When an Arbitral Award exceeds the value of Rs.1,000/-, the stamp duty on the Award is payable only in terms of Clause (b) thereof; and Clause (a) would be applicable only when the Award does not exceed the value of Rs.1,000/- : Delhi High Court
There can really be no dispute to the fact that as per Article 12 of Schedule-1A, as amended vide the Indian Stamp (Delhi Amendment) Act, 2001, when an Arbitral Award exceeds the value of Rs.1,000/-, the stamp duty on the Award is payable only in terms of Clause (b) as upheld by the High Court of Delhi through the learned bench led by Hon’ble Ms. Justice Rekha Palli in the case of M/S. Indsao Construction Pvt. Ltd. V. The Collector of Stamp/ Sub-Divisional Magistrate (W.P.(C) 886/2021) The brief facts, leading to the filing of the present petition, are that an Arbitral Award, pertaining to a dispute between the petitioner company and M/s Baroda House NRGE CGHS, came to be passed on 11.10.2013. The Award was made on a non-judicial stamp paper of Rs.1,000/- with directions to the petitioner to have the amount of stamp duty payable thereon adjudicated by the Collector of Stamps. Consequently, on 07.11.2013, the petitioner filed an application before the respondent/Sub Divisional Magistrate, Dwarka for adjudication of stamp duty on the Arbitral Award. The said application came to decided vide the impugned order on 03.01.2020, whereunder the respondent has held that the petitioner was liable to pay stamp duty @ 2% on the awarded amount. While passing the impugned order, the respondent has placed reliance on a decision dated 03.02.2010 of a Co-ordinate Bench in OMP No. 78/2003 titled “Eider Pwi Paging Limited &amp; Eider Pwi Communications Ltd. v. Union of India”. From a perusal of the facts and arguments, the Hon’ble Court held “I, therefore, have no hesitation in setting aside the impugned order and accepting the petitioner’s plea that it was liable to pay stamp duty only at @0.1% on the awarded amount, in accordance with Clause (b) of Article 12, Schedule 1-A. 11. The matter is, therefore, remanded back to the respondent for determining the stamp duty in accordance with the observations made hereinabove.”
IN THE HIGH COURT OF DELHI AT NEW DELHI Date of Decision: 08.11.2021 W.P.(C) 886 2021 M S. INDSAO CONSTRUCTION PVT. LTD. Petitioner Through Mr. Prashant Kumar Mittal Adv. SUB DIVISIONAL Respondent Through Mr. Anuj Aggarwal ASC with Mr. Vikrant Chawla Ms. Ayushi Bansal and Mr. Vishesh Jagga Advs. HON BLE MS. JUSTICE REKHA PALLI REKHA PALLI JEven though despite opportunity no counter affidavit has been filed the matter is taken up for disposal with the consent of the parties. The brief facts leading to the filing of the present petition are that an Arbitral Award pertaining to a dispute between the petitioner company and M s Baroda House NRGE CGHS came to be passed on 11.10.2013. The Award was made on a non judicial stamp paper of Rs.1 000 with directions to the petitioner to have the amount of stamp duty payable thereon adjudicated by the Collector of Stamps. Consequently on 07.11.2013 the petitioner filed an application before the respondent Sub Divisional Magistrate Dwarka for adjudication of stamp duty on the Arbitral Award. The said application came to decided W.P.(C) 886 2021 DigitallySigned By:AWANISHCHANDRA MISHRASigning Date:09.11.202112:22:39Signature Not Verified vide the impugned order on 03.01.2020 whereunder the respondent has held that the petitioner was liable to pay stamp duty @ 2% on the awarded amount. While passing the impugned order the respondent has placed reliance on a decision dated 03.02.2010 of a Co ordinate Bench in OMP No. 78 2003 titled “Eider Pwi Paging Limited & Eider Pwi Communications Ltd. v. Union of India”. In support of the petition Mr. Mittal learned counsel for the petitioner submits that the impugned order is wholly perverse as while determining the payable stamp duty the respondent has erroneously applied the provisions of Clauseof Article 12 of Schedule 1A as amended vide the Indian StampAct 2001 to the petitioner’s case as against Clause under which the petitioner’s case was covered. The Award in question is admittedly for an amount more than Rs.1 000 and therefore the respondent has erred in applying Clause of Article 12 without appreciating the fact that Clause would be only applicable in a case where the amount under the Award does not exceed Rs.1 000 . He therefore contends that the petitioner was liable to pay the stamp duty only 0.1% in terms of Clauseof Article 12 of Schedule 1A of the Act. Learned counsel for the respondent is not in a position to dispute either the fact that the Award is for a value of more than Rs.1 000 or that Clauseof Article 12 is applicable to such cases where the Award is for a sum exceeding Rs.1 000 . Even though learned counsel for the respondent has not disputed the petitioner’s plea that Clause of Article 12 would be applicable to the present case for the sake of clarity the said provision is reproduced hereinbelow: W.P.