1. HEARD learned counsel for the petitioner and learned Standing Counsel.
2. THIS petition has been filed for quashing the orders dated 12.2.1992 and 26.9.1988 passed by opposite parties no.1 and 2 respectively.
The facts in short giving rise to the present dispute are that the petitioner purchased a cold storage in district Barabanki in the court auction and requisite deposit was made by the petitioner. The Civil Judge, Barabanki issued a sale certificate on 14.5.1987. The petitioner deposited the requisite amount as required under law in the court. The matter was referred to the Collector by Sub-registrar. A show because notice was issued to the petitioner and the petitioner filed objection to the same alleging therein that the stamp duty has already been paid in accordance with the provisions of law and determination of stamp duty by the Sub-registrar was illegal. It was further alleged that the Sub-registrar had no jurisdiction to make any objection in respect of the sale made in the auction by the court nor there is any power to increase the stamp duty. The objection filed by the petitioner was rejected and the petitioner was asked to deposit Rs.1,45,117/- as stamp duty and Rs.251/- as registration charges and a penalty of Rs.54,883/- was also imposed upon the petitioner. Feeling aggrieved with the order passed by the Addl. District Magistrate (Finance and Revenue), Barabanki, a revision was preferred before the Chief Controlling Revenue Authority, U.P., who partly allowed the revision vide order dated 12.2.1992 reducing the penalty of Rs.54,883/- to Rs.5/- only. Hence this petition.
Submission of learned counsel for the petitioner is that under Section 89 (2) of the Registration Act (for short "the Act") the sale certificate cannot be subjected to stamp duty as the Sub Registrar is only required to file the copy in his book no.1. No other mode has been prescribed and neither any duty chargeable under the Act has been indicated in the aforesaid section. It is also submitted that under Article 18 of Schedule 1-B of the Indian Stamp Act (for short "the Stamp Act") the sale certificate cannot be subjected to any stamp duty and the orders passed by the opposite parties are illegal and without jurisdiction. The penalty imposed upon the petitioner for an amount of Rs.54,883/- under Section 40, Sub Clause (B) of the Stamp Act is also illegal for the reason that the stamp duty itself is not chargeable and as such, the penalty clause would not be applicable in the case of the petitioner. Provisions of Article 18 of Schedule 1-B of the Stamp Act are not applicable in the case of the petitioner. Learned counsel for the petitioner in support of his contention has relied upon the judgments rendered in the case of Ishwari Singh vs. State of U.P., 1980 All. C.J. 518 and Vijayalakshmi Charitable Trust, Registered Trust, represented by its Trustee vs. Sub- Registrar, Mettupalayam Taluk, Erode, [2009 (108) RD 572].
3. LEARNED Standing Counsel by filing counter affidavit has submitted that the stamp duty is chargeable in view of the law settled by the various courts and apart from it, Rule 176 of the General Rules (Civil) also contemplates charging of stamp duty. Sale certificate has been made chargeable under Article 18 of Schedule 1-B of the Stamp Act, under which same duty has been made chargeable as a conveyance as defined under Article 23 Clause (a) of the Stamp Act. He has placed reliance upon the judgments rendered in the case of the Collector vs Rambhau Tukaram Nirhali, (1930) 32 BOMLR 1084, Premier Vegetable (Pvt.) Ltd., Jaora v. State of M.P. And others, AIR 1986 MP 258, Vishwanath Agrawal v. State of U.P., (2004) 56 ALR 264, In Re, Official Liquidator, High Court, Madras, (2010) 2 CTC 113, Dhanalakshmi Bank Ltd v. State of Kerala, WP (C) No.12668 of 2007 and Raghunath v. Kedar Nath, (1969) 1 SCC 497.
In the case of The Collector vs Rambhau Tukaram Nirhali (supra), High Court of Bombay in para 2 held as under:-
"2. The matter arose out of a sale certificate granted by the Subordinate Judge under Order XXI, Rule 94, of the Civil Procedure Code, to an auction-purchaser so long ago as July 14, 1928. This sale certificate ought to have borne a stamp of eight annas, but in fact it had only a four-anna stamp. On that we may say at once that it was the duty of the purchaser to have borne the expense of the proper stamp having regard to Section 29 (f) of the Act and Article 18 of the first schedule. Question (a) will, therefore, be answered in the affirmative."
