Kirloskar Pneumatic Company Limited vs Oil And Natural Gas Corporation Limited
- Court
- Delhi High Court
$~51
* IN THE HIGH COURT OF DELHI AT NEW DELHI
# CNR No. DLHC011049942025
+ OMP (ENF.) (COMM.) 293/2025, EX.APPL.(OS) 1889/2025,
EX.APPL.(OS) 843/2026, & EX.APPL.(OS) 1318/2026 –Dir.
KIRLOSKAR PNEUMATIC COMPANY LIMITED
.....Decree Holder
Through: Mr. Raj Shekhar Rao, Sr. Adv.
with Ms. Pratiksha Sharma, Mr.
Ankit Aeharya, Mr. Sameer
Mahajan, Mr. Sahil Bijliwala,
Ms. Ritu Chaudhary, Mr.
Ayush Jain, Mr. Mukesh
Kumar and Mr Ajay, Advs.
versus
OIL AND NATURAL GAS CORPORATION LIMITED
.....Judgement Debtor
Through: Mr. Chetan Sharma, ASG with
Mr. Abhishek Gupta, Ms.
Ikshita Singh, Mr. Amit Gupta,
Mr. RV Prabhat, Mr. Shubham
Sharma, Mr. Naman, Mr.
Abhishek Pachauri and Mr. A S
Vamsi Krishna, Advs.
CORAM:
HON'BLE MR. JUSTICE OM PRAKASH SHUKLA
JUDGMENT(ORAL)
% 09.10.2026
1. The present petition has been filed under Section 36 of the
1
Arbitration and Conciliation Act, 1996 seeking enforcement of the
Arbitral Award dated 13.04.2023, read with Correction Order dated
15.04.2023.
2. The record reveals that the arbitral award was rendered and
Signature Not Verified
Signed By:GUNN
Signing Date:17.10.2026
19:31:53
OMP (ENF.) (COMM.) 293/2025 Page 1 of 25
signed at Ahmedabad, Gujarat.
3. Mr. Chetan Sharma, learned ASG appearing on behalf of the
Judgment Debtor, has raised a preliminary objection concerning the
sufficiency of stamp duty on the arbitral award sought to be enforced.
4. Learned ASG submits that although the chargeable event for the
purposes of stamp duty is the execution of the instrument, i.e., the
signing of the arbitral award as per Section 2(12) of the Indian Stamp
Act of 1899, an independent liability to pay stamp duty arises when
enforcement is sought in another State. It is accordingly contended
that, since the present enforcement proceedings have been instituted in
Delhi, the Decree Holder is liable to pay the differential stamp duty in
accordance with the Indian Stamp Act, 1899, as applicable to the NCT
2
of Delhi .
5. Learned ASG further contends that the differential stamp duty
was deposited beyond the prescribed period of one month and that
such belated payment is contrary to the decision of this Court in M/s
3
URC Construction (P) Ltd. v. Airports Authority of India . It is
additionally urged that the said decision does not adjudicate upon the
question of inter-State chargeability of stamp duty.
6. In this regard, learned ASG places reliance on the decisions of
4
this Court in Mohini Electricals Ltd. v. Delhi Jal Board and Gail
5
(India) Ltd. v. A.P. Gas Power Corpn. Ltd. , to contend that the
1
“ACA” hereinafter
2
“ISA” hereinafter
3
OMP (ENF.) (COMM.) 155/2026; 2026 SCC OnLine Del 6909
4
2021 SCC OnLine Del 3506
5
2024 SCC Online Del 5226
Signature Not Verified
Signed By:GUNN
Signing Date:17.10.2026
19:31:53
OMP (ENF.) (COMM.) 293/2025 Page 2 of 25
question of sufficiency of stamp duty assumes relevance at the stage
of enforcement of an arbitral award.
7. On the other hand, Mr. Raj Shekhar Rao, learned Senior
Counsel appearing on behalf of the Decree Holder, submits that the
arbitral award has been duly stamped in accordance with the Gujarat
Stamp Act of 1958, being the legislation applicable to the place where
the award was executed.
8. Learned Senior Counsel further submits that no additional
liability to pay stamp duty arises merely because enforcement is
sought in Delhi. It is urged that the ISA, as applicable to NCT of
Delhi, contains no provision akin to Section 18 of the Maharashtra
Stamp Act, 1958, which specifically mandates stamping of
instruments executed outside the State within three months upon their
receipt within the State. In the absence of any corresponding statutory
provision, the imposition of differential stamp duty is stated to be
legally unsustainable.
9. I have heard the learned Counsel for both the parties and
carefully considered their rival submissions.
10. At the outset, it is apposite to refer to the decision of this Court
in Genus Power and Infrastructures Ltd. v. Supreme Advertising
6
Pvt. Ltd. , wherein the observations made in GAIL (India) (supra) ,
were considered and distinguished, as follows:
“1. At this stage, learned Counsel for the Decree Holder sought to
place reliance on the decision of a co-ordinate Bench of this Court
6
OMP (ENF.) (COMM.) 83/2024
Signature Not Verified
Signed By:GUNN
Signing Date:17.10.2026
19:31:53
OMP (ENF.) (COMM.) 293/2025 Page 3 of 25
in GAIL (India) Ltd. v. M/s Andhra Pradesh Gas Power Corp.
7
Ltd. and upon M/s SA Builders Ltd. v. Municipal Corporation of
8
Delhi , which follows the former decision. The relevant excerpt is
reproduced thus:
9
“6. In fact, Section 17 of the Stamp Act requires all
instruments, chargeable to stamp duty, to be stamped
before or at the time of execution . In the case of an
arbitral award, Mr. Singh candidly acknowledges that
“execution” would refer to actual execution of the
award . That has yet to take place. Even otherwise, even
while this execution petition is pending, the deficient
stamp duty has been paid by the petitioner.
