Madras High Court
The Secretary To Government vs Tvl. Evergreen Enterprises on 25 January, 2018
Bench: S.Manikumar, V.Bhavani Subbaroyan
IN THE HIGH COURT OF JUDICATURE AT MADRAS DATED: 25/1/2018 C O R A M The Honourable Mr.Justice S.Manikumar a n d The Honourable Mr.Justice V.Bhavani Subbaroyan Writ Appeal No.20 of 2018 The Secretary to Government (Additional) State of Tamil Nadu Industries Department Fort St George Chennai 600 009. ... Appellant Vs Tvl. Evergreen Enterprises rep. By its Managng Partner R.Sabapathy 113 B Kailash Nagar Fairlands Salem 636 016. ... Respondent Prayer Appeal filed under Clause 15 of Letters Patent against the order dated 30/6/2014, made in W.P.No.31469 of 2012. For appellant ... Mr.J.Ramesh Additional Government Pleader - - - - - - J U D G M E N T
(Judgment of the Court was made by S.Manikumar,J) Challenge in this appeal is to an order made in W.P.No.31469 of 2012, dated 3/6/2014, by which the writ Court, directed the Secretary to Government, Industries Department, Chennai, to consider renewal of mining lease, for Magnesite, in the respondent's own patta lands, S.F.No.218/4, measuring to an extent of 1.45.0 hectares, situated in Seerapalli Village, Paramathi Vellore Taluk, Namakkal District, within a period of four months, from the date of receipt of a copy of the order in the main writ petition.
2. Facts culled out from the material on record are that the respondent was granted mining lease, to an extent of 1.45.0 hectares, in Seerapalli Village, Paramathi Vellore Taluk, Namakkal District, for a period of four years, vide G.O.Ms.No.45 (Industries Department), dated 23/5/1990. Lease period was extended upto 2/9/2000.
3. On 17/8/1999, respondent applied for renewal of mining lease. As no orders were passed, respondent contended that as per Rule 24-A, of the Mineral Concession Rules, 1960, lease was deemed to have been extended.
4. Renewal application was forwarded to the Government. Vide, G.O.(D) No.46 Industries (MMA.2) Department, dated 20/2/2012, application for renewal was rejected, on the grounds inter lia that the respondent failed to produce the following documents, (i). partnership deed, (ii). Income tax clearance certificate and (iii). No dues certificate.
5. Order of rejection in G.O.(D) No.46, Industries (MMA.2) Department, dated 20/2/2012, has been challenged, in W.P.No.6921 of 2012, with a prayer, for issuance of a writ of certiorarified mandamus, to call for the records of the Secretary to the Government, Industries Department, Chennai, in G.O.(D) No.46 Industries (MMA.2) Department, dated 20/2/2012, and to quash the same. Consequently, the writ petitioner has sought for a direction, to the Secretary to Government, Industries Department, Chennai, to grant renewal of mining lease, in respect of the quarry site.
6. In W.P.No.6921 of 2012, the writ petitioner has submitted that the impugned order therein, cannot be sustained, as a registered partnership deed, along with no due certificate, have already been submitted and also contended that subsequent to the filing of renewal application, I.T clearance certificate, has also been produced. Contention has been made that despite furnishing all the above said documents, no decision has been taken, on the application filed for renewal.
7. Taking note of the above, vide order, made in W.P.No.6921 of 2012, dated 25/4/2012, writ Court, at paragraph No.10, in W.P.No.6921 of 2012, ordered as hereunder:-
In view of the rebutted submissions of the petitioner, the writ petition is disposed of, by directing the first respondent, to take final decision, on the petitioner's application, for renewal of lease, by taking into consideration the partnership deed, income tax clearance certificate and no due certificate submitted by the petitioner.''