4. IN the case of Premier Vegetable (Pvt.) Ltd., Jaora (supra), Madhya Pradesh High Court in para 7 and 15 held as under:-
7. Learned counsel for the petitioner on the basis of Cl. 12 of S. 17(2) contended that the sale-certificate granted to the purchaser of any property sold by public auction by Civil or Revenue Officer, is exempt from registration. But this exemption from registration does not mean exemption from stamp-duty if a document which is not compulsorily registrable is submitted for registration. Sub-sec. (2) of S. 17 of the Registration Act is preceded by Sub-sec. (1)
(a), (b) and (c). Sub-sec. (2) thereof enumerates certain documents to which sub-sec. 1(b) and (c) of the Registration Act is not applicable,
(b) and (c) are non-testamentary instruments which purport to declare and assign limit or extinguish whether in present or in future any right, title or interest, whether vested or contingent, of the value of one hundred rupees and upwards, to or in immovable property; and
(c) enumerates non-testamentary instruments which acknowledge the receipt or payment of any consideration on account of the creation, declaration, assignment, limitation or extinction of any such right, title or interest, and such instruments are documents of which registration is compulsory as the title of this part suggests "of registrable documents."
A certificate of sale is granted by Civil or Revenue Officer is a registrable documents though not required to be compulsorily registered, but once it is submitted for registration, it cannot be said that such document is exempt from stamp-duty. The petitioners insistence for having the document registered, is evident from the record. It is not for pure academics that the orders Annexures-C and D are sought to be quashed. It is also an admitted fact that the sale-certificate issued by the Sales-tax Officer was sent by post for registration. It was contended that in view of S. 29(f) no stamp-duty could either be levied or was leviable. Sec. 29(f) of the Stamp Act reads as follows:--
29. "Duties by whom payable-In the absence of an agreement to the contrary, the expenses of providing, the proper stamp shall be borne:--
(a) In the case of any instrument described in any of the Following articles of Schedule, I namely:-- No. 2 (Administration Bond)., No. 6 (Agreement relating to Deposit of Title deeds, pawn or pledge.), No. 13. (Bill of Exchange,), No. 15. (Bond), No. 16. (Bottomry Bond), No. 26 (Customs Bond), No. 27 (Debenture), No. 32 (Further Charge), No. 34 (Indemnity Bond), No. 40 (Mortgage-deed), No. 49 (Promissory Note), No. 55. (Release), No. 56 (Respondentia Bond), No. 57 (Security Bond or Mortgage Deed), No. 58 (Settlement), No. 62(a) (Transfer of Shares, in an incorporated company or other body corporate), No. 62(b) (Transfer of debenture, being marketable securities whether the debenture is liable to duty or not, except debentures provided for by Section 8), No. 62(c) Transfer of any interest secured by a bond, mortgage deed or policy of insurance; by the person drawing, making or executing such instrument:
(b) in the case of a policy of insurance other than fire insurance by the person effecting the insurance: (bb) in the case of a policy of fire insurance -- by the person issuing the policy:
(c) in the case of conveyance including a reconveyance of mortgaged property -- by the grantee; in the case of a lease or agreement to lease -- by the lessee or intended lessee;
(d) in the case of a counter-part of a lease-by lessor:--
(e) in the case of an instrument or exchange-by the parties in equal shares;
(f) in the case of a certificate of sale -- by the purchaser of the property to which such certificate relates;" It is thus, clear that in event of a sale-certificate, sought to be registered the expenses of stamp-duty are to be borne by the purchaser of the property to which such certificate relates. The contention, that S. 147 M.P. Land Revenue Code, 1959 though a later legislation yet not providing for such an eventuality, the purchaser, of property in this case, the petitioner cannot be burdened with the stamp-duty, payable under the law. The learned counsel, urged that the two provisions 29(f) of the Stamp Act and S. 147 of the M.P. Land Revenue Code are repugnant. The omission, u/s. 147 as regards the liability of the purchaser of property, to pay the stamp- duty is indicative of the legislative intent that the purchaser is not liable to pay such duty, this argument cannot be accepted. Firstly, the Stamp Act is a central legislation and secondly, because S. 147 Land Revenue Code merely confines itself with the process for recovery of arrears, it cannot be said to be a comprehensive provision, which covers registration of the sale-certificate and the stamp-duty payable thereon.
There being separate enactments, for the purpose, the question of registration and payment of stamp-duty should be governed by the respective enactments.
15. Lastly Shri Khan M.A. urged that in compliance of S. 89(4) of the Registration Act, what was sent to the Sub-Registrar was a copy of certificate of sale, and a copy could neither be impounded nor levied with stamp- duty. This argument is like chasing the shadow and leaving the substance. The substantive question is whether the petitioner under the law was liable to pay the stamp duty? Or he is arbitrarily called upon to pay the same, secondly whether the instrument itself is chargeable to stamp duty? If the instrument is chargeable to stamp duty and undoubtedly it is, and the petitioner's liability to pay the same u/s 29(f) of the Stamp Act, cannot be disputed, such an argument is of no help to the petitioner, whose initial stand before the respondent No. 2 was that it was held out by the auctioning Authority that the purchaser would be not required to pay any duty for registration etc. (See Ann 'C') in short raising issue of 'Promissory Estoppel', which has rightly been not raised nor is it available to the petitioner. In such circumstances, the argument fails."
