In an execution petition filed before the Delhi High Court under Section 36 of the Arbitration and Conciliation Act, 1996 (Act), seeking enforcement of an arbitral award dated 26-03-2019, corrected by an order dated 07-05-2019 under Section 33 of the Act, whereby the decree holder was awarded Rs. 2,59,07,248.60/- crores along with pendente lite and future interest at 10% per annum, a Single Judge Bench of Justice Om Prakash Shukla issued directions for the procedure to be followed when an insufficiently stamped domestic arbitral award is presented for enforcement.
Upon perusing the record, the Court observed that the stamp duty initially affixed on the arbitral award was Rs. 100/-, and that the decree holder subsequently paid the deficient stamp duty of Rs.25,850/- on 29.07.2026. The Court raised a query regarding the mechanism for payment of stamp duty on the arbitral award and the process for remedying the deficit stamp duty, along with payment of any penalty as per the Indian Stamp (Delhi Amendment) Act, 2010, and invited submissions from the parties as well as other stakeholders on the issue.
The decree holder submitted that the requisite stamp duty had been paid in terms of Article 12 to Schedule I of the Stamp Act, and that since payment of stamp duty is a curable defect, the need to impound under Section 33 did not arise once adequate duty stood deposited. He urged a harmonious and purposive interpretation of the Arbitration Act and the Stamp Act, submitting that stamp duty becomes payable only when enforcement of the arbitral award is sought. It was contended that the one-month timeline under proviso (a) to Section 32(3) of the Stamp Act conflicted with the three-month enforcement window under Section 36 of the Arbitration Act, and that this inconsistency did violence to the Arbitration Act.
The judgment debtor emphasised that the Stamp Act, being a fiscal statute, must be construed strictly. It was contended that the real issue was not whether the decree holder could subsequently pay stamp duty, but whether mere payment of the deficient duty removed the statutory bar under Section 35 of the Stamp Act, and submitted that the answer lay in the negative. It was argued that Section 17 of the Stamp Act required the instrument to be stamped before or at the time of execution, and that the machinery under Sections 33, 35, 38, 40 and 42 was triggered once that time lapsed. The judgment debtor submitted that the Court’s duty under Section 33 was attracted the moment an insufficiently stamped award was placed before it, and that Section 35 barred any authority from acting upon the award unless the deficiency was cured.
The Court stated that it had regrettably observed a growing trend where the mandatory nature of payment of stamp duty at the stage of enforcement has been diluted. It was noted that a substantial number of enforcement petitions under Section 36 of the Arbitration Act had been filed before the Court with inadequately stamped arbitral awards. The Court said that while a decree is enforceable from the day it is made, an arbitral award, which must be enforced as a decree as well, becomes enforceable only after three months from passing of the award in light of Section 36 of the Arbitration Act. It was found that the controversy also thickens since the objection of insufficient stamp duty on an arbitral award is premature for setting aside the award at the Section 34 stage.
The Court noted that this leads to a practical problem that by the time decree holders reach the enforcement stage, the award is still insufficiently stamped, which even if curable, is an impediment for enforcement proceedings. It was stated that the questions to be considered were whether unilaterally depositing the adequate stamp by the decree holder at a belated stage, i.e., by circumventing the payment of penalty as envisaged under Sections 35 and 40 of the Act, is permissible and sufficient to cure the defect for the purposes of enforcement, that whether this Court is empowered to do away with the penalty component, and as to whether this Court is necessarily bound by Section 33 of the Stamp Act.
The Court found that the position of law as enumerated in M. Anasuya Devi v. M. Manik Reddy (2003) 8 SCC 565, still echoes. It was noted that the Supreme Court had merely deferred the time to take such objections regarding the payment of adequate stamp duty to the stage of enforcement only. The Court stated that these words only meant that the insufficient stamp duty was not a ground to set aside an arbitral award under Section 34 of the Act and nothing more as the Supreme Court had not, in any manner, created an exception to Section 33 of the Stamp Act.
The Court stated that on the face of it, both the statutes appeared to be temporarily inconsistent since the Stamp Act demands compliance within a month from affixing signatures on an arbitral award, but the Arbitration Act and judicial precedents somewhat relax this mandate at the Section 36 stage, i.e., after the lapse of at least three months from the execution of the award. However, it was said that both statutes operate independently of each other and that they must be read harmoniously. It was said that the enforcement of an arbitral award is not the chargeable event under the Stamp Act, rather execution/signing of the award is when stamp duty is attracted.
It was noted that since the Arbitration Act does not mandate filing of the original award with the accompanying Section 36 petition, no occasion would arise for courts to examine the adequacy of stamp duty and impound the same, even if found insufficient. The Court said this led to an absurdity and rendered the Stamp Act otiose by preventing an otherwise competent authority from discharging its statutory duty under Section 33 of the Stamp Act. It was stated that the preposition that a court cannot direct furnishing of the original award led to inconsistencies in law and gave rise to practical issues.
