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TMI Blog2023 (12) TMI 897X X X X Extracts X X X X X X X X Extracts X X X X ..... description in Schedule I and the penalty (if any), the Stamp Act provides for the certification of such payment by an endorsement by the appropriate authority. Once an instrument has been endorsed, it may be admitted into evidence, registered, acted upon or authenticated as if it had been duly stamped. The difference between inadmissibility and voidness - HELD THAT:- When an agreement is void, we are speaking of its enforceability in a court of law. When it is inadmissible, we are referring to whether the court may consider or rely upon it while adjudicating the case. This is the essence of the difference between voidness and admissibility. Section 35 of the Stamp Act renders a document inadmissible and not void - HELD THAT:- The arbitration agreement must satisfy the requirements of the Contract Act. However, the authority empowered to adjudicate whether the requirements of the Contract Act are satisfied is the arbitral tribunal, under Section 16 of the Arbitration Act. The purpose of the Stamp Act - HELD THAT:- The Stamp Act is a legislation which is enacted in the interest of the revenue. The statute must be interpreted with due regard to its purpose. The Arbitration and Concil ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ourts in the arbitration process, but gives priority to the arbitral tribunal to decide on disputes and issues pertaining to arbitration agreements as well as the substantive rights of the parties. The Arbitration Act reflects these aspects of modern arbitration law - It is the duty of this Court to interpret the Arbitration Act in a manner which gives life to the principles of modern arbitration in India. The law on the arbitration agreement - HELD THAT:- An arbitration agreement is the foundation of arbitration as it records the consent of the parties to submit their disputes to arbitration - Section 2(b) of the Arbitration Act defines an arbitration agreement to mean an agreement referred to in Section 7. Section 7 defines an arbitration agreement to mean an agreement by the parties to submit to arbitration all or certain disputes which have arisen or which may arise between them in respect of a defined legal relationship, whether contractual or not. It provides that an arbitration agreement could be in the form of an arbitration clause in a contract or in the form of a separate agreement. Further, Section 7 mandates that an arbitration agreement shall be in writing. According t ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... thereby ensures the sustenance of the tribunal s jurisdiction over the substantive rights and obligations of the parties under the underlying contract even after such a contract is put to an end. The doctrine of competence-competence allows the tribunal to decide on all substantive issues arising out of the underlying contract, including the existence and validity of the arbitration agreement. In case the issue of stamping is raised before an arbitral tribunal, Sections 33 and 35 of the Stamp Act make it evident that a person having authority by consent of parties to receive evidence is empowered to impound and examine an instrument. A person having authority by consent of parties to receive evidence includes an arbitral tribunal which is constituted by consent of parties. Negative competence-competence - HELD THAT:- The international arbitration law as well as domestic law prioritize the arbitral tribunal by permitting them to initially decide challenges to their authority instead of the courts. The policy consideration behind this approach is twofold: first, to recognize the mutual intention of the parties of choosing the arbitrator to resolve all their disputes about the substan ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... and, therefore, the said provision continues to remain in full force. Since Section 11(6A) continues to remain in force, pending the notification of the Central Government, it is incumbent upon this Court to give true effect to the legislative intent. Harmonious construction of the Arbitration Act, the Stamp Act, and the Contract Act - HELD THAT:- The object of the Arbitration Act is to inter alia ensure an efficacious process of arbitration and minimize the supervisory role of courts in the arbitral process. On the other hand, the object of the Stamp Act is to secure revenue for state. It is a cardinal principle of interpretation of statutes that provisions contained in two statutes must be, if possible, interpreted in a harmonious manner to give full effect to both the statutes. The Arbitration Act will have primacy with respect to arbitration agreements - HELD THAT:- The Arbitration Act is a legislation enacted to inter alia consolidate the law relating to arbitration in India. It will have primacy over the Stamp Act and the Contract Act in relation to arbitration agreements for multiple reasons. The Arbitration Act is a special law and the Indian Contract Act and the Stamp Act ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ard of review. The nature of objections to the jurisdiction of an arbitral tribunal on the basis that stamp-duty has not been paid or is inadequate is such as cannot be decided on a prima facie basis. Objections of this kind will require a detailed consideration of evidence and submissions and a finding as to the law as well as the facts. Obligating the court to decide issues of stamping at the Section 8 or Section 11 stage will defeat the legislative intent underlying the Arbitration Act. Once the arbitral tribunal has been appointed, it will act in accordance with law and proceed to impound the agreement under Section 33 of the Stamp Act if it sees fit to do so. It has the authority to receive evidence by consent of the parties, in terms of Section 35. The procedure under Section 35 may be followed thereafter. In this manner, the competence-competence doctrine is given life and arbitration proceedings can continue to remain a faster alternative to suits before the trial courts or other, similar actions. The object of the Stamp Act is preserved - HELD THAT:- The impounding of an agreement which contains an arbitration clause at the stage of the appointment of an arbitrator under S ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... required to examine whether a certified copy of the agreement/ instrument/ contract discloses the fact of payment of stamp duty on the original. Accordingly, we hold that the holding of this Court in SMS Tea Estate as reiterated in N N Global 2, is no longer valid in law. Vidya Drolia does not deal with the issue of stamping - HELD THAT:- The reasoning in Vidya Drolia does not lead to the conclusion that Garware Wall Ropes was rightly decided either on the aspect of examination and impounding of unstamped or insufficiently stamped instrument with respect to arbitration proceedings, or the validity of on arbitration agreement contained in an unstamped or insufficiently stamped underlying contract. Thus, following conclusions have been reached out by CJI:- a. Agreements which are not stamped or are inadequately stamped are inadmissible in evidence under Section 35 of the Stamp Act. Such agreements are not rendered void or void ab initio or unenforceable; b. Non-stamping or inadequate stamping is a curable defect; c. An objection as to stamping does not fall for determination under Sections 8 or 11 of the Arbitration Act. The concerned court must examine whether the arbitration agree ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 5 iii. The Arbitration Act is a self-contained code ............................................................... 52 iv. Principles of modern arbitration .................................................................................. 54 F. The law on the arbitration agreement ................................................................... 55 i. Separability of the arbitration agreement .................................................................... 56 d. United Kingdom ............................................................................................................................ 58 e. United States of America .............................................................................................................. 61 f. Singapore .................................................................................................................................... 62 g. International Conventions ............................................................................................................. 62 h. India ............................................................................................................................................. ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... .................................... 119 K. The Appointment of Arbitrators by the Chief Justice of India Scheme, 1996 . 124 L. Vidya Drolia does not deal with the issue of stamping ..................................... 126 M. Conclusions .......................................................................................................... 129 PART A A. Reference 1. This Court has been called upon to resolve an issue which arose in the context of three statutes the Arbitration and Conciliation Act 1996, Arbitration Act , the Indian Stamp Act 1899, Stamp Act , and the Indian Contract Act 1872., Contract Act The Stamp Act imposes duty on instruments . An instrument which is unstamped or insufficiently stamped is inadmissible in evidence and cannot be acted upon in terms of its provisions. Arbitration agreements are often embedded in underlying instruments or substantive contracts. When an application is made for the appointment of an arbitrator, an objection is raised on the ground that the arbitration agreement is inadmissible because it is in an instrument which is unstamped or inadequately stamped. The primary issue that arises is whether such arbitration agreements would be no ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... t what was specifically under consideration was an arbitration clause which would get activated only if an insurer admits or accepts liability. Since on facts it was found that the insurer repudiated the claim, though an arbitration clause did exist , so to speak, in the policy, it would not exist in law, as was held in that judgment, when one important fact is introduced, namely, that the insurer has not admitted or accepted liability. Likewise, in the facts of the present case, it is clear that the arbitration clause that is contained in the subcontract would not exist as a matter of law until the subcontract is duly stamped, as has been held by us above. The argument that Section 11(6-A) deals with existence , as opposed to Section 8, Section 16 and Section 45, which deal with validity of an arbitration agreement is answered by this Court's understanding of the expression existence in Hyundai Engg. case [United India Insurance Co. Ltd. v. Hyundai Engg. Construction Co. Ltd., (2018) 17 SCC 607 : (2019) 2 SCC (Civ) 530] , as followed by us. Thereafter, a three-Judge Bench of this Court in Vidya Drolia v. Durga Trading Corporation, (2021) 2 SCC 1 cited paragraph 29 of Garware W ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ed above with reference to existence and validity of the arbitration agreement being apposite and extremely important, we would repeat the same by reproducing para 29 thereof : (SCC p. 238) [ ] Existence and validity are intertwined, and arbitration agreement does not exist if it is illegal or does not satisfy mandatory legal requirements. Invalid agreement is no agreement. 3. N N Global 1 (supra) noted the decision of the co-ordinate Bench in Vidya Drolia (supra) and doubted the correctness of the view adopted in paragraphs 22 and 29 of Garware Wall Ropes (supra) and in paragraphs 146 and 147 of Vidya Drolia (supra) (extracted above). It referred the following issue to a Bench of five Judges: 58. [ ] Whether the statutory bar contained in Section 35 of the Stamp Act, 1899 applicable to instruments chargeable to stamp duty under Section 3 read with the Schedule to the Act, would also render the arbitration agreement contained in such an instrument, which is not chargeable to payment of stamp duty, as being non-existent, unenforceable, or invalid, pending payment of stamp duty on the substantive contract/ instrument? 