Bombay High Court
Mr. Gautam P Budhrani Director Budhrani ... vs The State Of Maharashtra Through ... on 4 August, 2023
Bench: G.S. Patel, Neela Gokhale
2023:BHC-AS:22214-DB 911-ASWP-1211-2023.DOC
Arun
IN THE HIGH COURT OF JUDICATURE AT BOMBAY
CIVIL APPELLATE JURISDICTION
WRIT PETITION NO. 1211 OF 2023
Gautam P Budhrani Director Budhrani ...Petitioner
Knowledge Pvt Ltd
Versus
The State of Maharashtra Through Industries ...Respondents
Dept & Revenue Dept & Ors
Ms Minal Chandnani, i/b JS Chandnani, for the Petitioner.
Ms PN Diwan, AGP, for State.
CORAM G.S. Patel &
Neela Gokhale, JJ.
DATED: 4th August 2023
PC:-
1. On 31st July 2023 we passed an order which we now reproduce since it summarises the history of this matter.
"1. On 21st March 2023 the following order came to be passed by this Division Bench.
ARUN RAMCHANDRA SANKPAL "1. On the statement of the Petitioner that he is willing to pay the stamp duty on Digitally signed by ARUN RAMCHANDRA SANKPAL the auction purchase of the sale property Date: 2023.08.05 15:12:20 +0530 and to communicate this figure to the 3rd Respondent, the 3rd Respondent through its Advocate will take the necessary steps to Page 1 of 16 4th August 2023 ::: Uploaded on - 05/08/2023 ::: Downloaded on - 06/08/2023 02:05:59 ::: 911-ASWP-1211-2023.DOC have the land records mutated in favour of the Petitioner.
2. The Petition is disposed of with these directions. There will be no order as to costs."
2. Clearly the Petitioner was represented, and that too by a Senior Advocate, and the statement that was recorded was on behalf of the Petitioner.
3. No application was made to us at any time for a clarification, modification, recall or review of this order. A Special Leave Petition was filed and on that Special Leave Petition No. 7592 of 2023, on 8th May 2023, the Supreme Court made the following order:
" Mr Vinay Navare, the learned senior counsel submits that as the statement of the petitioner before the High Court was on misunderstanding of the law on the issue of payment of stamp duty on the auction purchase of the property, the petitioner be permitted to withdraw the Special Leave Petition and move the High Court.
The Special Leave Petition accordingly stands dismissed as not pressed, reserving the liberty as aforesaid.
In case of an adverse order, the petitioner has the liberty to move this Court again against the present impugned order as well as the order that may now be passed by the High Court."
4. Today before us a most astonishing submission is made. We are told first that the learned Senior Advocate who appeared on 21st March 2023 "did not have instructions to make that statement". That is not what the Supreme Court was told. As a matter of course, we rely on Page 2 of 16 4th August 2023 ::: Uploaded on - 05/08/2023 ::: Downloaded on - 06/08/2023 02:05:59 ::: 911-ASWP-1211-2023.DOC statements made by all Counsel at our Bar, whether senior or not, and we do not in every case require Counsel to obtain specific written instructions. We proceed, as we believe we are entitled to do, that appearing advocates have the necessary authority to act, appear, plead and compromise a matter. Those are the words of a Vakalatnama.
5. Even more disturbing is the attempt that is now made to rewrite the order of the Supreme Court. The submission before the Supreme Court as recorded in the order is that there was a 'misunderstanding' on the part of the Petitioner as to the law on the issue of payment of stamp duty on the auction purchase of the property. Instead of this plain reading of the Supreme Court order, we are told that what the Supreme Court order 'actually means' is that the Senior Counsel before us on 21st March 2023 'did not have instructions or authority' from the Petitioner. This attempt to rewrite an order of the Supreme Court and to add words to it that do not exist is most unfortunate and highly regrettable. We will not permit this.
6. We will read the order for what it says without inserting a single word into it.
7. It is true that the Petitioner has, pursuant to leave of the Supreme Court approached us. But we believe we would be well within our rights to now insist that the entire amount of disputed stamp duty be deposited in Court at the earliest. If the Petition fails, there is no reason why the State Government should then have to take difficult and complicated steps to recover stamp duty. There is after all the statement on 21st March 2023, and we only have the assertion by the Petitioner that he had not instructed Senior Counsel to make that statement, and that too an assertion made well after the event.
