IN THE HIGH COURT OF DELHI AT NEW DELHI
Sachin Datta, J.
Splendor Landbase Ltd. – Appellant
Versus
Aparna Ashram Society & Anr. – Respondents
Arb.P. 366 of 2021 and IA Nos.10176 of 2021, 18015 of 2022, 18261 of 2022, 18840 of 2022, 19304 of 2022, 20490 of 2022, 7862 of 2023, 12592 of 2023, Rev. Pet.301 of 2022
Decided On : 22-08-2023
Unstamped Arbitration Agreements - Indian Stamp Act, 1899 - Summary
Fact of the Case:
The court considered the issue of unstamped arbitration agreements in light of the N.N. Global judgment and identified possible issues for consideration.
Finding of the Court:
The court delineated the procedure and modalities to be followed while dealing with petitions under Section 11 of the Act involving unstamped or insufficiently stamped arbitration agreements.
Issues: The issues identified included the filing of original agreements, payment of deficient stamp duty, time-bound directions to the Collector of Stamps, and instruments executed in one state but relied upon in another state.
Ratio Decidendi: The court emphasized the mandatory impounding of unstamped agreements, the requirement to file the original agreement, and the delegation of tasks to court officers for examination and impounding of instruments.
Final Decision: The court directed the individual consideration and further directions on the identified issues on a specified date.
JUDGMENT
Sachin Datta, J.
1. These matters have been listed together inasmuch as the relevant arbitration agreements on the basis of which these petitions have been filed are admittedly unstamped and/or have been incorporated in an instrument/agreement which is unstamped. As such, these have to be dealt with in the light of, and in consonance with the judgment rendered by a Constitution Bench of the Supreme Court in the case of N.N. Global Mercantile (P) Ltd. v. Indo Unique Flame Ltd, (2023) 7 SCC 1: 2023 SCC OnLine SC 495: (hereinafter referred to as `N.N. Global').
2. In N.N. Global, it has been, inter alia, held as under:
"110. Section 11(6-A) cannot be understood as merely predicating for an arbitration agreement existing literally. This means that the mere existence of the arbitration agreement for all intents and purposes on the exterior purporting to project a contract duly executed, may in certain situations, be insufficient under Section 11. If for reasons such as it being unstamped when it is clearly required to be stamped, then it cannot be said to be a case where the agreement exists for it would be no existence in law. While we agree, the Court must be careful in selecting contracts where an arbitration agreement which is produced is not to be acted upon for the reason that it does not exist in law, all we hold is that an arbitration agreement, which is unstamped, does not exist and an unstamped contract, containing an arbitration agreement, would not exist as it has no existence in law.
xxx xxx xxx
141. The interplay of the Evidence Act, the Stamp Act and the Registration Act is to be understood as follows:
141.1. In regard to an instrument, which is executed in India and which is liable to be stamped, then, stamping has to take place before or at the time of the execution of the instrument. It is after the instrument is stamped that it can be presented for registration. Section 17 of the Registration Act provides for documents, which are compulsorily registrable. Section 18 permits registration of other documents at the option of the persons concerned. An instrument, which is registered, necessarily involves, it being duly stamped before it is so registered. This result is inevitable, having regard to the impact of Section 35 of the Stamp Act. In fact, an instrument, which is not duly stamped and which is produced before the Registering Authority, would be liable to be impounded under Section 33 of the Stamp Act.
141.2. What Section 74 read with Section 76 of the Evidence Act provides for is, the issuance of certified copies. Certified copies can be issued only in respect of public documents. Section 62 inter alia of the Evidence Act defines "primary evidence" as the document itself produced for the inspection of the court. Section 63 of the Evidence Act defines "secondary evidence" as meaning and including, inter alia, "certified copies under the provisions hereinafter contained". The provisions "hereinafter contained" referred to in Section 63 must be understood as Section 74 read with Section 76. A certified copy can be given, no doubt, of "public records kept in any State of private documents". Thus, if a sale deed between two private parties comes to be registered, instead of producing the original document, a certified copy of the sale deed, may qualify as secondary evidence and a certified copy can be sought for and issued under Section 76 of the Evidence Act. The expression "public records kept in any State of a private document" in Section 74 is not confined to documents, which are registered under the Registration Act. A private document, which is kept as a public record, may qualify as a public document. What is important is, to bear in mind that in view of Section 33 of the Stamp Act, an instrument, which is not duly stamped, if it is produced before any public office, it would become liable to be impounded and dealt with as provided in the Stamp Act.
141.3. Let us assume a case where a contract, which c
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The main legal point established is the mandatory impounding of unstamped arbitration agreements and the delineation of the procedure to be followed in dealing with such agreements.
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