Karnataka High Court
Sri K.M. Srikanta vs State Of Karnataka on 29 May, 2024
Author: S.R.Krishna Kumar
Bench: S.R.Krishna Kumar
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NC: 2024:KHC:18054
WP No. 10530 of 2023
IN THE HIGH COURT OF KARNATAKA AT BENGALURU
DATED THIS THE 29TH DAY OF MAY, 2024
BEFORE
THE HON'BLE MR JUSTICE S.R.KRISHNA KUMAR
WRIT PETITION NO. 10530 OF 2023 (GM-ST/RN)
BETWEEN:
SRI K.M. SRIKANTA
S/O LATE MOLLEGOWDA,
AGED ABOUT 60 YEARS
R/AT NO. 159, 6TH CROSS,
BASAVESHWARA BADAVANE,
BEML 3RD STAGE,
RAJARAJESHWARI NAGAR,
BANGALORE-560 098.
...PETITIONER
(BY SRI. G S VENKAT SUBBA RAO, ADVOCATE)
AND:
1. STATE OF KARNATAKA
REPTD. BY ITS PRINICIPAL SECRETARY,
DEPARTMENT OF REVENEU,
M.S. BUILDING,
Digitally signed
BENGALURU-560 001.
by VANDANA S
Location: HIGH 2. THE INSPECTOR GENERAL OF REGISTRATION
COURT OF DEPARTMENT OF STAMPS AND REGISTRATION,
KARNATAKA KANDAYA BHAVANA, 8TH FLOOR,
BENGALURU-560 009.
3. THE SUB-REISTRAR
GANDHI NAGAR(HEBBALA),
NO.7, HMT LAYOUT,
R.T. NAGAR POST,
BENGALURU-560 032.
...RESPONDENTS
(BY SRI.N.B.PATIL, AGA)
THIS W.P IS FILED UNDER ARTICLES 226 AND 227 OF THE
CONSTITUTION OF INDIA PRAYING TO QUASH THE IMPUGNED
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NC: 2024:KHC:18054
WP No. 10530 of 2023
ENDORSEMENT DTD 15.05.2023 ISSUED BY THE SUB-REGISTRAR
GANDHI NAGAR (HEBBALA) BANGALORE VIDE ANNX-A AND ETC.
THIS PETITION, COMING ON FOR ORDERS, THIS DAY, THE
COURT MADE THE FOLLOWING:
ORDER
In this petition, the petitioner seeks for the following reliefs:
"a. Issue a writ in the nature of certiorari quashing the impugned endorsement dated 15.05.2023 ¸ÀASÉå : G£ÉÆÃPÀ/ ºÉ¨Áâ¼À/19/2023-24 issued by the Sub-Registrar, Gandhi Nagar (Hebbala, Bangalore, vide Annexure-A. b. Issue a writ in the nature of mandamus directing the 3rd respondent its Sub-Registrar, Gandhi Nagar (Hebbala), Bangalore to enter the transaction of the sale certificate dated 20.04.2023 issued by the official liquidator of Biodiversity Conservation (India) Pvt. Ltd., vide Annexure-H and issue such other order or directions as this Hon'ble Court deems fit to grant under the circumstances of the case, including costs, in the interest of justice and equity."
2. Heard learned counsel for the petitioner, learned counsel for the respondents and perused the material on record.
3. In addition to reiterating the various contentions urged in the memorandum of petition and referring to the material on record, learned counsel for the petitioner submitted that the petitioner acquired the subject property vide Sale Certificate dated -3- NC: 2024:KHC:18054 WP No. 10530 of 2023 20.04.2023 executed/issued in his favour by the Official Liquidator before the National Company Law Tribunal, Bengaluru (for short "the Tribunal"). Pursuant thereto, the said Official Liquidator forwarded/sent the aforesaid Sale Certificate for making necessary entries in this regard in terms of Section 89(4) of the Registration Act, 1908 (for short "the said Act of 1908"). It is the grievance of the petitioner that despite respondent No.3 being duty bound to make an entry in book No.1 of the records kept with him, pursuant to the aforesaid Sale Certificate as contemplated under Section 89(4) of the said Act of 1908, respondent No.2 proceeded to issue the impugned endorsement calling upon the petitioner to pay the requisite stamp duty as a pre-condition to make such entries, which is impermissible in law as held by this Court as well as the Apex Court in the cases of The Inspector General of Registration & Anr. Vs. G. Madhurambal & Anr. - Special Leave to Appeal (C) No(s).16949/2022 dated 11.11.2022 (Annexure-K) and Panduranga Acharya Vs. The Sub Registrar and another - W.P.No.55945/2013 dated 16.12.2013 (Annexure-L), respectively.