4. The Constitution Bench in N N Global Mercantile (P) Ltd. v. Ind ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... pra) and Garware Wall Ropes (supra) do not set out the correct position of law. 7. On 14 February 2020, a three-Judge Bench of this Court in Dharmaratnakara Rai Bahadur Arcot Narainswamy Mudaliar Chattram v. Bhaskar Raju and Brothers, (2020) 4 SCC 612 cited SMS Tea Estates (supra) with approval. In Bhaskar Raju (supra), this Court reversed the decision of the High Court which had relied on an insufficiently stamped lease deed to refer the parties to arbitration under Section 11(6) of the Arbitration Act. Bhaskar Raju (supra) was decided before N N Global 1 (supra). However, while the reference made by the three-Judge Bench in N N Global 1 (supra) was pending, review petitions were filed in Bhaskar Raju (supra). On 20 July 2021, the review petition was dismissed on the ground of delay as well as on merits., Review Petition (Civil) No. 704/2021 in CA No. 1599/2020. On 7 December 2022, a curative petition was filed seeking a reconsideration of Bhaskar Raju (supra). The Constitution Bench in N N Global 2 (supra) answered the reference and delivered its verdict on 25 April 2023. 8. On 8 May 2023, a three-Judge Bench of this Court issued notice in a petition for the appointment of an arb ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... process, we will consider the correctness of the view adopted in N N Global 2 (supra) as well as other ancillary issues. B. Submissions 11. The petitioners broadly contend that N N Global 2 (supra) does not lay down the correct position of law. The submissions of the learned counsel on behalf of the petitioners and the intervenors are summarized below. 12. Mr Arvind Datar, learned senior counsel, made the following submissions: a. Section 11(6A) of the Arbitration Act expressly confines the referral court s power to the examination of the existence of an arbitration agreement. Such examination does not extend to the adequacy of the stamping under Section 33 of the Stamp Act; b. The majority in N N Global 2 (supra) has effectively nullified Section 11(6A) which confined the jurisdiction of this Court and High Court to the examination of the existence of an arbitration agreement; c. Mandating the courts at the referral stage to follow the prescriptions contained under Section 33 of the Stamp Act would amount to exceeding the remit of examination. The Arbitration Act confines the authority of referral court to the examination of an arbitration agreement and not the instrument; d. The ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... person can have authority by consent of parties to determine issues of stamping. Such authority necessarily includes an arbitral tribunal which is constituted by the consent of parties through an arbitration agreement. 15. Mr Gourab Banerjee, learned senior counsel, made the following submissions: a. The object of the legislature in enacting the Stamp Act is to protect public revenue and not to interfere with commercial life by invalidating instruments vital to the smooth flow of trade and commerce; b. Non-stamping does not render an instrument null and void. Such instrument, even if unstamped, exists in fact and law; c. Investigation into the aspects of stamping at the referral stage under Section 11(6A) of the Arbitration Act is contrary to the plain language and legislative intent of the said provision; and d. The adjudication of stamp duty is a time-consuming process. Mandating the court under Section 11 of the Arbitration Act to adjudicate on the issue of stamp duty would be against the goal of expeditious appointment of arbitrators contained under Section 11(13) of the Arbitration Act. 16. Mr Jayant Mehta, learner senior counsel, made the following submissions: a. Although c ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... following submissions: a. The principle of separability contained in Section 16 of the Arbitration Act implies that an arbitration agreement can be treated as a distinct agreement only for the purpose of determining its validity or enforceability; b. The court exercising powers under Section 11 is not designated by the parties to receive evidence for the purpose of substantive adjudication of the rights and obligations of the parties; and c. Even if an instrument containing an arbitration agreement is unstamped or insufficiently stamped, such inadequacy or insufficiency should not derail the appointment of an arbitrator at the referral stage under Section 11(6A) of the Arbitration Act. 21. Ms Madhavi Divan, Mr Prashanto Chandra Sen, Mr Arvind Varma, Mr Ramesh Singh, Mr K Ramakant Reddy, Mr Rahul G. Tanwani, Mr Abir PART C Phukan, Mr Tejas Karia, Mr Pallav Mongia, Mr Kunal Vajani, Ms Apporva Neral, Mr Varun K Chopra, Dr. P. V. Amamadha Prasad, Mr Gauhar Mirza, Ms Hiral Gupta, Mr George Poothan Poothicote, Ms Manisha Singh, Mr Shadan Farasat, Mr Saurav Agarwal, Mr Siddhant Buxy, Ms Priyanka Vora, Mr Debanshu Khettry, Mr Shivam Singh, Ms Diya Kapur and Mr Jatinder Kumar Sethi suppleme ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... well-defined exceptions. 25. The respondent has relied on the Constitution Bench decision of this Court in Shilpa Sailesh v. Varun Sreenivasan, 2023 SCC OnLine SC 544 to submit that there is no live cause or matter to justify the invocation of this Court s jurisdiction. The issue before the three-Judge Bench in Seka Dobric (supra) pertains to the appointment of an arbitrator at Section 11 stage when the underlying contract is unstamped or insufficiently stamped. The Bench directed the Section 11 application to be listed along with the curative petition in view of the wider legal ramifications flowing from N N Global 2 (supra). Therefore, the respondent s argument is misplaced because Seka Dobric (supra), which is a live cause or matter, is also listed along with the curative petition. 26. The respondent has also argued that it was improper for the Constitution Bench to exercise its curative jurisdiction to refer the matter to this Bench of seven Judges. Order VI Rule 2 of the Supreme Court Rules 2013 provide that if a Bench in the course of hearing any cause, appeal or other proceedings considers that the matter be dealt with by a larger bench, it shall refer the matter to the Chie ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ubject be of such fundamental importance to national life or the reasoning is so plainly erroneous in light of the later thought that it is wiser to be ultimately right than to be consistently wrong. We are of the opinion that the reference by the five-Judge Bench raises question of seminal importance PART D with regard to the interpretation and application of the arbitration law in India, which in turn has implications for business and commerce in the country. Accordingly, we will answer the reference without delving into the facts of the individual cases. The issue of maintainability of the curative petition is left open and could be raised by the respondent before an appropriate Bench. D. The Indian Stamp Act 1899 i. Overview 29. As the title suggests, the Stamp Act is a legislation which consolidates the laws relating to the payment of stamp-duty on the execution of certain instruments in the manner specified in the statute. Section 2(14) defines instrument as follows: (14) instrument includes (a) every document, by which any right or liability is, or purports to be, created, transferred, limited, extended, extinguished or recorded; (b) a document, electronic or otherwise, crea ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... with the carrying out of purposes of the Special Economic Zone. Explanation. For the purposes of this clause, the expressions Developer , Special Economic Zone and Unit shall have meanings respectively assigned to them in clauses (g), (za) and (zc) of Section 2 of the Special Economic Zones Act, 2005. 31. Section 3 provides that the three categories of instruments in clauses (a), (b) and (c) shall be chargeable with duty of the amount indicated in Schedule I. The proviso to Section 3 indicates three other categories in respect of which no duty shall be chargeable. In terms of Section 5 of the Stamp Act, the duty chargeable on any instrument which comprises or relates to several distinct matters is the aggregate amount of the duties with which separate instruments (each comprising or relating to one of the many matters) would be chargeable under the same statute. Section 6 governs situations where the same instrument falls within two or more of the descriptions in Schedule I. In such a situation, if the duties chargeable under the different descriptions are different, the instrument shall be chargeable with the highest of them. The rule in Section 6 is subject to the provisions of ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... on of debt etc. is to be charged, Section 24, Stamp Act valuation in case of annuity, Section 25, Stamp Act stamp where value of subject-matter is indeterminate., Section 26, Stamp Act 34. Section 29 indicates who the stamp duty is to be borne by (in the absence of an agreement to the contrary) and Section 30 stipulates that a receipt must be given in certain cases. 35. A person may also apply to the Collector for his opinion as to the duty (if any) which is payable on a particular instrument, under Section 31 of the Stamp Act. The instrument given to the Collector for his opinion may be executed or previously stamped, but there is no requirement that it must be either executed or previously stamped., Section 31(1), Stamp Act If an instrument brought to the Collector under Section 31 is in their opinion chargeable with duty, and they determine that it is already fully stamped, or that the duty determined by them under Section 31 has already been paid, then they shall certify by endorsement on such instrument that the full duty with which it is chargeable has been paid., Section 32(1), Stamp Act If the Collector is of the opinion that the instrument is not chargeable with duty, they ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... mplied with because of the reasons listed in the preceding paragraph or otherwise. It was in recognition of this fact that the provisions in Chapter IV were enacted. Section 33 provides that every person who has authority to receive evidence (either by law or by consent of parties) shall impound an instrument which is, in their opinion, chargeable with duty but which appears to be not duly stamped. The power under Section 33 may be exercised when an instrument is produced before the authority or when they come across it in the performance of their functions. Persons in charge of public office except police officers are similarly empowered under Section 33, which is reproduced below: 33. Examination and impounding of instruments. (1) Every person having by law or consent of parties authority to receive evidence, and every person in charge of a public office, except an officer of police, before whom any instrument, chargeable, in his opinion, with duty, is produced or comes in the performance of his functions, shall, if it appears to him that such instrument is not duly stamped, impound the same. (2) For that purpose every such person shall examine every instrument so chargeable and ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ers bears the proper stamp, the contract or agreement shall be deemed to be duly stamped; (d) nothing herein contained shall prevent the admission of any instrument in evidence in any proceeding in a Criminal Court, other than a proceeding under Chapter XII or Chapter XXXVI of the Code of Criminal Procedure, 1898 (5 of 1898); (e) nothing herein contained shall prevent the admission of any instrument in any Court when such instrument has been executed by or on behalf of the Government or where it bears the certificate of the Collector as provided by Section 32 or any other provision of this Act. (emphasis supplied) In terms of Section 35, an instrument which is not duly stamped is inadmissible in evidence for any purpose and it shall not be acted upon, registered, or authenticated., Subject to the proviso to Section 35. Clause (a) of the proviso to Section 35 stipulates that the bar contained in the provision is removed upon the payment of duty and the penalty (if any). The party or parties may pay the duty chargeable to the person who has the authority to receive evidence by law or by consent of parties. Section 35 is significant because it gives teeth to the Stamp Act by ensuring ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... tes the collection of revenue. It permits instruments to be impounded not only by persons in charge of a public office or those who are empowered by law to receive evidence but also by any person who is empowered to receive evidence by consent of parties. The statute then sets out the procedure to be followed upon impounding a document. This procedure ensures that stamp-duty is paid. After the payment of the appropriate amount under the appropriate description in Schedule I and the penalty (if any), the Stamp Act provides for the certification of such payment by an endorsement by the appropriate authority. Once an instrument has been endorsed, it may be admitted into evidence, registered, acted upon or authenticated as if it had been duly stamped. b. The difference between inadmissibility and voidness 44. The admissibility of an instrument in evidence is distinct from its validity or enforceability in law. Section 2(g) of the Contract Act provides that an agreement not enforceable by law is said to be void. The admissibility of a particular document or oral testimony, on the other hand, refers to whether or not it can be introduced into evidence. P Ramanatha Aiyar s The Law Lexicon ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... es the distinction between enforceability and admissibility. 