5. IN the case of Vishwanath Agrawal (supra), Allahabad High Court in para 2 and 9 held as under:-
"2. Proceedings were then initiated under section 47-A of the Indian Stamp Act in respect of the 'sale certificate'. The contention of the revenue is that the instrument in question is a conveyance and duty is payable thereon under Article 23 of Schedule 1-B of the Indian Stamp Act. The contention of the petitioner is that the instrument is a sale certificate within the meaning of Article 18 of Schedule 1-B of the Stamp Act and is not a conveyance. The difference between the duty payable in respect of these two instruments is that in the case of a conveyance the duty in payable on the amount shown as the sale consideration in the instrument or upon the market value of the property whichever is higher whereas in the case of a sale certificate the duty is payable on the purchase money shown in the instrument itself irrespective of the market value. The Assistant Commissioner (Stamp) by his order dated 28.11.2002 held that the instrument in question was a conveyance and therefore dutiable under Item No. 23 and accordingly he found the instrument deficiently stamped. The order was challenged in revision by the petitioner before the Chief Controlling Revenue Authority which by the impugned order dated 8.8.2003 has remanded the case to the Assistant Commissioner (Stamp) with the direction that the plant and machinery be valued by a technical committee. 9. The next question to be considered is whether the instrument, which has been described as sale certificate by the official liquidator was an instrument falling under Article No.18, Schedule 1-B. It is indeed no doubt true that the official liquidator has been conferred with the power of sale under section 457 of the Companies Act and therefore one requirement of Article 18 that the officer selling by public auction must be so empowered is satisfied. However, there is no provision under which the official liquidator is empowered to issue a sale certificate. The difference between a sale certificate granted by a Civil Court under Order 21, Rule 94, C.P.C. and a conveyance is that a sale certificate by the Civil Court as we have noticed does not confer any title upon the party to whom it is issued and is only evidence of sale, the title having become absolute when the sale was confirmed whereas a deed of conveyance as defined under section 2 (10) of the Stamp Act passes on title. Rule 285 (M) of the U.P. Zamindari Abolition Rules relating to sales made by the Collector is an exception to the rule that no title passes by the sale certificate in view of the deeming clause contained in this provision that the sale certificate issued in respect of sales made for recovery of land revenue 'is a valid transfer of such property.' It appears that this deeming provision was enacted in view of the fact that in sales under the Zamindari Abolition and Land Reforms Act there is no provision making the sale absolute on confirmation. It is, however, clear that even in such sales the title passes on by the act of the Collector issuing a sale certificate--a power conferred upon him by the statute."
6. IN the case of In Re, Official Liquidator, High Court, Madras (supra), Madras High Court in paras 6, 7, 8, 30, 31, 49 and 59 held as under:-
"6. In Shree Vijayalakshmi Charitable Trust v. The Sub- Registrar, Erode District, 2009 (5) CTC 15, the purchaser of a property in public auction conducted by the Official Liquidator, sought to get the Certificate of Sale filed with the Registering Officer. But the Registering Officer demanded stamp duty as per the provisions of the Indian Stamp Act, 1899. Challenging the demand, the Trust filed a writ petition. Relying upon the decision of the Supreme Court in B. Arvind Kumar vs. Government of India, {2007 (5) SCC 745} and the decision of a Division Bench of this Court in K.Chidambara Manickam v. Shakeena, 2008 (1) CTC 660, the learned Judge allowed the writ petition filed by Shree Vijayalakshmi Charitable Trust, holding that the Sub Registrar cannot demand stamp duty on a Certificate of Sale issued by the Official Liquidator, when it is sought to be filed under Section 89 of the Registration Act, 1908. After holding so, the learned Judge pointed out that the law as it stands today is unfair to the Revenue in today's context and that the legislature should take note of the loophole in the law and plug it by necessary amendments.
