Contract Act Articles

Jul 15 08:23 2015 NarendraSharma Print This Article

This has reference to the observations of hon’ble Single Judge bench of Delhi HC in Eider PW1 Paging Limited and Eider PW1 Communications Ltd. Vs. Union of India and Ors. {2010 (115) DRJ 263- Delhi HC}, which has been referred to a larger bench of Delhi HC.

  This has reference to the observations of hon’ble Single Judge bench of Delhi HC in Eider PW1 Paging Limited and Eider PW1 Communications Ltd. Vs. Union of India and Ors. {2010 (115) DRJ 263- Delhi HC},Guest Posting which has been referred to a larger bench of Delhi HC.


However, with highest respect to hon’ble Single Judge bench of Delhi HC, it is most humbly submitted that I am unable to agree with the observations made therein for the following reasons.


(1)       It has been observed in para “10. ……………The aspect of whether the provision of Section 33 is directory or mandatory was not considered by the supreme court in the case of m. Anasuya devi's case (supra), and in fact, section 33 of the stamp act has not even been adverted to in the said judgment. The Supreme Court in the case of N. Bhargavan Pillai Vs. State of Kerala 2004 (13) SCC 217 has laid down that when any judgment, even of a Supreme Court, does not advert to a direct provision of law then, the judgment is to be treated as having been rendered per incuriam.” (emphasis mine)


(2)       However, on the contrary, Hon’ble Supreme Court in M. Anasuya Devi And Anr. vs M. Manik Reddy And Ors. {2003 (3) Arb.LR 404 SC, SC Suppl 2004 (1) CHN 167; Decided on 16/10/2003} observed and held as follows (in para 1, 4 and 6)


“1. The respondents herein, who appears to have not satisfied with the Award, filed two petitions under Section 34(1) of the Arbitration and Conciliation Act, 1996 (hereinafter referred to as 'the Act') for setting aside the Award, inter alia, on the following grounds:……………..(6) That the award is inadmissible and unenforceable in law for want of proper stamp duty and registration.


“4. …………The question as to whether the award is required to be stamped and registered, would be relevant only when the parties would file the award for its enforcement under Section 36 of the Act. It is at this stage the parties can raise objections regarding its admissibility on account of non-registration and non-stamping under Section 17 of the Registration Act. In that view of the matter the exercise undertaken to decide the said issue by the civil court as also by the high court was entirely an exercise in futility………...”


“6. The appeals are, accordingly, allowed. Since the High Court has not dealt with other objections raised under Section 34 of the Act, we remit the matter to the High Court to decide the same. We make it clear that the issue with regard to the stamping and registration of the award or documentation thereof, it would be open to the parties to raise the same before the Court at the stage of proceeding under section 36 of the Act……….”(emphasis mine)


COMMENTS- In view of aforesaid observations, it is wholly irrelevant to state that Supreme Court, did not advert to a direct provision of law, and therefore, the judgment can not at all be treated as having been rendered per incuriam.


(3) Arbitration and Conciliation Act, 1996- Section 36. Enforcement.—

“where the time for making an application to set aside the arbitral award under section 34 has expired, or such application having been made, it has been refused, the award shall be enforced under the Code of Civil Procedure, 1908 (5 of 1908) in the same manner as if it were a decree of the Court.”


COMMENTS: (i) It is evident that as provided in 36 of the Act, an “Enforcable Award” is that award, which has been finally upheld against the challenge u/s 34 of the Act, and not prior to that at all. Consequently, as per ratio of the said SC judgment, the requirement of law regarding stamping and registration is applicable to the “Enforcable Award” as provided in 36 of the Act and not prior to that at all.


(ii) In view of said SC judgment, by necessary implication, duly signed Arbitral Award, even being unstamped and unregistered, is valid in all respects to face the challenge u/s 34 of the Act. The stamp duty and registration fee are attracted to be paid just before when the parties would file the “Enforcable Award” in the court executing the decree u/s 47 of the Code of Civil Procedure.


(4)Law declared by Supreme Court to be binding on all Courts

Article 141 of the Constitution provides that “the law declared by the Supreme Court shall be binding  on all Courts within the territory of India.” Now let us examine the concept in detail as held by hon’ble Supreme Court in its various decisions. (source: The Book-“Shorter Constitution of India” by D.D.Basu, 11th edition 1994, Pp 475-479)


(4.1) Binding force of Supreme Court Decisions

All courts in India are bound to follow the decision of the Supreme Court even though they are contrary to the decisions of the House of Lords or of the Privy Council.


            ‘Law declared’ – In case of conflict between decisions of the Supreme Court itself, it is the latest pronouncement which will be binding upon the inferior courts; unless the earlier was of a larger bench. If the later decision is that of a larger bench the previous decision will be deemed to have been overruled and completely wiped out. This rule is followed by the Supreme Court itself. 



(i) When some principle has been laid down by the Supreme Court or some practice deprecated, it should be the duty of the high court or a subordinate court to follow the decision of the supreme court, even though it may not have the approval of the judge of the inferior court, where the Supreme Court decision is cited.   


(ii) A judgment of the high court which refuses to follow the directions of the supreme court, or seeks to revive a decision of the High Court which had been set aside by the Supreme Court, is a nullity.


(iii) If a direction of the Supreme Court is clear, a party cannot approach the court for a clarification for assisting the High Court, which would be tantamount to nullifying the Supreme Court order or notification.


(iv)The binding force of a supreme court decision can not be assailed on the ground that it did not consider a particular argument, provided the point to which the argument relates was actually decided therein.


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Narendra has around 25 years of rich experience in the domain of Companies Act, Arbitration and Conciliation Act, Consumer Protection Act, SICA, 1985, Recovery of Debts Due to Banks and Financial Institutions Act, 1993, Securitization Act, 2002 etc. Possess in depth expert knowledge of law in handling the prosecution of claims in Arbitration Proceedings. He is a regular contributor of articles on diversified legal topics in renowned legal magazines like Chartered Secretary, Corporate Law Adviser, Arbitration Law Reporter and Chartered Accountant Practice Journal, and also on websites www.lawyersclubindia.

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