48. Section 35 of the Stamp Act is unambiguous. It stipulates, No instrument chargeable with duty shall be admitted in evidence The term admitted in evidence refers to the admissibility of the instrument. Sub-section (2) of Section 42, too, states that an instrument in respect of which stamp-duty is paid and which is endorsed as such will be admissible in evidence. The effect of not paying duty or paying an inadequate amount renders an instrument inadmissible and not void. Non-stamping or improper stamping does not result in the instrument becoming invalid. The Stamp Act does not render such an instrument void. The non-payment of stamp duty is accurately characterised as a curable defect. The Stamp Act itself provides for the manner in which the defect may be cured and sets out a detailed procedure for it. It bears mentioning that there is no procedure by which a void agreement can be cured. 49. In Thiruvengadam Pillai v. Navaneethammal, (2008) 4 SCC 530 this Court noted that the trial court and the High Court had doubted the authenticity of an agreement for the sale of certain immoveable property because it was written o ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... N Global 2 (supra), this Court held that the failure to stamp an arbitration agreement is not a curable defect. Relying on the provisions of the Contract Act as well as Section 11(6-A) of the Arbitration Act, it held that an unstamped arbitration agreement is void. The relevant paragraphs of the judgment of the majority are extracted below: 103. It may not be apposite to merely describe an unstamped arbitration agreement as a curable defect . As long it remains an unstamped instrument, it cannot be taken notice of for any purpose, as contemplated in Section 35 of the Stamp Act. It remains unenforceable. It is not enforceable in law . In the said sense, it also cannot exist in law. It would be void. Our view in this regard that voidness is conflated to unenforceability receives fortification from Section 2(j) of the Contract Act which renders a contract which ceases to be enforceable void. (emphasis in original) 52. The above observation of this Court is incorrect. Section 2(j) of the Contract Act provides as follows: (j) A contract which ceases to be enforceable by law becomes void when it ceases to be enforceable. 53. Section 2(j) is not attracted when an instrument is rendered i ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... documents. Thus, an arbitration agreement should satisfy the mandate of Section 10 of the Contract Act, in addition to satisfying other requirements stipulated in Section 7 of the Arbitration Act. 58. The above observations are correct insofar as the arbitration agreement must satisfy the requirements of the Contract Act. However, the authority empowered to adjudicate whether the requirements of the Contract Act are satisfied is the arbitral tribunal, under Section 16 of the Arbitration Act. This is addressed in greater detail in the following segments. iii. The purpose of the Stamp Act 59. The Stamp Act is a fiscal legislation which is intended to raise revenue for the government. It is a mandatory statute. In Hindustan Steel Ltd. v. Dilip Construction Co., (1969) 1 SCC 597 this Court dealt with the import of Sections 35, 36 and 42 of the Stamp Act. One of the parties relied on the difference in the phraseology between Sections 35 and 36 to argue that an instrument which was insufficiently stamped or not stamped could be admitted in evidence upon the payment of duty and a penalty (if any) but that it could not be acted upon, once admitted. It was argued that Section 35 operates as ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... efficient, and binding resolution of disputes that have arisen between the parties in regard to their substantive obligations. The thrust of arbitration law is succinctly encapsulated in Redfern and Hunter: It is to be expeditious where the law is slow, cheap where the law is costly, simple where the law is technical, a peacemaker instead of a stirrer-up of strife. , Redfern and Hunter on International Arbitration (7th edn, Oxford University Press, 2023) 3. 62. Before the enactment of the Arbitration Act, the law on arbitration was contained in the Arbitration Act 1940, 1940 Act the Arbitration (Protocol and Convention) Act 1937, and Foreign Awards (Recognition and Enforcement) Act 1961. In 1978, the Law Commission of India suggested substantial amendments to the 1940 Act to make it more responsive to the contemporary legal and economic requirements. In the meanwhile, the United Nations Commission on International Trade Law, UNCITRAL 1 adopted the Model Law in 1985 to foster the development of a unified legal framework for the fair and efficient settlement of disputes arising in international commercial arbitration. The General Assembly of the United Nations recommended to all stat ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 32, 142. Judicial scepticism towards arbitration proceedings mainly stemmed from the attitude of judges that every activity that occurred within a jurisdiction should be within the purview of state law and court. , Julian D M Lew, Achieving the Dream: Autonomous Arbitration (2006) 22(2) Arbitration International 179, 183. 65. As cross-border commerce and transactions proliferated, companies and businesses sought different ways to resolve their commercial disputes. The formality, customs, and legal traditions of national courts were at variance with the intention of the parties to achieve a speedy and efficient resolution of their disputes. The internationalization of trade and commerce in the middle of the nineteenth century necessitated the regulation and institutionalization of arbitration. In the process, arbitration was also detached from the national legal systems, with the growth of arbitral institutions such as the London Chamber of Arbitration and International Chamber of Commerce. This new regime of arbitration law paved the way for greater recognition of the mutual intention of parties and the authority of arbitral tribunals to resolve disputes without being bogged down b ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... he arbitral tribunal. By surrendering their right to litigate in national courts, parties also surrender their right to be bound by national procedural laws in favour of expedition, informality, and efficiency of the arbitral process. The arbitral tribunal is not subject to the procedural laws of a country. For instance, Section 19 of the Arbitration Act expressly provides that the arbitral tribunal shall not be bound by the Code of Civil Procedure 1908 or the Indian Evidence Act 1872. Moreover, it stipulates that an arbitral tribunal may conduct the proceedings in any manner it deems appropriate if the parties fail to agree on the procedure to be followed by the tribunal. Although arbitral tribunals have autonomy in the procedural and substantive sense, they are not completely independent of the law of the country in which the arbitral tribunal has its juridical seat, as discussed in the following segments. ii. Principle of minimum judicial interference 69. The principle of judicial non-interference in arbitral proceedings is fundamental to both domestic as well as international commercial arbitration. The principle entails that the arbitral proceedings are carried out pursuant to ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... imilarly, Article 5 does not bar the national courts from intervening in matters not governed by the Model Law., Digest of Case Law on the Model Law on International Commercial Arbitration (2012) 21 The UNCITRAL Working Group itself identified certain situations not dealt with under the Model Law where the national courts could intervene: Article 5 would, for example, not exclude court control or assistance in those matters which the Working Group had decided not to deal with in the law (e.g., capacity of parties to conclude arbitration agreement; impact of state immunity; competence of arbitral tribunal to adapt contracts; enforcement by courts of interim measures of protection ordered by arbitral tribunal; fixing of fees or request for deposit, including security for fees or costs; time-limit for enforcement of awards). 72. This indicates that Article 5 of the Model Law emphasizes on arbitral tribunal being the first instance to determine all issues relating to matters of law or construction as well as issues of jurisdiction and scope of authority., Rio Algam v. Sammi Steel Co., Ontario Court of Justice, Canada, 1 March 1991, [1991] O.J. No. 268 It exclusively determines the mann ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ins with the expression notwithstanding anything contained in any other law for the time being in force. The non-obstante clause is Parliament s addition to the Article 5 of the Model Law. It is of a wide amplitude and sets forth the legislative intent of limiting judicial intervention during the arbitral process. In the context of Section 5, this means that the provisions contained in Part I of the Arbitration Act ought to be given full effect and operation irrespective of any other law for the time being in force. It is now an established proposition of law that the legislature uses non-obstante clauses to remove all obstructions which might arise out of the provisions of any other law, which stand in the way of the operation of the legislation which incorporates the non-obstante clause., State of Bihar v. Bihar Rajya M.S.E.S.K.K. Mahasangh, (2005) 9 SCC 129 76. A non-obstante clause is appended in a provision to give such provision overriding effect over other provisions of the law., Owners and Parties Interested in the Vessel M.V. Polaris Galaxy v. Banque Cantonale De Geneva, 2022 SCC OnLine SC 1293 In Chandavarkar Sita Ratna Rao v. Ashalata S. Guram, (1986) 4 SCC 447 Justice S ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... Act. 79. Similar to Article 5 of the Model Law, Section 5 uses the expression in matters governed by this Part. The use of this expression circumscribes the scope of judicial intervention to matters expressly governed by Part I of the Arbitration Act. The matters governed by Part I inter alia include (i) Section 8 which mandates judicial authorities to refer parties to arbitration when prima facie there is a valid arbitration agreement; (ii) Section 9 which allows courts to issue interim measures on an application made by a party to an arbitration agreement; (iii) Section 11 which empowers the Supreme Court or the High Courts to appoint arbitrators on an application made by parties to an arbitration agreement; (iv) Section 27 which allows the arbitral tribunal to request the court for assistance in taking evidence; and (v) Section 34 which empowers the court to set aside an arbitral award on the basis of the limited grounds mentioned therein. 