Delhi High Court: In a case wherein a review petition was filed by the respondent seeking review of the order dated 20-03-2023 passed by this Court, whereby the petition filed by the petitioner under Section 11 of the Arbitration and Conciliation Act, 1996 (‘Act’) was allowed, Sachin Datta, J.*, opined that in certain situations, it might be expedient to leave it to the arbitrator to determine the issue as to whether stamping was insufficient, and if so, the arbitrator would take recourse to Section 33 of the Stamp Act, 1889 (‘Stamp Act’). The Court observed that a review was even otherwise precluded in terms of the Explanation to Order XLVII Rule 1 of the Civil Procedure Code, 1908 (‘CPC’), which stated that where any question of law on which the judgment of the Court was based, had been reversed or modified by a subsequent decision of a superior Court in any other case, the same shall not be a ground for the review of such judgment. Thus, the Court dismissed the review petition and held that the applicant had failed to make out any case of review of the judgment/order dated 20-03-2023.
Background
The present review petition was filed on the premise that the agreement dated 02-02-2019 executed between the parties, containing the arbitration clause, was unstamped, and after the judgment in N.N. Global Mercantile (P) Ltd. v. Indo Unique Flame Ltd., 2023 SCC OnLine SC 495 (‘N.N. Global case’), the same was invalid in law and could not be acted upon, and thus, liable to be impounded by this Court.
Analysis, Law, and Decision
The Court noted that the stamp duty amount of Rs. 100 had been paid on the agreement dated 02-02-2019. Therefore, the contention of counsel for the respondent that the said agreement was unstamped was factually incorrect. The Court also noticed that the order dated 20-03-2023 was a consent order which specifically reserved the right of the respondent to raise preliminary objections with regard to the arbitrability/jurisdiction (which included objections on account of insufficiency of stamp duty, and/or for non-registration of the said agreement).
The Court opined that the order dated 20-03-2023 was consistent with the judgment of the Supreme Court in Intercontinental Hotels Group (India) (P) Ltd. v. Waterline Hotels (P) Ltd., (2022) 7 SCC 662, wherein the Supreme Court distinguished between the cases involving non-payment of stamp duty vis-à-vis insufficiency of stamp duty, and held that “when the stamp duty had been paid, then whether it be insufficient or appropriate was a question that might be answered at a later stage as this Court could not review or go into this aspect under Section 11(6) of the Act. If it was a question of complete non-stamping, then this Court might have had an occasion to examine the concern raised in N.N. Global case”.
Thus, the Court opined that the review of the order dated 20-03-2023 was sought based on the decision of the Constitution Bench of the Supreme Court in N.N. Global case (supra). The Court noted that even in N.N. Global case (supra), the Supreme Court held that “there might, however, be cases, where it might be stamped but the objection was taken by the party that it was not duly stamped. In such cases, no doubt, it was ordinarily the duty of the Court to examine the matter with reference to the duty under Section 33(2) of the Stamp Act. If the claim that it was insufficiently stamped, appeared to the Court to be on the face of it, wholly without foundation, it might make the reference based on the existence of an Arbitration Agreement otherwise and then leave it open to the Arbitrator to exercise the power under Section 33 of the Stamp Act, should it become necessary. This approach did justice to the word ‘examine’ in Section 33(2) of the Stamp Act while not ignoring the command of Section 11(6A) of the Act. It was not to be confused with the duty to examine prima facie whether an ‘Arbitration Agreement’ existed under Section 11(6A) of the Act but was related to the duty to examine the matter under Section 33(2) of the Stamp Act”.
Thus, the Court opined that in certain situations, it might be expedient to leave it to the arbitrator to determine the issue as to whether stamping was insufficient, and if so, the arbitrator would take recourse to Section 33 of the Stamp Act. In this case, the arbitrator, having already been appointed, the applicant was not constrained from taking appropriate plea/s regarding alleged insufficiency of stamping before the arbitrator. The Court observed that a review was even otherwise precluded in terms of the Explanation to Order XLVII Rule 1 of CPC, which stated that where any question of law on which the judgment of the Court was based, had been reversed or modified by a subsequent decision of a superior Court in any other case, the same shall not be a ground for the review of such judgment.
The Court relied on Neelima Srivastava v. State of Uttar Pradesh, 2021 SCC OnLine SC 610, wherein it was held by the Supreme Court that “it was not permissible for the parties to re-open the concluded judgments of the Court as the same might not only tantamount to an abuse of the process of the Court but would have far reaching adverse effect on the administration of justice”.
Thus, the Court dismissed the review petition and held that the applicant had failed to make out any case of review of the judgment/order dated 20-03-2023.
[Ambience Developers and Infrastructure (P) Ltd. v. Zesty Foods, 2023 SCC OnLine Del 4231, decided on 21-07-2023]
*Judgment authored by: Justice Sachin Datta
Advocates who appeared in this case:
For the Petitioner: Kittu Bajaj, Advocate;
For the Respondent: Amit Chaubey, Advocate.
Buy Arbitration and Conciliation Act, 1996 HERE
