Case Note & Summary
The National Highways Authority of India (NHAI) filed a writ petition challenging an order dated 22.10.2021 passed by the execution court in E.P No.302/2015. The execution court had directed NHAI, as the judgment debtor, to deposit stamp duty of Rs.6,34,821/- to get the arbitral award executed. NHAI sought a writ of certiorari to quash that order and a direction to the District Court to impound the award and send it to the Deputy Commissioner under the Karnataka Stamp Act, 1957. The High Court observed that under the Stamp Act, the liability to pay stamp duty on an award is on the person claiming under the award, i.e., the award holder (the respondents), and not on the judgment debtor. The execution court's direction to NHAI to deposit stamp duty was therefore erroneous. The High Court quashed the impugned order and directed the execution court to impound the award and forward it to the Deputy Commissioner for assessment and collection of stamp duty from the award holder. The writ petition was allowed.
Headnote
A) Stamp Act - Arbitral Award - Stamp Duty Liability - Karnataka Stamp Act, 1957, Sections 33, 35 - The execution court directed the judgment debtor (NHAI) to deposit stamp duty of Rs.6,34,821/- to execute the arbitral award. The High Court held that the liability to pay stamp duty on an award is on the person claiming under the award, i.e., the award holder, and not on the judgment debtor. The execution court's order was quashed, and the court was directed to impound the award and send it to the Deputy Commissioner for assessment of stamp duty. (Paras 1-5)
Issue of Consideration
Whether the execution court can direct the judgment debtor (NHAI) to deposit stamp duty on an arbitral award to execute the award, and whether the award should be impounded for insufficient stamp duty.
Final Decision
The High Court allowed the writ petition, quashed the execution court order dated 22.10.2021, and directed the execution court to impound the arbitral award and forward it to the Deputy Commissioner for assessment and collection of stamp duty from the award holder.
Law Points
- Stamp duty on arbitral award is payable by the person claiming under the award
- not the judgment debtor
- Execution court cannot direct judgment debtor to deposit stamp duty
- Arbitral award is not a decree for stamp duty purposes
- Sections 33 and 35 of Karnataka Stamp Act
- 1957 require impounding of insufficiently stamped award
Case Details
2022 LawText (KAR) (02) 17
Writ Petition No.104799/2021 (LA-RES)
Sri. B. P. Mathapati for petitioners, Sri. S. C. Jainar for respondents
The Deputy General Manager (Tech) and The Project Manager, National Highways Authority of India, and The Special Land Acquisition Officer, National Highways No.63
Smt. Shalini W/o Vijay Lathe and Nitin Vijay Lathe
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Nature of Litigation
Writ petition under Articles 226 and 227 of the Constitution of India challenging an execution court order directing the judgment debtor to deposit stamp duty on an arbitral award.
Remedy Sought
NHAI sought a writ of certiorari to quash the execution court order dated 22.10.2021 and a direction to the District Court to impound the award and send it to the Deputy Commissioner.
Filing Reason
The execution court directed NHAI, as judgment debtor, to deposit stamp duty of Rs.6,34,821/- to execute the arbitral award, which NHAI contended was not its liability.
Previous Decisions
The execution court in E.P No.302/2015 passed the impugned order on 22.10.2021.
Issues
Whether the execution court can direct the judgment debtor to deposit stamp duty on an arbitral award.
Whether the arbitral award should be impounded for insufficient stamp duty under the Karnataka Stamp Act, 1957.
Submissions/Arguments
NHAI argued that the liability to pay stamp duty is on the award holder, not the judgment debtor.
NHAI submitted that the award should be impounded and sent to the Deputy Commissioner for assessment.
Ratio Decidendi
Under the Karnataka Stamp Act, 1957, the liability to pay stamp duty on an arbitral award is on the person claiming under the award (the award holder), and the execution court cannot direct the judgment debtor to deposit such stamp duty. The award, if insufficiently stamped, must be impounded and sent to the Deputy Commissioner for assessment.
Judgment Excerpts
The National Highways Authority of India (NHAI), who is the petitioner in the above writ petition, has sought for the following reliefs: ... Issue a writ of certiorari and quash the order dated 22.10.2021 in E.P No.302/2015 that directs the respondents to deposit the stamp duty of Rs.6,34,821/- in order to get the award executed.
The Hon’ble District Court, Dharwad may be directed to impound the award of the Arbitrator and send the same to the Deputy Commissioner as per the provisions of the law.
Procedural History
The execution court in E.P No.302/2015 passed an order on 22.10.2021 directing NHAI to deposit stamp duty. NHAI filed the present writ petition on an unspecified date, and the High Court heard it on 28.02.2022.
Acts & Sections
- Karnataka Stamp Act, 1957: 33, 35
- Constitution of India: 226, 227