80. Section 5 has two facets positive and negative. The positive facet vests judicial authorities with jurisdiction over arbitral proceedings in matters expressly allowed in or dealt with under Part I of the Arbitration Act. The flip side to ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... . In Girnar Traders v. State of Maharashtra, (2011) 3 SCC 1 a Constitution Bench of this Court observed that a self-contained code is a complete legislation with regard to the purpose for which it is enacted. Such a self-contained code provides for a complete machinery to deal with the purpose sought to be achieved by that law and its dependence on other legislations is either absent or minimal. 84. A two-Judge Bench of this Court, in Fuerst Day Lawson Ltd. v. Jindal Exports Ltd, (2011) 8 SCC 333 explained the nature of the Arbitration Act in the following terms: 89. It is, thus, to be seen that Arbitration Act, 1940, from its inception and right through to 2004 (in P.S. Sathappan [(2004) 11 SCC 672]) was held to be a self-contained code. Now, if the Arbitration Act, 1940 was held to be a self-contained code, on matters pertaining to arbitration, the Arbitration and Conciliation Act, 1996, which consolidates, amends and designs the law relating to arbitration to bring it, as much as possible, in harmony with the UNCITRAL Model must be held only to be more so. Once it is held that the Arbitration Act is a self-contained code and exhaustive, then it must also be held, using the lucid ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... rbitral procedures, which ensures efficiency and expediency of the arbitration process. One of the reasons that business and commercial entities prefer arbitration is because it obviates cumbersome judicial processes, which can often prove expensive, complex, and interminable. Most legal jurisdictions have also recognized and adopted legal approaches that favor arbitration at both the domestic and international level. In the process, national courts have given effect to principles such as the separability presumption and jurisdictional competence of the arbitral tribunal. Modern arbitration law does not completely restrict the role of national courts in the arbitration process, but gives priority to the arbitral tribunal to decide on disputes and issues pertaining to arbitration agreements as well as the substantive rights of the parties. The Arbitration Act reflects these aspects of modern arbitration law. It PART F is the duty of this Court to interpret the Arbitration Act in a manner which gives life to the principles of modern arbitration in India. F. The law on the arbitration agreement 88. An arbitration agreement is the foundation of arbitration as it records the consent of ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... d., Redfern and Hunter on International Arbitration (7th edn, Oxford University Press, 2023) 81 The concept of separability reflects the presumptive intention of the parties to distinguish the underlying contract, which captures the substantive rights and obligations of the parties, from an arbitration agreement which provides a procedural framework to resolve the disputes arising out of the underlying contract. This presumption has various consequences in theory and practice, the most important being that an arbitration agreement survives the invalidity or termination of the underlying contract. 91. Schwebel, Sobota and Manton explain in a book on International Arbitration that the separability presumption, Stephen Schwebel, Luke Sobota, and Ryan Manton, International Arbitration: Three Salient Problems (Cambridge University Press, 2nd edn, 2020) 4. is based on four factors: first, the intention of the parties to require arbitration of any dispute arising between them, including disputes over the validity of the contract; second, preventing an unwilling party from avoiding its earlier commitment by alleging the invalidity of the underlying contract; third, since the arbitration ag ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... he separability presumption developed gradually in English law starting with the decision of the House of Lords in Heyman v. Darwins., [1942] AC 356 The issue before the House of Lords was whether an arbitration agreement contained in an underlying contract could survive the termination of such contract for a repudiatory breach. It was held that an arbitration agreement is collateral to the substantive contract and could survive its termination. Lord Macmillan observed that an arbitration agreement is materially different from other ordinary contracts, the reason being that breach of obligations under ordinary contracts cannot (in general) be specifically enforced and breach of them results only in damages, but an arbitration agreement can be specifically enforced by the machinery of the arbitration Acts. Lord Macmillan concluded that repudiation or breach of a contract does not extinguish the arbitration agreement, because it survives for the purpose of resolving the outstanding claims arising out of the breach: I am, accordingly, of the opinion that what is commonly called repudiation or total breach of a contract, whether acquiesced in by the other party or not, does not abrogat ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ion Act. In that case, the issue was whether a party was bound by an arbitration agreement contained in an underlying contract which was allegedly procured by fraud and bribery. Lord Hoffman, writing for the House of Lords, held that it could be enforced in view of the separability presumption. The Law Lord held that an arbitration agreement in terms of Section 7 of the UK Arbitration Act is a distinct agreement from the underlying contract and, therefore, can be void or voidable only on grounds which relate directly to the arbitration agreement. Lord Hoffman, built on his past decision in Harbour Assurance (supra), by holding that Section 7 protects an arbitration agreement from any indirect challenge. e. United States of America 99. The US Federal Arbitration Act presupposes that an arbitration agreement can be separate and distinct from the underlying contract., Gary Born (n 62) 382 The separability presumption was subsequently reiterated by US courts with respect to both international and domestic arbitration. In Prima Paint Corporation v. Flood Conklin Mfg. Co., 388 US 395 (1967) the Supreme Court of the United States affirmed the separability presumption by observing that arb ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ational laws and legal rules than the underlying contract, and, therefore, an arbitration agreement is presumptively separate from the underlying contract. According to Gary Born, Article II and Article V(1)(a) of the New York Convention indicate that the Convention treats an arbitration agreement as being different from the underlying contract., Gary Born (n 62) 378 102. Article 16 of the Model Law deals with the competence of an arbitral tribunal to rule on its own jurisdiction. Article 16(1) provides: The arbitral tribunal may rule on its own jurisdiction, including any objections with respect to the existence or validity of the arbitration agreement. For that purpose, an arbitration clause which forms part of a contract shall be treated as an agreement independent of the other terms of the contract. A decision by the arbitral tribunal that the contract is null and void shall entail ipso jure the invalidity of the arbitration clause. (emphasis supplied) 103. Rule 23 of the UNCITRAL Arbitration Rules, 2021 also provides that an arbitration clause that forms part of a contract shall be treated as an agreement independent of the other terms of the contract. In contrast to the New Y ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... TRAL Model Law states that the language used in the second sentence does not prevent the application of the separability presumption when a jurisdictional question is raised before a court. , Ibid. Gary Born suggests that the better view is that the separability presumption contained in Article 16(1) states a general rule of contractual validity which is applicable for all purposes. , Gary Born (n 62) 403 The judicial view that emerges from the Indian courts also seems to suggest that an arbitration agreement is treated as distinct and separate from the underlying contract as a general rule of substantive validity. 107. The separability presumption has undergone a significant evolution in India. Initially, the Indian courts viewed an arbitration agreement as an integral part of the underlying contract without any existence beyond such contract. For instance, in Union of India v. Kishorilal Gupta,, 1959 SCC OnLine SC 6 the issue before this Court was whether an arbitration clause in the original contract survived after the enactment of a subsequent contract. Justice K Subba Rao (as the learned Chief Justice then was) considered Heyman (supra) but distinguished it on the ground that ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e institution of a suit to enforce a right arising from a contract unless the firm is registered and the person suing is or has been shown in the Register of Firms as partner. This Court considered the overall scheme of the Arbitration Act to hold that an arbitration clause is separable from the other clauses of the partnership deed and constitutes an agreement by itself. 110. In National Agricultural Coop. Marketing Federation India Ltd. v. Gains Trading Co., (2007) 5 SCC 692 the issue before this Court in an application under Section 11 was whether an arbitration clause comes to an end if the contract containing such clause is repudiated. While answering this in negative, this Court observed that even if the underlying contract comes to an end, the arbitration agreement contained in such contract survives for the purpose of the resolution of disputes between the parties. Similarly, in P Manohar Reddy Bros. v. Maharashtra Krishna Valley Development Corp., (2009) 2 SCC 494 this Court referred to Buckeye Check Cashing Inc. (supra) to observe that an arbitration agreement contained in an underlying contract is a collateral term which may survive the termination of the contract. 111. ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... on by determining the existence and validity of the arbitration agreement. In the process, the separability presumption gives effect to the doctrine of competence-competence. 113. In view of the legal position, we now proceed to analyze the correctness of the decision in N N Global 2 (supra). The Constitution Bench acknowledged the separability presumption, but refused to apply it in the context of Sections 33 and 35 of the Stamp Act. The relevant observation of the Court is as follows: 157. [ ] The evolution of the principle that an arbitration is a separate and distinct agreement from the contract, would indicate that it would have no play in the context of the duty of a Court, within the meaning of Sections 33 and 35 of the Stamp Act, to act in consonance therewith. PART G 114. The above position of law is contrary to the separability presumption which treats an arbitration agreement as separate from the underlying contract. G. The doctrine of competence-competence 115. The doctrine of kompetenz-kompetenz (also known as competencecompetence), as originally developed in Germany, was traditionally understood to imply that arbitrators are empowered to make a final ruling on their o ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... . In Dallah Real Estate and Tourism Holding Company v. The Ministry of Religious Affairs, Government of Pakistan, [2010] UKSC 46 the United Kingdom Supreme Court held that the tribunal s own view of its jurisdiction has no legal or evidential value when the issue pertains to the exercise of legitimate authority by the tribunal. Thus, the UK position is that although the arbitral tribunal is empowered to consider whether it has jurisdiction, its determination is subject to the examination of the courts. 