| Headnote |
.Arbitration and Conciliation Act, 1996 – ss. 11(6A), 7, 8, 9,11 and 16 – Indian Stamp Act, 1899 – ss. 3, 33 & 35 – Contract Act,1872 – ss. 2(h), 10 – Appointment of Arbitrators by The Chief Justiceof India Scheme, 1996 – Arbitration Agreement in an unregisteredinstrument, which is not duly stamped, if valid and enforceable –Whether the statutory bar contained in s.35 of the Stamp Act, 1899applicable to instruments chargeable to stamp duty under s.3 readwith the Schedule to the Act, would also render the arbitrationagreement contained in such an instrument, which is not chargeableto payment of stamp duty, as being non-existent, unenforceable, orinvalid, pending payment of stamp duty on the substantive contract/instrument – Held [per K. M. Joseph, J. (for himself and forAniruddha Bose, J.)] : An instrument, which is exigible to stampduty, may contain an Arbitration Clause and which is not stamped,cannot be said to be a contract, which is enforceable in law withinthe meaning of s.2(h) of the Contract Act and is not enforceableunder s.2(g) of the Contract Act – An unstamped instrument, whenit is required to be stamped, being not a contract and not enforceablein law, cannot, therefore, exist in law – The true intention behindthe insertion of s.11(6A) in the Act was to confine the Court, actingunder s.11, to examine and ascertain about the existence of anArbitration Agreement – The Scheme permits the Court, under s.11of the Act, acting on the basis of the original agreement or on acertified copy –The certified copy must, however, clearly indicatethe stamp duty paid – If it does not do so, the Court should not acton such a certified copy – If the original of the instrument isproduced and it is unstamped, the Court, acting under s.11, is dutyboundto act under s.33 of the Stamp Act – When it does so, theother provisions, which, in the case of the payment of the duty andpenalty would culminate in the certificate under s.42(2) of the Stamp Act, would also apply – When such a stage arises, the Court will befree to process the Application as per law – An Arbi trationAgreement, within the meaning of s.7 of the Act, which attracts stampduty and which is not stamped or insufficiently stamped, cannot beacted upon, in view of s.35 of the Stamp Act, unless followingimpounding and payment of the requisite duty, necessary certificateis provided under s.42 of the Stamp Act – The provisions of s.33and the bar under s.35 of the Stamp Act, applicable to instrumentschargeable to stamp duty under s.3 read with the Schedule to theStamp Act, would render the Arbitration Agreement contained insuch instrument as being non-existent in law unless the instrumentis validated under the Stamp Act – Held (per C. T. Ravikumar, J.)(concurring): Being unstamped or insufficiently stamped, theagreement would not be available to be ‘admitted in evidence’ and‘to be acted upon’, till it is validated following the proceduresprescribed under the provisions of the Stamp Act and till then, itwould not exist ‘in law’ – When the original document carrying thearbitration clause is produced and if it is found that it is unstampedor insufficiently stamped, the Court acting under s.11 is duty boundto act u/s.33 of the Indian Stamp Act – Held (per Ajay Rastogi, J.)(dissenting): The existence of a copy/certified copy of an arbitrationagreement whether unstamped/insufficiently stamped at the prereferralstage is an enforceable document for purposes ofappointment of an Arbitrator under s.11(6A) of the Act, 1996 wherethe judicial intervention shall be minimal confined only to the primafacie examination of “existence of an arbitration agreement” alonekeeping in view the object of 2015 amendment and the courts muststrictly adhere to the time schedule for appointment of Arbitratorprescribed under s.11(13) of the Act, 1996 – All the preliminary /debatable issues including insufficiently stamped/unduly stampedor validity of the arbitration agreement etc. are referrable to theArbitrator/Arbitral Tribunal under s.16 of the Act, 1996 which, byvirtue of the Doctrine of Kompetenz - Kompetenz has the power todo so – Held (per Hrishikesh Roy, J.) (dissenting): The examinationof stamping and impounding need not be done at the threshold by aCourt, at the pre-reference stage under s.11 of the Arbitration Act,1996 – Non-stamping /insufficient stamping of the substantivecontract/instrument would not render the arbitration agreement nonexistentin law and unenforceable /void, for the purpose of referring a matter for arbitration – An arbitration agreement should not berendered void if it is suffering stamp deficiency which is a curabledefect.. |
