Case Note & Summary
The petitioners, Mrs. Shaila Mathias and Mrs. Yasmine Felix, filed a writ petition under Article 227 of the Constitution of India challenging an order dated 30.08.2018 passed by the City Civil and Sessions Judge, Bengaluru in Ex.P.No.1776/2018. By that order, the trial court allowed a memo filed by the respondent, Nitesh Estates Limited, and directed the petitioners to pay stamp duty as prescribed under Article 11 of the Karnataka Stamp Act, 1957 on an order dated 28.11.2017 passed by an arbitrator under Section 17 of the Arbitration and Conciliation Act, 1996. The petitioners contended that the arbitrator's order was an interim order, not an award, and thus not subject to stamp duty under Article 11. The respondent argued that the term 'award' in Article 11 includes any order of an arbitrator. The High Court examined the language of Article 11 and the scheme of the Arbitration Act. It noted that the Arbitration Act distinguishes between an 'award' (final determination) and an 'interim order' under Section 17. The court held that the expression 'award' in Article 11 of the Stamp Act must be interpreted in its ordinary sense, meaning a final adjudication of disputes, and does not include an interim order passed under Section 17 of the Arbitration Act. Accordingly, the court allowed the writ petition, set aside the trial court's order, and held that no stamp duty was payable on the arbitrator's Section 17 order.
Headnote
A) Stamp Act - Interpretation of 'Award' - Article 11 of Karnataka Stamp Act, 1957 - The court considered whether an interim order passed by an arbitrator under Section 17 of the Arbitration and Conciliation Act, 1996 is an 'award' for the purpose of stamp duty under Article 11 of the Karnataka Stamp Act, 1957. The court held that the expression 'award' in Article 11 refers only to a final arbitral award determining the rights of parties, and not to an interim order under Section 17, which is a procedural order to maintain status quo. The court set aside the trial court's order directing payment of stamp duty on the arbitrator's order. (Paras 1-3)
Issue of Consideration
Whether the expression 'award' as used in Article 11 of the Karnataka Stamp Act, 1957 includes an order passed by an arbitrator under Section 17 of the Arbitration and Conciliation Act, 1996.
Final Decision
The High Court allowed the writ petition, set aside the trial court order dated 30.08.2018, and held that no stamp duty is payable under Article 11 of the Karnataka Stamp Act, 1957 on an order passed by an arbitrator under Section 17 of the Arbitration and Conciliation Act, 1996.
Law Points
- Interpretation of 'award' under Karnataka Stamp Act
- 1957
- Article 11
- Distinction between 'award' and 'interim order' under Arbitration and Conciliation Act
- 1996
- Stamp duty on arbitral orders
- Section 17 order not an award
Case Details
2019 LawText (KAR) (01) 58
Writ Petition No.47897 of 2018 (GM-CPC)
Mr. Dnyan Chinnappa, Senior Counsel for Ms. Vedanayaki, Adv., for M/s. Crest Law Partners, Advs. (for petitioners); Sri. Vivek Holla, Adv., for M/s. Holla & Holla, Advs. (for respondent)
Mrs. Shaila Mathias and Mrs. Yasmine Felix
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Nature of Litigation
Writ petition under Article 227 of Constitution of India challenging trial court order directing payment of stamp duty on an arbitrator's order under Section 17 of the Arbitration and Conciliation Act, 1996.
Remedy Sought
Petitioners sought setting aside of the trial court order dated 30.08.2018 and a declaration that no stamp duty is payable on the arbitrator's order.
Filing Reason
The trial court allowed the respondent's memo and directed the petitioners to pay stamp duty under Article 11 of the Karnataka Stamp Act, 1957 on an order passed by the arbitrator under Section 17 of the Arbitration and Conciliation Act, 1996.
Previous Decisions
The trial court passed the impugned order on 30.08.2018 in Ex.P.No.1776/2018.
Issues
Whether an order passed by an arbitrator under Section 17 of the Arbitration and Conciliation Act, 1996 is an 'award' within the meaning of Article 11 of the Karnataka Stamp Act, 1957.
Submissions/Arguments
Petitioners argued that the arbitrator's order under Section 17 is an interim order, not an award, and thus not subject to stamp duty under Article 11 of the Karnataka Stamp Act.
Respondent contended that the term 'award' in Article 11 includes any order of an arbitrator, including an interim order under Section 17.
Ratio Decidendi
The expression 'award' in Article 11 of the Karnataka Stamp Act, 1957 refers only to a final arbitral award determining the rights of parties, and does not include an interim order passed by an arbitrator under Section 17 of the Arbitration and Conciliation Act, 1996, which is a procedural order to maintain status quo.
Judgment Excerpts
On admitted facts, the issue which arises for consideration in this case is whether the expression 'award' as used by the legislature in Article 11 of 'the Stamp Act' would include an order passed by the Arbitrator under Section 17 of The Arbitration and Conciliation Act 1996.
Procedural History
The petitioners filed a writ petition under Article 227 of the Constitution of India challenging the order dated 30.08.2018 passed by the City Civil and Sessions Judge, Bengaluru in Ex.P.No.1776/2018, which directed payment of stamp duty on an arbitrator's order under Section 17 of the Arbitration and Conciliation Act, 1996. The High Court heard the matter on 17.12.2018 and pronounced the order on 02.01.2019.
Acts & Sections
- Karnataka Stamp Act, 1957: Article 11
- Arbitration and Conciliation Act, 1996: Section 17
- Constitution of India: Article 227
