Section 31 adjudication is instrument-specific and cannot be conditioned on stamping a related document.

The petitioner and Mandeep Singh executed a lease agreement on 17 May 2019 for operating a guest house/hotel.

Arbitration resulted in an award dated 31 March 2023, modified by a final award dated 20 May 2023.

The petitioner applied under Section 31 of the Indian Stamp Act, 1899, for adjudication of the stamp duty payable on the arbitral award and supplied the lease agreement when requested by the Collector of Stamps, Kalkaji.

The Collector refused to adjudicate the award’s stamp duty and directed the petitioner to approach the Collector of Stamps at Mohali to have the lease agreement stamped first, reasoning, among other things, that the arbitrator had not determined whether the lease was compulsorily registrable and that the parties had colluded to evade stamp duty.

The petitioner challenged that order.

Whether a Collector acting under Section 31 of the Indian Stamp Act, 1899, may refuse to adjudicate the stamp duty on an instrument presented for adjudication because a connected instrument has not first been stamped.

Whether the Collector could make stamping of the lease agreement a precondition to adjudicating the stamp duty payable on the arbitral award.

Section 31 of the Indian Stamp Act, 1899, requires the Collector, upon an application concerning an instrument and payment of the prescribed fee, to determine the duty, if any, with which that instrument is chargeable.

The Collector may require an abstract and evidence relevant to that determination, but the inquiry is confined to the instrument presented and does not confer a general authority to investigate the stamping of every document connected with it.

The Court also relied on Government of U.P. v. Raja Mohd. Amir Ahmad Khan, 1961 SCC OnLine SC 274, for the principle that Section 31 is complete in itself and contemplates determination of the duty payable on the instrument, without further action under that provision.

The application before the Collector concerned the arbitral award. Under Section 31, the Collector’s task was therefore to determine the duty chargeable on that award.

The lease agreement’s relationship to the award, and the arbitrator’s failure to decide the issue of its registrability, did not enlarge the Collector’s jurisdiction under Section 31 to require the lease to be stamped first.

Any action concerning the lease agreement was distinct and could not be imposed as a precondition to adjudicating the award’s stamp duty.

It set aside the impugned order and disposed of the pending application.