Introduction:

In a recent judgment, the Delhi High Court has granted permission for a writ petition despite an ongoing arbitration process under Section 8 of the Arbitration and Conciliation Act. The petitioner sought adjudication from the Chief Controlling Revenue Authority concerning the stamp duty on an instrument involved in a dispute. Justice Subramonium Prasad emphasized that the arbitral tribunal’s authority does not preclude the High Court from addressing issues of potential revenue deprivation. The case involves an MoU with an arbitration clause, and the petitioner, dissatisfied with the stamping of the document, filed the writ petition seeking a declaration of nullity.

Arguments:

The petitioner argued that inadequate stamping of the MoU warranted a review by authorities to determine proper stamping, emphasizing the need for ad valorem stamping. Additionally, the petitioner relied on Section 33(2) to delegate the duty of examining instruments to a court-appointed officer. On the other hand, the respondents contended that the issue had already been decided during the Section 8 application, and the present petition aimed to circumvent that decision. They invoked Section 16(1)(a) of the A&C Act, asserting that the arbitral tribunal had the competence to address objections raised by the petitioner, including stamping issues.

Court’s Judgement:

The Court, referring to relevant sections of the Indian Stamp Act, underscored the legislative intent to prevent state revenue deprivation. It held that the earlier Section 8 application did not address the question of stamp duty, making it appropriate for the High Court to entertain the writ petition. The Court clarified that its intervention did not comment on the case’s merits but focused on determining whether the state was deprived of stamp duty revenue. The judgment directed the petitioner to approach the Chief Controlling Revenue Authority for a decision on the sufficiency of stamp duty paid on the instrument.