Case Briefs
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Mohini Electricals Limited v. Delhi Jal Board


Author:  Lakshya Raj Singh Rathore, 1st year Student at Institute Of Law, Nirma University.


Citation:  OMP (ENF.) (COMM.) 2/2020

Date of Decision:  Jan. 22, 2021

Bench:  Rekha Palli

Original Copy:  View

Statues Involved: Indian Stamps Act 1899, Arbitration Act and Delhi Stamps (Amendment) Act 2001

 

Issues in question:

  • The enforceability of the arbitral award, and whether changes are maintainable in the court of law or not after 30 days of signing.
  • Is the petition to get the arbitration award filed in the form of Xerox permissible? 
  • Whether JD had the duty to pay the award to the DH as asked by them?

Background of the case: 

  • The current application under Section 148 read with Section 151 of the Code of Civil Procedure, 1908 has been filed by the Delhi Jal Board(DJB)/judgment debt holder (JD) purportedly looking for augmentation of time for store of the granted sum, as coordinated by this Court vide its request dated 15.07.2020.
  •  Notwithstanding, the candidate is, generally, trying to have the award seized and have it sent to the Collector for deciding the extra stamp duty and punishment relevant consequently.
  •  A significant petition taken was for keeping in cessation the bearings given on 15.07.2020 for store of the granted sum, till such time the extra stamp obligation and punishment leviable are controlled by the Collector and paid by the DH.
  • The appeal was filed by the Decree Holder (DH) on 09.01.2020 looking for requirement of the award passed by the Arbitrator on 02.09.2019 of an amount of INR 38,00,97,929/ – alongside premium @ 12% p.a. w.e.f. 03.09.2018 has been stated., for which the DH has asked for the bank accounts and other resources to preserve its interest for the awarded money.
  • Since the appeal was filed on the basis of a Xerox of the award, as against the first award which was needed to be recorded therewith, the DH filed an application under Section 151 of the Code of Civil Procedure looking for exemption from filing of the order.
  • This application being Ex. Appl. (OS) No.21/2020, was permitted by the Court on the absolute first date, i.e., 10.01.2020 when notice was given in the appeal.
  • At the time of hearing of appeal the JD didn’t have a problem with the exemption being allowed yet looked for a postponement of the proceedings till the JD’s test to the award under Section 34 of the Arbitration and Conciliation Act was heard. Since the Court knew that the Section 34 appeal was probably going to be recorded for hearing inside 10 days, the Court dismissed this appeal to 21.01.2020 and later, to 18.03.2020, in line with the JD. But later taken on 18-3-2020 because of covid with the prayer by the JD for the adjournment on grounds of pendency of section 34 which was rejected and an SLP was filed seeking the disposal of the payment which was also rejected. 

Judgement:

  • The reply of the appeal by DH with stamp of 3, 80,100 being 0.1% of award as required under Article 12 of Schedule 1A of the Stamps Delhi (Amendment) Act 2001, JD contending the factum of that the awarded amount cannot be said to be merged with the SC’s order stating it to be limine mentioning the Kunhayammed & Ors v State of Kerala & Anr
  • Also stating that at first the stamp was of only Rs.100 which is clearly insufficient and the court ought to be impounded as the courts are bound under Section 33(1) of Indian Stamps Act 1899.
  •  Mr. Jain (counsel of JD) also mentioned that just the stamp paper for the remaining charge will not hide the defect done in the beginning, and even if the arbitrator had fixed the charges on stamp on October 2, 2019 then DH’s act to fix stamp duty on February 7, 2020 is against the law and cannot be made permissible as the arbitrator after signing the award cannot change it in any way and not affix after 30 days he had prescribed..
  • Ms. Anusuya (counsel for DH) opposed that the copy of the stamped award was already duly stamped as per article 12 of Schedule 1A before coming up before the court, and also the JD’s stamp was a Xerox copy of the award and thus it cannot be made enforceable to get impounded as per Section 33 and Section 35 of the Indian Stamps Act 1899.
  • Thus after hearing the counsels, as per section 33, 35 and 38 of Indian Stamps Act1899 she mentioned that it is duty of the court to examine the duty payment if should be made or not and also to check whether it the duly stamped or else as per Section 35(a) it will be not be admitted in the court in any sense, and an award passed at conclusion of arbitration is an instrument meaning under section 2 (14) of Indian Stamps Act and the necessity of the procedure was noted in the case M/s SMS Tea Estates P. Ltd vs M/S Chandmari Tea Co. P. Ltd. where the Supreme Court observed that that if an arbitral clause in the stamp if that is not signed it cannot be made enforceable and this observation stayed after the 2015 amendment to the act (section 11 6A introduced)
  • Thus to resolve the disputes Justice Rekha took the reference from State of Bihar v. Karamchand Thapar and Bros. Ltd where the Xerox copy of stamp was held unsustainable and stated that the contention of DH were right as Xerox copy had absolutely no sustainability under section33 of stamps act, thus the plea of JD was denied of the award, also JD had failed to oppose the issue of Xerox when it was first mentioned in the court on January10, 2020, and when it faced the trouble with this fact it started contending arbitrator’s act of permitting payment for award on February7, 2020 which was also invalid as it was after 30 days after granting the stamp duty to be affixed by DH and had become functus officio after the signing and as per section 31, 35 and 36 (i) of the arbitration act the arbitration tribunal has the complete duty to ensure the delivery of the signed copy to each party and the duty is not to ensure the payment to be paid at the time of signing of the award. 

Critical Analysis:

  • The prima facie fact on which the justice in the case relied on the judgment was that the award was filed with a Xerox of the award which is not permissible in the court.
  • This case also deals with an important question of law and its application as whether the arbitration act applies to such issues or not and if it does then how does it impact the course of enforceability.
  • The enforceability of the arbitration award arises only when the parties take the help of the court otherwise the parties are free to act upon the awards in their way. 
  • The main sections discussed were 31,33,35,38 of the Arbitration Act 1966.

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