7. In these circumstances, I am of the opinion that these
execution proceedings cannot be permitted to be kept on
hold awaiting any further proceedings in relation to the
stamp duty payable on the award under execution.”
(emphasis supplied)
2. It appears from a perusal of the aforesaid excerpt that the
learned co-ordinate Bench of this Court proceeds on the premise
that “execution” is synonymous to enforcement of an arbitral
award under Section 36 of the Arbitration and Conciliation Act,
10
1996 .
3. There is no quarrel with the proposition that “execution” as
employed in Section 17 of the Stamp Act refers to execution of an
instrument i.e., an arbitral award in the present case.
4. However, the meaning of “execution” is imported from the
definition clause under Section 2(12) of the Act, which
categorically provides that “executed” and “execution” means
“signed” and “signature”. It does not, by any stretch of
imagination, refer to actual execution or enforcement by the court.
As a logical corollary, “execution” under Section 17 does not refer
to execution of an arbitral award by a court in terms of Section 36
of the A&C Act.
5. Section 17 explicitly provides that an arbitral award attracts
stamp duty before or at the time it is signed and accordingly, has
nothing to do with the enforcement of an award (or execution of an
award by a court, as understood in the aforementioned judgments).
7
OMP(ENF)(COMM) 176/2022
8
Ex.P. 99/1998
9
17. Instruments executed in India. – All instruments chargeable with duty and executed by any person in
India shall be stamped before or at the time of execution.
10
“A&C Act” hereinafter
Signature Not Verified
Signed By:GUNN
Signing Date:17.10.2026
19:31:53
OMP (ENF.) (COMM.) 293/2025 Page 4 of 25
6. In the considered view of this Court, the learned co-ordinate
Bench did not decide the question as to when an arbitral award
would become amenable to stamp duty under the Act, as is
apparent from a facial reading of the excerpt, whereby the
conclusion of the learned Bench was premised on the candid
submission advanced by the learned Counsel appearing in that
matter.
7. In that view of the matter, according to this Court, the issue
having been not raised and/or decided before the learned Bench
and the same merely being a stray observation, cannot be binding
on this Court. This Court respectfully disagrees with the said
observation, since the aforesaid obiter lies in the teeth of the
statutory provisions of the Stamp Act.”
11. In the above decision, the Court clarified that the expression
“execution”, as employed in Section 17 of the ISA, must be
understood in the light of Section 2(12) thereof, which defines
“executed” and “execution”, with reference to instruments, as
meaning “signed” and “signature”.
12. Further, the Court held that execution of an arbitral award, for
the purposes of the ISA, cannot be equated with its enforcement under
Section 36 of the Act. It is trite that the former denotes affixing
signatures to the instrument, whilst the latter concerns the process
whereby the rights crystallised under the arbitral award are given
effect through judicial proceedings.
13. Significantly, the Court observed that the decision in GAIL
(India) (supra) did not directly adjudicate upon the point of time at
which an arbitral award becomes chargeable to stamp duty. The
observations therein, insofar as they appeared to equate execution with
enforcement, were therefore held not to constitute a binding
Signature Not Verified
Signed By:GUNN
Signing Date:17.10.2026
19:31:53
OMP (ENF.) (COMM.) 293/2025 Page 5 of 25
determination of that question.
14. Therefore, the reliance placed by the Judgment Debtor upon
GAIL (India) (supra) does not advance its case, particularly when the
said decision is examined in the context of the statutory definition of
“execution” and the subsequent clarification rendered in Genus Power
(supra) .
15. The decision in Mohini Electricals Ltd. (supra) was also
considered by this Court in M/s URC (supra) , whereby upon
examining the statutory scheme governing the stamping of arbitral
awards, this Court recognized that the question of adequacy of stamp
duty assumes significance when an award is sought to be enforced and
held as follows:
“87. The Court proceeded to discuss Sections 33, 35 and 38 of
the Indian Stamp Act, 1899 to hold that the Court was duty-bound
under Section 33 to impound an insufficiently stamped award and
cannot exercise any discretion in this regard. It was held that the
only way to cure the defect was to impound the instrument and
forward it to the concerned Collector, who will then assess the
applicable stamp duty and penalty thereof. To buttress, the Court
held that the aforesaid proposition was also made applicable at the
pre-referral stage by the decision in SMS Tea Estates P.
Ltd. v. Chandmari Tea Co. P. Ltd. [(2011) 14 SCC 66 : (2012) 4
SCC (Civ) 777], and was followed in Garware Wall
Ropes Ltd. v. Coastal Marine Constructions & Engg. Ltd. [(2019)
