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2010 DIGILAW 425 (DEL)

Suresh Kumar v. Satish Mehra & Anr.

2010-03-15

VALMIKI J.MEHTA

body2010
Valmiki J.Mehta, J:- 1. This objection petition under Section 34 challenges the Award of the Sole Arbitrator dated 19.4.2003. By the Award, specific performance has been granted of an Agreement to Sell dated 21.3.2002 with respect to the second and third floor of the property bearing No. B-123, Swasthiya Vihar, Delhi, as per the Agreement to Sell. 2. The petitioner before this court, and who was the respondent in the arbitration proceedings, had in the arbitration proceedings raised an objection to the admitting of the Agreement to Sell in evidence on the ground that the document was insufficiently stamped. Objection was that since the Agreement to Sell is in the nature of part performance as per Section 53A of the Transfer of Property Act, 1882 and under which Agreement to Sell possession was delivered, therefore, the said document was liable to be stamped under Article 23A of the Stamp Act, 1899 as applicable to Delhi but the stamp paper of the Agreement to sell was only of Rs.50/- and hence the Agreement to Sell was insufficiently stamped. Under Article 23A, the duty payable on a Sale Deed is also the duty payable under the Agreement to Sell which is in the nature of part performance under Section 53A of the Transfer of Property Act, 1882 however, the stamp duty is paid not on the total value of the conveyance/sale deed but only on 90% of the value thereof. It was the contention of the petitioner that the Agreement to Sell could not be considered as an evidence for passing of the Award under Section 35 of the Stamp Act, 1899 as the same was insufficiently stamped and therefore the deficient stamp duty alongwith the penalty was liable to have been paid before the document could have been looked into by the Arbitrator and for passing as Award thereon. 3. This objection as to the Agreement to Sell being insufficiently stamped was taken in the written statement which was filed by the petitioner before the Arbitrator. The Arbitrator has dealt with this objection for the first time only in the Award and held as under:- “Agreement to sell dated 21.03.2002 was an interim (bare) agreement and therefore needed to registration. This objection as to the Agreement to Sell being insufficiently stamped was taken in the written statement which was filed by the petitioner before the Arbitrator. The Arbitrator has dealt with this objection for the first time only in the Award and held as under:- “Agreement to sell dated 21.03.2002 was an interim (bare) agreement and therefore needed to registration. Similarly Rent deed was for 11 months which needed no registration.” Obviously this cannot be said to be a decision in the eyes of law as it does not at all deal with the issue at hand. 4. The provisions of the Stamp Act are not intended to prevent a document which is insufficiently stamped from being looked into for all times to come. The provisions are intended to see that there is no loss of revenue to the Government. Therefore, in my opinion, once the necessary stamp duty along with penalty is paid on the inadequately stamped instrument, then such a document can thereafter be looked into even by the court hearing objections to an Award treating the Award to be properly passed on merits, although the Arbitrator failed to impound the document at the necessary point of time. 5. Mr. A.P.Aggarwal, counsel for the petitioner has however, contended that no Award could be passed relying upon the Agreement to Sell treating the said Agreement to Sell as evidence because the document was not stamped, and therefore, the Award must necessarily fall on this ground itself. I do not agree. As already stated by me above, the object of requiring a person to pay the necessary stamp duty and failing which the document not to be looked into for the purpose of evidence, is basically in the nature of protecting the state revenue. Therefore, once the state revenue is secured by payment of the necessary duty and penalty, I do not think that thereafter this Court cannot hear the objections to the Award. Once the respondent herein and the claimant in the arbitration proceedings, pays the necessary stamp duty along with the penalty as is liable to be paid in law, and as would be adjudicated by the Collector of Stamps under Section 38 of the Stamp Act, the Award can be read as having been passed on payment of the stamp duty. Once the respondent herein and the claimant in the arbitration proceedings, pays the necessary stamp duty along with the penalty as is liable to be paid in law, and as would be adjudicated by the Collector of Stamps under Section 38 of the Stamp Act, the Award can be read as having been passed on payment of the stamp duty. There is no prejudice to the petitioner as the issue of payment of the state revenue is between the respondent and the court which is called upon to protect the interest of the state as regards payment of stamp duty and penalty. 6. I therefore, impound the Agreement to sell dated 21.3.2002 which has been exhibited as Ex. CW1/3 by the Arbitrator. I am impounding this document under Sections 33 and 38 of the Stamp Act, 1899. Let a certified copy of this Agreement to Sell be given to the respondent against payment of necessary charges along with a copy of the present order, and the same be submitted by the respondent to the appropriate adjudicating authority acting under the Stamp Act, 1899 for adjudicating the stamp duty and the penalty which would be payable by the respondent. The adjudication be done within a period of four weeks from the date on which the adjudicating authority receives the certified copy of the Agreement to Sell dated 21.3.2001, Ex.CW1/3. The Adjudicating Officer shall pass necessary orders with respect to the insufficient duty which was paid on the instrument and the penalty which is to be paid. The respondent shall pay the deficient stamp duty along with penalty as per the order of the adjudicating authority within a period of four weeks being the period of time which is requested by the counsel for the respondent. 7. On the respondent paying the deficient stamp duty along with penalty, in terms of the present order, the other objections of the petitioner to the Award would then be considered on merits. 8. List for further proceedings on 22nd July, 2010. 9. At this stage, the parties who are present in person state that they would like to explore the possibility of settlement through the Delhi High Court Mediation and Conciliation Centre. Accordingly, the operation of this order is suspended with the consent of the counsel for the parties and the parties for a period of four weeks from today. 10. 9. At this stage, the parties who are present in person state that they would like to explore the possibility of settlement through the Delhi High Court Mediation and Conciliation Centre. Accordingly, the operation of this order is suspended with the consent of the counsel for the parties and the parties for a period of four weeks from today. 10. Let the parties appear before the Delhi High Court Mediation and Conciliation Centre on 18th March, 2010 at 4.00 PM. If the matter is not settled by the Mediators and Conciliators by 18th April, 2010, the present order will come into operation.