8. Pursuant to the above directions, Government have considered the mining renewal application, and vide G.O.(D) No. 159 Industries (MMA.2) Department, dated 5/9/2012, rejected the renewal application as hereunder:-
6. With regard to the representation of the petitioner dated 2/8/2012, the District Collector, Namakkal has stated that as per the Hon'ble High Court order dated 25/4/2012, the petitioner has submitted the partnership deed, the Income Tax Clearance Certificate and valid mining dues clearance certificate. The District Collector, Namakkal has stated that though the petitioner submitted the partnership deed with regard to Tvl.Evergreen Enterprises, the firm had not obtained the prior permission of the Government for inducting two partners during November 1998 and they had not informed the retirement of four former partners during December 1998 to the Government in time. Hence, the firm had violated the rule provision of 37 (1) of Mineral Concession Rules, 1960. The District Collector, Namakkal has recommended for rejection of mining lease renewal application for the reason that the firm had violated the Rule provision 37 (1) of Mineral Concession Rules, 1960.
7. The Commissioner of Geology and Mining in his letter sixth read above, has stated that the request of the petitioner/Thiru R.Sabapathy, the Managing Director of Tvl.Evergreen Enterprises, Salem cannot be considered, since Tvl.Evergreen Enterprises, Salem had violated the Rule provisions 37 (1) of Mineral Concession Rules, 1960. The District Collector, Namakkal and the Commissioner of Geology and Mining have recommended to reject the mining lease renewal application of Thiru R.Sabapathy, Managing Partner of Tvl.Evergreen Enterprises 26/8/1999 and his representation dated 2/8/2012.
8. The Government after careful examination of the recommendations of the District Collector, Namakkal and the Commissioner of Geology and Mining, hereby reject the renewal application of Thiru.R.Sabapathy, the Managing Director of Tvl.Evergreen Enterprises, Salem, dated 26/8/1999 and his representation dated 2/8/2012 on the grounds mentioned in paras 3 and 4 above.
9. The said G.O.(D) No.159, Industries (MMA.2) Department, dated 5/9/2012, is challenged, in W.P.No.31469 of 2012, on the grounds inter alia that Rule 37 (1) of the Mineral Concession Rules, has no application to the case on hand and it applies only when the lessee has been transferred or sublet or assigned its interest or parted with substantial control to anybody or body of persons and so long as the lessee/partnership remained the same, mere change in the Managing Director or inclusion of two partners or deletion, from the confirmation, would not amount to transfer of lease, assignment or such lessee or mortgaged or any of the above, mentioned in Rule 37 (1) of the Mineral Concession Rules, 1960.
10. To sustain the order under challenge, Additional Secretary to Government, Industries Department, Chennai, has filed counter affidavit, stating that among four partners of the firm, one of the partners, was nominated as the Managing Partner of the firm, at the time of preferring the original mining lease application, granting of lease and the Managing Partner had executed the lease deed, with the District Collector, on behalf of the lessee firm. The then Managing Partner had executed the lease deed, with the District Collector, had retired from the firm. Other partners, have been inducted and in the above said circumstances, present partners of the firm are not entitled to seek, for renewal of lease, as no one had signed the original lease deed. Further contention has been made that change in the constitution of the partnership firm was not informed to the department.
11. Before the writ Court, contention has also been made that once the Managing Director of the partnership firm retires from the partnership, the lease deed has ceased to operate and the firm has no right to apply for renewal by induction of two partners. Upon considering the rival submissions, referring to Rule 37 of the Mineral Concession Rules, 1960, and taking note of a decision of the Gujarat High Court in Additional Commissioner of Income tax, Gujarat Vs. Harjivandas Hathibhai, reported in 1977 (108) ITR 517 (Guj.), writ Court, vide order made in W.P.No.31469 of 2012, dated 3/6/2014, at paragraph Nos.6 and 7, ordered as hereunder:-
"6.The above provision would show that Rule 37[1] is applicable only when a lease has been transferred or sub-let or assigned its interest or parted with substantial control to anybody or body of persons. In this case, admittedly, the name of the firm has not been changed and the petitioner alone has become the Managing Partner of the above firm. It is the further case of the petitioner that four persons have retired and two persons have been added, which would not make any change in the control of the firm. Moreover, the records would show that even during the filing of the renewal application, the petitioner had enclosed the new Partnership Deed, thereby the respondent was put on notice about that also. In support of his contention that there is only a mere change in the constitution and the same firm continues as before and that would not warrant rejection of the renewal application filed by the petitioner, the learned counsel relied on the judgment reported in 1977 [108] ITR 517 [Gujarat] .....