9 SCC 209 : (2019) 4 SCC (Civ) 324] .
88. Further, in the aforesaid matter, the learned Arbitrator had
permitted payment of stamp duty on the award at a belated stage,
i.e., well after the 30-day period expired. In this regard, two
contentions were raised on behalf of the Decree Holder that since
the (i) Arbitration Act does not stipulate a time period within which
the award shall be stamped and also (ii) does not impose any duty
on the Tribunal to stipulate or ensure such payment, such an act by
the Arbitrator was not permissible. The Court in its reasoning
placed reliance on Sections 31, 35 and 36 of the Arbitration Act to
hold as follows:
Signature Not Verified
Signed By:GUNN
Signing Date:17.10.2026
19:31:53
OMP (ENF.) (COMM.) 293/2025 Page 6 of 25
“30. The extracted provisions hereinabove show that
the sole duty cast on the arbitral tribunal at the time of
passing the award is to ensure that a signed copy of the
award is delivered to each party, but there is no
obligation on the tribunal to ensure that the requisite
stamp duty payable thereon stands paid at the time of
passing of the award. Section 36 of the Arbitration Act
dealing with enforcement of the award also proceeds to
clarify that a domestic arbitral award shall be treated as
a decree of the Court and, subject to the outcome of any
challenge thereupon under Section 34 of the Arbitration
Act, it can be simply enforced as a decree of the Court in
accordance with the provisions of the Code of Civil
Procedure, 1908 without any statutory requirement of
making it a Rule of Court, unlike Section 17 of the Indian
Arbitration Act, 1940. A combined reading of these
provisions shows that let alone the arbitral Tribunal,
there is no need even for the parties to file the award in
Court and certainly no duty on their part to do so, unless
they intend to initiate proceedings under Sections 34 or
36 of the Act
31. Interestingly, I find that the Arbitration Act does not
even create a legal obligation on the parties in
arbitration to pay stamp duty on an award. It is only
when they begin taking steps to enforce the award that
the parties are obligated to ensure that the instrument
has been duly stamped, at which point the Court shall be
guided by the provisions of Sections 33, 35 and 38 of
the Indian Stamp Act, 1899. This position was reiterated
by the Supreme Court in M. Anusuya Devi v. M. Manik
Reddy, 2003 Supp (4) SCR 853 when it held that the
question whether an award is stamped or not is only
relevant for enforcement proceedings, and not during the
Section 34 proceedings because an arbitral award cannot
be set aside on the ground of inadequate stamping. Thus,
the Arbitration Act envisages that the payment of
requisite stamp duty on an award shall only be required
when a party is seeking to get the same enforced under
Section 36 .
32. Once the question whether proper stamp duty was
paid on the award is precluded from being a valid ground
to challenge the same under Section 34, it is hard to
imagine that the legislature intended to include the
power to make substantive directions on the subject fall
in the core jurisdiction of an arbitral tribunal. In other
Signature Not Verified
Signed By:GUNN
Signing Date:17.10.2026
19:31:53
OMP (ENF.) (COMM.) 293/2025 Page 7 of 25
words, the issue of stamping of the award is not the
concern of the arbitral tribunal at all and has to be
examined only when a party approaches the Court for
enforcement of the award.
33. That being said, it is not necessarily true that every
time a party decides to enforce an award, it needs to
ensure that the same is duly stamped. For instance, a
situation may arise in which both parties in arbitration
mutually decide to accept the award, thereby dispensing
with the formality of instituting an enforcement petition.
In such cases, there would be absolutely no occasion for
any of the parties to pay the stamp duty.
34. That being said, when it comes to the question of
paying stamp duty on an arbitral award, I am inclined to
accept the legal position advanced by Ms. Salwan on
behalf of the DH that the learned arbitrator did not have
any statutory power to direct that the stamp duty must be
paid within a specific period. Therefore, the direction of
the learned arbitrator granting 30 days' time for
payment of stamp duty on the award was a direction
issued in excess of its powers under the Act. As a result,
a direction like this which was void could neither have
created an obligation on the part of the DH nor can be
used to call into question an act which was perfectly
sustainable in the eyes of law, i.e. payment of the stamp
duty in February 2020. Thus, I have no hesitation in
rejecting the JD's contention that the payment of stamp
duty applicable upon the award, on 07.02.2020 was
illegal or improper in any manner.”
(emphasis supplied)
89. Therefore, undoubtedly, the proposition that emerges out from
this decision as well is that adequacy of stamp duty is a relevant
factor at the stage of enforcement of an arbitral award and that the
Arbitration Act does not impose a duty upon the Arbitral Tribunal
to ensure payment of stamp duty. It was also held that there is no
discretion granted to a Court under Section 33 and that what must
be impounded is the original instrument, a copy/xerox thereof
cannot be validated by paying deficit duty and penalty.”
16. In view of the aforesaid, this Court in M/s URC (supra) further
considered the scope of Sections 33, 35 and 38 of the ISA and the
obligation of a court to impound an instrument found to be
Signature Not Verified
Signed By:GUNN
Signing Date:17.10.2026
19:31:53
OMP (ENF.) (COMM.) 293/2025 Page 8 of 25
insufficiently stamped. It was recognised that the statutory
consequences of insufficient stamping must be addressed in
accordance with the procedure prescribed under the ISA.
17. Thus, the position emerging from M/s URC (supra) , read with
the decisions in In Re: Interplay Between Arbitration Agreements
11
under Arbitration and Conciliation Act, 1996 and Stamp Act, 1899
12
and M. Anusuya Devi v. M. Manik Reddy , is that an objection
concerning insufficient stamping of an arbitral award falls for
consideration at the stage of enforcement. Such an objection is also
not a valid objection for setting aside the award under Section 34 of
the Act.
18. There can, therefore, be no dispute that a court exercising
jurisdiction under Section 36 of the Act is required to examine an
objection concerning the sufficiency of stamp duty, and in such
endeavour, the statutory requirements of Sections 33, 35 and 38 of the
ISA must be complied with wherever applicable.
19. However, what gains significance is that the stage where an
objection concerning insufficient stamping becomes relevant must not
be conflated with the event that attracts the chargeability of stamp
duty. These are distinct issues governed by different statutory
considerations.