118. The courts in the United States have considered the principle of competence-competence to be intertwined with the separability presumption. In Prima Paint (supra), the United States Supreme Court held that if a claim is made to the effect that the underlying contract was induced fraudulently, then the issue should be determined by the courts. The Supreme Court concluded that all the other issues should be left for the determination of the arbitral tribunal to not only honor the plain meaning of the statute, but also the unmistakably clear congressional purpose that the arbitration procedure, when selected by the parties to a contract, be speedy, and not subject to delay and obst ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... y party to the arbitration agreement to file an application before the courts challenging the existence or validity of an arbitration agreement. In view of this, this Court consistently held that the question as to the existence or validity of an arbitration agreement was to be decided only by application to courts and not by the arbitral tribunal., Dhanrajamal Gobindram v. Shamji Kalidas Co., 1961 SCC OnLine SC 28; Khardah Co. Ltd. v. Raymon Co. (India) Private Ltd., 1962 SCC OnLine SC 28. This position has now undergone a complete metamorphosis in the present legislation. Section 16 of the Arbitration Act, which is based on Article 16 of the Model Law, recognizes the doctrine of competence-competence in Indian arbitration law. Section 16 empowers the arbitral tribunal to rule on its own jurisdiction, including ruling on any objections with respect to the existence or validity of arbitration agreement. Importantly, the parties have a right under Section 16(2) and 16(3) to challenge the jurisdiction of the arbitral tribunal on grounds such as the non-existence or invalidity of the arbitration agreement. The arbitral tribunal is obligated to decide on the challenge to its jurisdicti ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... under the law for the time being in force; or (ii) the arbitral award is in conflict with the public policy of India. 122. Under Section 34, the grounds for setting aside an arbitral award are specific. The provision requires a party challenging an award to plead and prove the existence of one or more such grounds., Fiza Developers and Inter-Trade (P) Ltd. v. Amci (I) (P) Ltd., (2009) 17 SCC 796 The scheme of the Arbitration Act shows that although an arbitral tribunal is given priority to determine all issues pertaining to its jurisdiction based on the principle of competence-competence, the tribunal s decision is subject to judicial review at the stage when an award is challenged. Moreover, one of the grounds on which an arbitral award can be set aside is that the arbitration agreement is not valid under law. This indicates that the Arbitration Act does not contemplate the court determining the validity of an arbitration agreement at a pre-arbitral stage. 123. In Indian Farmers Fertilizer Cooperative Limited v. Bhadra Products, (2018) 2 SCC 534 one of the issues before this Court was whether a decision on the issue of limitation would go to the root of the jurisdiction of the arb ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... urisdiction refers to the authority of a court or tribunal to decide matters that are litigated before it or to take cognizance of matters presented before it in a formal way for its decision. In Official Trustee, West Bengal v. Sachindra Nath Chatterjee, (1969) 3 SCR this Court held that for a court to have jurisdiction to decide a particular matter, it must not only have jurisdiction to try the suit brought but must also have the authority to pass the orders sought. In NTPC v. Siemens Atkeingesllchaft, (2007) 4 SCC 451 this Court observed that any refusal to go into the merits of a claim may be in the realm of jurisdiction. Accordingly, it was observed that the issue of limitation goes to jurisdiction because if a claim is barred by limitation, a tribunal can refuse to exercise its jurisdiction. 126. Section 35 of the Stamp Act mandates that an unstamped instrument cannot be acted upon unless it is duly stamped. The question is whether a tribunal can effectively exercise its jurisdiction to settle the claims between the parties until stamp duty is paid on the underlying instrument. In view of the decision of this Court in Uttarakhand Purv Sainik Kalyan Nigam Ltd (supra), the scop ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... is subject to subsequent review by courts., Fouchard (n 116) 401 130. In Chloro Controls India (P) Ltd. v. Severn Trent Water Purification Inc., (2013) 1 SCC 641 one of the issues before this Court was whether the court at the referral stage under Section 45 is required to determine the validity of an arbitration agreement. This Court recognized that the doctrine of competence-competence has both the positive and the negative aspects. It was observed that while the positive aspect enables the arbitrator to rule on its own jurisdiction, the negative aspect deprives the courts of their jurisdiction. However, this Court noted the absence of a provision similar to Section 16 in Part II to conclude that the referral court is required to test for the ingredients of Section 45 at the threshold stage itself. 131. Thereafter, this Court in Vidya Drolia (supra) held that the doctrine of competence-competence has both negative and positive connotations. The relevant extract from the decision is set out below: 129. Principles of competence-competence have positive and negative connotations. As a positive implication, the Arbitral Tribunals are declared competent and authorised by law to rule ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... er of appointment of arbitrators is vested with national courts to resolve the deadlock in appointment of an arbitrator., Digest of Case Law on the Model Law on International Commercial Arbitration (2012) 60 134. As discussed in the preceding segments of this judgment, Section 5 of the Arbitration Act disallows a judicial authority from intervening unless expressly provided under Part I. In the present proceedings, the exercise of the powers by the courts or judicial authorities as provided under Section 8 and 11 becomes particularly relevant for our consideration. 135. According to Fouchard, an arbitration agreement has both a positive and negative effect. The positive effect is that the parties ought to honor their undertaking to submit to arbitration any disputes covered by their arbitration. On the flip side, the negative effect of the arbitration agreement is that courts are prohibited from hearing such disputes., Fouchard (n 116) 402 Most international covenants have recognised the principle that courts lack jurisdiction to hear disputes covered by an arbitration agreement. For instance, Article II(3) of the New York Convention states that [t]he court of a Contracting State, ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... s to be referred to arbitration may (upon notice to the other parties to the proceedings) apply to the court in which the proceedings have been brought to stay the proceedings so far as they concern that matter. [ ] (4) On an application under this section the court shall grant a stay unless satisfied that the arbitration agreement is null and void, inoperative, or incapable of being performed. and French, Article 1458 of French Code of Civil Procedure, 1981. It reads: If a dispute pending before an arbitral tribunal on the basis of an arbitration agreement is brought before a State court, it shall declare itself incompetent. If the dispute is not yet before an arbitral tribunal, the State court shall also declare itself incompetent, unless the arbitration agreement is manifestly null and void. national laws. It is worth noting that most of the national legislations entitle the courts at the referral stage to review the existence and validity of arbitration agreements. For example, Section 9(4) of the English Arbitration Act, 1996 provides that a court can stay the legal proceedings unless satisfied that the arbitration agreement is null and void, inoperative, or incapable of being ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... third arbitrator. Section 11(6) confers powers on the Supreme Court and the High Court, as the case may be, on the failure of the parties to comply with the agreed arbitration procedure. Section 11(6) enlists three possible defects in the appointment procedure, namely: first, a party fails to act as required by the agreed procedure; second, the parties or the two appointed arbitrators fail to reach an agreement expected of them under that procedure; or third, a person, including an institution, fails to perform any function entrusted to them or under the agreed procedure. 140. Section 11(6) has had a long and chequered history before this Court, particularly in respect of the nature of function of the Chief Justice or his designate in the appointment of an arbitrator. In SPB Co. v. Patel Engineering Ltd., (2005) 8 SCC 618 a seven-Judge Bench of this Court held that the power exercised by the Chief Justice of India or a Chief Justice of the High Court under Section 11(6) is a judicial power. In the process, this Court analysed the scope of the powers and authority of the referral court under Section 11(6). Moreover, this Court noted that Sections 8 and 11 are complementary in natur ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... bitral tribunal. These issues were: first, whether a claim made falls within the arbitration clause (as for example, a matter which is reserved for final decision of a departmental authority and excepted or excluded from arbitration); and second, merits or any claim involved in the arbitration. 142. The decisions of this Court in Patel Engineering (supra) and Boghara Polyfab (supra) allowed for greater judicial interference at the pre-arbitral stage. In effect, the referral courts were encouraged to conduct mini-trials instead of summarily dealing with the preliminary issues. This was also noted by the Law Commission of India, which observed that judicial intervention in the arbitral proceedings is a pervasive problem in India leading to significant delays in the arbitration process., Law Commission of India, 246th Report (2014) The Law Commission recognized that one of the problems plaguing implementation of the Arbitration Act was that Section 11 applications were kept pending for years by the courts. To remedy the situation, the Law Commission proposed changing the then existing scheme of the power of appointment being vested in the Chief Justice to the High Court and the Suprem ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... of the legislature in incorporating Section 11(6A) was to limit the scope of the referral court s jurisdiction to only one aspect the existence of an arbitration agreement. To determine the existence of an arbitration agreement, the court only needs to examine whether the underlying contract contains a clause which provides for arbitration pertaining to the disputes which have arisen between the parties to the agreement. This Court further held that Section 11(6A) incorporates the principle of minimal judicial intervention: 59. The scope of the power under Section 11(6) of the 1996 Act was considerably wide in view of the decisions in SBP and Co. and Boghara Polyfab. This position continued till the amendment brought about in 2015. After the amendment, all that the courts need to see is whether an arbitration agreement exists nothing more, nothing less. The legislative policy and purpose is essentially to minimise the Court's intervention at the stage of appointing the arbitrator and this intention as incorporated in Section 11(6-A) ought to be respected. 146. In 2017, the High-Level Committee to Review the Institutionalization of Arbitration Mechanism in India submitted a repo ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... of the decision, one of the questions before this Court in Vidya Drolia (supra) was the interpretation of the word existence as appearing in Section 11. It was held that existence and validity are intertwined. Further, it was observed that an arbitration agreement does not exist if it is illegal or does not satisfy mandatory legal requirements. Therefore, this Court read the mandate of valid arbitration agreement contained in Section 8 into the mandate of Section 11, that is, existence of an arbitration agreement. 