On November 2, the Delhi High Court set aside an interim arbitral award holding that four loan agreements between Religare Finvest Limited and Zee Group companies attracted stamp duty of Rs. 100 each under Maharashtra law.
Justice Om Prakash Shukla held that loan agreements signed by borrowers in Mumbai but executed by the lender in New Delhi attract stamp duty under the Indian Stamp Act, 1899, as applicable in Delhi, and not the Maharashtra Stamp Act, 1958. The Bench said:
“Although the borrowers had initially appended their signatures in Mumbai, in the considered opinion of this Court, such signatures do not, by themselves, constitute the completed chargeable instruments without execution of the instrument by the lender. Accordingly, the requisite connection between the taxable event and the taxing jurisdiction arose in Delhi.”
The dispute arose from four loan agreements dated 15 March 2014, between Religare and Zee Group companies, namely Asian Satellite Broadcast, Widescreen Holdings, Edisons Infrapower and Multiventures, and Konti Infrapower and Multiventures.
Following alleged non-repayment, Religare initiated arbitration proceedings, during which the Zee Group companies questioned the adequacy of stamp duty paid on the agreements.
On 22 October 2020, the Arbitrator held that the Maharashtra Stamp Act, 1958, applied and directed Religare to approach the Maharashtra Collector of Stamps to determine the applicable duty and penalty.
Religare challenged the decision before the Delhi High Court, which, on 10 January 2022, held that the Indian Stamp Act, 1899, as applicable in Delhi, governed the agreements.
The Zee Group companies approached the Supreme Court, which, through orders dated 22 April, 20 May and 19 September 2022, addressed the production of the original agreements and directed the Arbitrator to determine the applicable stamp law and adequacy of duty.
On 28 February 2026, the subsequently appointed Arbitrator held that Maharashtra law applied and that stamp duty of Rs. 100 on each agreement was sufficient because the agreements did not specify monetary amounts.
Both sides challenged the interim award under Section 34 of the Arbitration and Conciliation Act, 1996. Religare argued that it completed execution of the agreements in New Delhi when it signed them. The Zee Group companies maintained that Maharashtra law applied because the borrowers had signed first in Mumbai. They, however, sought stamp duty at 0.2% of the loan facility amounts.
The Court held that determining the applicable stamp legislation could constitute an interim award under Section 31(6) of the Arbitration and Conciliation Act, 1996, without deciding the Arbitral Tribunal's jurisdiction. It observed:
“Such a determination does not amount to a ruling on the arbitral tribunal's own jurisdiction since whether MSA or ISA would apply, does not, in any way, affect the jurisdiction of the tribunal to continue with the arbitral proceedings before it”.
Further, the Bench found no binding precedent conclusively establishing whether the first signature or the final necessary signature on an instrument executed across different States determines the applicable stamp legislation. It said:
“Having examined the relevant judicial authorities on the issue, this Court is unable to find a single binding precedent establishing that when multiple parties execute a single instrument across different States, the State where the first signature is affixed must exclusively supply the governing stamp law. Equally, there is no binding authority holding that the State where the final necessary signature is appended must apply.”
Justice Shukla noted that the relevant statutory expression was at least 147 years old and predated electronic documents and digital signatures. He cautioned that treating the location of the first signature as conclusive could make stamp duty depend merely on the accidental location of a signatory.
Moreover, the Bench clarified that under the Indian Stamp Act, 1899, stamp duty attaches to the execution of an instrument and not the underlying transaction. Applying the principle of territorial nexus, it found that Delhi had the requisite connection with the agreements because Religare completed their execution by signing them in New Delhi. The borrowers' earlier signatures in Mumbai did not, by themselves, complete the instruments.
It also found that the Arbitrator had overlooked the Facility Schedules of Terms, which formed part of the agreements and specified the loan amounts.
Accordingly, the High Court set aside the interim award dated 28 February 2026, allowed Religare's four petitions and dismissed the Zee Group companies' four cross-petitions.
Appearances for petitioner (Zee Group companies): Senior Advocate Kunal Tandon, with Advocates Aman Raj Gandhi, Ojasvi Sharma, Natasha Singh, Shreni Taran and Vanika Kansal.
Appearances for respondent (Religare Finvest Limited): Senior Advocate Abhimanyu Bhandari, with Advocates Siddharth Sharma, Mahesh Agarwal, Rishi Agarwal, Maj. Nirvikar Singh, Shruti Arora, Priyakshi, Ishika Chauhan and Daanish Abbasi.