Andhra HC (Pre-Telangana)
G.S.R. Industries vs Commissioner Of Survey, Settlements ... on 26 March, 2003
Equivalent citations: 2003(6)ALT526
ORDER S. Ananda Reddy, J.
1. This Writ Petition is filed by the Petitioner-Company aggrieved by the order of the 1st Respondent dated 5-9-1992, confirming the order of the 2nd Respondent that the impugned power of attorney should be stamped under Article 42 (e) of Schedule 1-A of the Indian Stamp Act, 1899 (hereinafter referred to 'the Act') and not under Article 42 (f).
2. According to the petitioner, it was engaged in the business of rice-milling etc. In order to get overdraft facility to the limit of Rs. 6 lakhs, the Petitioner-firm executed a power of attorney in favour of Vysya Bank Limited, Rajam, Srikakulam District with reference to the book debts due as on the date as well as to be due to the Petitioner-firm. When the said document was presented for registration, the Registering Authority raised an objection that it should be stamped under Article 42(e) of the Schedule-I-A of the Act and after impounding the said document submitted to the District Registrar, Srikakulam for adjudication, the District Registrar after issuing notice and hearing the Petitioner, though found that the said document was engrossed on a stamp paper of Rs. 5-50 paise, but, however, held that the document is chargeable with stamp duty under Article 42(e) of Schedule-1-A of the Act and the stamp duty payable is Rs. 30,000/- and therefore, sought for recovery of the balance amount, in addition to a penalty of Rs. 500/-, and the said amount was directed to be paid on or before 1-11-1987. Aggrieved by that, the petitioner preferred an appeal before the 1st Respondent. Before the 1st Respondent, the Petitioner contended that the power of attorney executed is intended only for creating a charge over all the amounts due to be received by the principal on the bills and the amounts to be received are free from any charge or encumbrance etc., and that the principal undertakes not to create any charge, interest or encumbrance hereafter or assign in favour of any other person over the said amounts in preference to the first charge created in favour of the Bank. The Petitioner himself binds not to draw any of the amounts from the Government, Semi-Government or other concerns without the written permission from the attorney. The said power of attorney coupled with interest is unless and until consented to by the attorney in writing and this power shall remain in force till then. Though the Petitioner contended that no interest in the immovable property was transferred or created under the impugned document and therefore, Article 42(e) is not applicable. But, however, the 1st Respondent also rejected the contention and confirmed the order of the 2nd Respondent. Hence, the present Writ Petition.
3. The learned counsel for the Petitioner reiterated the contentions that are advanced before the authorities below. It is further stated that Clause (e) of Article 42 would apply only when consideration received and attorney is authorised to sell any immovable property, and then only the stamp duty is payable, treating the same as conveyance for consideration. In any other case, it is only the Clause (f) of Article 42 that is applicable and has to be stamped accordingly.
4. A counter has been filed on behalf of the Respondents disputing and denying the allegations. In the counter it is reiterated the stand of the authorities that on all force the nature of the document shows that it falls under Article 42(e) of Schedule 1-A of the Act. It is also stated in the counter that as per the terms of the document, the attorney is empowered not only recovering the said amounts due to the Petitioner but also to initiate legal proceedings, prosecute and defend the Petitioner, in all actions of suits, claims, demands and the like disputes. Therefore, it is clear that the same constitutes an equitable assignment of the amount due under the book debts. Therefore, the adjudication as made by the Respondents 1 and 2 is just and proper and does not call for any interference.
5. From the above, the issue to be considered is whether the disputed document-power of attorney executed by the petitioner in favour of the Vysya Bank Ltd. creating a charge in respect of all of its book debts, which are to be recoverable from Government, Semi-Government and other concerns and also empowering the Bank to take all such steps that are necessary for the recovery of the book debts and appropriate the same under the irrevocable power of attorney, would amounts to a document falling under Article 42(e) of the Schedule 1-A of the Act and liable to be stamped accordingly.
6. A perusal of the above terms of the document shows that there is absolutely no reference to any immovable property. The relevant clause of Article 42 reads as under:
"42. Power of attorney as defined by Section 2(21) not being a proxy--
(a) ...............
(b) ...............
(c) ...............
(d) ...............
(e) When given for consideration and authorising the attorney to sell any immovable property, the stamp duty as a conveyance (No. 20) for a consideration or market value equal to the amount of the consideration.
(f) In any other case, twenty-five rupees for each person authorised".
A perusal of the above Clauses (e) and (f) shows that Clause (e) applies when the attorney is given power or authority to sell any immovable property and such authority is given for consideration; then only the instrument is liable to be stamped under that clause. In respect of all other cases, the document, authorising the attorney, would fall under Clause (f) of Article 42 and it is liable to be stamped, accordingly, at Rs. 25/- per each person authorised, as is shown in the Schedule, at present. Though there is no reference under the impugned document as to the right to sell any immovable property, but, however, the authorities construed the document as if such a right has been passed on to the Bank in respect of which a charge was created in respect of all the book debts, not only for recovery of such debts, but also to take all necessary steps for recovery of such book debts and also putting a restriction on the Petitioner from recovering or receiving such amounts of debts. The terms clearly show that the interest created or the authority provided under the document is only a right with reference to book debts for their recovery and an appropriation, in lieu of the overdraft facility to the extent of Rs. 6 lakhs provided to the Petitioner-firm. When there is no specific reference as to the right in immovable property, it is not understandable how Clause (e) of Article 42 of the Schedule 1-A of the Act would apply.' Though the 1st Respondent has referred to some of the judgments, there is absolutely no relevancy with reference to those decisions. Apart from that, a Division Bench of our High Court in the case of Satyanarayana Murthy v. Income Tax Appellate Tribunal, AIR 1958 A.P. 143, held that the document of power of attorney has to be strictly construed. If the said ratio is applied and the document in question is strictly construed, the said document could not be treated as if it is intended to deal with or transfer any interest in the immovable property. There is absolutely no reference to any immovable property of the Petitioner in respect of which any right or interest was created in favour of the bank. Under the above circumstances, the impugned document could not be held to be liable to stamp duty under Article 42 (e) of Schedule 1-A of the Act, but is only liable to stamp duty under Article 42 (f).
7. Under the above circumstances, the impugned order of the 1st Respondent is set aside, and the 3rd Sub-Registrar is directed to levy stamp duty only under Article 42 (f) of Schedule 1-A of the Act.
8. The Writ Petition is accordingly allowed. No costs.