The Delhi High Court clarified that an arbitral award inadequately stamped under the Indian Stamp Act, 1899 is not enforceable and must be impounded, though the defect is curable within a limited period. After granting a four-week indulgence to pay stamp duty and penalty, the Court held that no further extension could be given and the award was liable to be impounded under Section 33 of the Act. The petition was dismissed as withdrawn with liberty to re-file after curing the stamp duty defect.
Background & Facts
The Dispute
Siemens Aktiengesellschaft & Anr. (decree holder) sought enforcement of an arbitral award against Delhi Airport Metro Express Private Limited & Anr. (judgment debtor) under Section 36 of the Arbitration and Conciliation Act, 1996. The judgment debtor resisted enforcement on the ground that the award was not adequately stamped as required by the Indian Stamp Act, 1899, as applicable in the NCT of Delhi.
Key Facts
- The arbitral award sought to be enforced was found to be insufficiently stamped under the Indian Stamp Act, 1899.
- On 13.07.2026, the Court issued practice directions granting a last indulgence of four weeks to the decree holder to deposit sufficient stamp duty along with any penalty.
- The indulgence period expired on 13.08.2026.
- Section 33 of the Indian Stamp Act, 1899 imposes a duty on the Court to impound an inadequately stamped instrument.
- Section 35 of the same Act prohibits the Court from acting upon such an insufficiently stamped award.
- Learned counsel for the decree holder sought leave to withdraw the petition with liberty to satisfy the stamp duty aspect (including penalty, if any) and to re-file the petition thereafter.
Procedural History
- The original enforcement petition was filed as OMP (ENF.) (COMM.) 224/2024 before the High Court of Delhi.
- A connected matter, OMP (ENF.) (COMM.) 225/2024 & EX.APPL.(OS) 1238/2025, was also before the Court.
- Practice directions were issued on 13.07.2026.
- The indulgence period ended on 13.08.2026.
- The order was pronounced orally on 23.09.2026 by Justice Om Prakash Shukla.
Relief Sought
The decree holder originally sought enforcement and execution of the arbitral award. After the Court’s directions, the decree holder sought leave to withdraw the petition to cure the stamp defect, with liberty to re-file once the award was adequately stamped and any penalty paid.
The Legal Issue
The central question was whether an arbitral award that is inadequately stamped under the Indian Stamp Act, 1899 can be enforced, or whether the Court must impound the award and allow a limited period to cure the stamp duty defect.
Arguments Presented
For the Petitioner
The decree holder contended that the defect of insufficient stamp duty is curable under the Stamp Act and that they should be afforded a reasonable opportunity to pay the requisite stamp duty and penalty. They relied on the Court’s own practice directions of 13.07.2026 as evidence that the defect could be remedied, and argued that refusing enforcement would cause injustice where the defect could be rectified.
For the Respondent
The judgment debtor argued that an inadequately stamped instrument is a nullity for enforcement purposes and that the Court is statutorily bound to impound the award under Section 33 and prohibited from acting upon it under Section 35. They submitted that once the indulgence period had expired, no further extension could be granted and the award must be impounded.
The Court's Analysis
The Court began by reiterating the well-settled principle that an insufficiently stamped instrument cannot be enforced. It then held that while the defect of stamp duty is curable, the Court had already indulged the decree holder by issuing practice directions on 13.07.2026 granting a four-week period to deposit the requisite stamp duty and penalty. The Court emphasized that this indulgence had expired on 13.08.2026, and therefore no further indulgence could be granted.
Turning to the statutory framework, the Court noted that Section 33 of the Indian Stamp Act, 1899 imposes a duty upon the Court to impound an inadequately stamped instrument, and Section 35 prohibits the Court from acting upon such an award. Applying these provisions, the Court concluded that the arbitral award in question was liable to be impounded under Section 33.
The Court then addressed the request of the decree holder’s counsel to withdraw the petition with liberty to re-file after curing the stamp defect. It held that granting such leave and liberty was appropriate, as it allowed the decree holder to comply with the statutory requirement while preserving the right to seek enforcement thereafter. Consequently, the petition was dismissed as withdrawn.
"Accordingly, the award is liable to be impounded under Section 33 of the Act."
The Verdict
The decree holder succeeded in part: the Court granted leave to withdraw the petition with liberty to re-file after depositing sufficient stamp duty and any penalty. The award was held liable to be impounded under Section 33 of the Indian Stamp Act, 1899. The indulgence period of four weeks, granted via practice directions dated 13.07.2026, had expired on 13.08.2026, and no further extension was permissible. The petition was dismissed as withdrawn on 23.09.2026.
What This Means For Similar Cases
Stamp Defect Is Curable But Time-Bound
- A defect in stamp duty under the Indian Stamp Act, 1899 is curable, but the Court may limit the time for cure.
- Practitioners must monitor any court-granted indulgence periods and ensure compliance before expiry.
- Failure to cure within the allotted time results in the award being liable to impoundment.
Court Must Impound Non-Stamped Awards
- Once the indulgence period ends, the Court has a mandatory duty to impound the inadequately stamped award under Section 33.
- The Court is simultaneously prohibited from acting upon or enforcing such an award under Section 35.
- This creates a clear procedural barrier to enforcement until the defect is remedied.
Parties May Withdraw to Cure Defect
- A decree holder may seek leave to withdraw the enforcement petition to cure the stamp defect, with liberty to re-file thereafter.
- Such withdrawal does not prejudice the right to enforce the award once it is adequately stamped.
- Counsel should promptly file an application for withdrawal and liberty to re-file upon discovering a stamp deficiency.