20. Moreover, a conjoint reading of Sections 33, 35 and 38 in light
11
(2024) 6 SCC 1
12
2003 Supp (4) SCR 853
Signature Not Verified
Signed By:GUNN
Signing Date:17.10.2026
19:31:53
OMP (ENF.) (COMM.) 293/2025 Page 9 of 25
of the overall scheme of the ISA makes it abundantly clear that there
exists a mandatory and absolute statutory bar on this Court from
acting upon an insufficiently stamped instrument, which must
necessarily be dealt with in accordance with the provisions of the ISA.
21. Additionally, these decisions do not, by any stretch of
imagination, hold that the chargeability of an instrument to stamp duty
arises only at the stage of enforcement. Rather, they merely establish
that objections concerning the adequacy of stamp duty cannot be
entertained at the stages contemplated under Section 8, 11 and 34 of
the Act.
13
22. Pertinently, Section 17 of the ISA provides that instruments
executed in India and chargeable with duty shall be stamped before or
at the time of execution. To reiterate, in view of Section 2(12) of the
ISA, the expression “execution” refers to the signing of the
instrument. Thus, in the case of an arbitral award, the relevant event is
its signing and not the subsequent institution of proceedings for its
enforcement.
14
23. Section 18 of the ISA, on the other hand, deals with
instruments executed outside India and prescribes the period within
which such instruments may be stamped after their first receipt in
India.
13
17. Instruments executed in India. —All instruments chargeable with duty and executed by any person in
India shall be stamped before or at the time of execution
14
18. Instruments other than bills and notes executed out of India. —
(1) Every instrument chargeable with duty executed only out of India, and not being a bill of exchange or
promissory note, may be stamped within three months after it has been first received in India.
(2) Where any such instrument cannot, with reference to the description of stamp prescribed therefore, be
duly stamped by a private person, it may be taken within the said period of three months to the Collector, who
shall stamp the same, in such manner as the State Government may by rule prescribe, with a stamp of such
value as the person so taking such instrument may require and pay for.
Signature Not Verified
Signed By:GUNN
Signing Date:17.10.2026
19:31:53
OMP (ENF.) (COMM.) 293/2025 Page 10 of 25
24. It follows that although the question of sufficiency of stamp
duty may be examined at the stage of enforcement, the institution of
enforcement proceedings does not, in itself, constitute a fresh
chargeable event. Any additional or differential liability must
necessarily be traceable to an express statutory provision.
25. The submission advanced by the learned ASG regarding the
issue of inter-State chargeability may now be examined.
26. In this respect, I shall refer to the decision of the Supreme Court
15
in New Central Jute Mills Co. Ltd. v. State of W.B. , wherein the
Court considered the operation and application of stamp legislation in
circumstances involving instruments executed in one State but relating
to property situated, or transactions undertaken in another State.
27. The controversy before the Supreme Court arose in the context
16
of a mortgage deed executed in Uttar Pradesh but relating to
17
properties situated in West Bengal followed by subsequent
instruments involving substitution of these mortgaged properties. The
question revolved around the applicability of the respective State
amendments to the ISA and the sufficiency of stamp duty paid upon
the instruments.
28. The Supreme Court recognised that the determination of stamp
duty liability must be undertaken with reference to the statutory
provisions applicable in the concerned State. In particular, the Court
15
1963 SCC OnLine SC 201
16
“U.P.” hereinafter
17
“W.B.” hereinafter
Signature Not Verified
Signed By:GUNN
Signing Date:17.10.2026
19:31:53
OMP (ENF.) (COMM.) 293/2025 Page 11 of 25
considered the effect of State amendments extending chargeability to
instruments executed outside the State but relating to property
situated, or matter or things done or to be done within that State.
29. The Supreme Court, thus, acknowledged that since the
instrument had been executed in U.P., it was liable to stamp duty in
that State. The Court further observed that there could be no doubt that
a public officer of a State was required to determine the sufficiency of
stamp duty in accordance with the amendment to the ISA applicable in
that State. In this regard, the Court made reference to Section 3 of the
ISA, as amended in U.P. at the relevant time, read with Rule 3 of the
rules framed under the Stamp Act. The relevant excerpt is as follows:
“9. There cannot be any doubt that when it becomes necessary
for any public officer of a State - using that word to mean an
officer in charge of a public office to decide whether an instrument
is or is not "duly stamped the law he has to apply is the Indian
Stamp Act in the light of the appropriate modifications made by the
State Legislature. So, when the Uttar Pradesh public officers had
to decide in the present case whether the original mortgage deed
was or was not "duly stamped" they had to examine for the purpose
the Indian Stamp Act as it stood after its amendment by the Uttar
Pradesh Legislature. Section 3 of the Stamps Act creates a liability
for stamp duty. Section 3 after its amendment by the U.P.
legislature stands thus:
“3. Subject to the provisions of this Act and the exemptions
contained in Schedule I, the following instruments shall be
chargeable with duty of the amount indicated in that
Schedule as the proper duty therefor, respectively, that is to
say:-
(a) every instrument mentioned in that schedule which, not
having been previously executed by any person, is executed
in the States on or after the first day of July, 1899;
(b) every bill of exchange (payable otherwise then on
demand) or promissory note drawn or made of the States
on or after that day and accepted or paid, or presented for
acceptance or payment, or endorsed, transferred or
otherwise negotiated, in the States; and
(c) every instrument (other than a bill of exchange, or
promissory note) mentioned in that Schedule which, not
Signature Not Verified
Signed By:GUNN
Signing Date:17.10.2026
19:31:53
OMP (ENF.) (COMM.) 293/2025 Page 12 of 25
having been previously executed by any person, is executed
out of the States on or after that day, relates to any
property situate, or to any matter or thing done or to be
done, in the States and is received in the States:-
Provided that except as otherwise expressly provided in this Act,
and notwithstanding anything contained in clauses (a), (b) and (c)
of this section or in Schedule I or I-A the following instruments
shall subject to the exemptions contained in Schedule I-A or I-B be
chargeable with duty of the amount indicated in Schedule I-A or I-
B as the proper duty therefor respectively, that is to say-
(aa) every instrument mentioned in Schedule I-A or 1-B
which not having been previously executed by any person
was executed in Uttar Pradesh-
(i) in the case of instruments mentioned in Schedule -A on
or after the date on which the U.P. Stamp (Amendment)
Act, 1948, came into force, and
(ii) in the case of instruments mentioned in Schedule 1-B on
or after the date on which the U.P. Stamp (Amendment)
Act, 1952, comes into force.
