Bhupendra Kumar Sood & Anr. vs Government Of Nct Of Delhi Thourgh Chief Secretary 3Rd Level Delhi Secretariat I.P. Estate, New Delhi110002 & Ors.
- Court
- Delhi High Court
$~J
* IN THE HIGH COURT OF DELHI AT NEW DELHI
%
Judgment pronounced on: 01.07.2026
W.P.(C) 14448/2025, CM APPL. 59200/2025
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BHUPENDRA KUMAR SOOD & ANR. .....Petitioners
Through: Mr. B.B. Sawhney (Sr. Adv) along
with Mr. Nitish Ahuja, Mr. Manik
Sood, Advs. along with Mr. B.K.
Sood Petition- In Person.
versus
GOVERNMENT OF NCT OF DELHI THOURGH CHIEF
SECRETARY 3RD LEVEL DELHI SECRETARIAT I.P. ESTATE,
NEW DELHI110002 & ORS. .....Respondents
Through: Mr. Tushar Sannu, Mr. Parvin Bansal,
Advs. for GNCTD.
CORAM:
HON'BLE MR. JUSTICE SACHIN DATTA
JUDGMENT
1. The petitioners have filed the present writ petition impugning the
Order dated 02.09.2025 passed by the respondent no. 2, i.e., the Collector of
Stamps.
2. The background of the matter is thar the petitioners are the lawful
owners of property bearing No. E-76, Anand Niketan, New Delhi, which
stands duly mutated in their names pursuant to a memorandum of family
settlement dated 19.06.2000.
3. The said property originally belonged to Late Shri P.K. Sood, father
of the petitioners, who, during his lifetime, settled various properties among
his children. Under the aforementioned memorandum of family settlement,
other siblings of the petitioners, i.e., Mr. Shekhar Sood and Mrs. Neeru
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Duggal, were allotted separate properties, whereas the subject property came
to be exclusively allotted to the petitioners in equal shares.
4. It is submitted by the petitioners that in terms of the family settlement,
it was agreed that the existing structure on the said property would be
demolished and the property redeveloped, with each petitioner being entitled
to an equal share in the reconstructed property. Accordingly, the property
was demolished by the end of 2022, and construction commenced in January
2023 pursuant to the sanction of the building plans. However, during the
course of construction, disputes arose between the petitioners with respect to
the manner of enjoyment and demarcation of their respective shares in the
redeveloped property.
5. In order to amicably resolve the disputes, petitioner no. 1 invoked pre-
litigation mediation under Section 61 of the Arbitration and Conciliation
Act, 1996, by approaching the Delhi High Court Mediation and Conciliation
Centre on 07.08.2023. Pursuant thereto, a Conciliator was appointed.
Consequently, the disputes between the parties were amicably resolved,
culminating in a Conciliated Settlement Agreement dated 03.10.2023.
6. It is submitted by the petitioners that the said settlement agreement
had the same status and effect as an arbitral award under Section 74 of the
Arbitration and Conciliation Act, 1996.
7. Accordingly, the Conciliated Settlement, treated as a deemed arbitral
award, was presented for registration before the office of the Sub-Registrar-
VIIA on 16.10.2023.
8. It is pointed that initially deficiency was pointed out regarding non-
submission of Form A, the same was duly rectified by the petitioners. It is
submitted that the petitioners also paid stamp duty treating the document as
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an award under Article 12 of the Indian Stamp Act, at the applicable rate of
0.1% of the value of the land, amounting to Rs. 1,30,000/-, and re-presented
the document for registration.
9. Subsequently, it is submitted that the Sub-Registrar, referred the
instrument to the Collector of Stamps under Section 38 of the Indian Stamp
Act for determination of proper stamp duty. Thereafter, the petitioners
received a notice dated 19.01.2024 from the office of the Collector of
Stamps calling upon them to explain as to why deficient stamp duty and
penalty should not be imposed under Section 40 of the Act. The petitioner
no. 1 appeared before the authority. Subsequently, the petitioners filed
written submissions along with relevant judicial precedents in support of
their case.
10. Thereafter, the Office of the Tehsildar issued notice to the petitioners
vide communication dated 24.04.2024 calling upon them to furnish various
documents. It is submitted that the petitioners vide a reply dated 29.04.2024
furnished requisite documents including valuation reports.
