Gujarat High Court
Deesa Nagrik Sahkari Bank Ltd. At ... vs State Of Gujarat on 9 June, 2023
Author: Vaibhavi D. Nanavati
Bench: Vaibhavi D. Nanavati
NEUTRAL CITATION
C/SCA/9437/2021 JUDGMENT DATED: 09/06/2023
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IN THE HIGH COURT OF GUJARAT AT AHMEDABAD
R/SPECIAL CIVIL APPLICATION NO. 9437 of 2021
FOR APPROVAL AND SIGNATURE:
HONOURABLE MS. JUSTICE VAIBHAVI D. NANAVATI
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1 Whether Reporters of Local Papers may be NO
allowed to see the judgment ?
2 To be referred to the Reporter or not ? NO
3 Whether their Lordships wish to see the fair NO
copy of the judgment ?
4 Whether this case involves a substantial question NO
of law as to the interpretation of the
Constitution of India or any order made
thereunder ?
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DEESA NAGRIK SAHKARI BANK LTD. AT PRESENT ADARSH
COOP. BANK LTD.
Versus
STATE OF GUJARAT
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Appearance:
MR MANISH S SHAH(5859) for the Petitioner(s) No. 1
MR. NIRAJ SHARMA, AGP for the Respondent(s) No. 1,2
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CORAM:HONOURABLE MS. JUSTICE VAIBHAVI D. NANAVATI
Date : 09/06/2023
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NEUTRAL CITATION
C/SCA/9437/2021 JUDGMENT DATED: 09/06/2023
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ORAL JUDGMENT
1. RULE, returnable forthwith. Mr. Niraj Sharma, learned Assistant Government Pleader waives service of notice of Rule on behalf of the respondents- State.
2. By way of the present petition, the petitioner herein has prayed for the following reliefs:
"(A). The Hon'ble Court be pleased to admit and allow the present petition;
(B). The Hon'ble Court be pleased to issue a writ of certiorari or any other appropriate writ, order or direction quashing and setting aside the impugned order dated 05.10.2018 passed by the respondent no. 1 at Annexure-A to the present petition and also quash and set aside the impugned order dated 19/20.03.2021 passed by the respondent no. 2 at Annexure-B to the present petition;
(C). pending hearing and final disposal of the present petition, the Hon'ble court be pleased to stay the further implementation, operation and execution of the impugned order dated 05.10.2018 passed by the respondent no. 1 at Annexure-A to the present petition and also the impugned order dated 19/20.03.2021 passed by the respondent no. 2 at Annexure-B to the present petition;
(D) Ad-interim relief in terms of Para- (C) above be granted;
(E) To grant such other and further reliefs as may be deemed fit and proper in the facts and circumstances of the case."
3. Brief facts for the adjudication of the present petition reads thus:
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NEUTRAL CITATION C/SCA/9437/2021 JUDGMENT DATED: 09/06/2023 undefined 3.1. The petitioner herein is a Cooperative Bank registered under the provision of the Multi State Cooperative Societies Act, 2002. At the time of initiating the proceedings by the respondent no.1, the petitioner bank was known as the Deesa Nagrik Sahakari Bank Limited and thereafter, having merged with Madhav Nagrik Sahakari Bank Limited, presently known as Adarsh Cooperative Bank Limited.
3.2. It is the case of the petitioner that Mr. Gautambhai Bhailalbhai Shah was the borrower of the erstwhile Deesa Nagrik Bank (which merged with the petitioner bank) and had withdrawn Rs. Rs.96,00,000/- from the bank by way of a local cheque. That after passing of time, the outstanding amount in the year 2001 was Rs.69,32,855/- and due to the financial crisis, the said borrower was unable to repay regularly, resultanlty executed one equitable mortgage deed with the bank and deposited the original title deeds of the property owned by him.
Since the borrower was facing huge financial crisis, he himself voluntarily surrendered the possession of the property to the bank to recover the outstanding amount. Against the said Page 3 of 29 Downloaded on : Sat Sep 16 20:06:20 IST 2023 NEUTRAL CITATION C/SCA/9437/2021 JUDGMENT DATED: 09/06/2023 undefined outstanding amount and for the bank safety, as per the advice received, the borrower while surrendering the property for recovery, has executed different agreements, viz. General Power of Attorney, Possession Agreement and Sale Agreement dated 24.05.2001 in favour of the petitioner bank. Copies of the same are duly produced at Annexure-D. While executing the said documents, it was mere formality to avoid allegation of illegally taking possession for recovery. The title of the property was never transferred upon the petitioner bank and because of that, the petitioner bank initiated Lavad Suit No. 1545 of 2001 against the borrower for recovery of outstanding amount before the Board of Nominees under Section 96 of the Gujarat Cooperative Societies Act, 1961.
