Loan Agreement Signed in Two States Stampable Under Delhi Law, Not Maharashtra: Delhi High Court

The Delhi High Court set aside an interim arbitral award and ruled that loan agreements signed by borrowers in Mumbai and by the lender in New Delhi were executed in Delhi.

The Delhi High Court has held that loan agreements first signed by the borrowers in Mumbai and then by the lender in New Delhi were “executed” in Delhi, and must be stamped under the Indian Stamp Act, 1899 (ISA) as applicable in the National Capital Territory of Delhi, not under the Maharashtra Stamp Act, 1958 (MSA). Deciding petitions under Section 34 of the Arbitration and Conciliation Act, 1996, the Court set aside an interim arbitral award dated 28 Feb 2026 [Asian Satellite Broadcast Pvt Ltd v. Religare Finvest Limited & Ors., 2026-juristway.com-3383-HC(Delhi)-INDLAW].

Justice Om Prakash Shukla decided eight cross‑petitions together. Religare Finvest Limited (Religare) had extended four loan facilities to companies of the Zee Group under agreements dated 15 Mar 2014, each bearing Maharashtra stamp duty of ₹100. The Sole Arbitrator held that the MSA applied because the borrowers signed first in Mumbai, attracting a fixed duty of ₹100 under Article 5(h)(B) of Schedule I to the MSA.

The Court found no binding precedent holding that the State of the first signature, or of the last, must supply the stamp law when a multi‑party instrument is signed in different States. It noted that the expression “not having been previously executed by any person” in Section 3 predates electronic signatures by more than a century, and that tying duty to the accidental location of the first signatory could produce anomalous results in modern transactions.

The Court then applied the doctrine of territorial nexus, which requires a real and not illusory connection between the taxing State and the subject of the levy, relying on State of Bombay v. R.M.D. Chamarbaugwala (1957). It held that the governing stamp law must be found from the substance of the transaction embodied in the instrument. The borrowers’ signatures did not by themselves complete the chargeable instrument; execution was complete only when the lender signed in Delhi, so the requisite nexus arose there.

The Court also rejected the Arbitrator’s finding that the agreements did not quantify any loan amount. The facility schedules of terms stated the amounts, and the agreements’ own clauses required them to be read as part of the loan documents. Treating them as separate on a technicality, the Court said, rewrote the commercial bargain and ignored vital evidence.

Conscious of its limited jurisdiction under Section 34, the Court intervened because the choice of stamp law went to the root of the matter. Religare’s petitions were allowed and the Zee Group’s petitions were dismissed.

2026-juristway.com-3383-HC(Delhi)-INDLAW