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HIGH COURT OF DELHI
RELIGARE FINVEST LIMITED – Appellant
Versus
EDISONS INFRAPOWER AND MULTIVENTURES PVT. LTD. AND ANR. – Respondent
ARB. A. (COMM.)-9/2021
The Court held that the Loan Agreements were not chargeable to Stamp Duty in Mumbai. The Court held that the Loan Agreements were sufficiently stamped under Article 5(c) of Schedule 1A of the ISA as applicable to Delhi.
Headnote:
STAMP DUTY - ARBITRATION - JURISDICTION - [KEYWORD] - [KEYWORD] - [KEYWORD]
Fact of the Case:
Zee Companies approached Religare for loan facilities to consolidate promoters’ interest in their group companies. Separate Loan Agreements were entered into between Religare and Zee Companies. Zee Companies failed to repay their debt on time, constraining Religare to issue notices invoking arbitration. A common Sole Arbitrator was appointed and four separate arbitration proceedings ensued. Zee Companies filed applications in each of the proceedings, challenging the scope of proceedings and jurisdiction of the Arbitrator under Section 16 of the A&C Act. It was contended that, as the Loan Agreements were first executed in Mumbai, they should have been stamped in accordance with Section 24 read with Entry 5(h)(A)(iv)(b) of Schedule I of the Maharashtra Stamp Act, 1958 [hereinafter, “MSA”] at the rate of 0.2%, and since the Loan Agreements are insufficiently stamped, they are unenforceable. Thus, unless deficient Stamp Duty is paid, the proceedings should be terminated.
Finding of the Court:
The Court held that the Loan Agreements were not chargeable to Stamp Duty in Mumbai. Further, even if Stamp Duty has been affixed as per the MSA, it does not ipso facto, under law, render the instruments amenable to the MSA. A party’s understanding would not preclude it from disputing/contesting the question of chargeability of Stamp Duty under law. Under Section 19 of MSA, an instrument would be chargeable to duty in Maharashtra only when it is received in the State and not otherwise. The documents with signatures of only Zee Companies were not ‘instruments’ to attract the said provision.
Issues: 1. Whether the Loan Agreements were chargeable to Stamp Duty in Mumbai?2. Whether the Loan Agreements were sufficiently stamped under Article 5(c) of Schedule 1A of the ISA as applicable to Delhi?
Ratio Decidendi: 1. The Court held that the Loan Agreements were not chargeable to Stamp Duty in Mumbai. The Court relied on the definition of “chargeable” under Section 2(d) of the MSA, which states that an instrument is “(…) chargeable under the persons executed the instrument at different times,first executed;”. The Court held that the words “first executed” are a function of the expression “when” such instrument was executed preceding it, and not the word “where”. The emphasis is on the time of execution of the document and not the place.2. The Court held that the Loan Agreements were sufficiently stamped under Article 5(c) of Schedule 1A of the ISA as applicable to Delhi. The Court held that the Loan Agreements were executed in Delhi, and are hence, not chargeable under the MSA, and are instead amenable to Stamp Duty under Article 5(c) of Schedule I-A of the ISA as applicable to Delhi.
Final Decision: The impugned Order is set aside to a limited extent –qua findings rendered apropos applicability of the MSA. The matter is remanded back to the Arbitral Tribunal for issuing fresh directions in light of the afore-said findings. The learned Arbitrator shall examine if the instruments are sufficiently stamped under Article 5(c) of Schedule 1A of the ISA as applicable to Delhi, and issue appropriate directions.
ARB. A. (COMM.) 6/2021 & connected matters
Page 1 of 21
$~11 to 14
*
IN THE HIGH COURT OF DELHI AT NEW DELHI
Date of Decision: 10th January, 2022
+
ARB. A. (COMM.) 6/2021 & I.A. 2614/2021
RELIGARE FINVEST LIMITED
….. Appellant
Through:
Mr. Ashish Dholakia, Senior Advocate
with Mr. Sandeep Das, Mr. Sitesh
Mukherjee, Ms. Arushi Mishra and
Mr. Akash Panwar, Advocates.
versus
ASIAN SATELLITE BROADCAST PRIVATE LIMITED AND ORS.
..... Respondents
Through:
Mr. Nakul Dewan, Senior Advocate
with Mr. Aman Raj Gandhi, Mr.
Sambit Nanda, Mr. Vardaan Bajaj and
Ms. Ridhima Sharma, Advocates.