3.3. The said suit came to be allowed in favour of the petitioner bank and the judgment and order was pronounced on 24.06.2002 that the petitioner bank can recover the amount due from the borrower with interest from all types of movable and immovable properties of the borrower. Pursuant to the decree in favour of the petitioner bank, the bank gave public advertisement Page 4 of 29 Downloaded on : Sat Sep 16 20:06:20 IST 2023 NEUTRAL CITATION C/SCA/9437/2021 JUDGMENT DATED: 09/06/2023 undefined in the newspaper inviting offer price to purchase the property and on receiving highest bidding price, the property has been sold to the bidder by registered sale deed by the Recovery Officer on 06.11.2007.
3.4. One Mr. Hemantbhai P. Shah, claiming himself to be the holder of agreement to sale for the aforesaid auctioned property of the borrower approached the office of the respondent no.2 and informed on 05.03.2015 that in the document executed between the bank and borrower on 24.05.2001, the appropriate stamp duty has not been used. Pursuant to the aforesaid communication, the respondent no.1 initiated proceedings under Section 39 of the Gujarat Stamp Act 1958 (for short 'the Act') and issued letter dated 25.03.2015 to the petitioner bank. 3.5. The respondent no.1 issued show cause notice to the petitioner bank for deficit stamp duty of Rs.1,24,010/- vide letter dated 09.08.2018. The petitioner herein filed written submission to the said show cause notice. The 2nd show cause notice came to be issued on 14.09.2018, after re-calculating the same deficit stamp duty.
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NEUTRAL CITATION C/SCA/9437/2021 JUDGMENT DATED: 09/06/2023 undefined 3.6. The respondent no.1 passed the impugned order, duly produced at Annexure-A to recover the deficit stamp duty of Rs.2,87,950/- and penalty of Rs.25,000/- from the petitioner bank, on 05.10.2018.
3.7. Being aggrieved by the said order passed by the respondent no.1, the petitioner preferred an Appeal under Section 53(1) of the Act to the respondent no.2, wherein, the said Appeal came to be rejected by the respondent no.2 vide impugned order dated 19.03.2021, whereby, the order passed by the respondent no.1 came to be confirmed.
3.8. Being aggrieved by the impugned orders passed by the respondent nos. 1 and 2 duly produced at Annexure-A and Annexure-B, the petitioner herein approached this Court for the reliefs as stated herein-above.
4. Heard Mr. Manan S. Shah, learned advocate appearing for the petitioner.
4.1. Mr. Shah, learned advocate vehemently submitted that Page 6 of 29 Downloaded on : Sat Sep 16 20:06:20 IST 2023 NEUTRAL CITATION C/SCA/9437/2021 JUDGMENT DATED: 09/06/2023 undefined the title of the property was neither transferred from the borrower to the bank nor any consideration was passed on, to the borrower in any form and the outstanding amount was the same, on the date of execution of documents in question and were executed to avoid allegation of forceful possession taken by the bank, and therefore, there is clear error apparent on the part of the respondents in applying Article-20 of the Act, in the facts of the present case.
4.2. Mr. Shah, learned advocate submitted that, the execution of agreements dated 24.05.2001 was mere formalities, as the subject property is under the equitable mortgage and the borrower was defaulter in repayment of the loan. It was submitted that the borrower voluntarily surrendered the possession for the recovery of outstanding amount and even otherwise, for the recovery of the outstanding amount, the bank has to take physical possession of the property as per the law, but in the facts of the present case, it was voluntarily surrendered by the borrower.
4.3. It was submitted that, it was erroneously held by the Page 7 of 29 Downloaded on : Sat Sep 16 20:06:20 IST 2023 NEUTRAL CITATION C/SCA/9437/2021 JUDGMENT DATED: 09/06/2023 undefined respondent authorities that the documents by which the title of the property is being transferred is mandatory and required to be registered and except that, it cannot be said as valid document. It was further submitted that the petitioner bank has instituted the suit against the borrower before the Board of Nominees and only after the judgment and award passed in favour of the petitioner bank, the said property was sold. The petitioner bank was never the owner of the subject property and even cannot be the owner of the property. The property was auctioned by the petitioner bank, pursuant to the right received from the judgment and award of the Lavad Suit.
4.4. Placing reliance on the same, it was submitted that the orders impugned passed by the respondent authorities are barred by the provisions of Section 32(A)(4) of the Gujarat Stamps Act, 1958, which bars any action that can be undertaken, once the document is registered, after a period six years. It was submitted that the document in question is of the year 2001 and the proceedings initiated by the respondent authorities are of the year 2018. It was submitted that, in view of bar under Section Page 8 of 29 Downloaded on : Sat Sep 16 20:06:20 IST 2023 NEUTRAL CITATION C/SCA/9437/2021 JUDGMENT DATED: 09/06/2023 undefined 32(A)(4) of the Act, the orders impugned passed by the respondent authorities were without jurisdiction. Mr. Shah, learned advocate placed reliance in this regard to the decision reported in the case of AIR 2019 Gujarat 26.
