Madhya Pradesh High Court
National Highway Authority Of India vs Somwati Bai Kurmi on 16 March, 2026
NEUTRAL CITATION NO. 2026:MPHC-JBP:21893
1
MP No.1698/2021 & 1699/2021
IN THE HIGH COURT OF MADHYA PRADESH
AT JABALPUR
BEFORE
HON'BLE SHRI JUSTICE VIVEK JAIN
ON THE 16th OF MARCH, 2026
MISC. PETITION No. 1698 of 2021
NATIONAL HIGHWAY AUTHORITY OF INDIA
Versus
SOMWATI BAI KURMI AND OTHERS
Appearance:
Mr. Mohan Sausarkar - Advocate for petitioner.
WITH
MISC. PETITION No. 1699 of 2021
NATIONAL HIGHWAY AUTHORITY OF INDIA
Versus
SOMWATI KURMI AND OTHERS
Appearance:
Mr. Mohan Sausarkar - Advocate for petitioner.
ORDER
The present matters relate to the order passed by the executing Court, thereby rejecting the application filed by the National Highway Authority of India raising preliminary objection as to maintainability of execution proceedings on account of the position that the award passed by the Arbitrator under National Highways Act is not duly stamped as per the provisions of the Indian Stamp (Madhya Pradesh) Amendment Act, 2014, as per Signature Not Verified Signed by: PREM SHANKAR MISHRA Signing time: 16-03-2026 19:00:21 NEUTRAL CITATION NO. 2026:MPHC-JBP:21893 2 MP No.1698/2021 & 1699/2021 which 2% of the awarded amount is required to be affixed as stamp duty.
2. The aforesaid issue has already been decided by this Court in favour of the land losers in M.P. No.1693/2021 and this Court has held as under:-
"The present petition has been filed challenging the order dated 27.3.2021 (Annexure P-5) passed by the Executing Court, whereby the executing court has rejected the objection of the present petitioner relating to the award passed by the Arbitrator being unstamped, and thus, being inexecutable.
2. The brief facts are that the land of the respondent No.1 was taken over for construction of Toll Plaza on a National Highway. The Land Acquisition Officer under National Highways Act 1956 passed an Award dated 15.7.2016. The respondent No.1, being aggrieved with the quantum of compensation for the land so acquired, resorted to statutory arbitration in terms of Section 3-G (5) of the Act of 1956. The notified Arbitrator under the said provision is the Divisional Commissioner. The statutory Arbitrator enhanced the amount of compensation vide his award dated 01.11.2017. The Execution proceedings have been instituted to recover the enhanced amount of compensation. In course of the said execution proceedings, the petitioner filed an objection as to inexecutability of the Award being not stamped with appropriate Stamp Duty. This objection has been rejected by the Executing Court, and this is how the matter is before this Court.
3. The learned counsel for the petitioner submits that as per Indian Stamp (Madhya Pradesh) Amendment Act 2014, Stamp Duty of 2% award amount, or market value of the property to which the award related, whichever is higher, has to be paid. The learned counsel further relies on a judgment of this Court in the case of M.P. Stock Exchange Vs. CMC Limited, reported in 2011 (2) MPHT 374. It is further contended that an Award in an "instrument" in terms of section 2 (14) of the Indian Stamp Act, hence, Stamp Duty is leviable thereon.
4. Heard learned counsel for the petitioner.
5. The relevant entry, the applicability of which is under question in the present case, is entry 12 of Schedule 1-A of Indian Stamp Act, 1899 (as applicable in Madhya Pradesh), which is as under:-
12. Award, that is to say, any Two percent of the award decision in writing by an amount or market value of Arbitrator or umpire on a the property to which the reference made otherwise than by award relates, whichever is an order of the Court in the course higher.Signature Not Verified Signed by: PREM SHANKAR MISHRA Signing time: 16-03-2026 19:00:21
NEUTRAL CITATION NO. 2026:MPHC-JBP:21893 3 MP No.1698/2021 & 1699/2021 of a suit, being an award made as a result of a written agreement to submit present or future difference to arbitration and not being an award directing a partition.
6. Section 3-G of the National Highways Act, 1956 provides as under:-
"3G. Determination of amount payable as
compensation.--
(1) Where any land is acquired under this Act, there
shall be paid an amount which shall be determined by an order of the competent authority.
(2) Where the right of user or any right in the nature of an easement on, any land is acquired under this Act, there shall be paid an amount to the owner and any other person whose right of enjoyment in that land has been affected in any manner whatsoever by reason of such acquisition an amount calculated at ten percent, of the amount determined under sub-section (1), for that land. (3) Before proceeding to determine the amount under sub-section (1) or sub-section (2), the competent authority shall give a public notice published in two local newspapers, one of which will be in a vernacular language inviting claims from all persons interested in the land to be acquired.
(4) Such notice shall state the particulars of the land and shall require all persons interested in such land to appear in person or by an agent or by a legal practitioner referred to in sub-section (2) of section 3C, before the competent authority, at a time and place and to state the nature of their respective interest in such land. (5) If the amount determined by the competent authority under sub-section (1) or sub-section (2) is not acceptable to either of the parties, the amount shall, on an application by either of the parties, be determined by the arbitrator to be appointed by the Central Government.
