissory note; that in the said case, there was loan transaction. But in the present case, the nature of transaction is different. Hence, the judgment relied upon by the counsel for petitioner is not applicable to the present case on hand.
10. The learned Arbitrator after considering the entire material on record and also citations relied on by the parties, have rightly allowed the applications and passed the order to send the document to the Deputy Commissioner under Section 37(2) of the Karnataka Stamp Act for the purpose of payment of deficiency in the stamp duty. We do not find any good grounds to interfere in the order passed by the learned Arbitrator.
11. In view of the above said reasons, the contention of the petitioner cannot be accepted that instrument falls within the purview of the definition of agreement.
Hence, we proceed to pass the following :
ORDER Writ petition is dismissed. The order dated 10.8.2009 passed by the learned Arbitrator is confirmed.
Rule is discharged.
Sd/- JUDGE Sd/- JUDGE rs