(bb) every instrument mentioned in Schedule I-A or I-B
which not having been previously executed by any person,
was executed out of Uttar Pradesh-
(i) in the case of instruments mentioned in Schedule -A, on
or after the date on which the U.P. Stamp (Amendment)
Act, 1948, came into force and
(ii) in the case of instruments mentioned in Schedule I-B on
or after the date the U.P. Stamp (Amendment) Act, 1952
comes into force, and relates to any property situated, or to
any matter or thing done or to be done in Uttar Pradesh
and is received in Uttar Pradesh:
Provided also that no duty shall be chargeable in respect of
(1) any instrument executed by, or on behalf of, or in favour
of, the Government in cases where, but for this exemption,
the Government would be liable to pay the duty chargeable
in respect of such instrument;
(2) any instrument for the sale, transfer or other
disposition, either absolutely or by way of mortgage or
otherwise, of any ship or vessel, or any part, interest share
or property of or in any ship or vessel registered under the
Merchant Shipping Act, 1894, or under Article 19 of 1838,
or, the Indian Registration of Ships Act, 1841, (10 of 1841),
as amended by subsequent Acts."
10. Another important change in the legal position was effected
by framing rules under the Act. While Section 74 empowers the
State Government to make rules relating to the sale of stamps,
Section 75 empowers the Government generally to make rules "to
carry out generally the purposes of the Act". Section 76 provides
that all rules made under the Act shall be published in the Official
Signature Not Verified
Signed By:GUNN
Signing Date:17.10.2026
19:31:53
OMP (ENF.) (COMM.) 293/2025 Page 13 of 25
Gazette and on such publication shall have effect as if enacted by
the Act. Of the rules framed by the Uttar Pradesh Government it is
necessary to consider in the present case Rule 3 which is in these
words:
“3. Except as otherwise provided by the Stamp Act or by
these rules-
(i) all duties with which an instrument is chargeable shall
be paid, and such payment shall be indicated on such
instrument, by means of stamp issued by the Government
for the purposes of the Act, and
(ii) a stamp which by any word or words on the face of it is
appropriated to any particular kind of instrument shall not
be used for an instrument of any other kind.
(2) There shall be two kinds of stamps for indicating the
payment of duty with which instruments are chargeable
namely,
(a) impressed stamps overprinted with the words "Uttar
Pradesh" or the letters "U.P.", and
(b) adhesive stamps overprinted with the letters "U.P.";
Provided that the payment of stamp duty on instruments, executed
in any part of British India other than Uttar Pradesh and governed
by Section 19-A of the said Act, as amended in its appli-cation to
the Uttar Pradesh, may be indicated by such stamps as may be
prescribed for use in that part to the extent of the duty payable
there, the additional duty, if any chargeable in the Uttar Pradesh
being paid by means of stamps prescribed in this rule. Sub-rule (2)
of this rule shall take effect from 1st April, 1942:
Provided further that all impressed and adhesive stamps for
indicating the payment of duty with which instruments are
chargeable and which are not overprinted with the words "Uttar
Pradesh" or "U.P." respectively, shall be consumed or exchanged
at the treasuries in Uttar Pradesh, provided that they are
undamaged and unspoiled, with overprinted stamps of the name
and denomination and description before 1st April, 1942, after
which date the use or exchange of impressed and adhesive stamps
not so overprinted, shall not be permissible, except to the extent
indicated in the first proviso."
The effect of Section 76 already mentioned above is that this rule
operates as a part of the Stamp Act. In deciding whether the
instrument had been duly stamped or not the public officer had to
con-sider not only the provisions of the Act but also the provisions
of the rules. The position that confronted the officers may be
summarised thus: The document had been executed in Uttar
Pradesh. So, it became liable to pay duty under Section 3(aa) of
the Act as amended in Uttar Pradesh. Rule 3 required that the
liability had to be discharged by using stamps overprinted with the
words "Uttar Pradesh" or "U.P." The instrument did in fact bear
stamps overprinted with the words "West Bengal" and not with the
Signature Not Verified
Signed By:GUNN
Signing Date:17.10.2026
19:31:53
OMP (ENF.) (COMM.) 293/2025 Page 14 of 25
words "Uttar Pradesh" or "U.P." The public officer was therefore
bound to hold that it had not been stamped in accordance with the
law in force in Uttar Pradesh.”
30. Thus, the Court observed that, by way of the State amendments
to the ISA, the State Legislatures sought to substitute the term “India”
with the respective State.
31. The Supreme Court further held that the officer concerned in
U.P. was entitled to hold that the instrument had not been duly
stamped in accordance with the law applicable in U.P. at the relevant
time. It was observed that akin to U.P., W.B. had also introduced its
respective amendments to the ISA.
