THE HON'BLE SRI JUSTICE K.C. BHANU CIVIL REVISION PETITION NO.4711 OF 2010 ORDER: This revision under Article 227 of the Constitution of India is directed against the order, dated 20-07-2010 in I.A.No.1791 of 2010 in O.S.No.133 of 2010 on the file of the II Additional Chief Judge, City Civil Court, Hyderabad, whereunder and whereby the application filed by the petitioner-defendant under Section 8 of the Arbitration and Conciliation Act, 1996 (for short ‘the Act’) to refer the dispute involved in the suit to arbitrator as per clause 21 of unregistered lease deed, dated 19-12-2005 entered between both the parties, was dismissed. 2. Learned counsel appearing for the revision petitioner- defendant contended that under Section 8 of the Act, it is imperative on the Court to refer the matter to the arbitrator at any stage of the case, but that has not been properly exercised by the trial Court, that the unregistered lease deed, dated 19-12-2005 is not in dispute and therefore, it can be used for collateral purpose under Section 49 of the Registration Act, 1908 and hence, he prays to allow the revision. 3. On the other hand, learned counsel appearing for the respondent-plaintiff contended that since stamp duty and penalty has not been paid, question of looking into the document even for arriving at prima facie decision may not arise, that the trial Court rightly dismissed the application and the said order needs no interference by this Court. 4. The factual matrix is not in dispute. The unregistered lease deed, dated 19-12-2005 executed by the party is also not in dispute. It is also not in dispute that under clause 21 of the lease deed, in case of dispute arises between the parties, the same shall have to be referred to the arbitrator. 5. Learned counsel appearing for the revision petitioner placed reliance on the decision of Delhi High Court in CS (OS) 192 of 2009 and I.A. 5332 of 2009 between ASPIRE INVESTMENTS PRIVATE LTD., and NEXGON EDUSOLUTIONS PRIVATE LTD., wherein it was held thus: “Section 49 of the Registration Act provides that any document which requires registration in Section 17 shall not be received as evidence of any transaction affecting a property which is part of such an unregistered document save and except where it is placed as evidence of any ‘collateral’ transaction which is not required to be effected by a registered instrument. The word collateral, by itself would mean something which is not inconsistent with or directly connected with the principal obligation or issue in dispute. Thus, it is related to is complimentary accompanying as a co-ordinate. The word transaction in the present context would mean any act or agreement between or among parties whereby a cause of action or alteration of legal rights occur. There is no doubt that the transaction in issue is an agreement to arbitrate between the plaintiff and the defendant. The arbitration agreement is not inconsistent with but on the other hand, is both complimentary and related to the present contract. If that be so, then surely, it would fall with the expression ‘collateral’ transaction.” 6. He also relied on a decision reported in AMBATI DURGAMMA AND OTHERS V PERICHERLA REGAPAHIRAJU AND OTHERS [1], wherein it was held thus: “It has been vehemently urged by learned counsel for the petitioners that exs. A-1, a-12 and a-13 are unregistered lease deeds and therefore they have no evidentiary value. A question came up for consideration before a division bench of this court as to whether unregistered lease deed is admissible in evidence for collateral purpose in A. Kishore @ Kantha Rao v. G. Srinivasulu wherein it has been held that an unregistered lease deed which is compulsorily registrable can be used for the purpose of proving the nature of possession. In view of the settled position of law that though exs. A-1, a-12 and a-13 are unregistered lease deeds they can be used for the purpose of proving the nature of possession of r-1 over the land.” 7. He also relied on a decision reported in INTOUCH TECHONOLOGIES (INDIA) [PVT) LTD., NEW DELHI V AISHWARYA BUILDERS, HYDERABAD [2], wherein it was held thus: “A reading of the contents of the arbitration clause in the lease agreement shows that the parties have agreed to the procedure contemplated under sub-section (3) of Section 11 of the Act. In that, in the event of any disputes arising between them, as mentioned therein, each would nominate their Arbitrator, who in turn would appoint an umpire. Admittedly, in the instant case, on the alleged removal of fixtures by the