4. It is therefore submitted that the impugned endorsement at Annexure-A be quashed and necessary directions -4- NC: 2024:KHC:18054 WP No. 10530 of 2023 be issued to respondent No.3 to enter the aforesaid Sale Certificate in Book No.1 of the records and issue further directions in this regard.
5. Per contra, learned AGA would support the impugned endorsement and submits that there is no merit in the petition and that the same is liable to be dismissed.
6. Before adverting to the rival contentions it would be necessary to extract Section 89(4) of the said Act of 1908, which reads as under:
"89. Copies of certain orders, certificates and instruments to be sent to registering officers and filed.
(1) xxxx
(2) xxxx
(3) xxxx
(4) Every Revenue Officer granting a certificate of
sale to the purchaser of immovable property sold by public auction shall send a copy of the certificate to the registering officer within the local limits of whose jurisdiction the whole or any part of the immovable property comprised in the certificate is situate, and such officer shall file the copy in his Book No. 1."
7. A plain reading of Section 89(4) of the said Act of 1908 is sufficient to come to the conclusion that immediately after the -5- NC: 2024:KHC:18054 WP No. 10530 of 2023 Registering Officer receiving the Sale Certificate from the Officer/Official Liquidator, it is incumbent upon him to make an entry in this regard without insisting upon payment of stamp duty. The said issue/question came up for consideration before the Apex Court in the case of The Inspector General of Registration & Anr. Vs. G. Madhurambal & Anr. (supra), wherein it is held as under:
"Learned counsel for the petitioner(s) has made a valiant endeavor to persuade us to interfere with the impugned judgment(s) but not successfully. It is logically so as this issue has been repeatedly settled and if one may say, a consistent view followed for the last 150 years. We may refer to the judgments by the Madras High Court in the Board of Revenue No.2 of 1875 (In Re: Case Referred) dated 19.10.1875 opining that a certificate of sale cannot be regarded as a conveyance subject to stamp duty, by the Allahabad High Court in Adit Ram v. Masarat-un-Nissa1 opining that a sale certificate is not an instrument of the kind mentioned in clause (b) of Section 17 of Act III of 1877 and is not compulsorily registrable and this Court's view in Esjaypee Impex Pvt. Ltd. v. Asst. General Manager and Authorised Officer, Canara Bank opining that the mandate of law in terms of Section 17(2)(xii) read with Section 89(4) of the Registration Act, 1908 only required the Authorised Officer of the Bank under the SARFAESI Act to hand over the duly validated Sale Certificate to the Auction Purchase -6- NC: 2024:KHC:18054 WP No. 10530 of 2023 with a copy forwarded to the Registering Authorities to be filed in Book I as per Section 89 of the Registration Act and order of this Court in M.A. No.19262/2021 in SLP(C) No.29752/2019 dated 29.10.2021 opining that once a direction is issued for the duly validated certificate to be issued to the auction purchaser with a copy forwarded to the registering authorities to be filed in Book I as per Section 89 of the Registration Act, it has the same effect as registration and obviates the requirement of any further action.
2. It is time that the authorities stop filing unnecessary special leave petitions only with the objective of attaining some kind of a final dismissal from this Court every time. Costs this time has been spared but will not be spared the next time.