Further, the Court stated that in 2015, e-filing was made mandatory for this Court in arbitration matters on the original side. Accordingly, it was said that now requisition request is made to transmit the digitized arbitral record including the original award. Hence, this Court requisitions the arbitral record which includes the original award as well, it need not specifically direct parties to furnish the original for the purpose of impounding the same. In this manner, the Court said that it is in adherence of the binding precedent, while also not defeating the purpose of the fiscal statute.
The Court held that an interpretation which renders the Court powerless and reduces it to a mere observer while parties are permitted to evade the responsibility under a fiscal statute, cannot be adopted. It was stated that Section 33 is a mandatory duty of this Court and that it is triggered the moment the Court comes across an insufficiently stamped instrument in the course of its functions. Being mindful of the practical repercussions, the Court found it fit not to dispose of the enforcement petition, and directed the Collector to act as per the statute within a time-bound manner.
The Court noted that its earlier practice Directions dated 13-07-2026 had not been followed in true letter and spirit, and to enforce strict statutory compliance under the Indian Stamp Act, 1899, the Registration Act, 1908, and the procedural mandates of this Court, passed the following directions for all petitions filed under Section 36 of the Arbitration Act:
● Declaration: All execution petitions under Section 36 shall bear a declaration on the first page of the e-file on the top regarding stamp duty. The declaration was directed to consist the date of award, the date of payment of stamp duty, the awarded amount, and the quantum of stamp duty to be paid on such award as per the applicable rates.
● Registry Scrutiny Mandate: In addition to the declaration required from the decree holder at the top of the index, verified proof of payment of sufficient stamp duty and registration (where applicable) were directed to be annexed to the petition. The Registry was strictly directed not to list any enforcement petition that lacked such proof.
● Office Noting Requirement: The Registry was directed to explicitly record an Office Note detailing whether adequate stamp duty has been paid (specifically quantifying the amount paid versus chargeable) or if it remains unpaid.
● Pending Filings (On or before 13-08-2026): It was directed that all petitions filed on or before 13-08-2026 where the arbitral award is inadequately stamped are liable to be impounded under Section 33 of the Stamp Act. These petitions were directed to be listed before the Joint Registrar, who would either proceed under Section 35 or Section 38(2) depending upon the facts and circumstances of each case. These petitions were directed to be listed before the Court only upon due satisfaction in accordance with the Act.
● Future Filings (After 13-08-2026): For petitions filed after 13-08-2026 accompanied by an arbitral award that is inadequately stamped, the Registry was directed to return the petition under objections and the award was directed to be impounded forthwith. For this purpose, such petitions were to be listed before the Joint Registrar. The Joint Registrar was directed to be at liberty to proceed either under Section 35 or Section 38(2) depending upon the facts and circumstances of each case. These petitions are to be listed before the Court upon satisfaction of stamp duty.
● To balance out the objective behind the Arbitration Act and the bar under Section 35 of the Stamp Act, these petitions were directed not be disposed of for want of stamp duty and interim orders (if any) were directed to continue till the defect is cured by decree holders.
● Existing Pending Petitions: Parties in pending enforcement petitions lacking adequate stamp duty, if deemed fit, were also permitted to withdraw the petition with liberty to seek restoration as and when the situation arises and after due satisfaction of the stamp duty.
● Encumbered/Stayed Proceedings: In cases where a stay on the operation of the award is subsisting in connected proceedings under Section 34 or Section 37 of the Arbitration Act, or where a moratorium under the Insolvency and Bankruptcy Code of 2016 is imposed or liquidation proceedings are ongoing, parties were granted liberty to withdraw the enforcement petition, with liberty to re-file or seek restoration as and when the statutory or judicial impediment ceases to operate.
● Power to Call Original Award: In cases where the arbitral award is not requisitioned, the Registrar General/Joint Registrar of this Court were empowered to call for the original arbitral award. It was directed that if not furnished voluntarily, the Court may not impose any penalty. However, the bar under Section 35 of the Stamp Act was directed to continue to operate.
● Registration Act of 1908: Where applicable, if an award is liable to be registered by virtue of Section 17 of the Registration Act of 1908, and is not so registered, the decree holders were directed to ensure necessary compliance in view of Section 49 of the Registration Act.
The Court held that the arbitral award dated 26-03-2019 along with the order dated 07-05-2019, was liable to be impounded. The decree holder was directed to furnish the original award before the Joint Registrar, with the matter listed before the Joint Registrar on 08-09-2026, and the Collector of Stamps/SDM was requested to expedite the process, preferably within six weeks. The matter was directed to be listed before the Court after the requisite stamp duty and penalty, if applicable, were deposited. The Court clarified that these directions did not apply to foreign arbitration awards and directed the present judgment be forwarded to the Principal District & Sessions Judges, the Principal Secretary (Law, Justice & LA) of GNCTD, the Divisional Commissioner/Office of the Collector of Stamps, and the Director of the Delhi Judicial Academy.
