It is held by the Apex Court in the above decision made in 2007(5) SCC 745 (cited supra), that the Sale Certificate does not require registration. Consequently, the respondents are not entitled to seek for production of the said Sale Certificate for impounding the same for payment of deficit stamp duty. Accordingly, I am of the view that the impugned action in both the writ petitions are liable to be set aside
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Madras High Court
D.B.Prakashchand Jain vs The Inspector General Of ... on 24 February, 2014
Citation; AIR2014 Madras 161
W.P.No.23618 of 2012 is filed challenging the order of the first respondent dated 20.04.2012 and consequently seeking for a direction to the third respondent to complete the registration of document bearing P.Nos.26 to 37 of 2011.
2.W.P.No.25268 of 2012 is filed challenging the order of the first respondent dated 20.04.2012 and consequently seeking for a direction to the third respondent to complete the registration of document bearing P.Nos.20 to 37 of 2011.
3.The case of the petitioner W.P.No.23618 of 2012 is as follows:
The petitioner was the absolute owner of the property, which is subject matter under documents bearing P.Nos.26 to 37 of 2011, having acquired the same in and by the Sale Certificate bearing No.MDRT-1/O.A.179/01/16/2004 dated 26.10.2004, issued by the Mumbai Debts Recovery Tribunal-I, in favour of the petitioner. He also obtained patta bearing No.1048 in his name. He had executed twelve Deeds of Settlement on 14.12.2011 in respect of the said properties in favour of his sons viz.,Abilash Jain and P.Mukesh Kumar. Those Settlement Deeds were submitted for registration before the third respondent. The petitioner had paid stamp duty for the above Settlement Deeds along with the registration charges. After completion of all formalities, the Settlement Deeds were assigned P.Nos.26 to 37 of 2011. The petitioner also executed certain sale deeds in favour of one Mr.Ramesh (the petitioner in W.P.No.25268 of 2012) in respect of the said properties. Those sale deeds were assigned P.Nos.20 to 25 of 2011, after due completion of formalities. The third respondent refused to return those deeds by informing that the documents were impounded for improper payment of stamp duty and the second respondent has communicated to the first respondent regarding the same. The first respondent through his order dated 20.04.2012, directed the third respondent to require the production of Sale Certificate, impound the same and collect the deficit stamp duty and until then directed to keep the documents bearing Nos.26 to 37 of 2011 pending registration. The third respondent called upon the petitioner through the impugned communication dated 10.05.2012 to produce the copy of the Certificate of Sale bearing No.MDRT-1/O.A.179/01/16/2004 dated 26.10.2004 and pay the deficit stamp duty.
4.The case of the petitioner in W.P.No.25268 of 2012 is as follows:
Mumbai Debts Recovery Tribunal-I brought the pieces and parcels of the land admeasuring Ac.48.22 cents comprised in several survey numbers situated at Vadakuthu village, Kurinjipadi Taluk, Cuddalore District to sale in public auction in which one D.B.Prakashchand Jain (the petitioner in W.P.No.23618 of 2012) purchased the said property. Mumbai Debts Recovery Tribunal issued Certificate of Sale of immovable property bearing No.MDRT-1/0.A.179/01/16/2004 dated 26.10.2004 in favour of D.B.Prakashchand Jain. The petitioner purchased undivided shares in five portions of the said property by way of absolute sale dated 12.12.2011 from the said person. Those sale deeds were signed by D.B.Prakashchand Jain and the petitioner. The six sale deeds were presented at the office of the third respondent on 14.12.2011 for registration. Necessary registration fees were paid. The first respondent by order dated 20.04.2011 directed the third respondent to require production of the Certificate of Sale, impound the same, collect the deficit stamp duty and until then directed the third respondent to keep the documents pending registration. The third respondent based on the order passed by the first respondent called upon the petitioner to produce the Certificate of Sale and pay the deficit stamp duty. Therefore, the petitioner is challenging the order of the first respondent dated 20.04.2012.
