The Mint has a column by Heena Singhvi that discusses the often contentious issue of whether stamp duty is payable on an order the High Court sanctioning a scheme of amalgamation between two or more companies. Of greater relevance is the discussion of the Delhi High Court decision in Delhi Towers Ltd. v. G.N.C.T. of Delhi (MANU/DE/3152/2009), delivered on 4 December 2009, where the court held that an order of the High Court sanctioning a scheme of amalgamation would fall within the definition of “conveyance” under the Indian Stamp Act, 1899 thereby requiring payment of stamp duty. That is so even where the definition does not expressly include such order of the High Court.
Although the court’s reasoning is not entirely unusual (having been adopted in the past by the Bombay High Court in Li Taka Pharmaceuticals Ltd. v. State of Maharashtra in 1997), it does clarify the position in Delhi. Moreover, greater acceptability of such interpretation may embolden stamp authorities in other states with similar definition of “conveyance” in their stamp duty legislation to levy duty in relation to schemes of amalgamation or even other forms of arrangement such as demergers.