3. The needful be done in terms of the impugned judgment(s) within 15 days from today.
4. The special leave petitions are dismissed.
5. Pending applications stand disposed of."
8. A similar view was taken by this Court in Panduranga Acharya's case (supra), wherein it was held as under:
" 3. The brief facts are that the petitioner is the purchaser in respect of the auction conducted by Union Bank of India for realising certain sum due from the borrowers. The Sale Certificate dated 4-12-2012 as at Annexure-B was issued in favour of the petitioner. However, the borrower had assailed the action of 3 -7- NC: 2024:KHC:18054 WP No. 10530 of 2023 Union Bank of India by filing an appeal before the Debts Recovery Tribunal. The proceedings in the Debts Recovery Tribunal came to be disposed of on 21-10-2013. In that circumstance, the Sale Certificate was required to be entered in the Register maintained in the Office of the first respondent. The Union Bank of India being exempted from appearance before the Authority, had issued a letter dated 9-11-2013 (Annexure-D) addressed to the first respondent. Pursuant thereto the petitioner has also addressed a communication dated 13-11-2013 to the first respondent. The first respondent has however issued an endorsement dated 23-11-2013 stating therein that registration of the document cannot be made after lapse of four months from the date of execution of the Sale Certificate. Though from the manner in which the endorsement has been issued to the petitioner, it is seen that the first respondent has construed it as registration and applied the time stipulated under Section 23 of the Registration Act, 1908, what is necessary to be noticed is that in the instant case, the first respondent was required to enter the transaction of Sale Certificate in Book-I maintained by them as contemplated under Section 89 of the Act.
4. If this aspect of the matter is kept in view, all that the first respondent was expected to do is to follow the procedure as contemplated under Section 89 of the Act by entering the Sale Certificate in favour of the petitioner in Book-I as -8- NC: 2024:KHC:18054 WP No. 10530 of 2023 maintained in the said Office or by making such entry in electronic records. This position of law has already been clarified by the Hon'ble Supreme Court in the case of SMT. SHANTI DEVI L. SINGH V. TAX RECOVERY OFFICER AND OTHERS reported in AIR 1991 SC 1880 and also by this Court in the case of THOMSON PLANTATION (INDIA) PRIVATE LIMITED, KODAGU v. SENIOR SUB-REGISTRAR, MADIKERI AND ANOTHER reported in 2006 (1) KAR LJ 403. In that view of the matter, the endorsement dated 23-11-2013 impugned at Annexure-A to the petition is not sustainable and the same is accordingly quashed.
5. A direction is issued to the first respondent to enter the transaction of the Sale Certificate in favour of the petitioner in Book-I as contemplated under Section 89 of the Act and provide such documents in favour of the petitioner in accordance with law. The said procedure shall be complied by the first respondent as expeditiously as possible, but not later than four weeks from the date on which a certified copy is furnished to the first respondent.
The petition stands disposed of in above terms."
9. As it is clear from the provision contained in Section 89(4) of the said Act of 1908 and the judgment of the Apex Court as well as this Court, referred to supra, immediately upon receipt of -9- NC: 2024:KHC:18054 WP No. 10530 of 2023 Sale Certificate dated 20.04.2023 from the Official Liquidator, NCLT, respondent No.3 was duty bound to make an entry in this regard in Book No.1 of the record in terms of Section 89(4) of the said Act of 1908 without insisting or calling upon the petitioner to pay stamp duty and consequently, the impugned endorsement at Annexure-A is not only illegal and arbitrary, but also without jurisdiction or authority of law and also contrary to the provisions contained in Section 89(4) of the said Act of 1908, warranting interference by this Court in the present petition.
10. In the result, I pass the following:
ORDER i. The Writ Petition is hereby allowed.
ii. The impugned endorsement at Annexure-A dated 15.05.2023 issued by respondent No.3 is quashed.
iii. Respondent No.3 is directed to make an entry of the Sale Certificate dated 20.04.2023 in favour of the petitioner in Book No.1 and in all official records by filing a copy within two months from the date of receipt of a copy of this order.
Sd/-
JUDGE BMC: List No.: 1 Sl No.: 34