11. However, no order was passed by the Collector of Stamps for a
considerable period. The petitioners submitted repeated representations in
September and December 2024 requesting expeditious disposal of the
matter, but no action was taken.
12. Aggrieved by the inordinate delay and inaction on the part of the
authorities, the petitioners approached this Court by way of W.P.(C) No.
12617 of 2024. This Court, vide order dated 25.08.2025, directed the
respondent no. 2 to decide the matter within a specified timeframe.
13. Pursuant to the aforesaid directions, respondent no. 2 passed the
impugned order dated 02.09.2025, whereby the Conciliated Settlement
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Agreement was treated as a partition deed rather than an arbitral award. On
this basis, the respondent raised a demand of Rs. 14,75,035/- towards
alleged deficient stamp duty and penalty, and further directed payment of
registration charges at the rate of 1%, within 15 days, failing which recovery
proceedings were threatened under Section 48 of the Indian Stamp Act,
1899 as arrears of land revenue. The impugned order dated 02.09.2025 is
reproduced as under –
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14. Being aggrieved of the same the petitioners have now approached this
Court seeking quashing of the impugned order.
15. The case of the petitioners is that the Collector proceeded on two
misconceptions.
16. Firstly, it is submitted that the Collector erroneously concluded that
the instrument in question is, in substance, a “partition deed” within the
meaning of Section 2(15) of the Indian Stamp Act, 1899. This finding
proceeds on a misconception/ misunderstanding of the essential ingredients
of a partition. The sine qua non of an “instrument of partition” is the
division of property held jointly or in common by co-owners into separate
and exclusive ownership in severalty. In the present case, however, such an
essential element is absent. The petitioners were already owners in severalty
of defined portions of the property pursuant to the Memorandum of Family
Settlement. The Conciliated Settlement does not effect any division of
jointly held property; rather, it merely records a demarcation of pre-existing
ownership rights.
17. Specific reliance has been placed by the petitioners on Jinesh Jain v.
AIR 2025 (Del) 136.
Amit Jain & Ors .
18. Secondly, it is submitted that the Collector has erred in holding that
the document cannot be treated as an arbitral award on the ground that no
arbitral tribunal was constituted. This finding overlooks the express statutory
mandate of Section 74 of the Arbitration and Conciliation Act, 1996, which
provides that a settlement agreement arrived at in the course of conciliation
proceedings shall have the same status and effect as an arbitral award on
agreed terms under Section 30.
19. It is submitted that the legal position remains unaffected by the
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enactment of the Mediation Act, 2023. Although the said Act contemplates
eventual deletion of certain provisions of the Arbitration and Conciliation
Act, including Sections 61 to 81, the relevant provisions have not yet been
brought into force. As on date, Section 74 continues to operate with full
force, and the statutory fiction contained therein remains binding.
20. Thus the case of the petitioners is that the instrument in question is
liable to be stamped as an arbitral award under Article 12 of the Indian
Stamp Act.
21. While adverting to the contentions advanced by the petitioners, the
respondents have submitted as follows:
a. It is submitted that Section 2 (15) of Stamp Act, 1899 defines an
instrument of partition to mean any instrument whereby co-owners of
any property divide or agree to divide such property in severalty , and
includes also a final order for effecting partition passed by any revenue
authority or any civil court and an award directing a partition. The
liability to pay stamp in terms of Article 45 of Schedule I to the Indian
Stamp Act, 1899 arises when the instrument in question fell within the
definition of “instrument of partition” as given in Section 2 (15) of the
said Act. It is urged that any instrument whereby co-owners of any
property divide or agree to divide such property in severalty would be an
instrument of partition. It is submitted that it is not merely the instrument
whereby the property is in fact divided by co-owners, but also an
instrument whereby the said co-owners agree to divide the property in
severalty.
