Sh.Suresh Kumar vs Satish Mehra & Anr.
2010 Latest Caselaw 1433 Del

*                 IN THE HIGH COURT OF DELHI AT NEW DELHI

+                              OMP No. 245/2003
                                                        15th March, 2010


SH.SURESH KUMAR                                                 ...Petitioner

                               Through:     Mr. A.P.Aggarwal, Advocate for the
                                            petitioner with petitioner in person.
.

VERSUS

SATISH MEHRA & ANR. ....Respondents

Through: Mr. Rajesh Kumar, Advocate for the respondent with respondent in person

CORAM:

HON'BLE MR. JUSTICE VALMIKI J.MEHTA

1. Whether the Reporters of local papers may be allowed to see the judgment?

2. To be referred to the Reporter or not? Yes

3. Whether the judgment should be reported in the Digest? Yes

% JUDGMENT (ORAL)

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

OMP-245-2003 Page 1 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

OMP-245-2003 Page 2 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. 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.

OMP-245-2003 Page 3

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. 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

OMP-245-2003 Page 4 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

OMP-245-2003 Page 5 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.

                                                   VALMIKI J. MEHTA, J

March 15, 2010
ib




 OMP-245-2003                                                                 Page 6