14.Even apart from the decision of the learned Judges of the Allahabad High Court in the Full Bench decision referred to above, it is obvious on general principles that unless the words of the Income-Tax Act compel us to do so, it would not be correct to depart from the well-known principles of partnership law. The partnership law contemplates retirement of a partner and even though a partner retires, the firm continues as before. What is meant by a change in the constitution of the firm is coming in of a new partner with the consent of all the existing partners or by the retirement of a partner with the consent of all the partners ; in such cases there is a mere change in the constitution of the firm and nothing more. The same firm continues as before. The question of dissolution of a firm either by operation of law or by act of parties is a different thing altogether. When a firm is dissolved, the old relationship comes to an end and a new relationship comes into existence and if the succeeding partnership firm continues the old business, then there is succession of one firm by another as contemplated by section 188, sub-section [2] of section 187 merely specifies two kinds of changes one or more of thte partners ceasing to be partners or one or more new partners being admitted. It deals with cases of retirement of partners and introduction of new partner but the firm under the Indian Partnership Act would continue in such a case. Therefore all that sub-section [2] of section 187 points out is that with the retirement of one or more of the partners, so long as one of the old partners continues and with the introduction of new partners so long as one of the old partner continues, there is a mere change in the constitution of the firm. Again under clause [b] of sub-section [2] of section 187, by a mere variation in the respective shares of the partners or shares of some of the partners, there is not change in the firm itself. The old firm still continues and that is emphasized by sub-section [2] of section 187. It is therefore, not correct to say that a special provision of law has been introduced by the interpretation clause in such section [2] of section 187. We are, therefore, unable to accept the first contention urged on behalf of the revenue by Mr.Kaji. In our opinion, section 187 of the Income Tax Act, 1961 does not introduce any change in the relationship between the parties and does not introduce a change from the general law of partnership as laid down by the Indian Partnership Act. We therefore, reject the first contention urged on behalf of the revenue by Mr.Kaji.
7.Therefore, in the light of the above settled principle and the clear provision of law, the rejection of renewal application filed by the petitioner, invoking Rule 37[1] of the Mineral Concession Rules, 1960 cannot be sustained both in law and on facts. Excepting induction of new partners and removal of four old partners, there is absolutely no change in the name of the partnership firm and the firm continues. It is nothing but a mere change in the constitution of the firm and old firm still continues. Therefore, while allowing the above writ petition, by setting aside the impugned order dated 05.09.2012 made in G.O. [D] No. 159, Industries Department, this Court directs the respondent herein to grant renewal of Mining Lease for Magnesite in petitioner's own patta lands in SF No.218/4 measuring an extent of 1.45.0 hectares, in Paramathi Vellore Taluk, Namakkal District within a period of four months from the date of receipt of a copy of this order."
12. Assailing the correctness of the order made in W.P.No.31469 of 2012, dated 3/6/2014, instant writ appeal has been filed on the following grounds:-
a. On 26/8/1999, the respondent preferred an application, for grant of renewal of mining lease which was extended for six years, vide G.O.Ms.No.238 Industries Department, dated 5/10/1995, but continued mining operation upto 20/2/2012 under the deemed extension provision, as per Rule 24 (A) (6) of the Mineral Concession Rules, 1960.
b. As soon as the Managing Partner retired from the partnership firm of the subject lease in the year 1998, the original lease granted in favour of the firm itself deserves termination, in terms of the provision contained in sub-rule(1) of Rule 37 of the Mineral Concession Rules, 1960.