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8. We are now told something that is even more amazing viz., that the Petitioner does not even know what stamp duty is to be paid on the sale certificate in respect of the property that was sold at the auction. Ms Diwan, learned AGP, will urgently take instructions and will communicate the amount of stamp duty by the end of the day tomorrow to the Advocates who are now appearing for the Petitioner, the earlier Advocates evidently having been discharged.
9. The entire amount of stamp duty is to be brought into Court on or before 2nd August 2023.
10. The matter is to be listed first on board for compliance on 4th August 2023.
11. The fresh Vakalatnama is to be filed in the Registry by the end of the day tomorrow."
(Emphasis added)
2. Since then, Ms Diwan, learned AGP, has communicated the amount of stamp duty to Ms Chandnani. The amount is Rs 6,16,28,016.
3. Ms Chandnani's instructions are that the Petitioner is unable to pay this amount.
4. She submits that a sale certificate generally is not required to be stamped. For this proposition, she relies on the decision of the Supreme Court in The Inspector General of Registration And Anr v G Madhurambal And Anr.1 That order was made on 11th November 2022 and it reads thus:
1 SLP (C) No. 16949/2022, decided on 11th November 2022.Page 4 of 16
4th August 2023 ::: Uploaded on - 05/08/2023 ::: Downloaded on - 06/08/2023 02:05:59 ::: 911-ASWP-1211-2023.DOC "Learned counsel for the petitioner(s) has made a valiant endeavour 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- Nissa (Manu/UP/0089/1883) 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. specific. General Manager and Authorised Officer, Canara Bank, (2021) 11 SCC 537. 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 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 1 Manu/UP/0089/1883 2 (2021) 11 SCC 537 2 3 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.
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 Page 5 of 16 4th August 2023 ::: Uploaded on - 05/08/2023 ::: Downloaded on - 06/08/2023 02:05:59 ::: 911-ASWP-1211-2023.DOC next time.
The needful be done in terms of the impugned judgment(s) within 15 days from today.
The special leave petitions are dismissed. Pending applications stand disposed of."
(Emphasis added)
5. The argument that no stamp duty is ever payable on a sale certificate is misconceived. Indeed, the entire Petition is misconceived. It conflates the requirements of registration under Section 17 of the Registration Act, 1908 with the assessment to levy of stamp duty on an instrument under the Maharashtra Stamp Act, 1958. The argument seems to be that if the document is not registrable then it cannot be stamped under the State Stamp Act.
6. The submission has to be stated to be rejected. There are many documents that are not compulsorily registrable under the Registration Act, 1908. Yet they are assessed to stamp duty under the Maharashtra Act. An example would be one of any number of documents relating to the sale or purchase of movables.
7. Stamp duty attaches to an instrument. Instrument is defined in Section 2(l) of the Maharashtra Stamp Act, 1958 in an inclusive, that is to say not exhaustive, definition. It reads thus:
"(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, Page 6 of 16 4th August 2023 ::: Uploaded on - 05/08/2023 ::: Downloaded on - 06/08/2023 02:05:59 ::: 911-ASWP-1211-2023.DOC transfer of share, debenture, proxy and receipt;
Explanation.--The term "document" also includes any electronic record as defined in clause (t) of sub-section (1) of section 2 of the Information Technology Act, 2000."
8. Entry or Article 16 of Schedule I to the Maharashtra Stamp Act, 1958 deals specifically with a certificate of sale. The Entry reads as follows:
16. CERTIFICATE OF The same duty as is SALE (in respect of each leviable on a Conveyance property put up as a separate under clause (a), (b) or lot and sold) granted to the (c) as the case may be, of purchaser of any property Article 25 on the market sold by public auction by a value of the property.
Civil or Revenue Court, or Collector or other Revenue Officer or any other officer empowered by law to sell property by public auction.