+
ARB. A. (COMM.) 7/2021 & I.A. 2625/2021
RELIGARE FINVEST LIMITED
..... Appellant
Through:
Mr. Ashish Dholakia, Senior Advocate
with Mr. Sandeep Das, Mr. Sitesh
Mukherjee, Ms. Arushi Mishra and
Mr. Akash Panwar, Advocates.
versus
KONTI INFRAPOWER AND MULTIVENTURES
PRIVATE LIMITED AND ORS.
..... Respondents
Through:
Mr. Nakul Dewan, Senior Advocate
with Mr. Aman Raj Gandhi, Mr.
Sambit Nanda, Mr. Vardaan Bajaj and
Ms. Ridhima Sharma, Advocates.
+
ARB. A. (COMM.) 8/2021 & I.A. 2627/2021
RELIGARE FINVEST LIMITED
..... Appellant
Through:
Mr. Ashish Dholakia, Senior Advocate
with Mr. Sandeep Das, Mr. Sitesh
This is a digitally signed Judgement.
NEUTRAL CITATION NO: 2022/DHC/000273
ARB. A. (COMM.) 6/2021 & connected matters
Page 2 of 21
Mukherjee, Ms. Arushi Mishra and
Mr. Akash Panwar, Advocates.
versus
WIDESCREEN HOLDINGS PRIVATE LIMITED AND ORS.
..... Respondents
Through:
Mr. Nakul Dewan, Senior Advocate
with Mr. Aman Raj Gandhi, Mr.
Sambit Nanda, Mr. Vardaan Bajaj and
Ms. Ridhima Sharma, Advocates.
+
ARB. A. (COMM.) 9/2021 & I.A. 2629/2021
RELIGARE FINVEST LIMITED
..... Appellant
Through:
Mr. Ashish Dholakia, Senior Advocate
with Mr. Sandeep Das, Mr. Sitesh
Mukherjee, Ms. Arushi Mishra and
Mr. Akash Panwar, Advocates.
versus
EDISONS INFRAPOWER AND MULTIVENTURES
PVT. LTD. AND ANR.
.....Respondents
Through:
Mr. Nakul Dewan, Senior Advocate
with Mr. Aman Raj Gandhi, Mr.
Sambit Nanda, Mr. Vardaan Bajaj and
Ms. Ridhima Sharma, Advocates.
CORAM:
HON'BLE MR. JUSTICE SANJEEV NARULA
JUDGMENT
[VIA VIDEO CONFERENCING]
SANJEEV NARULA, J. (Oral):
1. The present appeals under Section 37(2)(a) of the Arbitration and
Conciliation Act, 1996 [hereinafter referred to as the‘A&C Act’], impugned
four separate orders dated 22nd October, 2020, passed by the learned
This is a digitally signed Judgement.
NEUTRAL CITATION NO: 2022/DHC/000273
ARB. A. (COMM.) 6/2021 & connected matters
Page 3 of 21
Arbitrator under Section 16 of the A&C Act.
2. Since the impugned orders have identical reasoning, and all the appeals
contain common grounds of challenge, the same are fit to be disposed of by
way of this common order.
BRIEF FACTS
3. A summary of the facts of the case, is as follows:
3.1. In March 2014, seven companies forming part of the Zee Group of
Companies approached the Appellant viz. Religare Finvest Limited
[hereinafter, “Religare”] to avail loan facilities for investment and
consolidation of promoters’ interest in their group companies.
3.2. Separate Loan Agreements dated, all on 15th March, 2014 [hereinafter
referred to as the “Loan Agreements”] were entered into between
Religare and (i) Asian Satellite Broadcast Pvt. Ltd.,1 (ii) Konti
Infrapower & Multiventures Pvt. Ltd.,2 (iii) Widescreen Holdings Pvt.
Ltd.,3 and (iv) Edisons Infrapower & Multiventures Pvt. Ltd.4
[hereinafter collectively referred to as the“Zee Companies”].
3.3. Zee Companies failed to repay their debt on time, constraining Religare
to issue notices dated 7th May, 2019 invoking arbitration viz. Clause 16.1
contained in the Loan Agreements. Consequently, a common Sole
Arbitrator was appointed on 7th May, 2019 and four separate arbitration
proceedings ensued.
1 Respondent No. 1 in Arb. A. (Comm.) 6/2021.
2 Respondent No. 1 in Arb. A. (Comm.) 7/202
