Steel Authority Gets Order For Debtors To Disclose Assets As Madras HC Says Award Need Not Be Impounded For Stamp Deficit

The applicant, decree-holder under an ICC arbitral award dated 28 February 2019, sought an order requiring the respondents to disclose by affidavit their movable and immovable properties, including survey numbers, to facilitate execution.

The respondents objected to the execution proceedings, including on the ground that the award was insufficiently stamped and should be impounded under Section 33 of the Indian Stamp Act, 1899.

The applicant stated that it had paid the deficit stamp duty; the respondents disputed whether that payment had been made through the procedure prescribed by law.

The Court identified the question whether the award had to be impounded for the execution petition to be maintainable.

Section 36 of the Arbitration and Conciliation Act, 1996 provides for enforcement of an arbitral award in accordance with the Code of Civil Procedure, 1908, in the same manner as a court decree, once the statutory conditions are met.

Section 33 of the Indian Stamp Act requires a person authorised to receive evidence, or a person in charge of a public office, to impound an instrument that appears not to be duly stamped; Section 2(14) defines an instrument to include a document by which a right or liability is created, transferred, limited, extended, extinguished or recorded.

The Court reasoned that the award before it determined rights and liabilities arising from an underlying instrument rather than creating a fresh right or liability, and therefore held that the Section 33 impounding procedure did not apply to the award.

The Court treated the dispute over stamping procedure as the central question for deciding maintainability.

It distinguished the award from the underlying instrument: in its view, the award crystallised rights and liabilities already arising from that instrument and did not itself create a fresh right or liability requiring stamp-duty valuation or adjudication.

It therefore rejected the respondents’ contention that the award had to be impounded before execution could proceed.

As to the respondents’ claim that they had no assets in India, the Court held that the issue could be considered after property disclosure and that providing the information would cause no prejudice.

It directed the respondents to file, within six weeks, affidavits listing their movable and immovable properties, with survey numbers and other relevant particulars.

No costs were ordered.