GAIL (INDIA) LIMITED vs M/S ANDHRA PRADESH GAS POWER CORPORATION LTD

$~38
* IN THE HIGH COURT OF DELHI AT NEW DELHI
+ OMP (ENF.) (COMM.) 176/2022 and EX.APPL.(OS) 911/2023
GAIL (INDIA) LIMITED …..Decree Holder
Through: Mr. N.L. Ganapathi,k Ms. Rini
V. Tigga and Mr. Amogh S. Rao, Advs.

versus

M/S ANDHRA PRADESH GAS POWER
CORPORATION LTD …..Judgement Debtor
Through: Mr. Arjun D Singh and Mr. Ishat Singh, Advocate
Mr. PBA Srinivasan, Mr. Sumit Swami, Ms.
Srishti Bansal, Mr. V Aravind and Ms.
Aanchal Pundir, Advs. for applicant in EA
911/2023

CORAM:
HON’BLE MR. JUSTICE C.HARI SHANKAR
ORDER (ORAL)
% 01.08.2024

1. An objection had been raised by the respondent to the effect that the award, of which execution is being sought in the present case, was insufficiently stamped.

2. The petitioner has, thereafter, paid stamp duty on the awarded amount. Mr. Arjun D Singh, learned counsel for the judgment debtor does not dispute the fact that the stamp duty that has now been affixed on the award represents the stamp duty which is actually payable thereon in terms of the Schedule to the Indian Stamp Act, 1899. He, however, submits that until there is an adjudication by the Collector of Stamps to that effect, the document cannot be treated as appropriately stamped.

3. To a query from the Court as to the provision of the Stamp Act, which would support this submission, Mr. Singh is not able to point out any provision which does so. He has placed reliance on Section 31(1)1 of the Stamp Act.

4. I am unable to agree.

5. Section 31(1) of the Stamp Act applies only in a case where a person seeks the opinion of the Collector as to whether an instrument has been properly stamped. In such an event, the Collector is required, under Section 31(1), to conduct the necessary inquiry and ascertain the amount of stamp duty payable on the instrument. Section 31(1), therefore, does not require an adjudication of the stamp duty payable on an instrument mandatorily before an instrument can be treated as sufficiently stamped.

6. In fact, Section 172 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.

8. This petition seeks enforcement and execution of an arbitral award dated 21 June 2021 awarding an amount of ? 931,11,67,979/- against the respondent.

9. The aforesaid award has been challenged by the respondent by way of OMP (COMM) 201/2021. Though notice stands issued in the said petition, which is being heard, there is, however, no order in the said petition interdicting these proceedings. Rather, on 9 May 2023, this Court clarified that the pendency of the said petition would not be treated as an impediment to the present enforcement proceedings.

10. Clearly, therefore, this Court is not required to await the outcome of OMP (COMM) 201/2021 before proceeding to execute the arbitral award.

11. By order dated 8 February 2023, this Court had directed the respondent to deposit 50% of the awarded amount within one month and to file an affidavit specifying the details of its unencumbered assets and other movable or immovable properties which would be available for the purpose of satisfying the award.

12. Mr. Ganapathy submits, and Mr. Singh does not dispute, that there has been no compliance, till date, with the direction to deposit 50% of the awarded amount.

13. In view thereof, this Court, by the next order passed in these proceedings on 17 March 2023 restrained the Union Bank of India (E-Andhra Bank), SCFB, Somajiguda, Hyderabad, which had issued the Bank Guarantees, from releasing them in favour of the respondent.

14. In compliance with the direction for declaration of its assets, an affidavit of unincumbered assets has been filed by the respondent. The value of the unincumbered assets of the respondent is to the tune of ?189.49 Cores.

15. In these circumstances, for the present, the following orders are issued:

(i) Union Bank of India is directed to release in favour of the petitioner the Bank Guarantee Nos (i) 100620IGFIN0017 dated 12 June 2020 and (ii) 77900IGL0003222 dated 05 May 2022, on the petitioner approaching it for the said purpose.

(ii) The properties covered by the list of unencumbered properties filed by the respondent, as annexed to the affidavit dated 18 March 2024, which has been handed over across the bar, shall stand attached.

(iii) The respondent shall therefore stand restrained from alienating or creating any third party rights in respect of the said properties, pending further orders.

16. Renotify for further proceedings on 23 October 2024.

C.HARI SHANKAR, J
AUGUST 1, 2024/yg

Click here to check corrigendum, if any

1 31. Adjudication as to proper stamp. –
(1) When any instrument, whether executed or not and whether previously stamped or not, is brought to the Collector, and the person bringing it applies to have the opinion of that officer as to the duty (if any) with which it is chargeable, and pays a fee of such amount (not exceeding five rupees and not less than fifty naye paise) as the Collector may in each case direct, the Collector shall determine the duty (if any) with which, in his judgment the instrument is chargeable.
2 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.
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