Calcutta High Court
The State Of West Bengal And Anr vs Subrata Saha on 1 August, 2017
Author: Tapabrata Chakraborty
Bench: Nishita Mhatre, Tapabrata Chakraborty
IN THE HIGH COURT AT CALCUTTA
Civil Appellate Jurisdiction
ORIGINAL SIDE
Present:
The Hon'ble Acting Chief Justice Nishita Mhatre
&
The Hon'ble Justice Tapabrata Chakraborty
GA 2473 of 2016
with
APOT 290 of 2016
WP 334 of 2014
The State of West Bengal and Anr.
versus
Subrata Saha
GA 2483 of 2016
with
APOT 291 of 2016
WP 341 of 2014
The State of West Bengal and Anr.
versus
Swapan Sarkar & Ors.
GA 2486 of 2016
with
APOT 292 of 2016
WP 331 of 2014
The State of West Bengal and Anr.
versus
Tarun Dixit & Anr.
GA 2488 of 2016
with
APOT 293 of 2016
WP 342 of 2014
The State of West Bengal and Anr.
versus
Tarak Nath Chowdhury & Anr.
F.M.A. 2069 of 2016
with
CAN 7860 of 2016
The State of West Bengal & Others
versus
Sri Apurba Das & Another
For the State in APOT 290
of 2016, APOT 291 of 2016,
APOT 292 of 2016 &
APOT 293 of 2016. : Mr. Abhratosh Majumder, A.A.G.
Mr. Ayan Banerjee, Adv.
For the State in FMA 2069
of 2016 & CAN 7860 of
2016 : Mr. Abhratosh Majumder, A.A.G.
Mr. Taley Masood Siddique, Adv.
For the Private Respondents
(FMA 2069 of 2016 &
CAN 7860 of 2016) : Mr. Debajyoti Basu, Adv.
Mr. Suvadip Bhattacharya, Adv.
For Private Respondent No.1
in APOT 290 of 2016,
APOT 291 of 2016,
APOT 292 of 2016 &
APOT 293 of 2016. : Mr. Dipak Ranjan Mukherjee, Adv.
Mr. Arijit Dey, Adv.
Hearing is concluded on : 21.06.2017
Judgment On : 1st August, 2017.
Tapabrata Chakraborty J. :
1. Writ petitions were preferred by the apartment owners of
a housing complex, namely, Sisir Kunja situated at
Madhyamgram, district - North 24 Parganas (hereinafter referred
to as the said property) claiming remission of stamp duty and
registration fees in terms of a notification dated 23rd March, 2012
issued by the Secretary to the Government of West Bengal,
Finance Department (Revenue) in exercise of the power conferred
under Section 9(1)(a) of the Indian Stamp Act, 1899 and Section
78 of the Registration Act, 1908 contending, inter alia, that they
purchased their respective apartments by registered deeds of
conveyance executed by the vendor, namely, West Bengal
Housing Board (hereinafter referred to as the Board) and that as
the Board is a statutory authority under the State Government
and has transferred the apartments in question upon receiving
the consideration amount, the respective deeds of conveyance
come within the purview of the said notification.
2. The learned Single Judge by a composite order dated 10th
February, 2016 upheld the contention of the writ petitioners and
directed the State and its agencies to forthwith ensure that the
benefits under the said notification are made available to each set
of the writ petitioners in respect of the deeds of conveyance.
Upon consideration of an indenture dated 2nd August, 2005, a
development agreement dated 15th February, 2006 and a deed of
conveyance dated 20th April, 2013, the learned Single Judge
observed that "since it is the Housing Board which has sold the
flats and the proportionate areas of land to the several sets of
petitioners herein and the Housing Board is, unquestionably, an
authority under the State government or an undertaking of the
State government, the benefit of payment of reduced stamp duty
under the notification of March 23, 2012 has to be extended to all
the petitioners without exception".
