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2023 DIGILAW 2680 (ALL)

Palika Towns LLP v. State of U. P.

2023-11-29

MANJU RANI CHAUHAN

body2023
JUDGMENT : MANJU RANI CHAUHAN, J. 1. The petitioner-M/s Palika Towns LLP, is a Company incorporated under the Companies Act, 1956, has preferred present writ petition challenging an order dated 22.08.2023 passed by second respondent/Chief Controller Revenue Authority, Board of Revenue, Circuit Court, Meerut. It has also been prayed in the writ petition that the fourth respondent/ District Magistrate, Gautambuddha Nagar may be directed to refund the amount of Rs. 6,00,18,100/- with interest @ 15% p.m. deposited by the petitioner. 2. Brief facts of the case are that the petitioner Company has its registered office at DSC-319, DLF South Court, Saket, New Delhi-110017. A public notice was issued in daily newspaper Business Standard, New Delhi on 08.03.2019 for the sale of assets of M/s Moser Baer India Ltd., thus, insolvency proceedings were initiated against M/s Moser Baer India Ltd. under the Indian Insolvency and Bankruptcy Code, 2016 [the Act 2016] before the National Company Law Tribunal, New Delhi, in which official liquidator was appointed by order dated 20.09.2018. Accordingly, e-auction of the assets of M/s Moser Baer India Ltd. was conducted. The assets included industrial land building bearing no. 66, admeasuring area 270201 square meter situated at Sector Ecotech-2, Greater Noida, Gautambuddha Nagar. 3. The petitioner participated in the auction proceedings and being the highest bidder, purchased the property in question for a sum of Rs. 145,75,00,000/- in support of which a sale certificate dated 11.09.2019 was issued by official liquidator. The petitioner applied for the registration of sale certificate in terms of Article 18 of Schedule 1-B of the Indian Stamp Act, 1899 [the Stamp Act] on 08.02.2021. The respondent no. 5 raised objections and calculation was made on 08.02.2021 by the Sub-Registrar, Sadar, Greater Noida, Gautambuddha Nagar/respondent no. 5, who issued a letter stating that the stamp duty is to be paid on the basis of market rate in terms of Article 23 of Schedule 1-B of the Stamp Act. The District Magistrate issued a letter dated 17.05.2021 to the Special Secretary, Stamp and Registration, U.P. referring to the issue related with applicability of Article 18 of Schedule I-B of the Stamp Act to the property sold out in e-auction and the same was replied by stating that the District Magistrate is fully competent to take decision. The District Magistrate vide order dated 23.07.2021 directed the petitioner to pay deficient stamp fee amount of Rs. The District Magistrate vide order dated 23.07.2021 directed the petitioner to pay deficient stamp fee amount of Rs. 4,61,67,750/- along with interest at the rate of 1.5% per month from the date of execution till the date of making payment, as well as the deficient registration fee of Rs. 92,33,550/- and penalty of Rs. 4,61,200/- . The petitioner deposited an amount of Rs. 6,00,18,100/- under protest on 28.07.2021. Thereafter, a sale certificate was issued in favour of the petitioner and the instrument was registered on 30.07.2021 at Bahi No. 1, Zild No. 39084, Page Nos. 245-294 at S. No. 12873. The petitioner approached the Board of Revenue, Circuit Court, Meerut against the order dated 23.07.2021 passed by the District Magistrate under Section 56(1) of the Stamp Act, which was rejected on 22.08.2023 by the Chief Controller Revenue Authority, Board of Revenue, Circuit Court, Meerut without considering the provisions of law. Hence the present writ petition. 4. Learned counsel for the petitioner submits that the petitioner purchased the property by means of e-auction and as per Article 18 of Schedule I-B of the Stamp Act, the petitioner is liable to pay stamp duty as per conveyance (no. 23) for a consideration equal to the amount of purchase money only. The State Government has issued Government Orders dated 24.06.2020 and 25.06.2020, clarifying that the property purchased through e-auction for registration of property, against which the stamp duty will be paid under Article 18 of Schedule I-B of the Stamp Act. Article 18 of Schedule I-B of the Stamp Act reads thus: Description of Instrument Proper Stamp duty 18. Certificate of sale (in respect of each property put up as a separate lot and sold), granted to the purchaser of any property sold by public auction by a Court, or by an officer, authority or body empowered under any law, for the time being in force, to sell such property by public auction and to grant the certificate. The same duty as Conveyance property put up as a separate lot and sold, [No. 23 clause (a)] for a consideration equal to the amount of the purchase money only. 5. The same duty as Conveyance property put up as a separate lot and sold, [No. 23 clause (a)] for a consideration equal to the amount of the purchase money only. 5. From a plain reading of the aforesaid it is clear that in spite of the property put up for auction, a sale certificate is granted to the purchaser of such property sold by public auction by a court or by an officer, authority or body empowered under any law for the time being in force to sell such property by public auction and to grant such certificate. The stamp duty payable on such certificate is described as the same duty as on conveyance (No. 23 Clause (a) for consideration equal to the amount of the purchase money only. He further submits that it is immaterial to see as to public auction was held by civil court or revenue court or collector or other revenue official and to see as to whether the provisions of Section 18 of Schedule I-B of the Stamp Act, as amended up to date, is applicable or not. 6. The petitioner purchased property in question by e-auction and as per Article 18 of Schedule I-B of the Stamp Act, the petitioner is liable to pay the stamp