An award is not an instrument executed in favour of the Government for the purposes of the exemption from stamp duty under the first proviso to section 3 of the Indian Stamp Act, 1899.

T. P. S. CHAWLA, J.

( 1 ) AT varies times, the union of India entered into three contracts with the Delton Catle Company for the purchase of certain goods to be manufactured by the company. Each of the contracts contained an arbitration clause. Disputes arose under all three of them and were refered to aroitration. The refereness were made to one and the same arbitraror. In the course of the arbitration proceedings the parties arrived at an amicabsc settlement in respect of all the dispute. It is conceded that the result of that settlement was in favour the Union of India. One term of the settlement was that :

THE stamp duly of the award will be borne by the Government on 17 July 1973 the arbitrator made a compose and disposing of all the disputes referred to him in accordance with the settlement between the parties. At the end of the award he ai:

"the stamp duty charges payable in respect of this award shall be borne by the Union of India"

( 2 ) SOON afterwards, the present application was moved in this Court by the Union of India for having the award filed and made a rule of the Court. Neither of the parties has objected to the award. When the award came before me for being made a rule 1 noticed that no stamp duty had been paid on it. Counsel for the Union of India contended that the award was exempt from payment of stamp duty by virtue of the first proviso to section 3 of the Indian Stamp Act 1899. As I was not satisfied that this claim of exemption was sound, I ordered notice to issue to Central Government counsel and counsel for Delhi Administration to appear and address me on the point. They have appeared; and, whereas Central Government counsel has argued in support of the claim for exemption, counsel for the Delhi Administration has argued against it. Although counsel for Delton Cable Company was otherwise disinterested in the question, he has, at my request, studied the point. He, too, has argued that the award is not exempt from payment of stam duty.

( 3 ) AN award is chargeable to stamp duty under Article 12 in Schedule I to the Stamp Act. That Article defines an award as:

"any decision in writing by an arbitrator or umpire, not being an award directing a partition, on a reference made otherwise than by an order of the Court in the course of a suit-"

THERE is no doubt, nor was there any suggestion to the contrary, that an award such as the one before me, would otherwise be chargeable with duty as provided by section 3 of that Act, being an instrument of the kind mentioned in Schedule 1. The argument has turned solely on the proper meaning to be placed on the words of the first proviso to that section, which exempts any instrument executed by, or on behalf of, or in. favour of the Government in cases where, but for this exemption, the Government would be liable to pay the duty chargeable in respect of such instrument;

( 4 ) NO one suggested that the award in this case was executed by or on behalf of the Government. These words in the proviso may therefore be eliminated from consideration. It was contended, however, that it was an instrument executed. . . . . . . . . . . . . . . in favour of the Government. Instrument is defined in section. 2 (14) of the Act. It is not necessary to dwell on that definition, because there can be no doubt that an award is an instrument for purposes of the Stamp Act for it is mentioned in Schedule I- The words executed and execution arc defined in section 2 (12) to mean signed and signature . As an award must necessarily be signed by the arbitrator, it is an instrument which is executed .

( 5 ) BUT, it yet remains a question whcther it can appropriately be called an instrument executed in favour of the Government . which is the full phrase in the proviso. When lawyers and laymen speak of a document being executed in favour of a party, they are. not using a term of art. favour according to the dictionaries. imports the showing of kindness. This flavour of the word is lost o

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