32. Keeping these respective State amendments in mind, the
Supreme Court recognised that similar issues could arise in other
States as well. Accordingly, it held as follows:
“13. The problem is therefore reduced to this: Where an officer in
Uttar Pradesh finds that an instrument has not been stamped in
accordance with the law in force in Uttar Pradesh, how is he to
proceed? It is easy to see that similar problems may arise before
public officers of other States. Thus, an officer in Bihar who has to
decide whether a particular instrument has been duly stamped,
may find that it has been stamped in accordance with the law in
force in Madras but not in accordance with the law in force in
Bihar. Should he hold that the
14. Primarily, the liability of an instrument to stamp duty arises
on execution. Execution in India itself made the instrument liable
to stamp duty under Section 3(a) as it stood before the amendment.
Under Section 3(c) execution out of India, where the instrument
relates to property situated or any matter or thing done or to be
done in India together with the further fact that the instrument is
received in India, made the instrument chargeable with duty. In
amending the Stamp Act what the State legislatures substantially
did was to treat the particular State as equivalent to India. Thus,
after the amendment by the U.P. legislature the position in law is
that execution of an instrument in Uttar Pradesh is made the
Signature Not Verified
Signed By:GUNN
Signing Date:17.10.2026
19:31:53
OMP (ENF.) (COMM.) 293/2025 Page 15 of 25
primary dutiable event and liability to stamp duty arises on such
execution. Apart from that, liability also arises where the
instrument though executed out of Uttar Pradesh relates to
property situated or any matter or thing done or to be done in
Uttar Pradesh and is received in Uttar Pradesh. It may be
mentioned that the changes in the law made by the other State
legislatures are exactly similar.
15. It is clear that in many cases the only one liability viz. the
liability on execution of the document will arise. After the
amendment of the Act the liability can no longer be said to arise
generally in India but must be held to arise in the particular State
where the instrument is executed. It stands to reason that liability
having arisen in a particular State it cannot be held to be I dis-
charged in accordance with the law in force in India unless it is
discharged in accordance with the law of the State where it arises.
In other words, where the only liability of an instrument to stamp
duty is the execution in Uttar Pradesh it must bear stamps of the
amount and of the description as required by the law of Uttar
Pradesh. If the liability of the instrument is on execution in Bihar it
must bear stamps of the amount and description required by the
law in Bihar; and so in the case of every other State which has
amended the Stamp law in the same manner as in Uttar Pradesh.
In all these cases the instrument can be said to be duly stamped
only if it bears stamps of the amount and description in accordance
with the law of the State concerned the law including not only the
Act but also the rules framed under the Act.
16. Some complications arise in the cases where both the
liabilities arise - i.e. where the instrument is executed in one State
but is related to property situated in or to things done or to be done
in another State and is received in the second State. In these cases
the liability to stamp duty arises first under the stamp law of the
first State on account of the execution in the State; a second
liability arises under the law of the second State when the
instrument is received in that second State.”
33. Therefore, acknowledging parallel legislations in the States, the
Supreme Court sought to strike a balance between the competing
considerations in the following manner:
“17. How is the liability to be discharged? Has it to be discharged
in accordance with the law in force in the State where execution
takes place or in accordance with the law in force in the State
where the second dutiable event viz. the receipt in the second State
occurred? Obviously, an officer, of the first State may reasonably
think that it is the law of his State which must prevail and so even if
Signature Not Verified
Signed By:GUNN
Signing Date:17.10.2026
19:31:53
OMP (ENF.) (COMM.) 293/2025 Page 16 of 25
the document has been stamped in accordance with the law of the
other State he may ignore that stamping as not done in accordance
with the law in India and proceed to demand that it must bear
stamps in accordance with the law of his State. It was to avoid the
hardships that may conceivably result from such a situation that
the legislatures of different States enacted Section 19-A of the
Stamp Act. This section of the Uttar Pradesh Act runs thus:
"19. A 'Where any instrument has become chargeable in
any part of the States other than the Uttar Pradesh with
duty under this Act or under any other law for the time
being in force in any part of the States and thereafter
becomes, chargeable with a higher rate of duty in the Uttar
Pradesh under clause (bb) of the first proviso to Section 3,
then,
(i) notwithstanding anything contained in the first proviso
to Section 3 the amount of duty chargeable on such
instrument shall be the amount chargeable on it under
Schedule 1-A, or Schedule 1-B, less the amount of duty, if
any, already paid on it in the States; and
(ii) in addition to the stamps, if any, already affixed thereto,
such instrument shall be stamped with the stamps necessary
for the payment of the amount of duty chargeable on it
under (1) in the same manner and at the same time and by
the same persons as though such instrument were an
instrument received in the States for the first time at the
time when it be-comes chargeable with the higher duty."
18. Therefore, where the rate of duty in Uttar Pradesh for an
instrument which becomes chargeable for stamp duty as mentioned
above, (i.e., an instrument executed out of Uttar Pradesh and
relating to property situated or to any matter or thing done or to be
done in Uttar Pradesh) with a higher rate of duty in Uttar Pradesh
than in West Bengal, only the excess has to be paid in Uttar
Pradesh and it is only this excess which requires to be paid in
Uttar Pradesh stamps. (Vide Rule 3 of the Uttar Pradesh Rules).
19. Section 19-A in terms applies only to an instrument which
afters becoming chargeable in any State outside Uttar Pradesh
becomes chargeable in Uttar Pradesh with a higher rate of duty. It
seems to us, however, that where the rate of duty in Uttar Pradesh
is the same or even lower, no further duty is payable on such an
instrument. For, it would be anomalous and unreasonable to hold
that the legislature intended that though where a higher rate is
payable in Uttar Pradesh the excess need only be paid, the Uttar
Pradesh rate should be paid in full where what has al-ready been
paid is the same or higher.”
