2023 (5) TMI 715

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....he same are dismissed. However, we would like to record some reasons for dismissal of the present special leave petitions. The judgment in Vidya Drolia & Ors. vs. Durga Trading Corporation (2021) 2 SCC 1 did not examine and decide the issue of effect of unstamped or under-stamped underlying contract on the arbitration agreement. As this issue and question has not been decided in Vidya Drolia (supra), the decision is not a precedent on this question. Vidya Drolia (supra) did refer to the judgment in the case of Garware Wall Ropes Limited vs. Coastal Marine Constructions and Engineering Limited (2019) 9 SCC 209, but in a different context, as is evident from paragraphs 146 and 147.1 of the judgment in Vidya Drolia (supra), which are reprod....

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....only when it is valid and legal. A void and unenforceable understanding is no agreement to do anything. Existence of an arbitration agreement means an arbitration agreement that meets and satisfies the statutory requirements of both the Arbitration Act and the Contract Act and when it is enforceable in law. 147. xxx xxx xxx 147.1. In Garware Wall Ropes Ltd. v. Coastal Marine Constructions & Engg. Ltd., (2019) 9 SCC 209, this Court had examined the question of stamp duty in an underlying contract with an arbitration clause and in the context had drawn a distinction between the first and second part of Section 7(2) of the Arbitration Act, albeit the observations made and quoted above with reference to "existence" and "validity" of the arb....

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....idya Drolia (supra) that reference to the decision in Garware Wall Ropes Limited (supra) was made to interpret the word 'existence', and whether an 'invalid' arbitration agreement, can be said to exist? This examination was to decide "who decides existence of an arbitration agreement" in the context of Sections 8 and 11 of the Arbitration and Conciliation Act, 1996. The distinction between obiter dicta and ratio decidendi in a judgment, as a proposition of law, has been examined by several judgments of this Court, but we would like to refer to two, namely, State of Gujarat & Ors. vs. Utility Users' Welfare Association & Ors. (2018) 6 SCC 21 and Jayant Verma & Ors. vs. Union of India & Ors. (2018) 4 SCC 743. The first judgment in State of ....