The Supreme Court on Tuesday referred the issue of whether unstamped/insufficiently Stamped Arbitration Agreements were unenforceable or not, to a seven-judge bench. 

The Bench of Chief Justice of India D.Y. Chandrachud, Justice Sanjay Kishan Kaul, Justice Sanjiv Khanna, Justice B.R. Gavai and Justice Surya Kant passed the order on a curative petition, which challenged its April 2020 verdict. 

The Constitution Bench of Justice K.M. Joseph, Justice Ajay Rastogi, Justice Aniruddha Bose, Justice Hrishikesh Roy and Justice C.T. Ravikumar had delivered the judgement by a 3:2 majority reference on the issue. 

In April 2020, the majority had decided in the case of M/s. N.N. Global Mercantile Pvt. Ltd. v. M/s. Indo Unique Flame Ltd. And Ors that an instrument which was not stamped could not be said to be a contract enforceable in law within the meaning of Section 2(h) of the Contract Act.

Calling the issue as ‘too important,’ which had caused ‘limitless uncertainty’ in the area of Arbitration law, the Apex Court today observed that it had to be considered by a larger bench. 

It further said that adjudicating on the correctness of the verdict passed in the NN Global case was the need of the hour and that hearing on the matter could not be allowed to be deflected.

The Bench noted a seven-judge bench had already been constituted to hear another matter, which could very well hear this matter also.

The Supreme Court has constituted a seven-judge bench to hear the reference of verdict in the PV Narasimha Rao v State case, which held in 1998 that legislators enjoyed immunity from prosecution in cases of bribery in relation to parliamentary vote and speech as per Article 105(2) and Article 194(2) of the Indian Constitution. 

The seven-judge Bench of CJI Chandrachud, Justice AS Bopanna, Justice MM Sundresh, Justice PS Narasimha, Justice JB Pardiwala, Justice Sanjay Kumar and Justice Manoj Misra was to hear the reference of verdict in the PV Narasimha Rao v State case.

The Apex Court today said that considering the larger ramifications and the view of majority in the NN Global case, the proceedings have been listed before a seven judge bench for hearing on October 11.

The top court of the country appointed Devesh Pandey and Pritha Srikumar as nodal counsels in the case. The Bench directed that aII compilation related to the matter be filed or submitted in the court before October 6, 2023. 

Appearing for the petitioner, Senior Advocate Arvind Datar challenged the 2020 ruling on the grounds that the courts were not to get into the validity of arbitration agreements at all. 

Representing the respondent i n the matter, Senior Advocate Shyam Divan contended that the  case pertained to a 1997 agreement and nothing survived in the matter. 

As per Divan, the respondents had filed an application for recall for notice issued in curative petition and that they were challenging the maintainability of the plea. 

The Senior Counsel requested the Apex Court not to reopen the factual issues in the matter.

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