5. Heard Mr. Niraj Sharma, learned Assistant Government Pleader appearing for the respondent-State. 5.1. Mr. Niraj Sharma, learned AGP submitted that, though the facts are undisputed, the documents in question are of dated 24.05.2001, that the original owners executed the sale agreement, general power of attorney and possession deed in favour of the bank. It was submitted that the aforesaid documents were never registered nor brought to the notice of the Sub Registrar. Subsequently, the bank filed Lavad Suit No. 1545 of 2001 before the Board of Nominees for recovery of its dues, which came to be allowed on 24.06.2002. The property in question came to be advertised for sale on 14.05.2006 and sold to the highest bidder on 06.11.2007.
5.2. It was submitted that the said sale deed dated Page 9 of 29 Downloaded on : Sat Sep 16 20:06:20 IST 2023 NEUTRAL CITATION C/SCA/9437/2021 JUDGMENT DATED: 09/06/2023 undefined 06.11.2007 was silent so far as the transaction dated 24.05.2001 with regard to the general power of attorney, the agreement to sale and the possession deed executed by the borrower in favour of the original owner. It was submitted that, in absence of the knowledge, the respondent authorities could not have undertaken any steps against the petitioner herein. It was submitted that, having come to the knowledge of the office of the respondents, only in the year 2015, pursuant to the communication dated 05.03.2015 from Advocate Mr. Devesh Bhatt, on behalf of his client, Mr. Hemantbhai Shah, show cause notice came to be issued by the department on 25.03.2015 calling upon the documents from the petitioner bank to produce the original records / documents of Lavad Suit No. 1545 of 2001 before the Board of Nominees.
5.3. It was submitted that Notices came to be issued on 23.06.2015, 24.06.2015, 04.05.2018 and 27.06.2018. The hearing was also held on 09.08.2018, pursuant to which, another notice dated 09.08.2018 came to be issued demanding payment of deficit stamp duty of Rs.1,24,010/-. However, on noticing error Page 10 of 29 Downloaded on : Sat Sep 16 20:06:20 IST 2023 NEUTRAL CITATION C/SCA/9437/2021 JUDGMENT DATED: 09/06/2023 undefined in calculation of the stamp duty, which was demanded earlier, the competent authority issued further notices on 05.09.2018 and 14.09.2018 and fixed the hearing on 10.09.2018 and 24.09.2018 respectively.
5.4. It was submitted by Mr. Sharma, learned AGP that in spite of the earlier notices calling upon the petitioner for production of sale deed and possession deed executed between the original owner and the bank, the said documents were not supplied by the petitioner. It was informed by the petitioner bank that, in view of the on-going dispute with regard to the subject property, the said documents were placed on record before the Court of Civil Judge (Senior Division), Gandhinagar in Regular Civil Suit No. 162 of 2006, the said suit was pending. It was submitted that the office of the respondent herein received the sale agreement and possession deed, by making an application on affidavit before the said Court and consequently, the document in question came to be impounded. In view of the aforesaid, the respondent authorities is in possession of the documents in question.
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NEUTRAL CITATION C/SCA/9437/2021 JUDGMENT DATED: 09/06/2023 undefined 5.5. Considering the overall aspect, the order impugned dated 05.10.2018 came to be passed by the respondent no.1 - Deputy Collector, Stamp Duty Valuation Division, Gandhinagar, which came to be confirmed by the respondent no.2 - Chief Controller, Revenue Authority, Gandhinagar by order dated 19/20.03.2021.
5.6. It was submitted that in the document in question it was clearly stated that the subject property was free from all encumbrances. The terms and conditions of the sale deed and possession deed leave no scope for any ambiguity or interpretation that the said documents would stand covered within the meaning of Section 2, Clause (g) r/w. Section 2 (l) and Section 3, Explanation (i) r/w. Article 20 of Schedule - 1 of the Gujarat Stamp Act, 1958 as also Section 5 of the Transfer of Property Act, 1882.
5.7. It was submitted that the stamp authority is not concerned with the mode and manner in which the bank chooses to recover its dues, but the stamp authority is concerned, merely Page 12 of 29 Downloaded on : Sat Sep 16 20:06:20 IST 2023 NEUTRAL CITATION C/SCA/9437/2021 JUDGMENT DATED: 09/06/2023 undefined whether the documents which are executed between the parties satisfied the criteria for being chargeable to the stamp duty or not. It was submitted that, though the order was passed in Lavad Suit No. 1545 of 2001 on 24.06.2002, the advertisement by the bank for sale of the property came to be published as late as on 14.05.2006.
5.8. It was submitted that admittedly the property in the interregnum period was under the ownership of the bank, by virtue of the documents executed in the year 2001, and hence, the present case cannot be treated as identical to the cases where possession of the property is taken and sale is effected for the said purpose of recovery of dues.
5.9. It was submitted that no error could be said to have been committed by the respondent authorities in passing the impugned orders and in view of the aforesaid submissions, the petition may kindly be dismissed.