c. As per the order dated 25/4/2012, made in W.P.No.6921 of 2012, the respondent submitted the partnership deed, Income tax clearance certificate and mining dues clearance certificate. But the respondent/writ petitioner did not obtain the prior permission of the Government, for including two partners during November 1998 and they also not informed the retirement of four partners during December 1998 to the Government.
d. Request of the respondent cannot be considered for the reason that the respondent has violated Rule 37 (1) of the Mineral Concession Rules, 1960.
e. Based on the recommendation of the District Collector, Namakkal and the Commissioner of Geology and Mining, the mining lease renewal application on the subject area was rejected by the appellant, vide, G.O.(D) No.159, Industries (MMA2) Department, dated 5/9/2012.
f. The respondent has not done the mining operation according to the approved mining plan. It is a clear violation of Rule 22-A(1) of the Mineral Concession Rules, 1960 and Rule 13 of the Mineral Conservation and Development Rules, 1988.
g. The respondent has not submitted any modified mining plan or scheme of mining for the subsequent period of every five years of mining operation and hence it is a clear violation of Rules 10 & 12 of the Mineral Conservation and Development Rules, 1988.
13. Heard Mr.J.Ramesh, learned Additional Government Pleader for the appellant and perused the materials available on record.
14. In exercise of powers conferred by Section 13 of the Mines and Minerals (Development and Regulation) Act, 1957, Central Government have made the Mineral Concession Rules, 1960. According to the Secretary to Government, Industries Department, Chennai, appellant herein, there is a violation of Rule 37 (1) and that therefore, Tvl. Evergreen Enterprises, a partnership firm, is not entitled for renewal of mining lease, in Seerapalli Village, Paramathi Vellore Taluk, Namakkal District, measuring an extent of 1.45.0 hectares.
15. Rule 37 of the Mineral Concession Rules, 1960, deals with Transfer of lease. As per Rule 37 (1) of the Mineral Concession Rules, 1960, the lessee shall not without the previous concern in writing of the State Government and in case of Mining lease in respect of any mineral specified in A or B of the First Schedule to the Act, without the previous approval of the Central Government
(a) assign, sub-let, mortgaged or in any other manner, transfer the mining lease, or any right, title or interest therein or
(b). enter into or make any (bona fide) arrangement, contract or understanding whereby the lessee will or may be directly or indirectly financed to a substantial extent by, or under which the lessee's operations or undertakings will or may be substantially controlled by, any person or body of persons other than the lessee:
16. Rule 37 speaks about assignment, subletting, mortgage, or in any other manner, transfer the mining lease, or of any right, title or interest therein. In the case on hand, lessee is Tvl. Evergreen Enterprises.
17. As rightly observed by the writ Court, except induction of new partners, removal of old partners and retirement of the then Managing Director, the firm remained as the lessee. Rule 37 (1) of the Mineral Concession Rules, 1960, can be made applicable, if there is any assignment, sub-letting, mortgage or in any other manner, mining lease or any right, title interest therein, by the lessee, i.e., the firm, to any other person, other than the lessee. Mere change in the constitution of the firm would not amount to assignment, sub-letting, mortgage, or transfer of mining lease or any right, title or interest therein, to an other person.
18. In light of the decision stated supra, and discussion, we are of the view that Rule 37 (1) of the Mineral Concession Rules, 1960 is inopposite to the case on hand. Grounds alleging violation of Rule 22-A(1) of the Mineral Concession Rules and 13 of the Mineral Conservation and Development Rules, 1988, do not form part of the order, in G.O.(D) No.159, Industries (MMA.2) Department, dated 5/9/2012. It is well settled that an impugned order has to succeed or fail, for the reasons contained therein, and it is not open to the authorities to add new grounds in the form of affidavits. Reliance can be made to a decision of the Hon'ble Apex Court in Mohinder Singh Gill v. Chief Election Commr., reported in 1978 (1) SCC 405, wherein at paragraph 8, the Apex Court held as follows:
"8. The second equally relevant matter is that when a statutory functionary makes an order based on certain grounds, it validity must be judged by the reasons so mentioned and cannot be supplemented by fresh reasons in the shape of affidavit or otherwise. Otherwise, an order bad in the beginning may, by the time it comes to Court on account of a challenge, get validated by additional grounds later brought out. We may here draw attention to the observations of Bose, J. in Commr., of Police, Bombay v. Gordhandas Bhanji, reported in AIR 1952 SC 16:
"Public orders, publicly made, in exercise of a statutory authority cannot be construed in the light of explanations subsequently given by the officer making the order of what he meant, or of what was in his mind, or what he intended to do. Public orders made by pubklic authorities are meant to have public effect and are intended to affect the actings and conduct of those to whom they are addressed and must be construed objectively with reference to the language used in the order itself.""