b. It is further submitted that Article 45 of Schedule I to the Stamp Act
prescribes the appropriate stamp duty for an instrument of partition as
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defined in Section 2 (15). The said Article, as applicable to Delhi, also
provides that where a final order for effecting a partition passed by any
revenue authority or any civil court, or an award by an arbitrator
directing a partition, is stamped with the stamp required for an instrument
of partition, and an instrument of partition in pursuance of such order or
award is subsequently executed, the duty on such instrument shall not
exceed ten rupees. It is submitted that this is also indicative of the fact
that an instrument which by itself does not affect a partition is also liable
to be stamped in accordance with Article 45 and in such an eventuality, a
subsequent instrument which brings about the partition would not be
required to be stamped twice over with the same amount of stamp duty
but the stamp duty on the second instrument would be limited to ten
rupees. It is emphasised that the scheme of the provisions appears to be
that where an instrument records an agreement to divide property, the
same has to be stamped in the first instance in accordance with Section 2
(15) read with Article 45 to Schedule I of the Stamp Act, 1899. Since
such an instrument is required to be followed up by another instrument
where the property is actually divided in severalty, the legislature has
made it clear that on the second instrument, the stamp duty would be
limited to only Rs 10 / - .
c. It is contended that a plain reading of the provisions of the Stamp Act do
indicate that when there are two instruments, one which records an
agreement to divide property followed by the other which actually brings
about the division of such property , both such instruments would fall
within the definition of Section 2 (15) of the said Act. Reliance has been
placed on Jitender Mohan Malik v Ravi Bhushan Malik , ILR (2009) I
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DELHI 282.
d. It is submitted that the petitioner no. 1 by way of Application dated
07.08.2023 invoked Mediation with respect to, “division of the shares in
the property inherited by both”. It is submitted that there existed no deed
of partition in past and instead as averred by the petitioners, there existed
a ‘Memorandum of Family Settlement’ dated 19.06.2000. The
Conciliation Agreement divides the share of petitioners in E-78, Anand
Niketan, New Delhi-110021. Clause 4 of the conciliation agreement
describes floor allocation, whereby the Basement and Terrace has to be
divided equally among petitioners, while the Second Floor and Third
Floor vests exclusively with petitioner no. 1 and Upper Ground Floor and
First Floor exclusively vests in petitioner No. 2.
e. The petitioners become the exclusive owners with equal undivided share
in the land beneath. Further, Clause 6 of the Agreement dated 03.10.2023
gives superintendence to the conciliation Agreement dated 03.10.2023
over the ‘Memorandum of Family Settlement’ dated 19.06.2000 in case
of any conflict and inconsistency between any term of Family Settlement
and Conciliation Agreement. It emphasised that the Conciliation
Agreement reads down the ‘Memorandum of Family Settlement’ dated
19.06.2000 in so far as property in question is concerned.
f. Thus, the case of the respondents is that the Agreement though bears a
title as ‘Conciliation Agreement’, the same is an Instrument of Partition
clothed as Conciliation Agreement.
g. As regards the second issue, whether the Conciliation Agreement can be
treated as an arbitral award under Sections 73 and 74 of the Arbitration
and Conciliation Act, 1996, it is submitted that under Section 74 of the
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Arbitration and Conciliation Act, a settlement agreement reached during
conciliation proceedings attains the same status and effect as an arbitral
award by virtue of legal fiction. However, it is submitted that this
statutory recognition does not transform the settlement agreement into an
arbitral award; it continues to remain a contractual agreement, merely
imbued with the status and enforceability of an award under the Act.
Consequently, since the document in the present case constitutes an
instrument of partition, it is liable to stamp duty under Article 45 of
Schedule 1A of the Indian Stamp Act, 1899, along with the applicable
penalty under Section 40 of the said Act.
h. Reliance has been placed on Anuradha SA Investments LLC v.
Parsvnath Developers Limited, 2017 SCC OnLine Del 7970.
ANALYSIS AND CONCLUSION
22. The principal questions that arise for consideration in the present
matter are –
a. whether the Conciliation Agreement dated 03.10.2023 constitutes
an “instrument of partition” within the meaning of Section 2(15)
of the Indian Stamp Act, 1899; and if not
b. whether the said agreement can be treated as an arbitral award by
virtue of Sections 73 and 74 of the Arbitration and Conciliation
Act, 1996 so as to attract stamp duty applicable to an award.
23. The controversy, therefore, centres on the true nature and legal
character of the instrument for the purposes of stamp duty.