(6) Subject to the provisions of this Act, the provisions of the Arbitration and Conciliation Act, 1996 (26 of 1996) shall apply to every arbitration under this Act. (7) The competent authority or the arbitrator while determining the amount under sub-section (1) or sub- section (5), as the case may be, shall take into consideration--
(a) the market value of the land on the date of publication of the notification under section 3A;
Signature Not Verified Signed by: PREM SHANKAR MISHRA Signing time: 16-03-2026 19:00:21NEUTRAL CITATION NO. 2026:MPHC-JBP:21893 4 MP No.1698/2021 & 1699/2021
(b) the damage, if any, sustained by the person interested at the time of taking possession of the land, by reason of the severing of such land from other land;
(c) the damage, if any, sustained by the person interested at the time of taking possession of the land, by reason of the acquisition injuriously affecting his other immovable property in any manner, or his earnings;
(d) if, in consequences of the acquisition of the land, the person interested is compelled to change his residence or place of business, the reasonable expenses, if any incidental to such change."
7. The arbitration under the Arbitration and Conciliation Act 1996 depends on an agreement between the parties, in terms of Section-7 of the Act of 1996. The said provision is as under:-
"7. Arbitration agreement. --
(1) In this Part, "arbitration agreement" means an agreement by the parties to submit to arbitration all or certain disputes which have arisen or which may arise between them in respect of a defined legal relationship, whether contractual or not.
(2) An arbitration agreement may be in the form of an arbitration clause in a contract or in the form of a separate agreement.
(3) An arbitration agreement shall be in writing. (4) An arbitration agreement is in writing if it is contained in--
(a) a document signed by the parties;
(b) an exchange of letters, telex, telegrams or other
means of telecommunication which provide a record of the agreement; or
(c) an exchange of statements of claim and defence in which the existence of the agreement is alleged by one party and not denied by the other.
(5) The reference in a contract to a document containing an arbitration clause constitutes an arbitration agreement if the contract is in writing and the reference is such as to make that arbitration clause part of the contract."
8. On the contrary, arbitration under the Act of 1956 is not an Arbitration under an Arbitration agreement, rather it is a statutory arbitration, by an arbitrator notified in terms of Section 3-G (5) of the Act of 1956 and the land owner has no choice whether to opt for remedy of arbitration, or not, nor has any choice whether to appoint a particular person or institution as arbitrator, or not, nor has any right to object to a particular authority acting as arbitrator. It is in fact, a legal remedy against the Award of Land Acquisition Officer, Signature Not Verified Signed by: PREM SHANKAR MISHRA Signing time: 16-03-2026 19:00:21 NEUTRAL CITATION NO. 2026:MPHC-JBP:21893 5 MP No.1698/2021 & 1699/2021 which is given to the land-owner in name of arbitration, without any choice.
9. The judgment of this Court in the case of M.P. Stock Exchange Vs. CMC Limited, reported in 2011 (2) MPHT 374, in fact relies on an earlier judgment of the Apex Court in the case of Hindustan Steel Ltd. Vs. Dilip Construction Company, reported in 1969 (1) SCC 597. The aforesaid two judgments are authorities on the point that an Award is an "instrument" in terms of section 2 (14) of the Indian Stamp Act 1899, and that the objection as to insufficiency of Stamp Duty can be looked into at the time of enforcement of the Award.
10. There is no quarrel as to the above proposition, and the bare language of section 2 (14) of the Act of 1899 makes it clear that an Award is and Instrument. Section 2 (14) is as under :-
"(14) "Instrument".-- "instrument" includes
(a) every document, by which any right or liability is, or purports to be, created, transferred, limited, extended, extinguished or recorded;
(b) a document, electronic or otherwise, created for a transaction in a stock exchange or depository by which any right or liability is, or purports to be, created, transferred, limited, extended, extinguished or recorded; and
(c) any other document mentioned in Schedule I."
11. The issue is now as regards chargeability of an Award to Stamp Duty. Section-3 of the Act of 1899 provides as under :-
"3. Instruments chargeable with duty. --Subject to the provisions of this Act and the exemptions contained in Schedule I, the following instruments shall be chargeable with duty of the amount indicated in that Schedule as the proper duty therefore respectively, that is to say--
(a) every instrument mentioned in that Schedule which, not having been previously executed by any person, is executed in 6 [India] on or after the first day of July, 1899;
(b) every bill of exchange payable otherwise than on demand or promissory note drawn or made out of India on or after that day and accepted or paid, or presented for acceptance or payment, or endorsed, transferred or otherwise negotiated, in India; and
(c) every instrument (other than a bill of exchange, or promissory note) mentioned in that Schedule, which, not having been previously executed by any person, is executed out of India on or after that day, relates to any property situate, or to any matter or thing done or to be done, in India and is received in India xx xx xx"Signature Not Verified Signed by: PREM SHANKAR MISHRA Signing time: 16-03-2026 19:00:21
NEUTRAL CITATION NO. 2026:MPHC-JBP:21893 6 MP No.1698/2021 & 1699/2021
12. In the State of Madhya Pradesh, a specific entry has been inserted by the Indian Stamp (Madhya Pradesh) Amendment Act of 2014, which is as under:-
"12. Award, that is to say, any Two percent of the decision in writing by an award amount or Arbitrator or umpire on a market value of the reference made otherwise than property to which the by an order of the Court in the award relates, course of a suit, being an award whichever is higher."
made as a result of a written agreement to submit present or future difference to arbitration and not being an award directing a partition.