19. The above position of law has been restated in Hindustan Petroleum Corpn. Ltd., v. Darius Shapur Chenai reported in 2005 (7) SCC 627, and at Paragraph 24 of the judgment, the Supreme Court held as follows:
"When an order is passed by a statutory authority, the same must be supported either on the reasons stated therein or on the grounds available therefor in the record. A statutory authority cannot be permitted to support its order relying on or on the basis of the statements made in the affidavit dehors the order or for that matter dehors the records."
20. In view of the above, order made by the writ Court does not call for any interference. Writ Appeal is dismissed. No costs. Consequently, the connected Miscellaneous Petition is closed.
21. Secretary to Government, Industries Department, is directed to grant renewal of mining lease, to the respondent, for Magnesite, within a period of one month, from the date of receipt of a copy of this order.
(S.M.K.,J) (V.B.S.,J) 25th January 2018 mvs. Note: Issue order copy on 1/2/2018 Index: yes/No Internet: yes/No S.MANIKUMAR,J A N D V.BHAVANI SUBBAROYAN,J mvs. Writ Appeal No.20 of 2018 25/1/2018 * IN THE HIGH COURT OF DELHI AT NEW DELHI % Judgment Reserved on : February 01, 2012 Judgment Pronounced on: February 06, 2012 + LPA No.827/2011 NEELIMA BAGARIA ..... Appellant Through: Mr.Pallav Saxena, Advocate. versus GNCT OF DELHI & ORS. ....Respondents Through: Ms.Sangeeta Sondhi, Advocate for R-1&2 Mr.Rishi Agrawala and Mr.Nakul Mohta, Advocates for R-3. CORAM: HON'BLE MR. JUSTICE PRADEEP NANDRAJOG HON'BLE MS. JUSTICE PRATIBHA RANI PRADEEP NANDRAJOG, J.
1. WP(C) No.6877/2009 filed by the appellant was dismissed vide order dated 27.08.2010 with the observation that such appropriate remedies as may be available to the appellant if a civil suit filed by her challenging the assignment deed dated 29.03.2006 was dismissed. The said suit being Civil Suit No.27/2010 (somewhere recorded as bearing No.77/2010) was dismissed on 19.01.2011 on the ground that the appellant did not have the locus standi to question the deed of assignment. The appellant thereafter filed CM No.6843/2011 praying that the writ petition be revived and disposed of on merits, which was disposed of vide order dated 27.08.2010.
2. The order dated 27.08.2010 reads as under:-
"1. The prayer in this writ petition is for issuance of directions to Respondent No.2 the Collector of Stamp to impound an assignment deed dated 29th March 2006 stated to have been executed by State Bank of India (SBI) in favour of Standard Chartered Bank (SCB) Respondent No.3 herein.
2. Learned counsel for the Petitioner has produced a copy of an order dated 19th May 2010 passed by the Debt Recovery Tribunal-I (DRT), Delhi in IA No. Global Ltd.) where in an application filed by Defendant No.2 in the said OA seeking inter alia the relief of holding the assignment deed dated 29th March 2006 to be null and void Neelima Bagaria vs Gnct Of Delhi & Ors. on 6 February, 2012 Indian Kanoon - http://indiankanoon.org/doc/29286693/ 1 being based upon a fraudulent averment made therein, the DRT directed the parties to approach the Civil Court to decide the issue. Learned counsel further states that pursuant to the above order dated 19th May 2010, Vishal Global Ltd. the Defendant No.2 in OA No. 480 of 2000 before the DRT, has on 29th May 2010 filed a Civil Suit No.27 of 2010 in the Court of Senior Civil Judge, New Delhi for a declaration that the said assignment deed dated 29th March 2006, as well as a subsequent amendment to it on 15th February 2010 is null and void.