respondent and when the respondent failed to refund the security deposit on the demand made by the applicant, the applicant vide legal notice dated 2-6-2004 while nominating their Arbitrator called upon the respondent to nominate their Arbitrator. The respondent having received the said notice, vide their reply notice dated 12-6-2004, denied existence of any arbitrable disputes, and failed to nominate their Arbitrator, within thirty days. It is required to notice that if the procedure under sub-section (3) of Section 11 of the Act applies, the provisions of clause (a) of sub-section (4) of section 11 of the Act, come into play, and as per which, if a party fails to appoint an arbitrator within thirty days from the receipt of a request to do so from the other party, the appointment shall be made, upon request of a party, by the Chief Justice or any person or institution designated by him. Inasmuch as the respondent having received the notice failed to nominate their Arbitrator within thirty days, and on the other hand, in their reply notice denied existence of any arbitration disputes, it becomes incumbent for this Court to appoint on Arbitrator.” 8. He also relied on a decision reported in HNDUSTAN PETROLEUM CORPORATION LTD., V M/S PINKCITY MIDWAY PETROLEUMS [3], wherein it was held thus: “This Court in the case of P. Anand Gajapathi Raju and Ors. v. P. V. G. Raju (Dead) and Ors.1 has held that the language of section 8 is peremptory in nature. Therefore, in cases where there is an arbitration clause in the agreement, it is obligatory for the court to refer the parties to arbitration in terms of their arbitration agreement and nothing remains to be decided in the original action after such an application is made except to refer the dispute to an arbitrator. Therefore, it is clear that if, as contended by a party in an agreement between the parties before the civil court, there is a clause for arbitration, it is mandatory for the civil court to refer the dispute to an arbitrator. In the instant case the existence of an arbitral clause in the agreement is accepted by both the parties as also by the courts below but the applicability thereof is disputed by the respondent and the said dispute is accepted by the courts below Be that as it may, at the cost of repetition, we may again state that the existence of the arbitration clause is admitted. If that be so, in view of the mandatory language of section 8 of the Act, the courts below ought to have referred the dispute to arbitration” 9. There cannot be any dispute that when there is an arbitration clause in the lease deed with regard to referring the matter to the arbitrator under Section 8 of the Act, the same shall have to be referred to the arbitrator. The basic question is whether the contents of the document can be looked into at this stage even though it is admitted by both parties. It is not in dispute that lease deed pertaining to immovable property is compulsorily registerable document in view of Section 17 (1) of the Registration Act, 1908. Admittedly, the lease deed is not registered. The lease deed in which both parties are relying is an instrument within the meaning of Section 2 (14) of the Indian Stamp Act, 1899. There cannot be any dispute that if a document is in the nature of ‘instrument’ under Section 2 (14) of the Indian Stamp Act, 1899 then, it requires stamp duty and penalty under Section 35 of the Act. Unless stamp duty and penalty is paid, the document cannot be used for any purpose by any person even for collateral purpose. On this aspect, it is pertinent to refer to a decision reported in AVINASH KUMAR CHAUHAN V VIJAY KRISHNA MISHRA [4], wherein it was held thus: “SECTION 35 of the Act, however, rules out applicability of such provision as it is categorically provided therein that a document of this nature shall not be admitted for any purpose whatsoever. If all purposes for which the document is sought to be brought in evidence are excluded, we fail to see any reason as to how the document would be admissible for collateral purposes” When stamp duty and penalty has not been paid, question of looking into the contents of the document even for prima facie purpose does not arise. Therefore, the trial Court rightly dismissed the application and absolutely, there are no grounds to interfere with the same. 10. Accordingly, the Civil Revision Petition is dismissed. No order as to costs. ________________ K.C. BHANU, J DATED: 12-09-2011 Hsd [1] 2005 (1) ALD 607 [2] 2005 (1) ALD 602 [3] AIR 2003 SC 2881 [4] AIR 2009 SC 1489