Friday, 30 October 2020

Standard Chartered Bank Vs. Essar Steel India Ltd. - Inadequate Stamp Duty & Verification of Claim in CIRP

NCLT Ahmedabad (08.03.2019) in Standard Chartered Bank Vs. Essar Steel India Ltd. [CP(IB) Nos. 39-40 /2017 & Allied IA’s] Claims were not admitted by RP due to non-payment of requisite stamp duty. AA held that this being a disputed issue whether such agreements in question (i.e.  inter- corporate deposit letters) has been properly stamped or otherwise at the time of producing it before the RP for consideration or not can only be looked into  by the RP or by competent authority for registering claims. Hence in our view this can be adjudicated only by a competent Civil Court, having  necessary  jurisdiction ….. because it is the subject matter of scrutiny by the office of Collector of Stamps and is in the domain of a competent Civil Court.

Excerpts of the order;

# 8, (Page 44). We carefully examined that issue and perused the material available on record including the documents in question, which shows that the applicants claims have not been admitted by the RP due to non -payment of requisite stamp duty and for non-completing the statutory formalities for not without furnishing the proof of making payments of requisite stamp duty as per Indian Stamp Act. Hence, such an agreement cannot be looked into as evidence nor it can be treated as valid claim. Therefore , in our view the RP cannot be found fault with due to non - admissions of such claims of the applicants for want of proper stamp duty. Further , this being a disputed issue whether such agreements in question (i.e.  inter- corporate deposit letters) has been properly stamped or otherwise at the time of producing it before the RP for consideration or not can only be looked into  by the RP or by competent authority for registering claims. Hence in our view this can be adjudicated only by a competent Civil Court, having  necessary  jurisdiction and this Adjudicating Authority cannot be expected to deal the relevant  provisions of the Indian Stamp Act or to make a declaration about documents in question are properly stamped or otherwise, because it is the subject matter of scrutiny by the office of Collector of Stamps and is in the domain of a competent Civil Court.

 

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The sole purpose of this post is to create awareness on the "IBC - Case Law" and to provide synopsis of the concerned case law, must not be used as a guide for taking or recommending any action or decision. A reader must refer to the full citation of the order & do one's own research and seek professional advice if he intends to take any action or decision in the matters covered in this post.