3. Mr. Majumder, the learned Additional Advocate General
appearing for the appellants submits that the Single Judge ought
to have ascertained the true nature of the transactions upon
ensuring the presence of the Board. Not a single penny was paid
to the Board as consideration money for the said sale and as
such the purchase made by the writ petitioners cannot come
within the purview of the notification dated 23rd March, 2012.
From the transactions, not a single farthing was earned by the
Board or the State. There was no conferment of ownership upon
the Board and it did not acquire any title over the said property
and in such circumstances the learned Single Judge ought to
have applied the doctrine of lifting the corporate veil. In support
of such contention, reliance has been placed upon the judgment
delivered in the case of Vodafone International Holdings B.V. -vs-
Union of India & Anr., reported in (2012) 6 SCC 613.
4. Drawing the attention of this Court to the indenture
dated 2nd August, 2005 executed by the Sale Committee
appointed by the Kolkata Debts Recovery Tribunal in favour of
the Board in which Appu Estates Private Limited (hereinafter
referred to as Appu) and Sri Tuhin Kanti Ghosh were confirming
party nos.1 and 2 respectively, he argues that the learned Single
Judge failed to look into the matter from a practical perspective
and to ascertain the actual nature of the sale by which Appu
purchased 762 cottas of land in the name of the Board. Appu
appointed the Board as its nominee for acquiring the land in
question. Such right to acquire as a nominee did not confer any
ownership upon the Board.
5. He further argues that a composite reading of the
indenture dated 2nd August, 2005, the development agreement
dated 15th February, 2006 entered into by the Board with Bengal
Shelter Housing Developing Limited (hereinafter referred to as
Bengal Shelter) and the deed of conveyance dated 20th April,
2013 executed by the Board in favour of the respective writ
petitioners in which Bengal Shelter was a confirming party,
would reveal that the land in question was purchased by Late
Tushar Kanti Ghosh & others by various deeds of conveyance.
The said purchasers (Tushar Kanti Ghosh & others) constituted
companies, namely, Amrita Bazar Patrika Limited, Jugantar
Limited and Allahabad Patrika Private Limited (hereinafter
referred to as the said companies). The said companies obtained
loan from different banks against security of mortgage by deposit
of title deeds of the said property. As the loan could not be
repaid, the bank, namely, United Bank of India filed a Title Suit
No.511 of 1990 against Jugantar Limited which was ultimately
settled out of Court. The consortium of banks initiated
proceedings before Kolkata Debt Recovery Tribunal which was
also settled on 8th January, 2004. As per the terms of settlement,
a Sales Committee was constituted which published a sale notice
and the second highest bidder, namely, Appu tendered the
purchase money on behalf of the Board and thereafter a housing
scheme was formulated and the Board entered into a
development agreement dated 15th February, 2006 with Bengal
Shelter Housing Development Limited (hereinafter referred to as
Bengal Shelter). Pursuant thereto, the said property was
developed by Bengal Shelter for and on behalf of the Board and
the deed of conveyance was executed and upon availing the
consideration amount, Bengal Shelter issued letters of allotment
in favour of the respective purchasers. From the said sequence
of facts, it is explicit that the Board was a mere name lender and
not the owner.
6. Mr. Basu, learned advocate appearing for some of the writ
petitioners submits that the writ petitioners purchased their
respective flats from the Board on the rudiments of valid deeds of
conveyance and as the Board is an instrumentality of the State,
the petitioners acquired a legal right to avail benefits of remission
in terms of the said notification. Such right cannot be denuded
on a purported plea that the transactions are sham and that the
Board was not the owner of the said property. The genuineness
of the deeds have not been questioned by the Board nor has it
raised any objection against incorporation if it's name in the deed
of conveyance as the vendor. In spite of notices being issued, no
one appeared on behalf of the said Board at the time of hearing of
the writ petitions.
7. Placing reliance upon the downloaded documents from
the website of Bengal Shelter, Mr. Basu submits that the Board is
the 50% share holder of Bengal Shelter. Assuming that the
consideration money towards sale of apartments had been
received by Bengal Shelter, the profit pertaining to such
transactions had been equally enjoyed by the Board. The Board
had been a backdoor beneficiary and as such the argument of
Mr. Majumder to the effect that the Board was merely a name
lender is not sustainable.
