The matter concerns a Karnataka High Court order passed in 2014.
In December 2014, the High Court held a lease deed with an arbitration agreement between the parties as valid and appointed an arbitrator. In February 2020, a three-judge Supreme Court Bench set aside this order.
The case arose after a charitable trust (respondents) had entered into a lease agreement with the appellants to develop a multi-purpose community hall and office complex, as well as for the renovation of some properties on their land. The agreement, which was for 38 years, was signed in 1996 and contained a clause for a security deposit of ₹55 lakh.
In 2008, a suit was filed by the trust against the appellants, pointing out that only ₹25 lakh had been deposited, while a samadhi in the property had been desecrated. Further, the appellants were accused of trying to file a fresh sale deed in connivance with some of the trust’s members.
The Bengaluru City Civil Court passed an interim order of status quo. Two years after the suit proceedings commenced, the appellants invoked the arbitration clause before the Karnataka High Court in 2013.
Notably, after the orders of a single-judge, the Judicial Registrar noted that the document in question was a lease deed and not an agreement to lease. Therefore, the Registrar directed the appellants to pay a deficit stamp duty and penalty of ₹1,01,56,388.
However, the High Court subsequently ignored the Registrar’s findings and appointed an arbitrator. In 2020, the Supreme Court set aside the High Court’s order.
A curative petition was filed in the matter following the dismissal of a review petition by the Supreme Court in July 2021 on the ground of delay.
Source: Barandbench