(Emphasis added)
9. Ms Diwan also points out that the argument completely overlooks the Maharashtra amendment to Section 17 of the Registration Act, 1908. We reproduce Section 17 entirely and, in boldface and italics show the three clauses (f ), (g) and (h) added by Maharashtra Act X of 2012.2 2 There is a typographical error in the commercially printed copy of the bare Act regarding this State Amendment. It incorrectly states that the amendment is to Section 17(2). That cannot be; FOR Section 17(2) has no clause (e). The Maharashtra Government Gazette of 25th May 2012 sets out the amendment as being to Section 17(1). A PDF of the Gazette is available Page 7 of 16 4th August 2023 ::: Uploaded on - 05/08/2023 ::: Downloaded on - 06/08/2023 02:05:59 ::: 911-ASWP-1211-2023.DOC "17. Documents of which registration is compulsory.
--(1) The following documents shall be registered, if the property to which they relate is situate in a district in which, and if they have been executed on or after the date on which, Act No. XVI of 1864, or the Indian Registration Act, 1866, or the Indian Registration Act, 1871, or the Indian Registration Act, 1877, or this Act came or comes into force, namely:--
(a) instruments of gift of immovable property;
(b) other non-testamentary instruments which purport or operate to create, declare, assign, limit or extinguish, whether in present or in future, any right, title or interest, whether vested or contingent, of the value of one hundred rupees and upwards, to or in immovable property;
(c) non-testamentary instruments which acknowledge the receipt or payment of any consideration on account of the creation, declaration, assignment, limitation or extinction of any such right, title or interest; and
(d) leases of immovable property from year to year, or for any term exceeding one year, or reserving a yearly rent;
(e) non-testamentary instruments transferring or assigning any decree or order of a Court or any award when such decree or order or award purports or operates to create, declare, assign, limit or extinguish, whether in present or in future, any right, title or interest, whether vested or contingent, of the value of one hundred rupees and upwards to or in immovable property;
( f ) agreement relating to the Deposit of title deeds, where such deposit has been made by way of security online: https://igrmaharashtra.gov.in/writedata/PDF/Amendment%20X%20of %2012.pdf Page 8 of 16 4th August 2023 ::: Uploaded on - 05/08/2023 ::: Downloaded on - 06/08/2023 02:05:59 ::: 911-ASWP-1211-2023.DOC for the repayment of a loan or an existing or future debts;
(g) sale certificate issued by any competent officer or authority under any recovery Act;
(h) irrevocable Power of Attorney relating to transfer of immovable property in any way, executed on or after the commencement of the Registration (Maharashtra Amendment) Act, 2010.
Provided that the State Government may, be order published in the Official Gazette, exempt from the operation of this sub-section any lease executed in any district, or part of a district, the terms granted by which do not exceed five years and the annual rents reserved by which do not exceed fifty rupees.
(1A) The documents containing contracts to transfer for consideration, any immovable property for the purpose of section 53A of the Transfer of Property Act, 1882 (4 of 1882) shall be registered if they have been executed on or after the commencement of the Registration and Other Related Laws (Amendment) Act, 2001 (48 of 2001) and if such documents are not registered on or after such commencement, then, they shall have no effect for the purposes of the said section 53A.