8. He further submits in terms of Section 91 of the Indian
Evidence Act, once the terms of contract have been reduced to
the form of a document, no evidence is required to be given in
proof of the terms of the contract and as such the State is
estopped from raising a plea that the Board was not the owner of
the property in respect of which the deeds of conveyance have
been executed.
9. Mr. Basu further argues that when the validity of the
deeds of conveyance have not been disputed, it cannot be urged
that there was no privity of contract between the writ petitioners
and the Board. Such a plea is unintelligible as the Board in this
case has executed the deeds of conveyance stating that it is the
owner of the property. The writ petitioners accepted the
covenants of the said deeds and paid the consideration money as
also stamp and registration charges, etc. There is therefore no
substance in the contention relating to privity of contract. In
support of such contention reliance has been placed upon the
judgment delivered in the case of B. Himantharaju Setty -vs-
Corporation of the City of Bangalore, reported in AIR 1954 Mysore
145.
10. Mr. Basu further argues that the State cannot challenge
its own policy decision. The Board being an instrumentality of
the State had sold the property and as such the writ petitioners
are entitled to the benefits in terms of the notification. The
doctrine of lifting of corporate veil is not applicable to the facts of
the case since it is not a case of evasion of tax and as such, the
judgment in Vodafone (supra) has no manner of application.
11. Adopting the submissions of Mr. Basu, Mr. Mukherjee,
learned advocate appearing for another set of writ petitioners
adds that the argument advanced on behalf of the State to the
effect that the transactions were circuitous and designed to evade
tax is absolutely untenable. The deed of conveyance was
executed by the Board as vendor. The genuineness of the said
deed has not been disputed and as such in terms of the said
notification, State cannot deny the benefits.
12. Drawing the attention of this Court to the provisions of
Sections 2(6A), 2(12A), 3, 5, 15 & 27(A) of the West Bengal
Housing Board Act, 1972 (hereinafter referred to as the said Act
of 1972), Mr. Mukherjee submits that Bengal Shelter is a joint
sector company in which the Board has 50% share. The
Chairman of the Board is the Minister-In-Charge of the Housing
Department, Government of West Bengal and majority of the
members of the said Board are appointed by the State
Government and as such the Board clearly comes under the
purview of Article 12 and now State cannot take a stand that the
notification is not applicable in respect of a transaction executed
by the Board moreso when the contract entered into by the
Board, involving an expenditure of more than a crore, must have
obtained previous sanction of the State and the housing scheme
must have availed prior approval of the State in terms of section
15 and section 27A of the said Act of 1972, the principles of
estoppel become squarely applicable to the facts of the case and
the State cannot change its stand. In support of such argument
reliance has been placed upon the judgment delivered in the case
of West Bengal Housing Board Etc. -vs- Brijendra Prasad Gupta &
Ors., reported in (1997)6 SCC 207.
13. In reply, Mr. Majumdar submits that the fact that
Bengal Shelter is a joint sector company and that Board is 50%
shareholder of Bengal Shelter does not improve the case of the
writ petitioners in any manner in as much as action of a joint
sector company is not covered under the said notification. Stamp
duty is a revenue earned by the State and the State cannot be
deprived of such revenue since the name of the Board appears as
the vendor.
14. We have given our thoughtful consideration to the
arguments advanced by the learned advocates appearing on
either side and have gone through the materials placed before us
and considered the contents of the indenture dated 2nd August,
2005, the development agreement dated 15th February, 2006 and
the deed of conveyance dated 20th April, 2013, the relevant
clauses of which we propose to quote hereunder in order to
appreciate the question raised.
15. Clauses 20 and 29 of the indenture dated 2nd August,
2005 run as follows :
Clause 20 - Under the compromise and the Terms of
Settlement filed on 8th January, 2004, before the Kolkata Debts
Recovery Tribunal No.1, Kolkata, it was, inter alia, agreed and
decided that the mortgaged assets, including the said property
would be sold and the settled amount of the debt due and owing to
the said Banks, as accepted under the compromise, would be paid
up or distributed out of the said proceeds.