(C) 886 2021 DigitallySigned By:AWANISHCHANDRA MISHRASigning Date:09.11.202112:22:39Signature Not Verified Description of Instrument Proper Stamp Duty Award that is to say any decision in writing by an arbitrator or umpire not being an award directing a partition on a reference made otherwise than by an order of this Court in the course of a suit a) Where the amount or value of the property to which the award relates are set forth in such award does not exceed Rs.1 000. b) If it exceeds Rs.1 000 but does not exceed Rs.5 000 and for every additional Rs.1 000 or part thereof in excess of Rs.5 000. The same duty as a Bond No.15) for such amount. One rupee for every one thousand of the value of the property to which the award relates. From a perusal of the aforesaid provision there can really be no dispute to the fact that as per Article 12 of Schedule 1A as amended vide the Indian StampAct 2001 w.e.f. 28.03.2001 when an Arbitral Award exceeds the value of Rs.1 000 the stamp duty on the Award is payable only in terms of Clausethereof and Clausewould be applicable only when the Award does not exceed the value of Rs.1 000 . 8. Moreover the reliance placed by the respondent on a decision of the Co ordinate Bench in OMP No. 78 2003 titled “Eider Pwi Paging Limited Eider Pwi Communications Ltd. v. Union of India” is also wholly misplaced. It appears that the said decision has been applied mechanically without even appreciating the fact that the issue raised in the said decision was not regarding as to which Clause of Article 12 would be applicable in a case where the Award is of a value of more than Rs.1 000 . W.P.(C) 886 2021 DigitallySigned By:AWANISHCHANDRA MISHRASigning Date:09.11.202112:22:39Signature Not Verified At this stage the petitioner also points out that the respondent has erroneously determined the payable stamp duty by applying Clause on the basis of an internal circular issued by the Govt. of India NCT of Delhi directing all SDMs to calculate the stamp duty payable on Arbitral Awards 2%. He submits that though a copy of the said circular is not available with the petitioner appropriate directions be issued to the respondent to correctly apply Clauseof Article 12 in all such cases where the Award exceeds the value of Rs.1 000 . I therefore have no hesitation in setting aside the impugned order and accepting the petitioner’s plea that it was liable to pay stamp duty only at @0.1% on the awarded amount in accordance with Clauseof Article 11. The matter is therefore remanded back to the respondent for determining the stamp duty in accordance with the observations made 12 Schedule 1 A. hereinabove. 12. However before concluding this Court is constrained to express its anguish in the lethargic manner in which the petitioner’s application has been dealt with by the respondent. The record shows that application for adjudication of stamp duty was preferred by the petitioner way back on 07.11.2013 to decide which the respondent took more than six years vide its impugned order which too as already held hereinabove is contrary to the plain language of Article 12 of Schedule 1 A itself. The respondent is therefore directed to determine the stamp duty payable by the petitioner on the Award dated 11.10.2013 within two weeks from the receipt of this order. 13. A copy of this order be sent to the Chief Secretary Govt. of NCT of W.P.(C) 886 2021 DigitallySigned By:AWANISHCHANDRA MISHRASigning Date:09.11.202112:22:39Signature Not Verified Delhi for information and appropriate action so that other similarly placed persons do not have to approach this Court on account of erroneous determination of stamp duty. REKHA PALLI) NOVEMBER 08 2021 W.P.(C) 886 2021 DigitallySigned By:AWANISHCHANDRA MISHRASigning Date:09.11.202112:22:39Signature Not Verified 