ANALYSIS:
6. Having heard the learned advocates appearing for the Page 13 of 29 Downloaded on : Sat Sep 16 20:06:20 IST 2023 NEUTRAL CITATION C/SCA/9437/2021 JUDGMENT DATED: 09/06/2023 undefined respective parties, following emerge for the consideration of this Court:
(a) . The petitioner herein is a Cooperative Bank registered under the provision of the Multi State Cooperative Societies Act, 2002. At the time of initiating the proceedings by the respondent no.1, the petitioner bank was known as the Deesa Nagrik Sahakari Bank Limited and thereafter, it merged with Madhav Nagrik Sahakari Bank Limited, which is presently known as Adarsh Cooperative Bank Limited.
(b). One Mr. Gautambhai Bhailalbhai Shah, who was the borrower of the erstwhile Deesa Nagrik Bank, which merged with the petitioner bank, had withdrawn around Rs. Rs.96,00,000/-
from the bank by way of a local cheque purchased. The outstanding amount in the year 2001 was Rs.69,32,855/-. Pursuant to the financial crises, the borrower was unable to repay regularly the installments, whereby, executing one equitable mortgage deed with the bank and deposited the original title deeds of the property owned by him by an agreement dated 05.10.2000. The borrower being under financial crisis, voluntarily Page 14 of 29 Downloaded on : Sat Sep 16 20:06:20 IST 2023 NEUTRAL CITATION C/SCA/9437/2021 JUDGMENT DATED: 09/06/2023 undefined surrendered the possession of the property to the bank to recover the outstanding dues by executing different agreements, viz. General Power of Attorney, Possession Agreement and Sale Agreement dated 24.05.2001 in favour of the bank. This Court has considered the documents which are produced on record i.e. general power of attorney is produced at page-32, relevant Para-8 reads thus:
"8. The deeds for sale, gift, mortgage or assigning the said property, can be prepared in the names as per their desire and can get the permissions of the society to do the same. They can prepare whatever documents required for deed or deeds for the sale, sureties, affidavit, bond, mortgage-deed, indemnity bond pertaining to the said land and they can prepare all such documents and make their signatures therein and can produce before the office of the sub-registrar, accept the consideration and admit the deed; moreover, they can complete the execution of the sale deed as per the Indian Registration Act, which have been signed by us, moreover, if any other supplementary deed or amendment deed are required with regard to the sale deed, they can execute and complete the same as per the Registration Act. Moreover, they can undertake procedure to handover the possession of the property to the purchaser and to obtain index copy of all such documents and they can also undertake procedure to transfer the said land to the person as desired by our power-of-attorney holder. They can obtain the consideration and give acceptance. They can give acceptance by making signature in the deeds. Our of power-of-attorney holder can under take all types of legal proceedings to transfer the said property in the name of the person he desires in such society or other required place and get the same transferred. Our power-of- attorney holder shall undertake all the works, procedures and correspondence which are required to be done or may arise as per the Indian Registration Act and Indian Stamp Act for the said property."Page 15 of 29 Downloaded on : Sat Sep 16 20:06:20 IST 2023
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(c). The possession deed is duly produced at Page-38 and the agreement to sale is duly produced at page-43, Para-5 and 10 of the said sale agreement reads thus:
"5. In this way, the land of the plot bearing the above number, measurement and corners has been handed over to you on the basis of absolute sale without any encumbrances, including the rights of the sky till the abyss, common rights of the said society, share capital rights, share certificate, the rights on the common plot of the said society, rights of passing with vehicles etc. from the margin land, rights of installing or passing water connection pipes, electrical wires, telephone wires, poles etc. from the said margin land, the rights for enjoying the common right admissible from the said society, responsibility to pay the common expenses and administrative expenses of the said society, responsibility to comply with the rules and regulations of the said society and all the original rights including other rights; and for that, we have taken Rs. 22,50,000-00/- in words rupees twenty two lakh fifty thousand only as per the details written below and the said property has been sold to you and the direct and vacant possession has been handed over to you. Hence, from today, you the purchaser, have become the occupant of the said property having similar rights and authorities like us.
10. Detail of sale consideration money received Rs.22,50,000/- Rupees Twenty Two Lakhs Fifty Thousand Only which is adjusted in I.B.P. The said amount to be considered as the amount of consideration.
------------------------------------------------------------------------------- Rs.22,50,000/-. Rupees Twenty Two Lakhs Fifty Thousand Only.
------------------------------------------------------------------------------- Accordingly, we have received total consideration money of sale price Rs.22,50,000/- Rupees Twenty Lakhs Fifty Thousand Only from you as per the above detail. We hereby give payment receipt for the same."Page 16 of 29 Downloaded on : Sat Sep 16 20:06:20 IST 2023
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(d). Pursuant to the aforesaid transaction, as referred above, the bank preferred Lavad Suit No. 1545 of 2001 before the Board of Nominees under Section 96 of the Gujarat Cooperative Societies Act, 1961, seeking the following reliefs:
"(A) Be pleased to execute the Decree against the Respondent and in the interest of the undersigned Appellant in the matter;
that regarding recovery amount due of Rs.63,32,152/- in words Rs.Sixty Three Lakh Thirty Two Thousand One Hundred and Fifty Two only and 22% accruing interest on the same for the period from date 01/10/2001 till its realization from the Respondent; in continuation of the Agreement for possession, etc. executed by the Respondent in favour of the Appellant - Bank and accordingly handing over to the Appellant - Bank w.e.f. 24/05/2001 possession of the property being that bearing Block No.162 paiki, in Sector- 'A', sub-plot no.18 admeasuring 1021 Sq.Mt., located in Alok Co-op. Ho. So. Ltd. (Suramya Society), At.Adalaj, Ta.Dist.Gandhinagar, having its four boundaries as under :
East : Sub-plot No. A-17.