Clause 29 - In a resolution of the Board of Directors passed
on 22nd June, 2005, Appu Estates Pvt. Ltd. the Confirming Party
No.1 duly appointed and/or nominated West Bengal Housing
Board,...... as its nominee for acquiring an area of 743
Cottahs........ at or for a consideration of Rs.9,02,49,800/- (Rupees
nine crore two lacs forty nine thousand and eight hundred only)
being the proportionate price of the land and the Sale Committee
accepted the nomination of the purchaser as the nominee of the
Confirming Party No.1 for acquiring the said land........ It is
recorded that the consideration money of Rs.9,02,49,800/-
(Rupees nine crore two lacs forty nine thousand and eight hundred
only) paid by the Confirming Party No.1 herein to the Vendor is
payment of consideration money paid by or on behalf of the
Purchaser herein.
16. Clauses E, F, G, I, J, K, L, M, N of the development
agreement dated 15th February, 2006 run as follows :
Clause E - Pursuant to the said order dated 11.02.2004
passed by the Presiding Officer of the Kolkata Debts Recovery
Tribunal No.1, Kolkata, a Sale Committee was formed headed by
Mr. K. P. Mishra (who was the receiver over the said properties)
comprising representative of the 5 members Banks of the
Consortium and representative of the Management of Amrita Bazar
Patrika Limited and its legal heirs for the effective compliance of
the Order.
Clause F - In response to the above, Sale Notice issued by the
said Sale Committee was published in different leading
Newspapers in different versions, inviting officers from public to
purchase the said property on as is where is basis.
Clause G - In response to the said Sale Notice, one Appu
Estates Pvt. Ltd. made the effective highest offer of the said
property against a sum of Rs.9,11,00,000/- (Rupees Nine Crores
Eleven Lacs only), which was accepted by the D.R.T.
Clause I - That due to unavoidable reasons the said Appu
Estates Pvt. Ltd. decided not to retain the land and on being
approached by M/S. Bengal Shelter Housing Development Ltd., the
Second party herein, agreed to assign by the way of nomination
their rights for the land is mentioned in the schedule hereunder.
Clause J - That the Second Party herein have paid a sum of
Rs.9,02,49,800/- (Rupees Nine Crore Two Lacs Forty Nine
Thousand Eight Hundred only) to the said Receiver and Chairman
of the Assets Sale Committee through Appu Estate in following
manner .......
Clause K - That on receipts of the full and final payment by
the Second Party and as per the request by the Second Party and
Appu Estates Pvt. Ltd. duly requested the Receiver to execute the
Deed of Conveyance in Govt. of West Bengal Housing Board,......
as its nominee for acquiring an area of 743 Cottahs (but on
physical verification and actual survey and measurement the same
was found to be 762 Cottahs more or less by the Purchaser)
hereinafter referred to as the "SAID LAND" and more particular
described in the FIRST SCHEDULE hereunder written and the Sale
Committee accepted the nomination of the said purchaser.
Clause L - That the Second Party has taken the possession of
the said place of land and retained the same for and on behalf of
the First Party herein on 21.06.2005 onwards.
Clause M - Sri K. P. Mishra, Receiver & Chairman of the Sale
Committee being duly authorised by the Sale Committee to sign all
Deed of conveyance in favour of the Purchaser, the West Bengal
Housing Board, in terms of the Order dated 11.02.2004 passed by
the Learned Presiding Officer, Kolkata Debts Recovery Tribunal
No.1 have executed the Deed of Conveyance for the land
measuring 762 Cottahs described in the schedule written
hereunder, where the Appu Estates Pvt. Ltd. and for and on behalf
of the previous Owners, Sri T. K. Ghosh have joined as the
Confirming Parties in favour of the First Party which was duly
registered ........... on payment of requisite fees, charges by the
Second Party herein and thus the sale have reached its finality.
