Religare Finvest Limited Vs Asian Satellite Broadcast Private Limited And Ors (Delhi High Court)
Zee Group of Companies signed the agreements in Mumbai, while Religare signed it in Delhi. Arbitrator accepted Zee Companies’ plea that Loan Agreements were first executed in Mumbai, they should have been stamped in accordance with Maharashtra Stamp Act (MSA). In the considered opinion of the Court, this is where the learned Arbitrator fell in grave error, for reasons which are elucidated below.
A document can only be said to be executed when it is signed by both the parties. Signatures appended in Mumbai by Zee Companies alone does not have the effect of rendering such document chargeable to Stamp Duty. The documents became chargeable when they were also signed by Religare.
First, as “executed” means “signed” and “execution” means “signature”, it is clear that this would include signatures of all such parties required to sign under the documents, in order to give such documents, the validity, as recognised by law. The phrase “first ‘, as found in Section 2(d) of the MSA, cannot be construed to mean that signatures of only one of the parties to a bilateral or multilateral document is sufficient to attract stamp duty. If under law, a document requires signatures of more than one party, it cannot be called an “executed instrument”, chargeable to stamp duty under the MSA unless the other party has signed. To put it differently, if a document is of such character that both parties to the document should sign it, to constitute it as a binding agreement between them, it should contain the signatures of both to make it valid and binding instrument. [See: Chief Controlling Revenue Authority, Madras v. Canara Industrial and Banking Syndicate Ltd.12] Thus, the signatures of only Zee Companies on their respective Loan Agreements did not give such documents any legality or validity under the law, until they were also signed by Religare’s representatives. That event, concededly, occurred at a later date, and in Delhi. At that stage, the agreements became “instruments’ amenable to stamp duty. Thus, the incident of “execution”/“executed” occurred at Delhi, and not Mumbai.