West : Sub-plot No. A-19.
North : Sub-plot No. A-34.
South : There is a society Road.
To direct selling this property or getting the same sold by the Appellant - bank; further, to direct selling or getting sold, the property of the Respondent No.2 being Flat No: 3 located on ground floor known as Akshat Apartment, in Rajul Owners Association, by the Appellant - bank. Moreover, to direct the said recovery done by selling or getting the same sold all properties of the Respondents, by the Appellant - bank. (B) Be pleased to pass the order as to costs of this Suit from the Respondents.
(C) Be pleased to pass other reliefs deemed fit and property in the matter."
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(e). The said suit came to be allowed in favour of the petitioner bank by judgment and order dated 24.06.2002 passed by the Board of Nominees, whereby, passed the following order:
"The Respondents are hereby directed to pay the claimed amount of Rs.63,32,152/- and to pay total amount of simple interest on the same @19.5% for the period from date 01/10/2001 and in addition the costs of Rs.6000/- to the Appellant. In default of the same by the Respondents, the Appellant shall be entitled to recover the said amount by selling personal and entire nature of properties of Respondents and that mentioned in para-7(a) of the Suit application. The temporary injunction passed earlier vide Mark-6 is hereby confirmed till full recovery of the amount due for the Appellant. The amount of Rs.6000/- (In words Rs.Six Thousand only) as deposited by the Appellant in the matter, be deposited against Arbitration fees."
(f). Pursuant to the said order, the petitioner herein in the year 2006 issued a public notice for sale of the property in question by issuing public advertisement. Pursuant to the said public notice dated 14.05.2006, duly produced at page-59, after receiving the offers from the bidders, the petitioner bank entered into sale deed with the highest bidder on 05/06.11.2007 which is duly produced at pg-60. The said sale deed is also silent, so far as the transaction between the original borrower and the bank with regard to the possession deed and agreement to sale is Page 18 of 29 Downloaded on : Sat Sep 16 20:06:20 IST 2023 NEUTRAL CITATION C/SCA/9437/2021 JUDGMENT DATED: 09/06/2023 undefined concerned.
7. In the light of the aforesaid facts, it is apposite to refer to the orders impugned. The relevant paras and order dated 05.10.2018 passed by the respondent no.1, reads thus:
"It is true that on 24/05/2021, Deesa Nagrik Sahkari Bank Limited, now Adarsh Cooperative Bank Limited has got executed deed of the property i.e. Sub-Plot No.18 admeasuring 1021 Square Yard (853.68 Sq.Mtr) paiki Block No.162 of Alok Cooperative Society Limited i.e. Suramya Society, moje Adalaj, Taluka & District-Gandhinagar in its favour from Mr.Gautambhai Shah and Mrs.Paragiben Shah. Ld. Advocate of the said Bank has admitted this fact in his oral submission. The said sale agreement and possession agreement were entered into before the Securitization and Reconstruction of Financial Assests and Enforcement of Security Interest Act, 2002 came into force. Therefore, the provision of the said Act cannot be applied to the aforesaid sale agreement and possession agreement.
Considering Section-5 of Transfer of Property Act-1882 and Section-2(g) of the Gujarat Stamp Act-1958, it clearly transpires that the property has been transferred on the basis of sale agreement and possession agreement entered into by the bank between Mr.Gautambhai Shah and Mrs. Paragiben Shah. As per Article-20(a) of Schedule-1 of Gujarat Stamp Act-1958, in case of conveyance deed, the consideration amount for such conveyance or the market value of the property subject to such conveyance, as the case may be, is Rs.100/- each, whichever is higherr or stamp duty is leviable as per lot. In the present case, consideration amount of Rs.22,50,000/- has been mentioned in sale agreement. At that time, the existing stamp duty rate was 12.8%. Accordingly, Rs.2,88,000/- is recoverable. Adjusting stamp of Rs.50/- affixed by the bank against it, due stamp duty is Rs.2,87,950/- and upon adding penalty of Rs.25,000/- thereon as per Section-39(1)(b) of Gujarat Stamp Act-1958, total Rs.3,12,950/- has to be recovered.
Moreover, this order deals only with the matters affecting Page 19 of 29 Downloaded on : Sat Sep 16 20:06:20 IST 2023 NEUTRAL CITATION C/SCA/9437/2021 JUDGMENT DATED: 09/06/2023 undefined stamp duty. This means no opinion is given by this order regarding legality of the property, verification of illegality of the seller, ownership rights or any other facts relating to the title and legality of the property not affecting the stamp duty. Thus, any further action regarding the legality, registration and verification of this deed, the Competent Revenue Officer has to take into consideration the latest instructions received by him from the Government. Further, Sub-Registrar also has to take any further action regarding the registration thereof. In this regard, they have to take into consideration the last instructions received from the Government so that the said order cannot be entered into evidence for any purpose other than recovery of stamp duty.