24. In the impugned order, the respondent no. 2 has concluded that the
contents of the instrument are in the nature of a partition deed under Article
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45 of Schedule IA of the Stamp Act and has, on that basis, directed payment
of deficient stamp duty along with penalty under Section 40.
25. The correctness of this conclusion necessarily depends upon whether
the document satisfies the statutory definition of an “instrument of partition”
under Section 2(15) of the Indian Stamp Act, 1899, or whether it merely
records and adjusts pre-existing rights.
26. At this stage, it is apposite to examine the definition contained in
Section 2(15), which provides as under –
“(15) “Instrument of partition”.— “instrument of partition” means any
instrument where by co-owners of any property divide or agree to divide
such property in severalty, and includes also a final order for effecting a
partition passed by any Revenue-authority or any Civil Court and an
award by an arbitrator directing a partition”
27. A plain reading of the provision makes it clear that the essence of
partition lies in the division of property held jointly or in common into
separate and exclusive ownership in severalty. From this definition, certain
essential ingredients emerge: first, there must exist co-ownership in respect
of the property, i.e., the parties must hold a joint or undivided interest;
second, the property must constitute a common or undivided estate capable
of division; third, the instrument must effect or record an agreement to effect
such division in severalty, resulting in the creation of exclusive rights; and
fourth, the instrument itself must be the operative source of such division,
and not merely a record of a pre-existing arrangement.
28. In Shub Karan Bubna v. Sita Saran Bubna And Others , (2009) 9
SCC 689, the Supreme Court has observed as under –
“5. “Partition” is a redistribution or adjustment of pre-existing rights,
among co-owners/coparceners, resulting in a division of lands or other
properties jointly held by them into different lots or portions and delivery
thereof to the respective allottees. The effect of such division is that the
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joint ownership is terminated and the respective shares vest in them in
severalty.”
29. In Indu Singh and Anr. v. Prem Chaudhary and Ors . 2018 SCC
OnLine Del 8951, a three judge bench of this Court has observed as under -
“60. Clearly, to “partition” means “to divide”; it is an act of cleaving or
splitting what is one into more than one whereupon each separated part
vests in different person.”
30. Applying the aforesaid principles to the facts of the present case, it is
evident that the essential requirement of co-ownership of an undivided estate
is absent.
31. It is significant to note that after the Family Settlement Agreement of
2000, the Anand Niketan property was never held as a single undivided asset
by the parties. Each petitioner held exclusive rights in specified portions of
the property. The relevant portion of the Family Settlement Agreement of
2000 is reproduced as under –
“1. Shri. P.K. Sood, son of late Shri. P.N.Sood, resident of E-76,
Anand Niketan, New Delhi-110021. (hereinafter called “the First Party”
which expression shall wherever the context admits mean and include his
heirs, successors and assigns).
2. Smt. Krishna Devi Sood, wife of Shri. P.K. Sood, resident of E-76,
Anand Niketan, New Delhi-110021 (hereinafter called “the second
party” which expression shall wherever the context admits mean and
include her heirs successors and assigns).
3. Smt. Neeru Duggal, wife of Shri. M.L. Duggal, resident of 161,
Jeevan Nagar, New Delhi-110014 (hereinafter called “the Third Party”
which expression shall wherever the contest admits mean and include her
heirs, successors and assigns).
4. Shri. B.K. Sood, son of Shri. P.K. Sood, resident of E-76, Anand
Niketan, New Delhi- 110021 (hereinafter called “The Fourth Party”
which expression shall wherever the contest permits mean and include
his heirs, successors and assigns).
5. Shri Yogendra Sood, son of Shri P.K. Sood, resident of 7C, Pocket
B, Siddhartha Extension, New Delhi- 1100014 (hereinafter called “the
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Fifth Party” which expression shall wherever the context permits mean
and include his heirs, successors and assigns.).
6. Shri. Shekhar Sood, son of Shri. P.K. Sood, resident of Bundla,
Mauja Aima, Baikunth, Palampur District: Kangra, Himachal Pradesh
(hereinafter called “the Sixth Party” which expression shall wherever
the context permits mean and include his heirs, successors and assigns.)