7. But the question as to whether stamp duty is payable on a Certificate of Sale, was not examined in Shree Vijayalakshmi Charitable Trust, on a comparative analysis of all the provisions of the Transfer of Property Act, 1882, the Indian Stamp Act, 1899 and the Registration Act, 1908, and the issues of repugnancy and overriding effect of one Act over the other. Moreover, the question as to whether stamp duty was payable on a Certificate of Sale or not, was not decided either by the Supreme Court in B.Arvind Kumar case or by the Division Bench in K.Chidambara Manickam case. In any event, in B.Arvind Kumar, the Supreme Court was concerned with a Certificate of Sale issued by the Official Assignee, who stands on a different footing than the Official Liquidator. Similarly, in K.Chidambara Manickam, the Division Bench was concerned with a Certificate of Sale issued by the Authorised Officer of a Bank, in exercise of the power conferred under the SARFAESI Act, 2002. Therefore, neither the decision in B.Arvind Kumar nor the decision in K.Chidambara Manickam, is for the proposition that a Certificate of Sale does not attract stamp duty. Both these decisions do not deal with the issue of payment of stamp duty on Certificates of Sale issued by the Official Liquidator nor do they lay down any law that no stamp duty is payable on the Certificates of Sale issued by the Official Liquidator. It is on account of these material differences that it has become essential to explode the myth.
8. The confusion as to whether stamp duty as payable on a Sale Deed, is payable even on a Sale Certificate, has arisen, primarily on account of the omission to take note of the fundamental distinction between the field of operation of the Indian Stamps Act, 1899 and the Registration Act, 1908, the foundation of both of which, are to be traced to the Transfer of Property Act,1882. While the Stamp Act is a fiscal measure enacted to secure revenue for the State on certain classes of instruments, the Registration Act strikes only at documents and not at transactions, as is done by the Transfer of Property Act, 1882. Therefore, a comparative study of the provisions of all the three enactments alone would clear the congestion in the mind.
30. Therefore, by virtue of the provisions of the Indian Stamp Act, 1899, a "Certificate of Sale" issued by a Revenue or Civil Court or Collector or Revenue Officer is chargeable with duty prescribed in Article 18 under Schedule I. A deed of conveyance, whether titled as a "deed of sale" or otherwise, is chargeable with duty prescribed in Article 23. A combined reading of Articles 18 and 23 would show that if the purchase money of a property sold by public auction exceeds Rs.50/-, the same duty is payable, irrespective of whether it is a certificate of sale or a deed of conveyance/sale. The person by whom such duty is payable is also spelt out in Section 29(f) of the Act, leaving no room for any doubt that stamp duty is certainly payable even on a certificate of sale.
31. Section 35 of the Indian Stamp Act, makes it clear that no instrument chargeable with duty shall be admitted in evidence for any purpose by any person having by law or consent of parties, authority to receive evidence, or shall be acted upon, registered or authenticated by any such person or by any Public Officer, unless such instrument is duly stamped. The proviso to Section 35 makes exception to 5 categories of instruments, from the operation of the main provision. A certificate of sale does not fall under any of these exceptions listed in the proviso to Section 35. Therefore, irrespective of and de hors the provisions of the Registration Act, a certificate of sale issued to the purchaser of a property sold by public auction, by a Civil or Revenue Court or Collector or other Revenue Officer, is required to be stamped as per Article 18 (read with Article 23 if the purchase money exceeds Rs.50/-) of Schedule I of the Indian Stamp Act. 49. The provisions of the Stamp Act and the Registration Act are not in pari materia. The Stamp Act is a purely fiscal Act providing for the payment of Government revenue, while the Registration Act has as its objective, the conservation of evidence, assurance of title, publicity of documents and prevention of fraud. The provisions of the Registration Act, do not have overriding effect upon the provisions of the Indian Stamp Act or even the Transfer of Property Act. There is no non obstante clause in Section 17(2) of the Registration Act. Therefore, it is incorrect to say that a certificate of sale need not be stamped in accordance with the Indian Stamp Act merely because it does not require compulsory registration by virtue of Section 17(2)(xii) of the Registration Act. It is equally incorrect to say that the Sub Registrar is obliged to shut his eyes to the provisions of the Stamp Act, merely because of the obligations imposed under Section 89(2) and (4) of the Act. 59. Therefore, the only conclusion that one can draw by a combined reading of the provisions of the Transfer of Property Act, 1882, the Indian Stamp Act, 1899 and the Registration Act, 1908 is that by whatever name the instrument is called (whether certificate of sale or Sale Deed), the instrument is chargeable with stamp duty, under Article 18 read with Article 23 of Schedule I to the Stamp Act. While the Official Liquidator can leave the choice to the auction purchaser to choose the title to or the nomenclature of the document, neither he nor the purchaser has any choice with regard to the liability to pay stamp duty."
