He submitted that this was noted by a Coordinate bench of this Court in Eider PWI Paging Ltd. v. Union of India Ltd., 2010 SCC OnLine Del 410.
7. The contention that the present petition has been filed within the period as stipulated under Section 34(3) of the A&C Act is, plainly, unmerited. Under Section 31(1) of the A&C Act, an arbitral award is required to be made in writing and signed by the members of the Tribunal. In the present case, the signed award was delivered to the petitioner by DIAC in the month of May 2018. There is no dispute that the petitioner had received a duly signed award. Section 34(3) of the A&C Act expressly provides that an application for setting aside an arbitral award may not be made after three months have elapsed and on the date on which the party making the application had received the arbitral award.
8. The contention that an arbitral award cannot be considered as such and is non est till it is stamped, is misconceived. An instrument that requires to be stamped does not cease to be one if it is not stamped. Under Section 33 of the Stamp Act, an instrument which is insufficiently stamped is required to be impounded; it does not cease to be an instrument.
9. Section 2(12) of the Stamp Act defines the term ‘executed’ and ‘execution’. The said definition is set out below:
“2(12) “Executed” and “execution”, used with reference to instruments, mean “signed” and “signature and includes attribution of electronic record within the meaning of section 11 of the Information Technology Act, 2000 (21 of 2000).”
10. Thus, notwithstanding that an arbitral award may be insufficiently stamped; it is an arbitral award nonetheless.
11. In M. Anasuya Devi (supra), the Supreme Court had observed as under:
“4. After we heard the matter, we are of the view that in the present case this issue was not required to be gone into at the stage of the proceedings under Section 34 of the Act. In fact, this issue was premature at that stage. Section 34 of the Act provides for setting aside of the award on the grounds enumerated therein. It is not in dispute that an application for setting aside the award would not lie on any other ground, which is not enumerated in Section 34 of the Act. The question as to whether the award is required to be stamped and registered, would be relevant only when the parties would file the award for its enforcement under Section 36 of the Act. It is at this stage the parties can raise objections regarding its admissibility on account of non-registration and non-stamping under Section 17 of the Registration Act. In that view of the matter, the exercise undertaken to decide the said issue by the civil court as also by the High Court was entirely an exercise in futility. The question whether an award requires stamping and registration is within the ambit of Section 47 of the Code of Civil Procedure and not covered by Section 34 of the Act.”
13. The petitioner's case is not that an insufficiently stamped award is required to be impounded in proceedings under Section 34 of the A&C Act. According to Mr. Rao, the period of limitation under Section 34(3) of the A&C Act would not run till the award is stamped. This contention is bereft of any merit.
14. In view of the above, it is not necessary to examine the petitioner's grievance on the merits of the award.
In the High Court of Delhi at New Delhi
(Before Vibhu Bakhru, J.)
NCS Sugars Ltd. Vs PEC. Limited
O.M.P. (COMM) 18/2020 and I.A. 456/2020 & 457/2020
Decided on October 22, 2021
Citation: 2021 SCC OnLine Del 4826
The Judgment of the Court was delivered by
Vibhu Bakhru, J. (Oral):— The petitioner has filed the present petition under Section 34 of the Arbitration and Conciliation Act, 1996 (hereafter ‘the A&C Act’) impugning an arbitral award dated 01.05.2018 (hereafter ‘the impugned award’) delivered by an Arbitral Tribunal constituted by Justice (Retired) J.S. Khehar, former Chief Justice of India as the Sole Arbitrator (hereafter ‘the Arbitral Tribunal’).
2. The arbitration was conducted under the aegis of the Delhi International Centre (DIAC) and, in accordance with its Rules. The record of the proceedings held on 01.05.2018 indicates that the impugned award was pronounced at the DIAC by the Arbitral Tribunal. The Authorized Representative of the claimant (PEC Limited) was present but none had appeared on behalf of the respondents (the petitioners in this petition). The record of the proceedings also indicate that four signed copies of the award were furnished to the DIAC for its records and as well as for onward transmission to the concerned parties. It is not disputed that the award was forwarded by the Coordinator, DIAC. The signed award was forwarded by DIAC along with the record of the proceedings held on 01.05.2018, under the cover of a letter dated 23.05.2018 and the same was duly received by the petitioner.
3. The petitioner has filed the present petition on 31.10.2019 after a delay of more than seventeen months from receiving the impugned award. Notwithstanding, the petitioner contends that the present petition is within the period as prescribed under Section 34(3) of the A&C Act as the duly stamped and executed award was received by the respondents on 01.10.2019 and the present petition has been filed within the stipulated period of three months from that date.
4. The first and foremost question to be decided is whether the petition has been filed within the period as prescribed under Section 34(3) of the A&C Act. At the outset, it is necessary to note that it is not disputed that if the present petition is held to have been filed beyond the period of thirty days from the expiry of three months from the date of receipt of the award; this Court would have no jurisdiction to condone the delay and the present petition is required to be summarily dismissed.