XXX XXX XXX
(iii) Pursuant to and in terms of the Oral Arrangement/Settlement, the
Fourth Party constructed the first and second floors of the Anand
Niketan property from out of his own personal funds during 1995-96. The
First and Second Floors stand allotted/allocated exclusively to and in
favour of the Fourth Party together with half undivided share in the plot.
The rights of use and enjoyment in Ground Floor with half undivided
share in the plot stands allotted/allocated to and vests in favour of the
First and second parties exclusively during their lifetime and after the
demise of either of them, to the survivor during his/her life time as the
case may be. They are and shall continue to use and enjoy the said
portion of property during their respective life times except that the same
shall not be mortgaged or sold or encumbered in any manner except that
same could be leased and lease amount so accured would be available to
first and second party exclusively, which they shall be entitled to
appropriate in any manner they deem fit. However, the Third Floor or its
rights could be disposed of by First or second party in the eventuality of
either of them requiring substantial amount for their immediate medical
need or attention. After the lifetime of both of them, the same as also the
third floor/third floor rights shall devolve on and vest exclusively in the
fifth party hereto, who would be absolute owner thereof. Pursuant to and
in terms of the Oral Arrangement/Settlement, the First party has already
applied for conversion of tenure of the plot from leasehold to freehold
with funds therefore provided by the fourth and fifth parties hereto in
equal proportions. Property tax in respect of the said property has been
borne and paid by the parties in whom the title to the respective portions
vests for the time being in proportion to the respective portions in their
enjoyment. First and second party have a right of residence in the first
floor alongwith fourth party during their life time and further have a
right of residence at any other property mentioned herein except with the
third party. None of the other parties has any right, title or interest, or
claim surviving in the said Anand Niketan property or any part thereof,
except only that in the event that the fourth party and/or the fifth party
effecting sale of their respective portions, such shall make over 10% (Ten
Percent) of the sale proceeds to the sixth party hereto.”
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32. The petitioner no. 1 became absolute owner of first and second floors
of the property along with half undivided share in the plot. While the
parents of the petitioners held only a life interest in ground floor and third
floor of the property along with half undivided share in the plot, with
remainder rights already vested in the petitioner no. 2. Upon the demise of
the parents, those remainder rights matured into full ownership. Therefore,
there was no subsisting joint estate requiring division at the time of
execution of the Conciliation Agreement in 2023.
33. Even the Conciliation Agreement itself records that pursuant to the
Family Settlement dated 19.06.2000, the petitioners had already acquired
defined and exclusive rights in respect of the Anand Niketan property. The
relevant portion of the Conciliated Agreement is reproduced as under –
34. Thus, the partition of the property, insofar as division of ownership is
concerned, stood effectuated as early as in the year 2000.
35. The Conciliation Agreement dated 03.10.2023 does not effect any
division of jointly held property. It merely records a re-adjustment and
mutual exchange of certain portions between parties who were already
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absolute owners of their respective shares. Such an exchange or adjustment
between independent owners cannot be equated with a partition of joint
property. The document, therefore, does not operate to sever joint
ownership, but rather gives effect to pre-existing rights and arrangements.
The relevant portion of the Conciliation Agreement dated 03.10.2023 is
reproduced as under –
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36. Thus the Conciliation Agreement does not create such rights for the
first time.
37. Arrangements which define or adjust pre-existing rights without
effecting a fresh division of joint property do not fall within the scope of
Section 2(15).
38. In the present case, the Family Settlement of 19.06.2000 was itself a
comprehensive arrangement that effected partition of all family properties,
including the Anand Niketan property, and vested exclusive ownership
rights in the respective parties. That document alone could be regarded as
the instrument effecting partition, if at all.
39. The Conciliation Agreement of 2023, on the other hand, neither
creates a fresh partition nor alters the fundamental nature of ownership; it
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merely records a consensual adjustment arising out of redevelopment and
resolves disputes relating to enjoyment of the property.
40. To treat the 2023 document as a fresh instrument of partition would,
in effect, amount to recognizing a second partition of property that had
already been partitioned more than two decades earlier. Such an approach is
legally untenable, as partition can only operate upon property held jointly
and not upon property already held in severalty.
41. In view of the foregoing, it is clear that as on the date of execution of
the Conciliation Agreement, there existed no joint or undivided estate
between the parties which could be the subject matter of partition. The
essential precondition for the application of Section 2(15) is thus not
satisfied. The document in question cannot be construed as an “instrument
of partition.”
