IN THE HIGH COURT OF JUDICATURE AT BOMBAY ORDINARY ORIGINAL CIVIL JURISDICTION COMMERCIAL ARBITRATION PETITION (L) NO.22660 OF 2025 Sachin Corporation & Anr. ….Petitioners Versus Kusuma Bhandary Construction Pvt. Ltd. & Ors. ….Respondents Mr. E.A. Sasi a/w. Bhagyashri Mangale, Tejas Shinde & Arnav Rane, Advocates for Petitioners.

Mr. Nirman Sharma i/b. Dharam & Co., Advocate for Respondents.

CORAM: SOMASEKHAR SUNDARESAN, J.

DATE : JULY 30, 2025 ORAL JUDGEMENT:

Context:

1. This Petition has been filed seeking directions to the Collector of Stamps invoking Section 27 of the Arbitration and Conciliation Act, 1996 (“Arbitration Act”) to expeditiously complete the assessment of stamp duty and penalty as applicable, so that the instruments sought to be relied upon in evidence can be introduced into the proceedings and get examined by the Arbitral Tribunal.

2. Having heard Mr. E.A. Sasi, Learned Advocate representing the Petitioners and Mr. Nirman Sharma, Learned Advocate representing the Respondents, and having examined the record and the law with their assistance, in my opinion, it would be open to the Arbitral Tribunal to compute the value of the stamp duty without having to wait for the Stamp Authorities, in view of the framework envisaged in the Maharashtra Stamp Act, 1958 (“Stamp Act”).

3. While allowing the prayer made in the Petition could appear to be an obvious choice, on reflection, I felt it would be necessary to examine the requirements of law and consider whether, as a matter of law, it is necessary to hold up arbitration proceedings waiting only for instruments to be duly stamped.

4. It is seen that multiple Arbitral Tribunals routinely direct that inadequately stamped instruments be sent to the Stamp Authorities for assessment of stamp duty and penalty regardless of the nature of the instrument and the transactions that the instrument evidences. Pending such assessment and adjudication, arbitration proceedings come to a standstill. This Court is often visited with requests for extension of mandate of Arbitral Tribunals, with the period of the mandate having run out simply waiting for the instrument to be stamped and returned. There are also requests such as the one made in this Petition, purporting to invoke Section 27 of the Arbitration Act since that provision deals with Court assistance in taking evidence.

Maharashtra Stamp Act:

5. Therefore, it would be appropriate to examine the provisions of the Stamp Act, which enable the Arbitral Tribunal to take its own view on instruments being under-stamped; compute the stamp duty amount and penalty payable; direct that such amount be paid; send it over to the Collector of Stamps; admit the instrument into evidence and continue with the arbitration proceedings. Once such amount is paid over to the Collector of Stamps along with the authenticated copy of the instrument, it is for the Collector of Stamps who may then apply his mind to the computation of the value involved, and potentially adopt proceedings for any deficit in the computation of stamp duty by the Arbitral Tribunal.

Section 33 – Stamp Act:

6. First, the provisions of Section 33 of the Stamp Act, which requires Arbitral Tribunals to impound inadequately stamped instruments must be noticed:

33. (1) Subject to the provisions of section 32A, every person having by law or consent of parties authority to receive evidence, and every person in charge of a public office, except an officer of police or any other officer, empowered by law to investigate offences under any law for the time being in force, before whom any instrument, chargeable, in his opinion, with duty, is produced or comes in the performance of his functions shall, if it appears to him that such instrument is not duly stamped, impound the same irrespective whether the instrument is or is not valid in law.

(2) For that purpose every such person shall examine every instrument so chargeable and so produced or coming before him in order to ascertain whether it is stamped