Clause N - That the Second Party viz. Bengal Shelter Housing
Development Limited had made a joint declaration in a non-judicial
stamp paper with M/S Appu Estates Pvt. Ltd. regarding the
modalities of transfer of ownership of the land mentioned
hereinabove in favour of West Bengal housing Board.
17. Clauses 4.4 and 4.6 of deed of conveyance dated 20th
April, 2013 run as follows :
Clause 4.4 - That on receipt of the full and final payment by
Bengal Shelter Housing Development Ltd. on behalf of the Board
and decided to have executed and registered the Deed of
Conveyance of the property in favour of The Board, which admits
and acknowledges by the BOARD, which has been duly registered
and recorded being No.1-04932 dated 02-08-2005 measuring
about 12.57(762 Cottah) acres more or less, in the office of the
Addl. Registrar of the FIRST SCHEDULE and the land has duly
been mutated in the name of the Board from B.L. & L.R.O. The
residential complex of the project has been built up with an area of
10.186 Acres more or less out of 12.57 acres, which is mentioned
in the FIRST SCHEDULE.
Clause 4.6 - The Board entered into a development
agreement dated 15-02-2006 for the development of the property to
a Residential Complex (namely "SISIRKUNJA") and appointed the
Company as its Developer and or agent for the development and
construction of the complex on the land and it was agreed that the
Company will develop the land and enter into contracts on behalf
of the Board with prospective allottees/purchasers for sale of units
in the complex.
18. The crux of the dispute is thus as to whether the Board
received any consideration money for the sale and as to whether
it did acquire any title over the said property and assuming that
the consideration money towards sale of apartments had been
received by Bengal Shelter, whether the profit pertaining to such
transactions had been equally enjoyed by the Board with Bengal
Shelter.
19. The object of the Indian Stamp Act is to collect proper
stamp duty on an instrument or conveyance on which such duty
is payable. This is to protect the State revenue. Stamp duty is a
revenue earned by the State. The contents of the notification
dated 23rd March, 2012 granting remission of stamp duty are to
be strictly construed and the same can neither be tinkered with
nor diluted. There cannot be any addition or subtraction from the
contents of the said notification.
20. From the contents of the indenture dated 2nd August,
2005, it appears that Board acted as a nominee of Appu to
acquire the said property and that the genesis of the transactions
was a settlement arrived into by the parties to repay the debt of
the bank and to obliterate the shackles of mortgage upon the said
property and to develop the same upon formulation of a scheme
framed under the Act of 1972. No document could be produced to
establish that money was paid by the writ petitioners to the
Board at the time of execution of deed of conveyance. Rather
upon final payment, the allotment letter was issued by Bengal
Shelter.
21. The State says that there was no conferment of
ownership upon the Board and the Board did receive any
consideration money for the sale and did not acquire any title
over the said property whereas the writ petitioners being the
respondents contend that they purchased their respective flats
from the Board on the rudiments of valid deeds of conveyance
and as the Board is an instrumentality of the State, the writ
petitioners acquired a legal right to avail benefits of remission in
terms of the said notification. They further contend that the
genuineness of the deeds have not been questioned by the Board
and that the Board is also 50% shareholder of Bengal Shelter.
Such controversies among the warring litigants demanded a
categoric finding as to whether the consideration money for the
sale was shared by the Board and Bengal Shelter in any
proportion and as to whether the rigors of ownership and the
consequential rights were vested upon the said Board through
the transactions.
22. Records reveal that the writ petitions being WP 331 of
2014 and WP 334 of 2014 were filed on 7th April, 2014 and on 8th
April, 2014 respectively. The writ petitions being WP 341 of 2014
and WP 342 of 2014 were filed on 11th April, 2014. In the writ
petitions being WP No.331 of 2014 and WP 334 of 2014, Board
was served on 8th April, 2014 and 17th April, 2014 respectively.
