The Delhi High Court has held that four loan agreements executed between Religare Finvest Limited and companies belonging to the Zee Group are governed by the Indian Stamp Act, 1899, as applicable in the National Capital Territory of Delhi, and not the Maharashtra Stamp Act, 1958. The Court accordingly set aside a common interim arbitral award which had held that the agreements were sufficiently stamped under the Maharashtra Stamp Act.
The dispute arose from four loan agreements executed on March 15, 2014, under which Religare had extended loan facilities to four companies forming part of the Zee Group. The central question was whether the agreements attracted stamp duty under the Maharashtra Stamp Act or the Indian Stamp Act. A further issue concerned the applicable rate of stamp duty if the Maharashtra legislation applied.
The Sole Arbitrator had held that the Maharashtra Stamp Act governed the agreements and that Article 5(h)(B) of its Schedule I attracted a fixed stamp duty of ₹100 for each agreement. The Arbitrator consequently held that the agreements were sufficiently stamped and did not require impounding.
Rejecting the application of the Maharashtra Stamp Act, the Court held that the loan agreements were executed in Delhi. It noted that although the borrower companies had initially signed the agreements in Mumbai, Religare, the lender, signed them subsequently in New Delhi on the same day. The Court reasoned that the borrowers’ signatures alone did not constitute completed chargeable instruments without execution by the lender.
Applying the doctrine of territorial nexus, the Court held that the relevant territorial connection between the taxable event and the taxing jurisdiction arose in Delhi, where the agreements became executed instruments upon being signed by all contracting parties.
The Court also disagreed with the Arbitrator’s reasoning that the loan agreements did not specify any monetary value. It noted that the Facility Schedule of Terms (FST), which stipulated the loan amounts, was required under the agreements to be read as part and parcel of them. The Arbitrator had overlooked these contractual provisions, thereby ignoring vital evidence relevant to determining the nature and value of the transaction.
Justice Om Prakash Shukla observed that the Arbitrator’s technical approach of treating the Facility Schedule of Terms separately from the loan agreements effectively rewrote the commercial bargain between the parties.
Holding that the question of applicable stamp legislation went to the root of the matter and warranted interference under Section 34, the Court concluded that the agreements dated March 15, 2014, were executed in Delhi and were therefore liable to be stamped under the Indian Stamp Act, 1899, as applicable in the NCT of Delhi.
Accordingly, the High Court set aside the interim arbitral award dated February 28, 2026. It allowed the four Section 34 petitions filed by Religare and dismissed the four cross-petitions filed by the Zee Group. There was no order as to costs.