3. Obviously the prayer of the Petitioner to the same effect in the present petition would stand satisfied in the event that the above civil suit is decreed. In any event the Civil Court is seized of the issue whether the said assignment deed is to be declared null and void. In the circumstances, this Court does not consider it necessary to continue with the present petition.
4. While disposing of the writ petition, it is clarified that in the event the Civil Suit is dismissed, or the relief of declaring the assignment deed dated 29th March 2006 to be null and void is refused, it would be open to the Petitioner to seek such appropriate remedies as may be available to her in law.
5. The writ petition is disposed of in the above terms."
3. We may note at the outset that disposing of WP(C) No.6877/2009, the learned Single Judge had held that the issue raised in the writ petition was the same in respect whereof CS No.27/2010 was filed by the appellant and since a Civil Court was seized of the matter, though the suit was filed subsequently, the learned Single Judge was of the opinion that the Court did not consider it necessary to continue with the petition.
4. Obviously, whatever may be the reason for the suit to be dismissed, the appellant could not seek a revival of the writ petition and if she was aggrieved by the reason for which the suit filed by her was dismissed, appellate remedy had to be availed of.
5. She filed CM No.6843/2011 informing that suit filed by her challenging the Deed of Assignment was dismissed and hence prayer made was for the writ petition to be revived.
6. Disposing of CM No.6843/2011, the learned Single Judge held that there was gross suppression in the writ petition and for said reason the learned Single Judge has held that he found no merit to recall the order dated 27.08.2010 and hear the writ petition on merits. CM No.6843/2011 was accordingly dismissed.
7. Suffice would it be to state that the appellant could not seek revival of the writ petition if the suit filed by her was dismissed, whatever be the reasons for the dismissal of the suit and thus the conclusion arrived at by the learned Single Judge is correct.
Neelima Bagaria vs Gnct Of Delhi & Ors. on 6 February, 2012 Indian Kanoon - http://indiankanoon.org/doc/29286693/ 2
8. However, with respect to the reasoning of the learned Single Judge, noting the same to be cryptic, but agreeing that the appellant and her husband are playing ducks and drakes with the Court and are abusing the process of the law, we prefer to be a little verbose, an activity we normally refrain from and commend others to so do, but what the appellant and her husband have been resorting to, must invite some outrage in the form of written words by us.
9. Vishal Global Ltd., a company registered under the Companies Act of which the appellant and her husband Saroj Kumar are directors obtained credit facilities from the State Bank of India for which the appellant and her husband stood guarantees.
10. Alleging that dues payable in sum of `7,37,84,093.13 (Rupees Seven Crores Thirty Seven Lakhs Eighty Four Thousand Ninety Three and Paise Thireteen only) were outstanding in the account of the company, SBI filed OA No.480/2000 under Section 19 of the Recovery of Debts Due to Bank and Financial Institutions Act 1993 before the Debts Recovery Tribunal, in which the appellant and her husband were impleaded as co-respondents, being the guarantors. Pendente lite and future interest at the agreed rate was prayed for. Neither the company nor the appellant or her husband joined issues and preferred to remain ex-parte. The claim succeeded. The appellant and her husband have successfully frustrated the execution of the order dated 05.06.2002, decreeing the claim of the bank, by resorting to one or the other proceedings, in which neither appellant nor her husband impleads the other party as a respondent. Proceedings fought by the husband do not implead the appellant as a respondent and vice-versa. In this manner, the husband and wife have successfully frustrated the process of the law for the bank to execute the decree obtained. Public funds have been successfully withheld and probably squandered by the appellant and her husband.