In the case of Dhanalakshmi Bank Ltd. (supra), Kerala High Court in para 4 held as under:-
"4. The issue raised in the instant case is covered by the decision of a learned single Judge of this Court in Varghese v. Sub Registrar, 2007 (2) KLT 223 and the decision of a Division Bench of this Court in Ajith Kumar v. Jeeja, 2009 (1) KLT 630. In the said decisions it was held that stamp duty is payable on a certificate of sale issued by the Recovery Officer under the Recovery of Debts due to Banks and Financial Institutions Act, 1993 and that no registration charge is payable for filing a copy of the sale certificate in Book No.1 in terms of section 89 (4) of the Registration Act, 1908. In the said cases this Court directed the Recovery Officer to execute a fresh sale certificate on the purchaser producing the requisite stamp paper. This Court also directed that thereafter a copy of the sale certificate shall be filed in Book No.1 by the Sub Registrar concerned. In such circumstances the petitioner bank cannot be heard to contend that it is not liable to pay stamp duty."
In the case of Raghunath (supra), the Apex Court held as under:-
"The inclusion of the words "by any provision of the Transfer of Property Act, 1882", by the Amending Act, 1929, settled a doubt entertained as to whether the documents of which the registration was compulsory under the Transfer of Property Act, but not under Section 17 of the Registration Act, were affected by Section 49 of the Registration Act. Section 4 of the Transfer of Property Act enacts that "Section 54, paras 2 and 3, 59, 107 and 123 shall be read as supplemental to the Indian Registration Act, 1908". It was previously supposed that the affect of this section was merely to add to the list of documents of which the registration was compulsory and not to include them in Section 17 so as to bring them within the scope of Section 49. This was the view taken by the Full Bench of the Allahabad High Court in Sohan Lal case. The same view was expressed in a Madras case Rama Sahu v. Gowro Ratho [ ILR (1921) 44 Mad 55] and by MacLeod, C.J., in a Bombay case Dawal v. Dharma [ ILR (1918) 41 Bom 550] . We are however absolved in the present case from examining the correctness of these decisions. For these decisions have been superseded by subsequent legislation i.e. by the enactment of Act 21 of 1929, which by inserting in Section 49 of the Registration Act the words "or by any provision of the Transfer of Property Act, 1882", has made it clear that the documents in the supplemental list, i.e. the documents of which registration is necessary under the Transfer of Property Act but not under the Registration Act fall within the scope of Section 49 of the Registration Act and if not registered are not admissible as evidence of any transaction affecting any immovable property comprised therein, and do not affect any such immovable property. We are accordingly of the opinion that Ex. A-26 being unregistered is not admissible in evidence. In our opinion, Mr Sinha, is unable to make good his argument on this aspect of the case."
7. RULE 176 of the General Rules (Civil), 1957 clearly provides as under:-
"176.Contents of sale certificates. (1) A certificate of sale issued under O. XXI, r. 94 shall invariably contain the following particulars:-
(1) the "addition" (as defined in section 2 of Act No.XVI of 1908) of the person who is declared to be the purchaser;
(2) particulars sufficient to identify the property as required in sections 21 and 22 of the said Act. (2) A certificate issued under O. XXI, r.94 in respect of any sale held after the first day of April, 1879, shall be drawn up upon a stamp paper of the value required by section 3 clause (a) and Article 18 of the 1st Schedule and section 35 of the Indian Stamp Act (No.II of 1899) as amended in its application to Uttar Pradesh.
(3) On each copy of the certificate the amount of stamp-duty paid on the original certificate shall be noted."
On the consideration of law propounded by the Apex Court as well as by different High Courts, it is clear that the stamp duty is payable on a sale certificate, which has been issued to a party in pursuance to the auction proceedings held in a court. The only exception is that if the party does not use the instrument in evidence and does not rely on it, the stamp duty would not be payable but as soon as the party concerned relies upon the sale certificate in evidence as contemplated under Section 35 of the Registration Act, then the stamp duty is payable on the sale certificate. Apart from it, Rule 176 of the General Rules (Civil) also provides that stamp duty is chargeable upon the sale certificate issued by a court.
8. SO far as the case laws cited by the learned counsel for the petitioner are concerned, the aforesaid legal position as enumerated hereinabove was not taken into consideration and neither the said contingency arose and as such, the aforesaid case laws cited by the learned counsel for the petitioner have been considered in the light of the case laws cited by the learned Standing Counsel.
The petitioner has already paid part of the stamp duty assessed against him to the tune of Rs.10,133/- and therefore, rest of the amount of stamp duty shall be payable by the petitioner as fixed by the opposite parties. The writ petition, therefore, has no merit. It is accordingly dismissed. No order as to costs.