150. At the outset, Vidya Drolia (supra) noted that Section 11 has undergone another amendment vide Act 33 of 2019 with effect from 9-8-2019. The purport of the omission of the said clause was further explained in the following terms: 145. Omission of sub-section (6-A) by Act 33 of 2019 was with the specific object and purpose and is relatable to by substitution of sub-sections (12), (13) and (14) of Section 11 of the Arbitration Act by Act 33 of 2019, which, vide subsection (3-A) stipulates that the High Court and this Court shall have the power to designate the arbitral institutions which have been so graded by the Council under Section 43- I, provided where a graded ar ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... Engineering (supra) where it was held that Section 8 and Section 11 are complementary in nature. Accordingly, the two provisions cannot be read as laying down a similar standard. 154. The legislature confined the scope of reference under Section 11(6A) to the examination of the existence of an arbitration agreement. The use of the term examination in itself connotes that the scope of the power is limited to a prima facie determination. Since the Arbitration Act is a self-contained code, the requirement of existence of an arbitration agreement draws effect from Section 7 of the Arbitration Act. In Duro Felguera (supra), this Court held that the referral courts only need to consider one aspect to determine the existence of an arbitration agreement whether the underlying contract contains an arbitration agreement which provides for arbitration pertaining to the disputes which have arisen between the parties to the agreement. Therefore, the scope of examination under Section 11(6A) should be confined to the existence of an arbitration agreement on the basis of Section 7. Similarly, the validity of an arbitration agreement, in view of Section 7, should be restricted to the requirement ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... nded Section 45 of the Arbitration Act when the objection with regards to the arbitration agreement being null and void, inoperative or incapable of being performed is raised before a judicial authority. Writing for the majority, Justice B N Srikrishna held that Section 45 does not require the judicial authority to give a final determination. The court observed that: 74. There are distinct advantages in veering to the view that Section 45 does not require a final determinative finding by the court. First, under the Rules of Arbitration of the International Chamber of Commerce (as in force with effect from 1-1-1998), as in the present case, invariably the Arbitral Tribunal is vested with the power to rule upon its own jurisdiction. Even if the court takes the view that the arbitral agreement is not vitiated or that it is not invalid, inoperative or unenforceable, based upon purely a prima facie view, nothing prevents the arbitrator from trying the issue fully and rendering a final decision thereupon. If the arbitrator finds the agreement valid, there is no problem as the arbitration will proceed and the award will be made. However, if the arbitrator finds the agreement invalid, inop ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... visions which appear to be in conflict with each other in such a manner as to harmonise them; b. The provisions of one section of a statute cannot be used to defeat the other provisions unless the court, in spite of its efforts, finds it impossible to effect reconciliation between them; c. When there are two conflicting provisions in an Act, which cannot be reconciled with each other, they should be so interpreted that, if possible, effect should be given to both. This is the essence of the rule of harmonious construction; d. The courts have also to keep in mind that an interpretation which reduces one of the provisions to a dead letter or useless lumber is not harmonious construction; and e. To harmonize is not to destroy any statutory provision or to render it otiose. 161. In Kandla Export Corporation v. OCI Corporation (2018) 14 SCC 715 , the issue before this Court was whether an appeal which was not maintainable under Section 50 of the Arbitration Act was nonetheless maintainable under Section 13(1) of the Commercial Courts Act 2015. Section 50 the Arbitration Act provides that no appeal shall lie from the order refusing to: (a) refer the parties to arbitration under section 4 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... expressly provides that proceedings initiated under Section 18(3) shall be carried out as if they were in pursuance of an arbitration agreement under Section 7(1) of the Arbitration Act, the right to make a counter-claim before the statutory authorities exists under the MSMED Act. In this way, the two statutes were harmonized. 165. In the present reference, the challenge before this Court is to harmonize the provisions of the Arbitration Act and the Stamp Act. The object of the Arbitration Act is to inter alia ensure an efficacious process of arbitration and minimize the supervisory role of courts in the arbitral process. On the other hand, the object of the Stamp Act is to secure revenue for state. It is a cardinal principle of interpretation of statutes that provisions contained in two statutes must be, if possible, interpreted in a harmonious manner to give full effect to both the statutes., Jagdish Singh v. Lt. Governor, Delhi, (1997) 4 SCC 435 In providing a harmonious interpretation, this Court has to be cognizant of the fact that it does not defeat the purpose of the statutes or render them ineffective., State of Tamil Nadu v. M K Kandaswami, (1975) 4 SCC 745 The challenge, ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... to their subject-matter: a. The Stamp Act is a law governing the payment of stamp-duty for all manner of instruments. Schedule I to the Stamp Act sets out various types instruments which fall within the ambit of the said legislation; b. The Contract Act, as the name suggests, sets out the rules in relation to contracts in general. An arbitration agreement is one of the many different types of contracts to which it is applicable; and c. The Arbitration Act contains the law relating to domestic arbitration, international commercial arbitration, the enforcement of foreign arbitral awards, and conciliation. 171. Second, the particular perspective of this case pertains to whether an unstamped arbitration agreement is rendered unenforceable pending the payment of stamp-duty so as to interpose a bar on the referral court to refer parties to arbitration. The issue is not whether all agreements are rendered unenforceable under the provisions of the Stamp Act but whether arbitration agreements in particular are unenforceable. 172. The Arbitration Act is a special law in the context of this case because it governs the law on arbitration, including arbitration agreements Section 2(1)(b) and S ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... It provides against judicial interference except as provided in the Act. The non obstante clause purports to proclaim so despite the presence of any law which may provide for interference otherwise. However, this does not mean that the operation of the Stamp Act, in particular, Sections 33 and 35 would not have any play. We are of the clear view that the purport of Section 5 is not to take away the effect of Sections 33 and 35 of the Stamp Act. The Court under Section 11 purporting to give effect to Sections 33 and 35 cannot be accused of judicial interference contrary to Section 5 of the Act. 175. Section 5 is effectively rendered otiose by the interpretation given to it in N N Global 2 (supra). The court failed to provide a reason for holding that Section 5 of the Arbitration Act does not have the effect of excluding the operation of Sections 33 and 35 of the Stamp Act in proceedings under Section 11 of the Arbitration Act. The non-obstante clause in Section 5 does precisely this. In addition to the effect of the non-obstante clause, the Arbitration Act is a special law. We must also be cognizant of the fact that one of objectives of the Arbitration Act was to minimise the super ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ry assumption of an obligation by contracting parties to resolve their disputes through a private tribunal. The intent of the parties is expressed in the terms of their agreement. Where commercial entities and persons of business enter into such dealings, they do so with a knowledge of the efficacy of the arbitral process. The commercial understanding is reflected in the terms of the agreement between the parties. The duty of the court is to impart to that commercial understanding a sense of business efficacy. 53. Jurisprudence in India must evolve towards strengthening the institutional efficacy of arbitration. Deference to a forum chosen by parties as a complete remedy for resolving all their claims is but part of that evolution. Minimising the intervention of courts is again a recognition of the same principle. (emphasis supplied) 179. The decision of the majority in N N Global 2 (supra) assumes that the inadmissibility of the document in evidence renders it unenforceable. However, the effect of the principle of competence-competence is that the arbitral tribunal is vested with the power and authority to determine its enforceability. The question of enforceability survives, pend ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... of objections to the jurisdiction of an arbitral tribunal on the basis that stamp-duty has not been paid or is inadequate is such as cannot be decided on a prima facie basis. Objections of this kind will require a detailed consideration of evidence and submissions and a finding as to the law as well as the facts. Obligating the court to decide issues of stamping at the Section 8 or Section 11 stage will defeat the legislative intent underlying the Arbitration Act. 186. The purpose of vesting courts with certain powers under Sections 8 and 11 of the Arbitration Act is to facilitate and enable arbitration as well as to ensure that parties comply with arbitration agreements. The disputes which have arisen between them remain the domain of the arbitral tribunal (subject to the scope of its jurisdiction as defined by the arbitration clause). The exercise of the jurisdiction of the courts of the country over the substantive dispute between the parties is only possible at two stages: a. If an application for interim measures is filed under Section 9 of the Arbitration Act; or b. If the award is challenged under Section 34. Issues which concern the payment of stamp-duty fall within the re ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... liance with the provisions, the fact that the noncompliance with the provisions is or is not visited by some penalty, the serious or trivial consequences that flow therefrom, and, above all, whether the object of the legislation will be defeated or furthered. 191. This Court must therefore interpret Sections 33 and 35 to assess whether they are mandatory in relation to a court presiding over proceedings under Section 8 or Section 11 by examining: a. Whether the context indicates that the provision is directory; b. The scope of the statute; c. The nature and design of the statute; d. The consequences which would follow from construing it one way or another; e. The impact of other provisions; f. The consequences of non-compliance; and g. Whether the object of the legislation will be furthered or destroyed. 