11. So frustrated was SBI, that on 29.03.2006 it assigned the debt due to Standard Chartered Bank. The Deed of Assignment dated 29.03.2006, unfortunately for the bank, contains a wrong, but an irrelevant recital, in the following words: The Purchaser is a Limited Liability Company, duly organized, validly existing and in good standing under the laws of India, has obtained a certificate of registration as a securitization and asset reconstruction company from the Reserve Bank of India, pursuant to Section 3 of SARFAESI and is duly qualified and licensed to do business in each jurisdiction in which the charter of its properties or the nature of its activities requires such qualifications.
12. Hereinafter started a game of tricks played by the appellant and her husband.
13. The appellant as also her husband, filed separate applications seeking recall of the ex-parte order dated 05.06.2002 decreeing claim against the company and them, and they also filed objections (separately) before the Recovery Officer in which the appellant questioned the Deed of Assignment dated 29.03.2006 on the ground that the document was insufficiently stamped.
14. As regards the appellant the objection filed by her was dismissed by the Recovery Officer vide order dated 28.05.2008 against which appellant preferred Appeal No.21/2008 before the Presiding Officer of the Debt Recovery Tribunal in which appeal she managed a stay of recovery proceedings against her.
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15. The appellant also preferred a representation to the Collector of Stamps alleging that the Deed of Assignment was inadequately stamped and thus it was prayed that the document be impounded and further orders be passed. The said representation was dismissed by the Collector of Stamps vide order dated 14.01.2009 in which he held that there was no force in the submissions made.
16. What was argued before the Collector of Stamps was that where different debts were assigned under one Deed of Assignment, stamp duty had to be determined on the basis of each assignment. The Collector of Stamps held that if several debts are assigned under a single assignment, for the purposes of Section 5 of the Stamp Act the same would not amount to distinct matters.
17. At this stage it needs to be noted that on 12.01.2006 the Government of NCT Delhi issued a notification in exercise of power conferred by Section 9 of the Indian Stamp Act notifying that instruments of securitization of loan or assignment of debts chargeable under Article 23 of Schedule 1 of the Indian Stamp Act, as applicable to Delhi shall be chargeable to stamp duty in sum of `1/- for every thousand rupees or part thereof of the loan securitized or debt assigned, subject to a maximum of `1 lakh.
18. The appellant filed WP(C) No.6877/2009 in which she prayed that the notification dated 12.01.2006 be quashed. She also prayed that the Assignment Deed dated 29.03.2006 be impounded.
19. The grounds on which she challenged the notification is that Article 23 deals with a single conveyance and does not contemplate multiple conveyances and that the State has to protect its revenue and not cause loss by fixing a cap on the maximum stamp duty chargeable.
20. After notice was issued in the writ petition on 16.02.2009 and during its pendency, the Presiding Officer DRT before whom Appeal No.21/2008 was pending, passed an order on 19.05.2010 declaring that the recital in the Deed of Assignment, which recital we have noted in paragraph 11 above, amounted to perjury because Standard Chartered Bank was neither a securitization nor an asset reconstruction company and was not registered with the Reserve Bank of India as required by Section 3 of SARFAESI Act. It needs to be highlighted that when this issue was raised, Standard Chartered Bank took immediate corrective action by getting executed and registered a rectification-cum-confirmation deed on 15.02.2010 amending paragraph 5(a) of the Assignment Deed dated 29.03.2006 and remove the offending clause. Surprisingly, notwithstanding noting the same the Tribunal held that there was perjury but held that the Tribunal was not the competent authority to quash the same and opined that the proper forum has to be the Civil Court.
21. We are surprised at the meager legal knowledge shown by the Presiding Officer of the Debt Recovery Tribunal. A wrong recital in the Deed of Assignment, which was inconsequential for the reason, Standard Chartered Bank is neither a securitization nor a reconstruction company; it is a bank authorized by Reserve Bank of India to do banking business in India and thus on the strength of its character as a bank is authorized to buy debts has been overlooked. Such a simple issue i.e. a wrong recital in a document can never be perjury for the reason it is not a statement made on oath before a Court and in the instant case the wrong recital was inconsequential, could not be understood by the Tribunal.