5. Mr. Rajshekhar Rao, learned senior counsel appearing for the petitioner, submitted that the impugned award delivered by the Arbitral Tribunal was insufficiently stamped and therefore, could not be considered as an award. He referred to Section 29 of the Indian Stamp Act, 1899 (hereafter ‘the Stamp Act’) and submitted that the obligation for stamping the arbitral award would be upon the executor, that is, the Arbitral Tribunal. He submitted that since the Arbitral Tribunal had not stamped the arbitral award, the same was required to be considered as non est. He also referred to Section 17 of the Stamp Act, which requires that all instruments chargeable with duty shall be stamped “before or at the time of execution”. He submitted that the provisions of the Stamp Act, are required to be read conjointly with Section 31 of the A&C Act and thus, the impugned award cannot be considered as an award under Section 31 of the A&C Act till such time that it is stamped. He contended that since in the present case, the duly stamped arbitral award was received on 01.10.2019 and the present petition was filed within the period of three months from that date, the same must be considered within the period of limitation as prescribed.
6. Mr. Rao, also referred to the decision of the Supreme Court in M. Anasuya Devi v. M. Manik Reddy, (2003) 8 SCC 565, wherein the Supreme Court had held that the issue whether an award is required to be stamped and registered would be relevant only once the party files the award for its enforcement under Section 36 of the A&C Act and not at the stage of Section 34 of the A&C Act. He submitted that the said decision is per incuriam as it does not take into account an earlier decision of the Supreme Court in Ram Rattan v. Bajarang Lal, (1978) 3 SCC 236. He submitted that this was noted by a Coordinate bench of this Court in Eider PWI Paging Ltd. v. Union of India Ltd., 2010 SCC OnLine Del 410.
7. The contention that the present petition has been filed within the period as stipulated under Section 34(3) of the A&C Act is, plainly, unmerited. Under Section 31(1) of the A&C Act, an arbitral award is required to be made in writing and signed by the members of the Tribunal. In the present case, the signed award was delivered to the petitioner by DIAC in the month of May 2018. There is no dispute that the petitioner had received a duly signed award. Section 34(3) of the A&C Act expressly provides that an application for setting aside an arbitral award may not be made after three months have elapsed and on the date on which the party making the application had received the arbitral award.
8. The contention that an arbitral award cannot be considered as such and is non est till it is stamped, is misconceived. An instrument that requires to be stamped does not cease to be one if it is not stamped. Under Section 33 of the Stamp Act, an instrument which is insufficiently stamped is required to be impounded; it does not cease to be an instrument.
9. Section 2(12) of the Stamp Act defines the term ‘executed’ and ‘execution’. The said definition is set out below:
“2(12) “Executed” and “execution”, used with reference to instruments, mean “signed” and “signature and includes attribution of electronic record within the meaning of section 11 of the Information Technology Act, 2000 (21 of 2000).”
10. Thus, notwithstanding that an arbitral award may be insufficiently stamped; it is an arbitral award nonetheless.
11. In M. Anasuya Devi (supra), the Supreme Court had observed as under:
“4. After we heard the matter, we are of the view that in the present case this issue was not required to be gone into at the stage of the proceedings under Section 34 of the Act. In fact, this issue was premature at that stage. Section 34 of the Act provides for setting aside of the award on the grounds enumerated therein. It is not in dispute that an application for setting aside the award would not lie on any other ground, which is not enumerated in Section 34 of the Act. The question as to whether the award is required to be stamped and registered, would be relevant only when the parties would file the award for its enforcement under Section 36 of the Act. It is at this stage the parties can raise objections regarding its admissibility on account of non-registration and non-stamping under Section 17 of the Registration Act. In that view of the matter, the exercise undertaken to decide the said issue by the civil court as also by the High Court was entirely an exercise in futility. The question whether an award requires stamping and registration is within the ambit of Section 47 of the Code of Civil Procedure and not covered by Section 34 of the Act.”
12. In Eider PWI Paging Ltd. v. Union of India Ltd. (supra), a Coordinate Bench of this Court had expressed reservations regarding the said decision and was of the view that an insufficiently stamped award was required to be impounded under Section 33 of the Stamp Act. However, that is not the controversy in this matter. Mr. Rao's contention that unless an award is stamped, it is not an award at all is, clearly, not a view expressed or even considered by the Court in the case of Eider PWI Paging Ltd. v. Union of India Ltd. (supra).
13. The petitioner's case is not that an insufficiently stamped award is required to be impounded in proceedings under Section 34 of the A&C Act. According to Mr. Rao, the period of limitation under Section 34(3) of the A&C Act would not run till the award is stamped. This contention is bereft of any merit.
14. In view of the above, it is not necessary to examine the petitioner's grievance on the merits of the award.
15. The present petition has been filed beyond the period as specified under Section 34(3) of the A&C Act and is, accordingly, dismissed. All pending applications are disposed of.
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