Chennai: The Madras high court has held that the sale certificate issued by the authorised officer of the bank is liable for stamp duty under Article 18 and 126 read with Article 23 of Schedule 1 of the Indian Stamp Act.
The full bench comprising Chief Justice Vijaya K.Tahilramani, Justices M.Duraiswamy and Krishnan Ramaswamy gave the ruling while answering the reference made by a single judge. Since there are two conflicting judgments rendered by different division benches, the single judge referred the matter to the full bench.
The bench further said in the event of undervaluation of the property, which is the subject matter of the sale certificate, the registering officer is entitled to proceed in accordance with Section 47 and 126 of the Indian Stamp Act.
Originally, Dr R.Thiagarajan purchased a property situated at Allinagaram in Madurai in the public auction conducted by the Syndicate Bank on December 31, 2011, for a sum of `1.03 crore. The bank had invoked the provisions of SARFAESI Act for conducting the said auction. The bank also issued the sale certificate, which was registered on March 15, 2012.
However, the sub-registrar, Theni, who received the sale certificate for registration, insisted that Thiagarajan should pay the stamp duty as per the market value. Thiagarajan contended that he was liable to pay the stamp duty only in terms of the sale consideration set out in the sale certificate. Since, the sub-registrar declined to accept his stand, Thiagarajan filed a petition, seeking a direction to the special deputy collector (stamps) to return the original sale deed and further direction to refund the excess stamp duty of 2 per cent already paid by the petitioner.
Before the single judge, counsel for Thiagarajan relied upon a judgment reported in 2015 (the inspector general of registration and others Vs K.K. Thirumurugan), wherein a division bench of the Madras high court held that the registering authority, cannot doubt the value mentioned in the sale certificate, therefore, section 47 and 126 would not be applicable in respect of the property purchased by way of public auction conducted under the SARFAESI Act.
Before the single judge, the government advocate placed reliance on the unreported judgment of the Madras high court made in the inspector general of registration and others Vs Kanagalakshmi Ganaguru case in 2017, wherein, another division bench held that the authorized officer appointed by the bank in the proceedings initiated under SARFAESI Act, by itself could not be equivalent to civil or revenue court and that the SARFAESI Act merely provides for a mechanism and the lender uses the said mechanism to recover the money from the borrower.
Further, the division bench held that it was only a mode of recovery and that the authorized officer can only be termed an agent of the secured creditors. The division bench also held that the purchaser therein was liable to pay the stamp duty on the market value of the property concerned.
Agreeing with the proposition laid down by the division bench in the unreported 2017 judgment, the full bench gave the above ruling and directed the registry to place the petition before the single judge for hearing on merits....