34. The Supreme Court held that where the applicable State
amendments provide for the levy of stamp duty on an instrument
Signature Not Verified
Signed By:GUNN
Signing Date:17.10.2026
19:31:53
OMP (ENF.) (COMM.) 293/2025 Page 17 of 25
executed outside the State but relating to property situated, or a matter
of thing to be done within that State, in such case, only the differential
stamp duty, if any, would be payable where the rate prescribed by that
State exceeds the rate at which the instrument has already been
stamped. That is to say, since the instrument was stamped in W.B. but
pertained to assets situated in Varanasi, only the excess stamp duty, if
any, payable under the rates applicable in U.P. would be required to be
paid. Conversely, it was also clarified that if the applicable rate of
stamp duty in U.P. was equal to or lower than that in W.B., no
additional stamp duty would be payable.
35. Therefore, the Supreme Court recognised the possibility of
there being distinct points in time giving rise to the liability to pay
stamp duty in the following manner:
“20. The result of this will be that if an instrument after becoming
liable to duty in one State on execution there becomes liable to
duty also in another State on receipt there, it must first be stamped
in accordance with the law of the first State and it will not require
to be further stamped in accordance with the law of the second
State when the rate of that second State is the same or lower; and
where the rate of the second State is higher, it will require to be
stamped only with the excess amount and that in accordance with
the law and the rules in force in the second State.”
36. Accordingly, the aforesaid decision necessarily rests on the
existence of a similar provision giving rise to the liability to pay stamp
duty upon receipt of the instrument in the subsequent State for a thing
to be done in that State.
37. In this regard, this Court is cognizant of the amendments to the
Signature Not Verified
Signed By:GUNN
Signing Date:17.10.2026
19:31:53
OMP (ENF.) (COMM.) 293/2025 Page 18 of 25
ISA by various States and Union Territories, including but not limited
to the following:
MAHARASHTRA STAMP ACT, 1958
“3. Instruments chargeable with duty. Subject to the provisions of
this Act and the exemptions contained in Schedule I, the following
instruments shall be chargeable with duty of the amount indicated
in Schedule I as the proper duty therefor respectively, that is to
say-
(a) every instrument mentioned in Schedule I, which, not
having been previously executed by any person, is executed
in the State on or after the date of commencement of this
Act;
(b) every instrument mentioned in Schedule I, which, not
having been previously executed by any person, is executed
out of the State on or after the said date, relates to any
property situate, or to any matter or thing done or to be
done in this State and is received in this State”
KARNATAKA STAMP ACT, 1957
“3. Instruments chargeable with duty. Subject to the provisions of
this Act and the exemptions contained in the Schedule, the
following instruments shall be chargeable with duty of the amount
indicated in that Schedule as the proper duty therefor, respectively,
that is to say,-
(a) every instrument mentioned in that Schedule which, not
having been previously executed by any person, is executed
in the territories of the [State of Karnataka] on or after the
commencement of this Act; and
(b) every instrument mentioned in that Schedule which, not
having been previously executed by any person, is executed
out of the [State of Karnataka] on or after that day, relates
to any property situate, or to any matter or thing done or to
be done, in the territories of the [State of Karnataka] and is
received in the territories of the [State of Karnataka]”
GUJARAT STAMP ACT, 1958
[
“3. Instruments chargeable with duty. Subject to the provisions of
this Act and the exemptions contained in Schedule 1, the following
instruments shall be chargeable with duty of the amount indicated
Signature Not Verified
Signed By:GUNN
Signing Date:17.10.2026
19:31:53
OMP (ENF.) (COMM.) 293/2025 Page 19 of 25
in Schedule I as the proper duty therefor respectively, that is to
say,-
(a) every instrument mentioned in Schedule 1, which, not
having been previously executed by any person, is executed
in the State on or after the date of commencement of this
Act;
22[(aa) every instrument mentioned in Schedule I, which
not having been previously executed by or on behalf of or in
favour of, the Government or any local authority, is
executed by or on behalf of or in favour of, the Government
or any local authority,]
(b) every instrument mentioned in Schedule I, which, not
having been previously executed by any person is executed
out of the State on or after the said date, relates to any
property situate, or to any matter or thing done or to be
done in this State and is received in this State”
THE INDIAN STAMP (GOA, DAMAN AND DIU
AMENDMENT) ACT, 1968
“3. Amendment of section 3.- In section 3 of the principal Act, for
the proviso, the following provisos shall be substituted, namely:-
"Provided that, except as otherwise expressly provided in
this Act, and notwithstanding anything contained in clause
(a) or clause (c) or in Schedule I, the amount indicated in
Schedule I-A shall, subject to the exemptions contained in
that Schedule, be the duty chargeable on the following
instruments, namely:-
(1) every instrument mentioned in Schedule I-A as
chargeable with duty under that Schedule which, not having
been previously executed by any person, is executed in the
Union territo-ry on or after the date of commencement of
the Indian Stamp (Goa, Daman and Diu Amendment) Act,
1968;
(2) every instrument mentioned in Schedule I-A as
chargeable with duty under that Schedule, which, not
having been previously executed by any person, is executed
out of the Union territory on or after the date of
commencement of the Indian Stamp (Goa, Daman and Diu
Amendment) Act, 1968, and relates to any property
situated, or to any matter or thing done or to be done in the
Union territory and is received in the said Union territory”
38. Indeed, the legislative framework governing stamp duty is not
uniform across all States. The Supreme Court has acknowledged that
Signature Not Verified
Signed By:GUNN
Signing Date:17.10.2026
19:31:53
OMP (ENF.) (COMM.) 293/2025 Page 20 of 25
different States may prescribe different rates of stamp duty and that
the relevant statutory provisions must be construed in a manner that
gives effect to the legislative scheme governing instruments having
connections with more than one State. As can be seen from above,
several States, including but not limited to Maharashtra, Karnataka
and Gujarat, have enacted provisions addressing the chargeability or
stamping of instruments executed outside their territorial limits but
subsequently received within the State in circumstances specified by
their respective enactments.