5. A Counter affidavit is filed in W.P.No.25268 of 2012 by the first respondent wherein it is stated as follows:
The Registering Officer should prima facie be satisfied that the document presented before him for registration is neither illegal nor void. Therefore, it is bounden duty of the said Officer to verify the previous documents. The Registering Officer is bound by Section 35 of the Indian Stamp Act, 1899, which stipulates that any public officer shall not act upon an instrument which is not duly stamped. The first respondent instructed the second respondent to call for the original deed of Certificate of Sale and impound the same under section 33 of the Indian Stamp Act, 1899 and keep the registration of Settlement Deeds till the payment of deficit duty in respect of the Certificate of Sale. As per section 3 of the Indian Stamps Act, every instrument mentioned in Schedule-I to the said Act shall be chargeable with duty of the amount indicated in that schedule. Certificate of Sale granted to the purchaser by the Debts Recovery Tribunal is chargeable with stamp duty of 5% on the purchase money. The execution of Sale Certificate at Mumbai does not absolve it from the liability of being stamped under the Indian Stamp Act, 1899. As per section 19(A) of the Indian Stamp Act, 1899, any document executed outside the State but which relates to a thing to be done in the State will attract increased duty, if the same is brought into the state of Tamilnadu.
6.Mr.S.R.Raghunathan, learned counsel appearing for the petitioner in both the writ petitions submitted as follows:
The petitioner in both the writ petitions are not seeking for registration of the Sale Certificate. Section 34 and 35 of the Registration Act dealing with powers of Registering Officers do not empower the authority to go into the title to the property. Section 33 of the Indian Stamps Act has no application to the facts of the present case. The second respondent has no power under section 34 of the Registration Act, 1908 to compel production, impound and review of stamp duty or document not presented for registration. The issue involved in this case is squarely covered by the decision of the Apex Court reported in 2007(5) SCC 745, B.ARVIND KUMAR V. GOVT. OF INDIA AND OTHERS as well as the decision of this Court reported in (2010) 155 Comp Cas 549 (Mad), SHREE VIJAYALAKSHMI CHARITABLE TRUST V. SUB-REGISTRAR.
7.Per contra, the learned Additional Government Pleader appearing for the respondents supported the impugned order and reiterated the contents raised in the counter affidavit filed by the first respondent in W.P.No.25268 of 2012.
8.Heard the learned counsels appearing on either side and perused the materials placed before this Court.
9.In writ petition W.P.No.23618 of 2012, the petitioner therein presented Settlement Deeds for registration before the third respondent. In W.P.No.25268 of 2012, the petitioner therein presented the Sale Deeds for registration before the third respondent. In respect of the documents presented for registration in both the matters, the Sale Certificate issued by the Mumbai Debts Recovery Tribunal-I dated 26.10.2004 in favour of D.B.Prakashchand Jain, who is the petitioner in W.P.No.23618 of 2012 is the parent document. Now, the first respondent through the impugned order in W.P.No.25268 of 2012 directed the third respondent to require production of the said Sale Certificate, impound the same, collect the deficit stamp duty on the said Sale Certificate and until then, he directed those documents presented for registration to be kept as pending registration documents. Therefore, the issue involved in both these writ petitions is one and the same, which is as follows: Whether the Certificate of Sale issued by the Debts Recovery Tribunal, Mumbai dated 26.10.2004 is liable to be impounded for collecting the deficit stamp duty and whether the documents presented by the petitioners in these writ petitions are liable to be kept as pending documents till impounding of the said Sale Certificate and for collection of deficit stamp duty.
10.The crux of the issue is as to whether the Sale Certificate issued by the Mumbai Debts Recovery Tribunal requires registration.
11.In this connection, the decision relied on by the learned counsel for the petitioner reported in 2007(5) SCC 745, (cited supra) is relevant to be quoted, since the said decision answers the above issue. At paragraph No.12 of the said decision, the Hon'ble Supreme Court has observed as follows: "12....When a property is sold by public auction in pursuance of an order of the court and the bid is accepted and the sale is confirmed by the court in favour of the purchaser, the sale becomes absolute and the title vests in the purchaser. A sale certificate is issued to the purchaser only when the sale becomes absolute. The sale certificate is merely the evidence of such title. It is well settled that when an auction-purchaser derives title on confirmation of sale in his favour, and a sale certificate is issued evidencing such sale and title, no further deed of transfer from the court is contemplated or required. In this case, the sale certificate itself was registered, though such a sale certificate issued by a court or an officer authorised by the court, does not require registration. Section 17(2)(xii) of the Registration Act, 1908 specifically provides that a certificate of sale granted to any purchaser of any property sold by a public auction by a Civil or Revenue Officer does not fall under the category of non-testamentary documents which require registration under sub-sections (b) and (c) of Section 17(1) of the said Act. We therefore hold that the High Court committed a serious error in holding that the sale certificate did not convey any right, title or interest to plaintiff's father for want of a registered deed of transfer."