Moreover, the aforesaid order has been passed by taking into consideration merits and evidences produced in the matter. The Competent Authority concerned will have to decide whether to enter the same as an evidence by taking into consideration similar merits and evidences produced in the matter. Taking into consideration the entire facts of this case, I find it suitable to pass the following order.
ORDER I, Shri J.M.Vegda, Deputy Collector, Stamp Duty Valuation Organization, Gandhinagar state that sale agreement signed on 24/05/2001 mentions consideration amount of Rs.22,50,000/-. Accordingly, after holding stamp duty of Rs.2,88,000/- levieable as per Article-20(a) of Schedule-1 of Gujarat Stamp Act-1958 and adjusting stamp duty of Rs.50/- affixed on the deed, I pass order to recover Rs.3,12,950/- (In words Rupees Three Lakh Twelve Thousand Nine Hundred Fifty only) including Rs.2,87,950/- towards stamp duty and Rs.25,000/- towards penalty under Section-39(1)(b) of Gujarat Stamp Act-1958 from Deesa Nagrik Sahkari Bank Limited (Now, Adarsh Cooperative Bank Limited), Madhupura Branch, Ahmedabad.
The aforesaid amount has to be deposited to the Government under the head of "0030 Stamp and Registration" within 90 days from the date of this order. Otherwise, from the date of this order, if the aforesaid amount is not repaid within stipulated time period, the same would have to be repaid with interest at the rate of 15 percent per annum.
If the party is aggrieved by the aforesaid order, as per Page 20 of 29 Downloaded on : Sat Sep 16 20:06:20 IST 2023 NEUTRAL CITATION C/SCA/9437/2021 JUDGMENT DATED: 09/06/2023 undefined provision of Section-53(1) of Gujarat Stamp Act-1958, Appeal can be made before Appellate Authority Chief Controlling Revenue Authority, State of Gujarat, Stamp and Registration Bhavan, First floor, Sector-14, Near Kh-5 Circle, Gandhinagar.
Sealed and signed today i.e. on 05/10/2018."
8. The order passed by the respondent no.2 dated 19.03.2021 reads thus, by which the order dated 05.10.2018 passed by the respondent no.1 came to be confirmed by the respondent no.2:
"ORDER I, Dinesh Patel (I.A.S.), Chief Controlling Revenue Authority, Gujarat State, Gandhinagar by virtue of powers vested on me under Section-53(1) of the Gujarat Stamp Act 1958, for the reasons stated above, hereby confirm the order passed by the Deputy Collector, Stamp Duty Valuation Organization, Gandhinagar vide order No./STAMP/ TAPASANI/F.No.118/15/VASHI/4215/17/2018, dated 05/10/2018 regarding the property located at mauje Adalaj, Taluka & District Gandhinagar, Block No. 162 Paiki Sector No.A, Sub Plot No.18 having 1021 Sq.mtrs situated in Alok Co. Op. Hsg. Soc. Ltd. (Surmya Society), directing to make payment of a deficit stamp duty Rs.2,87,950/- on the amount of consideration R.22,50,000/- mentioned in sale agreement executed on 24/05/2001 in favour of Disa Nagarik Cooperative Bank L. (At present Aadarsh Co.op. Bank L.) Madhupura Branch, Ahmedabad by Shri Gautambhai Bhailalbhai Shah and Smt. Paragiben Gautambhai Shah, in addition penalty of Rs.25,000/-, thereby total amount of Rs.3,12,950/- under Section-39(1)(B) of the Gujarat Stamp Act, 1958 and I dismiss an appeal dated 04/01/2019 of applicant Shri Disa Nagarik Cooperative Bank L. and presently known as Aadarsh Cooperative Bank Ltd., preferred under section-53(1) of the Gujarat Stamp Act, 1958.
Given under my signature and seal on this 19th March year Page 21 of 29 Downloaded on : Sat Sep 16 20:06:20 IST 2023 NEUTRAL CITATION C/SCA/9437/2021 JUDGMENT DATED: 09/06/2023 undefined 2021."
9. It is apposite to refer to Section 2(g), 2(l), Section-3, Article-20(a), Explanation-1 of the Gujarat Stamp Act and Section 5 of the Transfer of Property Act, which read thus:
"9.1. 2(g) "Conveyance" includes,-
(i) a conveyance on sale, (ії) every instrument,) every instrument,
(iii) every decree or final order of any Civil Court;
(iv) every order made by the National Company Law Tribunal under section 232 of the Companies Act, 2013 (18 of 2013) in respect of a scheme for reconstruction of the company or companies involving merger or the amalgamation of any two or more companies and every order made by the Reserve Bank of India under section 44A of the Banking Regulation Act, 1949 (10 of 1949) in respect of amalgamation or dissolution of Banking companies, or.]