duty in view of conveyance (no. 23) for a consideration equal to the amount of purchase money only. Learned counsel for the petitioner further contends that the State Government has issued Government Orders dated 24.06.2020 and 25.06.2020 clarifying that the property purchased through e-auction for registration of stamp duty will be paid under Article 18 of Schedule I-B of the Stamp Act. The sale certificate is fully covered by Article 18 as the jurisdiction of the court and other authority is barred from exercising jurisdiction of the court and other authority, and the Tribunal alone is entitled to recover the debts due to the Banks and financial institutions, therefore, there can be no doubt to hold that Debt Recovery Tribunal is an authority or body empowered under law for time being to sell the property. The petitioner is not liable to pay stamp duty under Article 23 of Schedule I-B on the market value of the property determined by the Collector under the Stamp Act. The petitioner is not liable to pay stamp duty under Article 23 of Schedule I-B on the market value of the property determined by the Collector under the Stamp Act. Learned counsel for the petitioner also contended that the petitioner is not liable to pay stamp duty under Article 23 of Schedule I-B on market value, however, the Chief Controller Revenue Authority, Board of Revenue, Circuit Court, Meerut, without considering the provisions of law and material available on record, proceeded to pass the order impugned. @@@@ 7. The question which has arisen for consideration as to whether recovery officer appointed under Section 7(1) of the Recovery of Debts Due to the Banks and Financial Institutions Act, 1993 [The Act 1993] who granted sale certificate to the petitioner, is an officer or authority and Debt Recovery Tribunal empowered under law for time being in force to sell the property secured by the Bank as security for loan. Learned counsel for the petitioner submits that the recovery officer appointed under Section 7(1) of the Act, 1993 has granted the sale certificate to the petitioner and he is an officer or authority and DRT is body empowered under the Act, 1993. In support of his submissions, learned counsel for the petitioner has placed reliance on a judgment of this Court in the case of Avdhesh Tyagi and Another vs. Commissioner Meerut Division and Others, 2012 (9) ADJ 519 . 8. It is a well settled law 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 authorized by the court, does not require registration. Section 17(2)(xii) of the Registration Act, 1908 [the 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-section (b) and (c) of Section 17(1) of the said Act. Therefore, once 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. Therefore, once 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. There is no further requirement of any registration, thus no stamp duty is to be paid for the same. In support of his contention, he has relied upon the judgment of the Apex Court in the case of B. Arvind Kumar vs. Government of India and Others, (2007) 5 SCC 745 . 9. Thus, the certificate of sale issued by any court or by a revenue court, be it official liquidator who is empowered under the Act, 1993 to issue said sale certificate, the same does not need any registration. The said issue has been dealt with by the Apex Court in the case of Smt. Shanti Devi L. Singh vs. Tax Recovery Officer and Others, (1990) 3 SCC 605 . 10. In the proceedings under Securitisation and Reconstruction of Financial Assets and Enforcement of Security Interest Act, 2002 [SARFAESI Act] the Court has gone to the extent of saying that a sale certificate is not an instrument of the kind mentioned in clause (b) of Section 17 of the Registration Act; the authorized officer of the bank under SARFAESI Act should hand over the duly validated sale certificate to the auction purchaser with a copy forwarded to the registering authority to be filed in Book no. 1 as per section 89 of the Registration Act. Once a direction is issued for the duly validated certificate to be issued to the auction purchaser with a copy forwarded to the registering authority to be filed in Book No. 1 as per Section 89 of the Registration Act, it has the same effect as registration and obviates the requirement of any further action. In support of his contention, he has relied upon the judgment of Hon’ble Telangana High Court in the case of M/s. Anirudh Agro Farms Pvt. Ltd. vs. State of Telangana, Writ Appeal No. 414 of 2023, Decided on 04.04.2023. 11. Thus, in the present case, where the official liquidator has forwarded the sale certificate to the first respondent for the purpose of filing a copy of the same in book no. 11. Thus, in the present case, where the official liquidator has forwarded the sale certificate to the first respondent for the purpose of filing a copy of the same in book no. 1 as per Section 89 (4) of the Act, 1908, such would be taken as sale certificate issued by a revenue officer and would fall within ambit of Section 89(2) of the Registration Act. Thus, the act of the respondent no. 4 declining to file a copy of the same in Book No. 1 as per Section 89(4) of the Registration Act, 1908 is against the settled proposition of law and provisions of the Act, 1908. 12. Learned Standing Counsel could not dispute the aforesaid facts, submissions advanced by learned counsel for the petitioner and settled proposition of law. 13. Having heard submissions of learned counsel for the parties and the settled position of law, enumerated in preceding paragraphs, this Court finds substance and merit in favour of the petitioner. Accordingly, the order impugned dated 22.08.2023 passed by respondent no. 2 is quashed. The respondent authority is directed to refund the money deposited by the petitioner towards stamp duty. 14. The writ petition stands allowed accordingly. 15. No order as to costs.