42. Accordingly, the classification of the instrument by the Collector
under Article 45 of Schedule IA of the Indian Stamp Act is fundamentally
erroneous and unsustainable in law.
43. The second question that arises is whether the said agreement can be
treated as an arbitral award by virtue of Sections 73 and 74 of the
Arbitration and Conciliation Act, 1996 so as to attract stamp duty applicable
to an award.
44. In Anuradha SA Investments LLC & Anr v. Parsvnath Developers
.
Limited & Ors (supra) a Coordinate bench of this Court has observed as
under –
“29. The contention that the Settlement Agreement is insufficiently stamped
is unpersuasive. It is well settled that the stamp duty is payable on an
instrument. In the present case, the instrument is an agreement and not an
arbitration award. In terms of Section 74 of the Act, a settlement
agreement would have the status and effect “as if it is an arbitral award”;
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thus by legal fiction, a settlement agreement arrived at during the
conciliation proceedings and authenticated by the conciliator has been
provided the same status and effect as an arbitral award. In other words,
the settlement agreement can be enforced as an arbitral award and it is not
necessary for a party to institute fresh proceedings for obtaining a decree
in terms thereof. However, it does not mean that the settlement agreement
ceases to be an agreement voluntarily entered into between the parties and
becomes an arbitral award; it merely has the status and effect of an award
under the Act. The settlement agreement continues to be an agreement and
would require to be stamped as such
. This Court is, respectfully, unable to
concur with the view of the Karnataka High Court in Smt N.S. Geetha v.
Sri B. Raghuveer (supra) that the legal fiction created by Section 74 of the
Act, which treats the settlement agreement as if it is an award, would also
require the instrument to be stamped as an award and not as a settlement
agreement.
30. It is well settled that a legal fiction cannot be extended beyond the
purpose for which it is created. Section 74 of the Act creates a legal fiction
to elevate the status and effect of a settlement agreement under Section 73
to an award. The purpose is clearly to enable enforcement of such
agreements as an arbitral award without further adjudicatory process. The
legal fiction cannot be extended to other statutes. In Bengal Immunity
Company Limited v. State of Bihar : (1955) 2 SCR 603, a Constitution
Bench of the Supreme Court held that “Legal fictions are created only for
some definite purpose…..a legal fiction is to be limited to the purpose for
which it was created and should not be extended beyond that legitimate
field” (Also see : K. Prabhakaran v. P. Jayarajan : (2005) 1 SCC 754).”
45. Applying the aforesaid principles, it is evident that although the
Conciliation Agreement in the present case may be enforceable as if it were
an arbitral award, it does not thereby lose its character as an agreement
voluntarily entered into between the parties. The deeming provision
contained in Section 74 cannot be extended to the provisions of the Indian
Stamp Act so as to require the document to be stamped as an arbitral award.
46. Accordingly, the Conciliation Agreement must be stamped as an
agreement and not as an award. It equally cannot be treated as a partition
deed for the reasons already discussed. The applicable provision, therefore,
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is Article 5 of Schedule IA to the Indian Stamp Act, and the instrument
squarely falls within clause (c) thereof. The same reads as under –
“5. AGREEMENT OR MEMORANDUM OF AN AGREEMENT
(a) if relating to the sale of
a bill of exchange
One rupee for every Rs.10000 or
part thereof.
(b) if relating to the sale of a
Government Security or
share in an incorporated
company or other body corporate
One rupee for every Rs. 10000 or
part thereof of the value of the
security or share subject to
maximum of Rs. 1000.
(c) if not otherwise provided for
Fifty rupees”
47. In view of the above, the impugned order is unsustainable and is
hereby set aside in totality. The competent authority is directed to
expeditiously reassess the stamp duty payable on the instrument by treating
it as an agreement under Article 5(c) of Schedule IA, and not as a partition
deed or an arbitral award.
SACHIN DATTA, J
JULY 1, 2026/ sv
Signature Not Verified
W.P.(C) 14448/2025 Page 22 of 22
Digitally Signed By:ROHIT
KUMAR PATEL
Signing Date:01.07.2026
18:53:59