(v) any writing or letter of allotment in respect of the premises, given to its members or allottee by a co-operative society registered or deemed to have been registered under the Gujarat Co-operative Societies Act, 1961 (Guj. X of 1962), or a corporation or an association formed and registered under the Bombay Non-Trading Corporation Act, 1959 (Bom. XXVI of 1959) or the Gujarat Ownership Flat Act, 1973 (Guj. 13 of 1973) as the case may be.] by which property, whether movable or immovable, or any estate or interest in any property is transferred to, or vested in, any other person, inter vivos, and which is not otherwise specifically provided for by Schedule I;
9.2. 2(l) "instrument" includes every document by which any right or liability is, or purports to be created, transferred, limited, extended, extinguished or recorded, but does not include a bill of exchange, cheque, promissory note, bill of lading, letter of credit, policy of insurance, transfer of share, debenture, proxy and receipt;
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NEUTRAL CITATION C/SCA/9437/2021 JUDGMENT DATED: 09/06/2023 undefined 9.3. 3. Instruments chargeable with duty. Subject to the provisions of this Act and the exemptions contained in Schedule I, the following instruments shall be chargeable with duty of the amount indicated in Schedule I as the proper duty therefore respectively, that is to say-
(a) every instruments mentioned in Schedule I, which, not having been previously executed by any person, is executed in the State on or after the date of commencement of this Act; [(aa) every instrument mentioned in Schedule I, which not having been previously executed by or on behalf of or in favour of the Government or any local authority, is executed by or on behalf or in favour of the Government or any local authority]
(b) every instrument mentioned in Schedule I, which, not having been previously executed by any person, is executed out of the State on or after the said date, relates to any property situate, or to any matter or thing done or to be done in this State and is received in this State:
Provided that no duty shall be chargeable in respect of-
(1) any instrument executed by or on behalf of, or in favour of, the Government in cases where, but for this exemption, the Government would be liable to pay the duty chargeable in respect of such instrument;
(2) any instrument for the sale, transfer or other disposition, either absolutely or by way of mortgage or otherwise of any ship or vessel, or any part, interest, share or property of or in ship or vessel registered under the Bombay Coasting Vessels Act, 1838 (XIX of 1938), or the Indian Registration of Ships Act, 1841 (X of 1941).
9.4. Article-20 (a).
Description of Instrument Proper Stamp Duty CONVEYANCE not being a (Three Rupees and fifty transfer charged or paise) for every Rs.100 or exempted (under Article part thereof of the amount No. 56, relating to of the consideration for immovable property.) such conveyance or, as Exemption the case may be, the Page 23 of 29 Downloaded on : Sat Sep 16 20:06:20 IST 2023 NEUTRAL CITATION C/SCA/9437/2021 JUDGMENT DATED: 09/06/2023 undefined Assignment of copyright market value of the by entry made under the property which is the Copyright Act, 1957 (XIV subject matter of such of 1957.) conveyance whichever is greater.
Explanation I - For the purpose of this Article (and subject to sub-item (a) of item (i) of clause (1) of article 45), an agreements to sell an immovable property or an irrevocable power of attorney shall, in case of transfer of the possession of such property before, at the time of, or after the execution of such agreement or power of attorney, be deemed to be a conveyance and the stamp duty thereon shall be chargeable accordingly:
Provided that the provisions of section 32 - A shall apply mutatis mutandis to such agreement or power of attorney as are applicable to a conveyance:
Provided further that where subsequently a conveyance is executed in pursuance of such agreement of sale, or an irrevocable power of Attorney, the stamp duty, It any, already paid and recovered on the agreement of sale or an irrevocable power of Attorney which is deemed to be a conveyance, shall be adjusted towards the total duty leviable on the conveyance.]"
9.5. 5. 'Transfer of property' defined: In the following sections, "transfer of property" means an act by which a living person conveys property, in present or in future, to one or more other living persons, or to himself, (or to himself) and one or more other living persons; and "to transfer property" is to perform such act."
10. Considering the aforesaid, the respondent authority considered the amount of Rs.22,50,000/- in accordance with the sale agreement dated 24.05.2001, wherein, the amount of sale is referred to at pg.47 in Paragraph-10 is mentioned as Rs.22,50,000/-.Page 24 of 29 Downloaded on : Sat Sep 16 20:06:20 IST 2023
NEUTRAL CITATION C/SCA/9437/2021 JUDGMENT DATED: 09/06/2023 undefined
11. Considering the aforesaid document, the respondent authority considered it as a sale and levied stamp duty to the tune of Rs.2,87,950/- and imposed the penalty of Rs.25,000/- and Rs.50/- came to be deducted for the stamp used by the bank, and therefore, total duty payable came to be Rs.3,12,950/-.