192. The decisions adverted to in the preceding paragraphs were delivered in the context of a single provision in a single statute. Additional factors must be considered in cases such as the present one, where multiple statutes appear to operate in relation to a single issue (or a single agreement such as the arbitration agreement in the present case). To this list of consideration ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... pretation of the law must give effect to the purpose of the Arbitration Act in addition to the Stamp Act 196. The decision of the Constitution Bench in N N Global 2 (supra) gives effect exclusively to the purpose of Stamp Act. It prioritises the objective of the Stamp Act, i.e., to collect revenue at the cost of the Arbitration Act. As discussed previously, the purpose of the Arbitration Act is to ensure that a speedy and efficacious alternative dispute resolution system is available to parties both commercial and otherwise. This purpose is in danger of being undermined by the interpretation accorded to the Stamp Act in N N Global 2 (supra). The impounding of an agreement which contains an arbitration clause at the stage of the appointment of an arbitrator under Section 11 (or Section 8 as the case may be) of the Arbitration Act will delay the commencement of arbitration. It is a well-known fact that courts are burdened with innumerable cases on their docket. This has the inevitable consequence of delaying the speed at which each case progresses. Arbitral tribunals, on the other hand, deal with a smaller volume of cases. They are able to dedicate extended periods of time to the adj ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... tain a proviso like Section 49 of the Registration Act enabling the unstamped instrument to be used for a collateral purpose. Thereafter, this Court observed that Section 33 casts a duty upon every court, as also an arbitrator, before whom an unregistered instrument chargeable with stamp duty is produced to examine the instrument in order to ascertain whether it is duly stamped. If the Court or arbitrator comes to the conclusion that the instrument is not duly stamped, it has to necessarily impound the document. The Court laid down the procedure to be adopted when an arbitration is contained in a document which is not duly stamped in the following terms: a. The Court should, before admitting any document into evidence or acting upon such document, examine whether the instrument/ document is duly stamped and whether it is an instrument which is compulsorily registerable. b. If the document is found to be not duly stamped, Section 35 of the Stamp Act bars the said document being acted upon. Consequently, even the arbitration clause therein cannot be acted upon. The court should then proceed to impound the document under Section 33 of the Stamp Act and follow the procedure under Secti ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... udicial authority has only to consider the question whether the parties have a valid arbitration agreement? The Court cannot refuse to refer the parties to arbitration unless it finds that prima facie no valid arbitration agreement exists . The amended provision, thus, limits the intervention by judicial authority to only one aspect i.e. refusal by judicial authority to refer is confined to only one aspect, when it finds that prima facie no valid arbitration agreement exists. 203. In Emmar MGF Land (supra), this Court clarified that the expression notwithstanding any judgment referred to in Section 8(1) relates to those judicial precedents which explained the discretion and power of judicial authority to examine various aspects while exercising powers under Section 8. In a similar vein, Section 11(6A) intended to minimize judicial interference to the examination of the existence of an arbitration agreement. Accordingly, the non-obstante clause contained in Section 11(6A) pertains to those judicial precedents which delved into the discretion and power of referral courts to intervene and examine the existence and validity of an arbitration agreement at the Section 11 stage. This incl ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... provides a timeline of sixty days for disposal of any application for appointment of an arbitrator. In view of Section 11(13), this Court held that the provisions of the Stamp Act and the Arbitration Act need to be harmoniously construed. Accordingly, the Court held that once the High Court impounds an unstamped instrument at the Section 11 stage, it shall hand it over to the relevant authority under the Maharashtra Stamp Act to be decided within a period of forty-five days from which such authority receives the instrument. Once the stamp duty and penalty was paid, the High Court could proceed expeditiously to hear and dispose of the Section 11 application. 207. The conclusions of this Court in Garware Wall Ropes (supra) can be summarized as follows: first, there was no legislative intent to overrule SMS Tea Estates (supra) because neither the Statement of Objects and Reasons of the 2015 Amendment Act nor the Law Commission of India Report, 2014 mentions it; second, the referral court at the Section 11 stage is only giving effect to the provisions of the Stamp Act and not deciding any preliminary issues between the parties; third, the separability presumption could only be applied ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... t the separability presumption cannot be applied in case of an unstamped instrument because the Stamp Act applies to the instrument as a whole. As discussed in the preceding segments, the separability presumption ensures the validity of an arbitration agreement notwithstanding the invalidity, illegality, or non-existence of the underlying contract. 211. The scope of authority of an arbitral tribunal under Section 16 is wide because it can deal with issues pertaining to the existence and validity of an arbitration agreement. In his dissenting opinion in NN Global 2 (supra), Justice Roy correctly observes that since [s]ection 16 specifically deals with both existence and validity whereas Section 11 only deals with existence, the former should be given more weight. This observation comports with the stated goal of the Arbitration Act to minimize the supervisory role of courts in the arbitral process. Post the 2015 Amendment Act the referral courts are only required to prima facie determine the existence or validity of an arbitration agreement. The basis for such prima facie determination lies in the fact that the arbitral tribunal will later have the competence to rule on the issue of ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... cation or information with respect to the payment of stamp duty to satisfy the requirements as laid down in SMS Tea Estates (supra). 216. N N Global 2 (supra) also refers to the two-Judge Bench decision of this Court in Jupudi Kesava Rao v. Pulavarthi Venkata Subbarao, (1971) 1 SCC 545 where it was held that Section 35 of the Stamp Act renders any secondary evidence of an unstamped or insufficiently stamped instrument inadmissible in evidence. It was further held that any secondary evidence of such instrument cannot be acted upon in terms of Section 35. Subsequently, a three-Judge Bench of this Court in Hariom Agrawal v. Prakash Chand Malviya, (2007) 8 SCC 514 affirmed Jupudi Kesava Rao (supra) by observing that Sections 33 and 35 of the Stamp Act are not concerned with any copy of the instrument. The relevant paragraph is extracted below: 10. It is clear from the decisions of this Court and a plain reading of Sections 33, 35 and 2(14) of the Act that an instrument which is not duly stamped can be impounded and when the required fee and penalty has been paid for such instrument it can be taken in evidence under Section 35 of the Stamp Act. Sections 33 or 35 are not concerned with a ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... on agreement means an arbitration agreement which satisfies the requirements of both the Arbitration Act and the Contract Act. In the succeeding paragraphs, this Court sought to reinforce its conclusion. In the process, it referred to various precedents of this Court including Garware Wall Ropes (supra). 221. Paragraph 147.1 clarifies that it is referring to Garware Wall Ropes (supra) only for the purposes of establishing the correlation between existence and validity of an arbitration agreement. The relevant paragraph of Garware Wall Ropes (supra) refers to United India Insurance Co. Ltd. v. Hyundai Engg. Construction Co. Ltd., (2018) 17 SCC 607 in which the arbitration clause was triggered only if one of the parties admitted or accepted its liability. In that case, since the relevant party (the insurer) did not accept its liability, the court held that the arbitration clause did not exist in law although it existed in fact. Garware Wall Ropes (supra) relied on Hyundai Engg. (supra) to hold, albeit incorrectly, that an unstamped agreement would not exist as a matter of law until the underlying instrument is duly stamped. We are of the opinion that Vidya Drolia (supra) did not, in ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... prima facie exists; d. Any objections in relation to the stamping of the agreement fall within the ambit of the arbitral tribunal; and e. The decision in NN Global 2 (supra) and SMS Tea Estates (supra) are overruled. Paragraphs 22 and 29 of Garware Wall Ropes (supra) are overruled to that extent. 225. The Registry is directed to take administrative directions from Hon ble Chief Justice of India for placing the matters before an appropriate Bench. JUDGMENT SANJIV KHANNA, J. I respectfully agree with the view expressed by the Hon ble the Chief Justice of India Dr. D.Y. Chandrachud in his elaborate exposition of the different contours which arise for consideration in the present reference. Complementing the same, I would like to provide additional justifications for the final conclusion, viz., unstamped or insufficiently stamped instruments inadmissible in evidence in terms of Section 35 of the Indian Stamp Act, 1899, For short, the Stamp Act . , are not rendered void and void ab initio; an objection as to the under-stamping or non-stamping of the underlying contract will not have any bearing when the prima facie test, the existence of arbitration agreement , is applied by the courts ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... upon request of a party, by 1[the Supreme Court or, as the case may be, the High Court or any person or institution designated by such Court]; (5) Failing any agreement referred to in sub-section (2), in an arbitration with a sole arbitrator, if the parties fail to agree on the arbitrator within thirty days from receipt of a request by one party from the other party to so agree the appointment shall be made, upon request of a party, by the Supreme Court or, as the case may be, the High Court or any person or institution designated by such Court. (6) Where, under an appointment procedure agreed upon by the parties, (a) a party fails to act as required under that procedure; or (b) the parties, or the two appointed arbitrators, fail to reach an agreement expected of them under that procedure; or (c) a person, including an institution, fails to perform any function entrusted to him or it under that procedure, a party may request the Supreme Court or, as the case may be, the High Court or any person or institution designated by such Court to take the necessary measure, unless the agreement on the appointment procedure provides other means for securing the appointment. (6A) The Supreme C ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ence to the Supreme Court or, as the case may be, the High Court in those sub-sections shall be construed as a reference to the Supreme Court ; and (b) Where the matters referred to in sub-sections (4), (5), (6), (7), (8) and sub-section (10) arise in any other arbitration, the reference to the Supreme Court or, as the case may be, the High Court in those sub-sections shall be construed as a reference to the High Court within whose local limits the principal Civil Court referred to in clause (e) of sub-section (1) of section 2 is situate, and where the High Court itself is the Court referred to in that clause, to that High Court. (13) An application made under this section for appointment of an arbitrator or arbitrators shall be disposed of by the Supreme Court or the High Court or the person or institution designated by such Court, as the case may be, as expeditiously as possible and an endeavour shall be made to dispose of the matter within a period of sixty days from the date of service of notice on the opposite party. (14) For the purpose of determination of the fees of the arbitral tribunal and the manner of its payment to the arbitral tribunal, the High Court may frame such r ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... r the purposes of this section, in cases of doubt, (a) the State Government may determine what offices shall be deemed to be public offices; and (b) the State Government may determine who