In writ petitions being WP No.341 of 2014 and WP No.342 of
2014, the Board was served on 17th April, 2014. All the said writ
petitions which were filed in the Original Side were released on
personal ground by Datta J. on 25th April, 2014. Thereafter the
same appeared before Pal, J. and direction for exchanging
affidavits was passed on 13th May, 2014. On 11th September,
2015, the matters were, however, released by Pal, J. The records
do not reveal as to whether fresh service was effected upon the
Board after the matters were released by Datta, J. and by Pal, J.
The matters thereafter appeared before Banerjee, J. on 1st October, 2015 when none appeared on behalf of the writ petitioners and thereafter on 11th December, 2015 a writ petition involving the identical issue and filed in the Appellate Side being WP 21557 (W) of 2014 was directed to appear along with the other writ petitions. The writ petition being WP 21557 (W) of 2014 was filed in the Appellate Side on 24th July, 2014. The Board and Bengal Shelter were served on 24th July and 25th July, 2014 respectively. Thereafter, direction for exchanging affidavits was passed but by an order dated 6th July, 2015 the matter was released by Datta, J. Thereafter, the said writ petition was dismissed for default on 16th July, 2015 and a restoration application being CAN 7904 of 2015 was filed on 7th August, 2015. The affidavit of service filed in connection with CAN 7904 of 2015 does not reveal that service of the said restoration application was effected upon the Board and Bengal Shelter. However, the restoration application was allowed by an order dated 18th September, 2015 and the said writ petition along with the writ petitions filed in the Original Side were thereafter finally heard on 5th February, 2016 and disposed of by a common judgment delivered on 10th February, 2016. From such sequence it appears that service upon the Board and Bengal Shelter was not satisfactory.
23. A writ petition is required to be disposed of on the basis of "affidavit evidence" [See the judgment delivered in the case of Barium Chemicals Ltd. and another -vs- Company Law Board and Others, reported in AIR 1967 SC 295]. The Board and Bengal Shelter were not represented before the learned Single Judge and no affidavit was filed on their behalf. As a general rule, lack of proper adjudication in the presence of all the parties by the trial body cannot stand cured when the party absent before the trial body is heard by the appellate body [See the judgment delivered in the case of Institute of Chartered Accountants of India -vs- L.K. Ratna and others, reported in (1986) 4 SCC 537].
24. Though Bengal Shelter was a party in the writ petition being WP 21557 (W) of 2014 filed in the Appellate Side, it was not made a party in the writ petitions filed in the Original Side, whose presence was necessary to enable the Court to effectually and completely adjudicate upon and settle all the questions involved in the matter.
25. The decision arrived at becomes vulnerable since the writ petitions were heard in the absence of the Board and Bengal Shelter and a finding was arrived at that the Board had sold the flats and the proportionate areas of land to the several sets of writ petitioners. The contention of the Board would be relevant in this case as it has been named as the vendor in the conveyance. We cannot presume that it did not receive the consideration or a percentage thereof only on the basis of the arguments advanced on behalf of the State. In our opinion, unless we intervene at this stage, the flaws, if any might earn immunity. At the same time it needs to be borne in mind that such intervention might delay the proceedings and give a litigant undeserved lease of life. In the present case the Board and Bengal Shelter did not appear before us and the learned Single Judge and as such in the event upon remand the Court holds that the respondents are entitled to the benefits of the notification dated 23rd March, 2012, they would be entitled to interest at the rate to be determined by the Court over the payment of reduced stamp duty under the said notification.
26. For the reasons discussed above, we set aside the order dated 5th February, 2016 passed by the learned Single Judge in the writ petitions and remand the writ petitions for hearing afresh without being influenced by the observations made in the present judgment and upon impleading Bengal Shelter in the writ petitions filed in the Original Side.
27. With the above observations and directions all the appeals and the connected applications are disposed of.
There shall, however, be no order as to costs.
Urgent Photostat certified copy of this judgment, if applied for, be given to the parties, as expeditiously as possible, upon compliance with the necessary formalities in this regard.
(Tapabrata Chakraborty, J.) (Nishita Mhatre, A.C.J.)