12. The respondent no.1 has considered the said document as sale agreement and considering the same, the respondent authority levied the stamp duty as per Article 20(a) of Schedule-I of the Gujarat Stamp Act, 1958 on the ground that the subject property was transferred on the basis of the sale agreement and possession agreement entered into between the petitioner bank and Mr. Gautambhai Shah and Mrs. Pragiben Shah and the same would resultantly be a conveyance deed. On the aforesaid consideration, the respondent authority took into consideration the amount of Rs.22,50,000/- as mentioned in the said agreement and accordingly, levied stamp duty recoverable to the tune of Rs.2,88,000/- @ 12.8% adjusting Rs.50/- affixed by the bank, against the stamp duty due and payable being Rs.2,87,950/- and added penalty of Rs.25,000/- under the Page 25 of 29 Downloaded on : Sat Sep 16 20:06:20 IST 2023 NEUTRAL CITATION C/SCA/9437/2021 JUDGMENT DATED: 09/06/2023 undefined provision of Section 39(1)(b) of the Act. The total amount of the stamp duty payable being Rs.3,12,950/-.
13. Considering the aforesaid, the documents in question i.e. power of attorney, sale agreement and possession deed were never produced before the concerned respondent authority at any stage. The petitioner bank while entering into the sale deed with the highest bidder, pursuant to the order passed in Lavad Suit No. 1545 of 2001 and after holding the auction, while entering into the sale deed on 06.11.2007, the said sale deed is also silent qua the aforesaid documents which are in question. Undisputedly the said documents were never in the custody of the concerned respondent authority, as the said documents were never registered before the concerned respondent authority, and therefore, the concerned respondent authority could not have initiated any action in absence of any knowledge qua the aforesaid transaction. On coming to the knowledge in the year 2015, the respondent No.1 initiated inquiry and after affording hearing and considering the documents on record, the orders impugned came to be passed. It is the case of the petitioner Page 26 of 29 Downloaded on : Sat Sep 16 20:06:20 IST 2023 NEUTRAL CITATION C/SCA/9437/2021 JUDGMENT DATED: 09/06/2023 undefined herein that there is no transfer of rights. The aforesaid arrangement was only to facilitate the borrower, who voluntarily wanted to surrender the possession of the property to the bank to recover the outstanding dues of the borrower and that the said transaction was not amenable to stamp duty does not weigh with this Court.
14. No error can be said to have been committed by the respondent authorities in passing the orders impugned, in view of the fact that the said documents having never been registered with the respondent authorities, the bar of Section 32(A)(4) of the Act would not operate. In the opinion of this Court, the documents in question, i.e. general power of attorney, agreement to sale and possession deed, for which the notice was issued are amenable of paying the stamp duty, the same having been executed for consideration of Rs.22,50,000/- as can be inferred from the said documents as referred above. The said documents would also stand covered within the meaning of Section 2 (g) r/ w. Section 2 (l) and Section 3 and Article 20(i) of the Schedule-I of the Gujarat Stamp Act as well as Section 5 of the Transfer of Page 27 of 29 Downloaded on : Sat Sep 16 20:06:20 IST 2023 NEUTRAL CITATION C/SCA/9437/2021 JUDGMENT DATED: 09/06/2023 undefined Property Act. The decision relied upon by the petitioner i.e. AIR 2019 Gujarat 26 would not be applicable in the facts of the present case. The documents having not been registered with the respondent authorities, it was only when it came to the knowledge of the respondent authorities, the respondent authorities would invoke the provision of Section 33 of the Act and initiate the action against the petitioner herein. It is also not in dispute that the documents in question are also in possession of the respondent authorities.
15. In view of above, in the opinion of this Court, the document in question being sale agreement dated 24.05.20021 is an instrument falling under the definition of 'conveyance' under Article-20(a) of the Gujarat Stamp Act, wherein, there is transfer by Mr. Gautambhai Bhailalbhai Shah and Mrs. Paragiben Gautambhai Shah in favour of the petitioner bank for the consideration of Rs.22,50,000/- within the meaning of Section 5 of the Transfer of Property Act. It is an instrument, where duty is payable for the conveyance in accordance with Article-20(a) r/ w. Explanation -1 and Section 39(1)(b) of the Gujarat Stamp Act Page 28 of 29 Downloaded on : Sat Sep 16 20:06:20 IST 2023 NEUTRAL CITATION C/SCA/9437/2021 JUDGMENT DATED: 09/06/2023 undefined and Section 5 of the Transfer of Property Act. Once the said document falls under the aforesaid domain, the same is for a consideration of Rs.22,50,000/-, on which the stamp duty is levied and the said document being covered under the definition of 'conveyance', the same would be covered under Explanation-1 of Article-20(a) of Schedule-1 of the Act. No interference is called for exercising extraordinary and / or supervisory jurisdiction under Articles 226 and / or 227 of the Constitution of India in the impugned orders passed by the respondent authorities, having levied the stamp duty under Article-20 (a) Explanation-1 of Schedule-1 r/w. Section 39(1)(b) of the Gujarat Stamp Act.
With the aforesaid reasons, the present petition fails and is accordingly dismissed. Rule discharged.
(VAIBHAVI D. NANAVATI,J) Pradhyuman Page 29 of 29 Downloaded on : Sat Sep 16 20:06:20 IST 2023