shall be deemed to be persons in charge of public offices. xx xx xx 35. Instruments not duly stamped inadmissible in evidence, etc. No instrument chargeable with duty shall be admitted in evidence for any purpose by any person having by law or consent of parties authority to receive evidence, or shall be acted upon, registered or authenticated by any such person or by any public officer, unless such instruments is duly stamped: Provided that (a) any such instrument shall be admitted in evidence on payment of the duty with which the same is chargeable or, in the case of an instrument insufficiently stamped, of the amount required to make up such duty, together with a penalty of five rupees, or, when ten times the amount of the proper duty or deficient portion thereof exceeds five rupees, of a sum equal to ten times such duty or portion; (b) where any person from whom a stamped receipt could have been demanded, has given an unstamped receipt and such receipt, if stamped, would be admissible in evide ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... argeable with duty shall not be admitted in evidence by any person having by law or by consent of the parties the authority to receive evidence. The words for any purpose mean that the instrument cannot be relied upon for a Curative Petition (C) No. 44 of 2023 and Anr. Page 7 of 25 collateral purpose either. Further, the instrument shall not be acted upon, registered or authenticated by such person or by any public officer, unless it is duly stamped. The words acted upon are with reference to the acts or the proceedings before such officer or public officer, as the case may be. 8. Section 35 permits admission of an unstamped or under-stamped instrument after the same instrument is duly stamped. Proviso (a) requires payment of the chargeable duty and penalty, before an insufficiently stamped instrument is admitted in evidence, or is acted upon, registered or authenticated. 9. Section 40(1)(b) of the Stamp Act provides for payment of proper duty if the instrument impounded is not duly stamped. Section 42(1) provides for certifying that proper duty has been paid on the impounded instrument. Sub-section (2) of Section 42 provides that after certification the instrument shall be admissi ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... stage of the same suit or proceeding on the ground of insufficient stamping. 13. An instrument which is void ab initio or void, cannot be validated by mere consent or waiver, unless consent or wavier undoes the cause of invalidity. On the other hand, Section 36 of the Stamp Act incorporates the doctrine of waiver, estoppel and implied consent. That apart, after due stamping as per the Stamp Act, the unstamped or insufficiently stamped instrument can be admitted in evidence, or be registered, authenticated or be acted upon by such person or public officer. 14. This has long been a recognised position of law, as accepted by this Court in several decisions, which I would like to refer to. 15. In Javer Chand and Others. v. Pukhraj Surana AIR 1961 SC 1655 , way back in 1961, a four Judges Bench of this Court had examined the interplay between Sections 35 and 36 of the Stamp Act to hold that Section 36 is categorical in terms that when a document has been admitted in evidence, such admission cannot be called in question at any stage of the suit or proceedings on the ground that the instrument had not been duly stamped. The only exception recognised by Section 36 is the class of cases con ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... every document by which any right or liability is, or purports to be created, transferred, limited, extended, extinguished or recorded. There is no scope for inclusion of a copy of a document as an instrument for the purpose of the Stamp Act. 14. If Section 35 only deals with original instruments and not copies Section 36 cannot be so interpreted as to allow secondary evidence of an instrument to have its benefit. The words an instrument in Section 36 must have the same meaning as that in Section 35. The legislature only relented from the strict provisions of Section 35 in cases where the original instrument was admitted in evidence without objection at the initial stage of a suit or proceeding. In other words, although the objection is based on the insufficiency of the stamp affixed to the document, a party who has a right to object to the reception of it must do so when the document is first tendered. Once the time for raising objection to the admission of the documentary evidence is passed, no objection based on the same ground can be raised at a later stage. But this in no way extends the applicability of Section 36 to secondary evidence adduced or sought to be adduced in proof ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... rve: 10. It is clear from the decisions of this Court and a plain reading of Sections 33, 35 and 2(14) of the Act that an instrument which is not duly stamped can be impounded and when the required fee and penalty has been paid for such instrument it can be taken in evidence under Section 35 of the Stamp Act. Sections 33 or 35 are not concerned with any copy of the instrument and party can only be allowed to rely on the document which is an instrument within the meaning of Section 2(14). There is no scope for the inclusion of the copy of the document for the purposes of the Stamp Act. Law is now no doubt well settled that copy of the instrument cannot be validated by impounding and this cannot be admitted as secondary evidence under the Stamp Act, 1899. 21. In Shyamal Kumar Roy v. Sushil Kumar Agarwal, (2006) 11 SCC 331 , this Court observed that Section 36 is a standalone clause which categorically prohibits the court of law from reopening the matter with regard to the sufficiency or otherwise of the stamp duty paid on an instrument in the event the same has been admitted in evidence, the only exception being Section 61 providing for reference and revision. Reliance was placed on ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... onsistency in judicial decisions is conducive to reassuring parties of the consequences of the transactions forming part of their daily affairs., Total Environment Building Systems Pvt. Ltd. v. Deputy Commissioner of Commercial Taxes and Others, 2022 SCC OnLine SC 953; Union of India and Another v. Raghubir Singh (DEAD) by LRs. etc., (1989) 2 SCC 754. 25. An instrument is to be stamped as per Section 33 when it is executed or first executed. The expressions executed and execution have been defined in clause (12) to Section 2 of the Stamp Act to mean signed or signature ., 2. Definitions . In this Act, unless there is something repugnant in subject or context, (12) Executed and execution. Executed and execution , used with reference to instruments, mean signed and signature and includes attribution of electronic record within the meaning of Section 11 of the Information Technology Act, 2000 (21 of 2000). It includes attribution of electronic record within the meaning of Section 11 of the Information Technology Act, 2000, 11. Attribution of electronic records . An electronic record shall be attributed to the originator (a) if it was sent by the originator himself; (b) by a person who ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 461; Govind Rubber Ltd. v. Louis Dreyfus Commodities Asia Pvt. Ltd. (2015) 13 SCC 477 Similarly, clause (c) to subsection (4) to Section 7 which refers to exchange of statements of claim and defence, in which the existence of the arbitration agreement is alleged by one party and not denied by the other, does not refer to an instrument which is signed by the parties. Clause (c) incorporates the principle wherein the parties by consent agree to the existence of an arbitration agreement, or impliedly agree by not denying its existence when alleged by one party and not denied by the other. An arbitration agreement is defined in the widest terms, and may be in the form of a clause in the underlying contract or separate from an underlying agreement. Significantly, even when it is a clause of the underlying agreement, it is treated as a separate agreement, an aspect to which I shall advert. 28. Section 16, 16. Competence of arbitral tribunal to rule on its jurisdiction. (1) The arbitral tribunal may rule on its own jurisdiction, including ruling on any objections with respect to the existence or validity of the arbitration agreement, and for that purpose, (a) an arbitration clause which f ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... positive contours of the doctrine of separability in reference to an arbitration agreement, with which I respectfully agree. 29. In this connection, I may note a decision of the Singapore High Court in the case of BNA v. BNB and Another, [2019] SGHC 142. which holds that a defect in the arbitration agreement does not render it void ab initio unless the defect is so fundamental or irretrievable as to negate the parties intent or agreement to arbitrate. This principle is based upon the observations of the Court of Appeal of Singapore in the judgment in Insigma Technology Co Ltd v. Alstom Technology Ltd, [2009] SGCA 24 . 30. Jurisprudentially it is important to distinguish the terms and consequences of an agreement void ab initio, and a voidable agreement, and the effect of illegality and violation of law on an agreement. 31. As per the Indian Contract Act, 1872, For short, the Contract Act , an agreement not enforceable by law is said to be void, and an agreement enforceable by law is a contract., 2 (g) An agreement not enforceable by law is said to be void; (h) An agreement enforceable by law is a contract A contract which ceases to be enforceable by law becomes void when it ceases ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... contract by which parties agree for disputes arising between them to be referred to arbitration shall not render the contract illegal., Section 28, The Indian Contract Act, 1872 34. Sections 13 to 19A relate to consent, Section 13, The Indian Contract Act, 1872 , free consent, Section 14, The Indian Contract Act, 1872 , coercion, Section 15, The Indian Contract Act, 1872 , undue influence, Section 16, The Indian Contract Act, 1872 , fraud, Section 17, The Indian Contract Act, 1872 , misrepresentation, Section 18, The Indian Contract Act, 1872 , voidability of agreements without free consent, Section 19, The Indian Contract Act, 1872 , and power to set aside contract induced by undue influence, Section 19A, The Indian Contract Act, 1872 . The Contract Act declares contracts affected by the preceding provisions to be voidable at the option of the aggrieved party. 35. Under Section 21, a contract is not voidable because it is caused by mistake as to law enforced in India, Section 21, The Indian Contract Act, 1872 , and a contract where mistake of fact is made by one party is also not voidable as per Section 22, Section 22, The Indian Contract Act, 1872 . 36. According to Section 23 o ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... fer or acceptance, which prevents a contract from coming into operation. Thus, a contract by a minor or by a person of unsound mind would be void due to lack of effectual offer or acceptance. But once the contract is made, that is to say where parties, whatever their innermost state of mind, have to all outward appearances, agreed with sufficient certainty in the same terms of the subject matter, then the contract is good unless and until it is set aside for failure of some condition on which the existence of contract depends, or for fraud, or on some other equitable ground. Neither party can rely upon its own mistake to say that it was a nullity from the beginning, no matter that it was a mistake which to his mind was fundamental, no matter that the other party knew that he was under a mistake., See ITC Ltd. v. George Joseph Fernandes and Another (1989) 2 SCC 1, which quotes from Smith v. Hughes LR (1871) 6 QB 597 and Solle v. Butcher (1950) 1 KB 671. The judgment in ITC Ltd.(supra) was under the Arbitration Act,1940 and should not be applied to interpret the Arbitration and Conciliation Act, 1996. 40. The judgment in Vidya Drolia and Others v. Durga Trading Corporation, (2021) 2 ..... X X X X Extracts X X X X X X X X Extracts X X X X
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