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1980 Supreme(J&K) 16

IN THE HIGH COURT OF JAMMU AND KASHMIR AT JAMMU
A.S. Anand, J.
Behari Lal Suri - Appellant
Versus
Executive Engineer - Respondent
Arbitration Application No. 85/1974
Decided On : 07 March, 1980

Advocates Appeared:
Advocate For Appellant: L.K. Sharma
Advocate For Respondent: S.D. Sharma

An unstamped award cannot be acted upon or admitted into evidence but becomes admissible in evidence after the defect is cured under section 35 of the Stamp Act and can be acted upon thereafter.

Headnote:

ARBITRATION - AWARD - STAMP DUTY - UNSTAMPED AWARD - ADMISSIBILITY IN EVIDENCE - AWARD CAN BE ADMITTED IN EVIDENCE ON PAYMENT OF STAMP DUTY AND PENALTY UNDER SECTION 35 OF THE STAMP ACT.

Fact of the Case:

An arbitration award was challenged on the ground that it was not on a stamp paper. The petitioner contended that the award was inadmissible in evidence and could not be acted upon. The respondent argued that the court could admit the award in evidence on payment of stamp duty and penalty or remit the award to the arbitrator for re-writing the same on a stamp paper.

Finding of the Court:

The court held that an unstamped award cannot be received in evidence by the court nor can it be acted upon but the Court is competent to impound such an instrument and to send it to the Collector with a certificate in writing stating the amount of duty and penalty levied thereon and after the defect is cured to act upon the Award.

Issues: 1. Whether the award is not properly stamped ? 2. Whether the award is invalid as the Arbitrator has mis-calculated the items, while multiplying the same ? 3. Whether the Arbitrator has committed misconduct while rejecting certain items ?

Ratio Decidendi: The court relied on the Supreme Court judgment in Rikhabdas V. Ballabhdas (AIR 1962 SC 551) and held that want of stamp is a defect de hors the award and does not make it invalid. The court also relied on the Stamp Act and held that an unstamped award can be admitted in evidence on payment of stamp duty and penalty under Section 35 of the Stamp Act.

Final Decision: The court impounded the award and directed the respondent to make up the deficiency in stamp duty and penalty within two weeks. The court also directed that an authenticated copy of the document be sent to the Collector Jammu for records.

1. Certain disputes having arisen between the petitioner and the respondent, the same were referred to the arbitration of Pir Zada Ghulam Nabi Commissioner and Secretary to Government Housing and Urban Development Department, Jammu, and Kashmir in terms of an agreement entered into between the parties. The Arbitrator entered upon the reference and published his award. The petitioner thereafter filed an application under sections 14/17 of the Arbitration Act requesting for a direction to the arbitrator to file the award in court. A notice was accordingly issued and the arbitrator filed the award in court. The parties took notice of the filing of the award on 31-3-1975. The petitioner thereafter filed an application under section 33 of the Arbitration Act praying that the award be declared as invalid and non existent in the eye of law on a number of grounds. The respondent resisted the application and filed his objections to the application under section 33 of tie Arbitration Act. He requested that the award be made a rule of the court.

2. On 11-8-1975 following issues were framed :

1. Whether the award is not properly stamped ? If so, what is its effect ? OPP

2. Whether the award is invalid as the Arbitrator has mis-calculated the items, while multiplying the same ? OPP

3. Whether the Arbitrator has committed misconduct while rejecting certain items ? OPP

4. Relief.

3. An application was filed by the respondent on April 5, 1076, stating therein that he may be permitted to raise an additional objection in the nature of a preliminary objection to the maintainability of the petition. Vide order of the court dated 17-4-1976, following additional issue in the nature of a preliminary issue was framed :

Is the application filed by the petitioner barred by time? OPR.

The petitioner only appeared as his own witness and did not lead any other evidence. The respondent, on the other hand, did not lead any evidence at all.

ISSUE NO. 1

4. A perusal of the award, dated 12th Sept. 1974 shows that the same has been prepared on a plain paper. It is not disputed by the parties and rightly so, that the award of the arbitrator was required to be made on a stamp paper. Section 17 of the Stamp Act provides that instruments chargeable win duties and executed by any person in India are required to be stamped before or at the time of their execution. According to learned counsel for the petitioner the award not being on a stamp paper is inadmissible in evidence and as such cannot lie acted upon for any purpose whatsoever. On the other hand, learned Addl. Advocate General appearing for the respondent, submits that though the award is not on a stamp paper, that the Court can admit it in evidence on payment of stamp duty and penalty or in the alternative remit the award to the arbitrator for re-writing the same on a stamp paper and that it cannot be declared invalid on this account. Reliance in this respect is placed on a judgment of the Judicial. Commissioner of Nagpur in Ram Kumar Vs. Kushal Chand Ganesh Dass and others AIR 1928 Nagpur 166, where the Court, after hole rig that the award in question was unstamped and had therefore, no valid existence, remitted the same to the arbitrator under para 14 Schedule 2 CPC (corresponding to Section 16 of tie Arbitration Act) for re-writing and engrossing it on a stamp paper.

5. So far as the question of remitting the award to tie arbitrator u/s 16 of the Arbitration Act is concerned, tie matter is concluded by the Supreme Court Judgment reported in AIR 1962 SC 551 wherein the proposition of law as laid down by the Nagpur High Court (Supra) was overruled, in the course of judgment, the court laid down the following law on the point:

Under S. 18 an award can be remitted to the arbitrators for reconsideration. When it is remitted, for re-writing it on a stamped paper, it is not remitted for reconsideration. Reconsideration by the arbitrators necessarily imports fresh consideration of matters already considered by the n. It foll


















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