(2) Nothing in clauses (b) and (c) of sub-section (1) applies to--
(i) any composition deed; or
(ii) any instruments relating to shares in a joint stock Company, notwithstanding that the assets of such Company consist in whole or in part of immovable property; or
(iii) any debenture issued by any such Company and not relating, declaring, assigning, limiting or extinguishing any right, title or interest, to or in immovable property except in so far as it entitles the holder to the Page 9 of 16 4th August 2023 ::: Uploaded on - 05/08/2023 ::: Downloaded on - 06/08/2023 02:05:59 ::: 911-ASWP-1211-2023.DOC security afforded by a registered instrument whereby the Company has mortgaged, conveyed or otherwise transferred the whole or part of its immovable property or any interest therein to trustees upon trust for the benefit of the holders of such debentures; or
(iv) any endorsement upon or transfer of any debenture issued by any such Company; or
(v) any document other than the documents specified in sub-section (1A) not itself creating, declaring, assigning, limiting or extinguishing any right, title or interest of the value of one hundred rupees and upwards to or in immovable property, but merely creating a right to obtain another document which will, when executed, create, declare, assign, limit or extinguish any such right, title or interest; or
(vi) any decree or order of a Court except a decree or order expressed to be made on a compromise and comprising immovable property other than that which is the subject-matter of the suit or proceeding; or
(vii) any grant of immovable property by Government; or
(viii) any instrument of partition made by a Revenue-Officer; or
(ix) any order granting a loan or instrument of collateral security granted under the Land Improvement Act, 1871, or the Land Improvement Loans Act, 1883; or
(x) any order granting a loan under the Agriculturists, Loan Act, 1884, or instrument for securing the repayment of a loan made under that Act; or (xa) any order made under the Charitable Endowments Act, 1890 (6 of 1890), vesting any property in a Treasurer of Charitable Endowments or divesting any such Treasurer of any property; or Page 10 of 16 4th August 2023 ::: Uploaded on - 05/08/2023 ::: Downloaded on - 06/08/2023 02:05:59 ::: 911-ASWP-1211-2023.DOC
(xi) any endorsement on a mortgate-deed acknowledging the payment of the whole or any part of the mortgage-money, and any other receipt for payment of money due under a mortgage when the receipt does not purport to extinguish the mortgage; or
(xii) any certificate of sale granted to the purchaser of any property sold by public auction by a Civil or Revenue-Officer.
[Explanation.-- A document purporting or operating to effect a contract for the sale of immovable property shall not be deemed to require or ever to have required registration by reason only of the fact that such document contains a recital of the payment of any earnest money or of the whole or any part of the purchase money. (3) Authorities to adopt a son, executed after the 1st day of January, 1872, and not conferred by a will, shall also be registered."
(Emphasis added)
10. Broadly stated, sub-section (1) of Section 17 deals with documents that are liable to be registered while sub-section (2) deals with those that are exempted from registration. Section 17(2)(xii) refers to a sale certificate granted to a purchase of any property that is sold by public auction by Civil or Revenue officer.
11. But the Maharashtra amendment deals specifically in newly added sub-clause (g) of a sale certificate issued by any competent officer or authority under any Recovery Act being compulsorily registrable.
12. In this case, there is no doubt and in fact the entire Petition proceeds on the basis that the Petitioner is the purchaser at an Page 11 of 16 4th August 2023 ::: Uploaded on - 05/08/2023 ::: Downloaded on - 06/08/2023 02:05:59 ::: 911-ASWP-1211-2023.DOC auction purchase by an asset reconstruction company of an immovable property that was secured to the Saraswat Cooperative Bank by one Glodyne Technoserve Limited. A sale certificate was issued in these recovery proceedings on 12th February 2018. The amended Section (g) of the Maharashtra amendment to the Registration Act, 1908 will therefore apply. It is not challenged before us.
13. Once this is so, we see no reason why Entry or Article 16 of Schedule I to the Maharashtra Act should be completely ignored as the Petitioner seeks to do. There is no doubt that the Petitioner's sale certificate is covered by Entry 16 of the Schedule to the Stamp Act. This speaks of such a sale certificate as is granted to the purchase of any property sold by a Civil or Revenue Court or Collector or other revenue officer or any other officer empowered by law to sell property by public auction. This is conceivably even wider than the definition under the Maharashtra amendment to the Registration Act, 1908 in sub-clause 17(1)(g). Thus, unlike the case that came up to the Supreme Court from the Madras High Court, the sale certificate in question is in fact registrable under Section 17(1)(g), following the Maharashtra amendment; and it is also covered by Article 16 of Schedule I to the Maharashtra Stamp Act.
14. It is to be noted that in the Supreme Court case that came up from the Madras High Court there was no provision corresponding to the Maharashtra amendment that was under consideration.
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15. Having regard to the statement that Ms Chandnani makes on instructions now, in our view there is no cause for interference.