39. These provisions show that the Legislature expressly provides
for an additional incidence of stamp duty where an instrument bears
the requisite territorial or transactional nexus with a State distinct from
the one where the instrument was executed/signed. Equally, the
existence of such provisions in certain State enactments underscores
the necessity of identifying a corresponding statutory basis before
imposing an analogous liability elsewhere.
40. In that context, the Court recognised that where the applicable
State legislation specifically contemplates liability upon receipt of an
instrument executed outside the State, and the duty chargeable in the
receiving State exceeds the duty already paid, the differential amount
may become payable in accordance with the governing statutory
provisions.
41. The material consideration, therefore, is the existence of a
statutory provision attracting such additional liability. The mere fact
that an instrument executed and stamped in one State is subsequently
brought into another State does not, without more, establish an
Signature Not Verified
Signed By:GUNN
Signing Date:17.10.2026
19:31:53
OMP (ENF.) (COMM.) 293/2025 Page 21 of 25
obligation to pay differential stamp duty.
42. Insofar as the ISA, as applicable to the NCT of Delhi, is
concerned, no analogous provision creating a fresh liability to pay
differential stamp duty merely upon receipt or enforcement of an
instrument executed in another State has been brought to the attention
of this Court.
43. In the absence of such a provision, this Court cannot, by
undertaking an interpretative exercise, create an additional chargeable
event or impose a fiscal liability that the Legislature has not
prescribed. It is a settled principle that a taxing statute must be
construed strictly and in accordance with its express terms, and a
liability to pay tax or duty cannot be founded upon implication or
consideration of perceived legislative intent.
44. Thus, a liability unknown to the statute cannot be brought to life
under the guise of judicial interpretation. This Court cannot transgress
the confines of the statute or invent what the legislature did not
envisage.
45. The contention of the Judgment Debtor, if accepted, would
effectively render the institution of enforcement in Delhi as an
independent distinct event attracting stamp duty, notwithstanding that
the arbitral award had already been executed and stamped in Gujarat.
Such a construction would impermissibly conflate the enforceability
of an instrument with its chargeability under the applicable stamp
legislation.
Signature Not Verified
Signed By:GUNN
Signing Date:17.10.2026
19:31:53
OMP (ENF.) (COMM.) 293/2025 Page 22 of 25
46. Accordingly, in the considered opinion of this Court, the
arbitral award having been executed at Gujarat, is governed, for the
purposes of the present controversy, by the stamp legislation as
applicable in Gujarat. The mere fact that enforcement of an award is
sought before this Court does not create an additional liability to pay
differential stamp duty under the ISA as applicable to NCT of Delhi.
47. It is also pertinent to note that the Decree Holder has, in fact,
deposited the differential amount calculated with reference to the
stamp duty rates applicable in NCT of Delhi, although no such
additional payment was legally required in the facts and circumstances
of the present case.
48. Accordingly, this Court holds that the arbitral award is
sufficiently stamped in accordance with Article 13 of the Schedule-I
to the Gujarat Stamp Act, 1958. The objection raised by the Judgment
Debtor concerning the insufficiency of stamp duty, is therefore,
rejected.
49. Adverting now to the question of disbursement, it is noted that,
on 14.08.2026, Mr. Chetan Sharma, learned ASG submitted before
this Court that the entire amount payable under the award had already
been deposited.
50. The record further reveals that upon adjudication of the petition
under Section 34 of the Act, the learned Commercial Court at
Ankleshwar, Gujarat, set aside the interest component of the arbitral
award. Consequently, an amount of Rs. 3,78,22,968/- remains payable
to the Decree Holder.
Signature Not Verified
Signed By:GUNN
Signing Date:17.10.2026
19:31:53
OMP (ENF.) (COMM.) 293/2025 Page 23 of 25
51. It is, however, brought to the attention of this Court that an
appeal under Section 37 of the Act is pending adjudication. In regard
to the pendency of the said appeal, the Decree Holder shall furnish an
undertaking in terms of Paragraph 9 of the order 29.05.2026 passed by
this Court, together with an indemnity bond.
52. Accordingly, the present enforcement petition is disposed of
with liberty to the Decree Holder to withdraw the amount of
Rs.3,78,22,968/-, subject to furnishing the aforesaid undertaking and
indemnity bond to the satisfaction of the Registrar General of this
Court.
53. It is clarified that the parties shall be at liberty to seek revival of
the present proceedings, should any cause of action survive after
adjudication of the pending appeal under Section 37 of the Act.
EX.APPL.(OS) 969/2026 (Seeking refund of Excess amount)
54. The present application has been filed on behalf of the
Judgment Debtor seeking refund of the excess amount deposited with
the Registry of this Court.
55. For the reasons stated in the application and there being no
objection to the relief sought, the application is allowed.
56. The Registry is directed to refund the excess amount deposited
by the Judgment Debtor, in accordance with the applicable rules and
procedure.
Signature Not Verified
Signed By:GUNN
Signing Date:17.10.2026
19:31:53
OMP (ENF.) (COMM.) 293/2025 Page 24 of 25
57. The application stands disposed of accordingly.
OM PRAKASH SHUKLA, J
OCTOBER 9, 2026/ gunn
Signature Not Verified
Signed By:GUNN
Signing Date:17.10.2026
19:31:53
OMP (ENF.) (COMM.) 293/2025 Page 25 of 25