(emphasis supplied)
13. Looking to the bare language of the aforesaid provision, it is clear that an Award, which will attract chargeability under entry 12 of Schedule 1-A, will have to be an award made as a result of written agreement to submit present or future differences to arbitration.
14. Since there is a specific entry for "award", the chargeability cannot be looked into or assessed from the definition of any other instrument. It will be seen only on the anvil of specific definition and chargeability given to an "award" in terms of the entry-12 aforesaid.
15. As discussed above, arbitration under the National Highways Act 1956 is not an arbitration under a written agreement, but it is the sole remedy provided by statute against the award of land acquisition, and the arbitrator is not chosen by the land owner. It is by an statutory arbitrator notified in terms of Section 3-G (5) of the Act of 1956 and the land owner has no choice whether to opt for remedy of arbitration, or not, nor has any choice whether to appoint a particular person or institution as arbitrator, or not, nor has any right to object to a particular authority acting as arbitrator. It is in fact, a legal remedy against the Award of Land Acquisition Officer, which is given to the land-owner in name of arbitration, without any choice.
16. The High Court of Karnataka, in a recent case - Shalini Vs. National Highways Authority of India, reported in 2022 SCC OnLine Kar 1654, has held as under :-
"22. The state cannot take away the compensation awarded to the land-loser by imposing a duty to make payment of stamp duty on the said award, which is an additional burden on the land-loser to obtain just compensation on account of loss of his land. It is also clear from the fact that, while calculating the compensation payable, there is no calculation of the value of the stamp duty payable on the award made. The Signature Not Verified Signed by: PREM SHANKAR MISHRA Signing time: 16-03-2026 19:00:21 NEUTRAL CITATION NO. 2026:MPHC-JBP:21893 7 MP No.1698/2021 & 1699/2021 requirement to make payment of stamp duty on the award would amount to reduction of just compensation, which is not permissible.
23. In view of the above, though there is an arbitration proceedings and though the A and C Act, is made applicable to the said arbitration proceedings, I am of the considered opinion that the award of compensation rendered by the said Arbitrator would not come within the purview and ambit of Article 11 of the Karnataka Stamps Act, 1957, which deals with an arbitral award and the stamping thereon.
24. Just because the award is rendered by the Arbitrator under Section 3G of the NHA would not suffice more so since this award of compensation by the Arbitrator would have had to be rendered by the Land Acquisition Officer under the Land Acquisition Act or any other similarly situate enactment. Such an award rendered by the Land Acquisition Officer under the Land Acquisition Act or any other similarly situate enactment is not amenable to payment of any stamp duty.
25. I am of the considered view that the award rendered by an Arbitrator in terms of Section 3G(5) of the NHA cannot be treated as an Award under Article 11 of the KSA as to make it amenable for payment of Stamp duty by a land loser on an award for compensation which the state or the union is bound to award for acquisition of land by exercise of powers of eminent domain, which in turn is an exercise of sovereign powers.
26. Looked at from any angle, the levy of stamp duty on an award of compensation passed on account of acquisition of land, in my considered opinion, would be highly unconscionable. The land-loser in order to obtain compensation as regards the land acquired by the State cannot be made to pay premium on the award to be statutorily rendered by calling it stamp duty or otherwise."
17. The land-loser, indeed, cannot be asked to pay a part of compensation to the State as Stamp Duty. This is not the intention of the legislature while enacting the Amendment Act of 2014, nor the bare language of the provision provides so. The provision provides for payment of Stamp Duty only on awards made as a result of a written agreement to submit present or future difference to arbitration. It is, thus, held that no Stamp Duty is payable on the Award of an statutory Arbitrator appointed in terms of Section 3 (G) (5) of the National Highways Act 1956, determining compensation payable to a land Signature Not Verified Signed by: PREM SHANKAR MISHRA Signing time: 16-03-2026 19:00:21 NEUTRAL CITATION NO. 2026:MPHC-JBP:21893 8 MP No.1698/2021 & 1699/2021 loser whose land has been acquired by the State for construction of National Highway.
18. In the result, the petition stands dismissed, and the order of the executing court is upheld."
3. In view of the aforesaid, the order of the executing Court is upheld and these petitions are dismissed.
(VIVEK JAIN) JUDGE Psm Signature Not Verified Signed by: PREM SHANKAR MISHRA Signing time: 16-03-2026 19:00:21