16. The reliefs that the Petitioner seeks are set out at pages 23 to 24 and they read as follows:
"(a) That by an Order of this Hon'ble Court, the records and proceedings in respect with the public auction conducted by the Respondent No.4 and Sale Certificate Dt 12.02.2019 issued by the Respondent No.4 in respect with plot bearing No.38 situated at Rajiv Gandhi Infotech Park, Hinjewadi, Pune 57 admeasuring 1,13,002 sq ft alongwith the structure standing thereon admeasuring 51,634 sq ft (built-up) be called for from the office of the Respondent No.4;
(b) That by an Order of this Hon'ble Court the Respondent Authorities be directed to mutate the name of the Petitioner in the necessary books of records as owner of the plot bearing No.38 situated at Rajiv Gandhi Infotech Park, Hinjewadi, Pune 57 admeasuring 1,13,002 sq ft alongwith the structure standing thereon admeasuring 51,634 sq ft (build-up) as per the Sale Certificate Dt 12.02.2018 forthwith;
(c) That by an order of this Hon'ble Court, the Respondents be restrained from initiating any civil and/or criminal proceedings against the Petitioner for not registering the sale certificate Dt 12.02.2018 issued by the Respondent No.4 in respect with the plot bearing No.38 situated at Rajiv Gandhi Infotech Park, Hinjewadi, Pune 57 admeasuring 1,13,002 sq ft alongwith the structure thereon admeasuring 51,634 sq ft (built-up)"Page 13 of 16
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17. The challenge in the Petition is to the inaction in acting upon the Petitioner's representation for mutating the names in the relevant land revenue records. Reference is made to Section 89 of the Registration Act, 1908. We do not see how, in light of the foregoing discussion, this assists the Petitioner. Section 89 reads thus:
"89 Copies of certain orders, certificates and instruments to be sent to registering officers and filed.--
(1) Every officer granting a loan under the Land Improvement Loans Act, 1883 (19 of 1883), shall send a copy of his order to the registering officer within the local limits of whose jurisdiction of whole or any part of the land to be improved or of the land to be granted as collateral security, is situate, and such registering officer shall file the copy in his Book No. 1.
(2) Every Court granting a certificate of sale of immovable property under the Code of Civil Procedure, 1908 (19 of 1883), shall send a copy of such certificate to the registering officer within the local limits of whose jurisdiction the whole or any part of the immovable property comprised in such certificate is situate, and such officer shall file the copy in his Book No. 1. (3) Every officer granting a loan under the Agriculturists' Loans Act, 1884 (12 of 1884), shall send a copy of any instrument whereby immovable property is mortgaged for the purpose of securing the repayment of the loan, and, if any such property is mortgaged for the same purpose in the order granting the loan, a copy also or that order, to the registering officer within the local limits of whose jurisdiction the whole or any part of the property so mortgaged is situate, and such registering officer shall file the copy or copies as the case may be, in his Book No. 1.Page 14 of 16
4th August 2023 ::: Uploaded on - 05/08/2023 ::: Downloaded on - 06/08/2023 02:05:59 ::: 911-ASWP-1211-2023.DOC (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 office shall file the copy in his Book No. 1."
18. This Section therefore sets out the certain ministerial acts that are to be performed in the transmission of copies of certain orders, certificates and instruments to registering officers. The Section does not exclude the operation of Section 17 of the Registration Act as amended in Maharashtra nor the operation of the Maharashtra Stamp Act, 1958.
19. The entire case of the Petitioner especially in grounds (e) to
(i) is that the Petitioner is entitled to a mutation and a transfer of the land records in his name bypassing the provisions of the registration under the Maharashtra amendment to Section 17(1) of the Registration Act and without paying any stamp duty at all.
20. As we noted on the last occasion, we did not even ask the Petitioner to make payment into the stamp office. We only asked that the amount be brought to Court. If the Petitioner was found to be correct that entire amount would have been returned to the Petitioner. But we are now told that the Petitioner cannot pay any amount at all towards stamp duty. In other words, we are being asked to somehow carve out an exception to Article 16 of Schedule 1 to the Maharashtra Stamp Act, 1958. In our view, that would be entirely illegal and contrary to the statute.
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21. The Petition is dismissed with no order as to costs.
22. Ms Chandnani's Vakalatnama will be filed by Monday, 7th August 2023.
(Neela Gokhale, J) (G. S. Patel, J) Page 16 of 16 4th August 2023 ::: Uploaded on - 05/08/2023 ::: Downloaded on - 06/08/2023 02:05:59 :::