12.From the above decision of the Apex Court, it is clear that the Sale Certificate issued by the Mumbai Debts Recovery Tribunal does not require registration and it is merely evidencing the title to the property in favour of the purchaser, who got such title in pursuant to the court auction.
13.A learned single Judge of this Court in a decision reported in (2010) 155 Company cases 549 (Mad), (cited supra), after following the above said decision of the Apex Court has held at paragraph 16 to 18 as follows: "In view of the above judgment and exemption granted under section 17(2), the copy of the document is only required to be filed in Book No.1 under the special procedure under section 89 of the Act. If stamp duty is required even for filing of the copy of instrument under section 89 of the Act, the exemption given under section 17(2) of the Act would become meaningless. In that event, there is no necessity for the special procedure under section 89 of the Act and it would amount to violation of the Act. The Hon'ble Supreme Court in similar circumstances in Smt.Shanti Devi L.Singh v. Tax Recovery Officer reported in 91990) 183 ITR 481; AIR 1991 SC 1880, after comparing "registration" under section 17 with "filing" under section 89 of the Act held that though the processes are different, the purchaser at a Court or revenue sale is under no disadvantage because of lack of registration and transfer of title is not vitiated by non-registration of certificate and directed the Registrar to file the copy of the sale certificate in Book No.1. The office of the Official Liquidator, High Court, Madras, wrote a letter dated March 15, 2007, to the respondent/Registrar enclosing a copy of the certificate of sale dated December 22, 2006, to be filed in Book No.1 as per section 89 of the Act. Section 89 of the Act is very categorical that the Registering Officer has to file the copy of such certificate in Book No.1 and it is the bounden duty of the officer to file the copy in his Book No.1 or get it scanned. When such is the position, the sale certificate would have come under Section 17"(2)(xii) of the Registration Act, 1908. As long as sections 17(2) and 89 are there in the Registration Act, the court can only go by the statute and quash the order which are ultra vires the Act. In view of the categorical pronouncement of the judgment of the Supreme Court and also the judgment of this Court and also in view of provisions given in the Registration Act, the court holds that court auction sale certificate sent to the Registration for filing in Book No.1 would not attract stamp duty. The respondent has got no power and jurisdiction to issue the impugned order because of sections 17(2)(xii) and 89(2) of the Registration Act and cannot demand stamp duty. Hence the impugned order is liable to be set aside."
14.In my considered view, the above decisions relied on by the learned counsel for the petitioners are squarely applicable to the case on hand. Moreover, the sale certificate is only a parent document in so far as the documents which are sought to be registered before the third respondent. Admittedly, the said Sale Certificate was not sought to be registered by the petitioners. I wonder as to whether the respondents are entitled to insist upon the production of parent document in respect of the documents sought to be registered and impound the same for payment of deficit stamp duty, even assuming such parent documents require registration. In my considered view, the Registering Authorities are not entitled to go into the validity of the title to the property conveyed and sought to be registered. At any event, in this case, the sale certificate was issued by the Mumbai Debts Recovery Tribunal and consequent upon such purchase, the Settlement Deeds and Sale Deeds were executed by the purchaser of the property through the said Sale Certificate.
15. It is held by the Apex Court in the above decision made in 2007(5) SCC 745 (cited supra), that the Sale Certificate does not require registration. Consequently, the respondents are not entitled to seek for production of the said Sale Certificate for impounding the same for payment of deficit stamp duty. Accordingly, I am of the view that the impugned action in both the writ petitions are liable to be set aside and accordingly, they are set aside. Consequently, the writ petitions are allowed and the third respondent in both the writ petitions is directed to complete the registration of the documents presented for registration by the petitioners bearing P.Nos.26 of 2011 to 37 of 2011 and P.Nos.20 of 2011 to 37 of 2011 respectively, within a period of three weeks from the date of receipt of a copy of this order. No costs. The connected miscellaneous petitions are closed. 24.02.2014
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