Case Note & Summary
The petitioners, Milind Dattatraya Mahajan and others, filed a writ petition challenging an order dated 8.4.2018 passed by the learned sole Arbitrator. The Arbitrator had rejected the petitioners' application objecting that the agreement dated 9.4.2014 was not duly stamped and could not be acted upon or read in evidence unless impounded under Section 33 of the Maharashtra Stamp Act and dealt with under Chapter IV of that Act. The background of the case is that the respondent, Pramod Deshraj Budhraja, had filed a summary civil suit under Order 37 of the Code of Civil Procedure against the petitioners seeking a decree for Rs. 3,51,26,260/- with interest. The petitioners, at the first opportunity, filed an arbitration agreement dated 9.4.2014 and moved an application under Section 8 of the Arbitration and Conciliation Act, 1996 read with Section 9A of the CPC for referring the matter to arbitration. The trial court rejected that application on 27.10.2015, but the petitioners appealed under Section 37(1)(a) of the Arbitration Act, and a learned single Judge of this Court allowed the appeal on 29.2.2016, directing the parties to be referred to arbitration. Subsequently, the respondent filed an application under Section 11(6) of the Arbitration Act, and this Court appointed a former Judge as the sole arbitrator. Before the arbitrator, the petitioners filed an application (exhibit 23) objecting that the agreement was insufficiently stamped and could not be acted upon. The arbitrator rejected that application, leading to the present writ petition. The legal issue was whether the arbitrator had the power to impound the document under Section 33 of the Maharashtra Stamp Act. The petitioners argued that the arbitrator is not a 'person in charge of a public office' under Section 33 and that the objection should have been upheld. The respondent contended that the arbitrator has such power and that the objection was rightly rejected. The Court analyzed the provisions of Section 33 of the Maharashtra Stamp Act and held that an arbitrator, being a person in charge of a public office, has the power to impound an insufficiently stamped document. The Court also noted that the objection regarding stamp duty can be raised at any stage before the document is acted upon. The Court further held that the fact that the court referred the matter to arbitration under Section 8 does not preclude the arbitrator from examining the stamp duty aspect. The Court dismissed the writ petition, upholding the arbitrator's order.
Headnote
A) Arbitration Law - Stamp Duty - Power of Arbitrator to Impound - Section 33 of Maharashtra Stamp Act - The arbitrator, being a person in charge of a public office, has the power to impound an insufficiently stamped document and deal with it under Chapter IV of the Stamp Act. The objection regarding stamp duty can be raised at any stage before the document is acted upon or read in evidence. The arbitrator's order rejecting the petitioners' application was upheld. (Paras 1-10) B) Arbitration Law - Reference to Arbitration - Stamp Duty Objection - Section 8 of Arbitration and Conciliation Act, 1996 - The fact that the court referred the matter to arbitration under Section 8 does not preclude the arbitrator from examining the stamp duty aspect. The arbitrator is not bound by the court's prima facie view on the existence of an arbitration agreement. (Paras 4-6) C) Stamp Act - Impounding of Documents - Section 33 - Person in Charge of a Public Office - An arbitrator appointed by the court is a person in charge of a public office for the purposes of Section 33 of the Maharashtra Stamp Act, and thus has the duty to impound insufficiently stamped instruments. (Paras 7-9)
Issue of Consideration
Whether an arbitrator can reject an application objecting to the admissibility of an agreement on the ground that it is insufficiently stamped, and whether the arbitrator has the power to impound such document under Section 33 of the Maharashtra Stamp Act.
Final Decision
The writ petition is dismissed. The order of the learned sole arbitrator dated 8.4.2018 is upheld. No order as to costs.
Law Points
- Arbitrator has power to impound insufficiently stamped document under Section 33 of Maharashtra Stamp Act
- Arbitrator is a person in charge of a public office for purposes of Section 33
- Objection as to stamp duty can be raised at any stage before the document is acted upon
- Section 8 of Arbitration Act does not bar raising stamp duty objection before arbitrator
