LI Network
Published on: 28 January, 2024 at 18:25 IST
In a recent ruling, the Delhi High Court has affirmed that the mere reference of a dispute to arbitration, as per Section 8 of the Arbitration and Conciliation Act, does not prohibit the High Court from scrutinizing the issue of stamp duty.
Justice Subramonium Prasad’s bench permitted a writ petition, allowing the petitioner to approach the Chief Controlling Revenue Authority to determine the amount payable on the instrument.
The case originated from an MoU dated 12.11.2014, which included an arbitration clause for dispute resolution. Subsequently, a dispute arose, leading to the filing of a suit by the petitioner.
The respondents sought reference to arbitration under Section 8 of the A&C Act, and the Court granted the petition. Dissatisfied, the petitioner filed a writ petition seeking various directions, including declaring the agreement null and void.
The petitioner argued that the respondents improperly stamped the MoU, requiring a review by authorities to ascertain proper stamping.
The petition sought a declaration that the MoU, creating property rights, qualifies as conveyance under the Indian Stamp Act, necessitating ad valorem stamping. The petitioner also invoked Section 33(2), allowing delegation of the duty of examining and impounding instruments to an appointed officer.
The respondents countered that the Court had already ruled on the issue during the Section 8 application, determining that the MoU was admissible in evidence.
They further argued that the arbitral tribunal, under Section 16(1)(a) of the A&C Act, had the authority to address the petitioner’s objection, including impounding non-stamped or insufficiently stamped instruments.
In its analysis, the Court referred to relevant sections of the Indian Stamp Act, emphasizing the legislative intent to prevent the state’s deprivation of revenue.
It clarified that a direction by the Court on stamp duty would not override the findings in the Section 8 application, where the Court deemed stamping irrelevant for arbitration reference.
The Court asserted that the arbitral tribunal’s potential involvement does not strip the High Court of jurisdiction to entertain the writ petition, as it primarily addresses whether the state has been denied revenue from the stamp duty.
The Court refrained from making observations on the case’s merits and directed the petitioner to seek a determination from the Chief Controlling Revenue Authority on the sufficiency of stamp duty paid on the instrument.
The case, titled “Mrs. Vinnu Goel v. Deputy Commissioner of Stamp Registration & Ors,” was heard on 16.01.2024
