The Delhi High Court has observed that stamping of registration of a Memorandum of Understanding ( MOU ) is not relevant for adjudication of an application under section 8 of the Arbitration & Conciliation Act, 1996.
Mrs Vinnu Goel, the Petitioner prayed to declare that the Memorandum of Understanding dated 12.11.2014 has been incorrectly and insufficiently stamped/endorsed by the Respondent
In Re: Interplay between Arbitration Agreements under the Arbitration and Conciliation Act, 1996 and the Indian Stamp Act, 1899; the Seven Judges Bench has held that the Agreements which are not stamped or are inadequately stamped are inadmissible in evidence under Section 35 of the Stamp Act. Such agreements are not rendered void or void ab initio or unenforceable or that Non-stamping or inadequate stamping is a curable defect.
The Petitioner is a plaintiff in which is a suit for declaration of the Memorandum of Understanding, which is purported to be signed between Defendant Nos.1-3 and the Plaintiff, as null and void as well as partition of the suit properties. An application under Section 8 of the Arbitration & Conciliation Act was filed praying that the parties to the said suit be referred to arbitration in view of the MOU dated 12.11.2014.
It was evident that the intent was to ensure that the State was not deprived of its revenue. The contention of Senior Counsel for the Respondent that granting prayer (a) would amount to undoing the Order passed allowing the application under Section 8 of the Arbitration & Conciliation Act, 1996 cannot be accepted because the Single Judge has held that the issue of stamping of registration of MOU is not relevant for adjudication of the application under Section 8 of the Arbitration & Conciliation Act.
The court comprising Justice Subramonium Prasad viewed that the interest of justice would be served by permitting the Petitioner to approach the Chief Controlling Revenue Authority as to the amount of duty with which the instrument in question is chargeable and proceed ahead per law.
The Senior Counsel contended that the same exercise can be done by the Arbitral Tribunal cannot denude the jurisdiction of the Court from entertaining the writ petition as the question that is being considered is whether the State has been deprived of the revenue of the stamp duty payable on the instrument or not.
The Court disposed of the Writ petition directing the Chief Controlling Revenue Authority to apply its mind without being influenced by any observations.
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