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22. The appellant thereafter filed Civil Suit No.27/2010 (somewhere the number stated is 77/2010) in which she sought a declaration that the Deed of Assignment dated 29.03.2006 is a perjured document and thus be declared null and void, with consequence that Standard Chartered Bank should not be permitted to prosecute the recovery proceedings pertaining to the decree dated 05.06.2002 against the appellant.
23. Since she had filed the Civil Suit questioning the Deed of Assignment on the ground of it being a perjured document, when this fact was brought to the notice of the learned Single Judge who was seized of WP(C) No.6877/2009, it came to be disposed of vide order dated 27.08.2010 and we would highlight immediately that the appellant never told the learned Single Judge that she had made two prayers in the writ petition, one of which pertained to the notification dated 12.01.2006 which was not a subject matter of the Suit.
24. If the appellant was aggrieved by the fact that the learned Single Judge could not have disposed of the writ petition on the strength of the reasoning contained in the order dated 27.08.2010, her remedy was to challenge the said order and not keep quiet. But she kept quiet.
25. The appellant then filed WP(C) No.7707/2010 when Standard Chartered Bank proceeded to take action under Section 13 of the SARFAESI Act and questioned the Deed of Assignment dated 29.03.2006 in which she took the ground that the said document was a perjured document. The writ petition was withdrawn and the order dated November 19, 2010 reads: After considerable hearing, the counsel for the petitioner seeks to withdraw the petition. Dismissed as withdrawn with no order as to costs.
26. The appellant immediately approached the Presiding Officer DRT by way of an appeal against the order issued by the Standard Chartered Bank under Section 13 of SARFAESI Act and obtained a stay against the bank to proceed and enforce the mortgage which was created with respect to an immovable property bearing No.C-4 Diplomatic Enclave Extension, Westend, New Delhi.
27. On 19.01.2011, Suit No.27/2010 was dismissed, holding that the appellant did not have the locus standi to question the Deed of Assignment and soon thereafter on 18.04.2011 the Presiding Officer DRT disposed of Appeal No.21/2008 rejecting appellants opposition to the Deed of Assignment but after holding that Standard Chartered Bank being substituted in place of SBI was without jurisdiction.
28. To cut the matter short, on various dates thereafter, the appellant and her husband filed either interim applications or took resort to substantive action and successfully stayed the recovery proceedings and when everything finally failed, but with a state of utter confusion, for the reason the Deed of Assignment dated 29.03.2006 was held to be a perjured document and Standard Chartered Bank substituting SBI was held to be without jurisdiction, and thus nobody knew how to come out of the confusion, appellant filed CM No.6843/2011 praying that WP(C) No.6877/2009 be revived, resulting in the passing of the impugned order dated 09.08.2011.
Neelima Bagaria vs Gnct Of Delhi & Ors. on 6 February, 2012 Indian Kanoon - http://indiankanoon.org/doc/29286693/ 5
29. It is apparent that the appellant and her husband have litigated on frivolous issues. A wrong recital in the Deed of Assignment, which has been corrected, can never constitute perjury for the reason perjury would relate to a false statement deliberately made on oath.
30. A bank or a financial institution does not require to be registered under SARFAESI Act to buy and sell debts.
31. Thus, all orders which hold the said document to be a perjured document are hereby declared null and void.
32. On the subject matter of challenge to the notification dated 12.01.2006, suffice would it be to state that in what manner fiscal policies have to be framed is for the Government to decide and where the Government caps the upper limit of tax or stamp duty payable, we see no scope for anyone to urge that the decision is arbitrary.
33. As regards the challenge to the Deed of Assignment dated 29.03.2006, where various debts held by SBI have been assigned to Standard Chartered Bank, suffice would it be to state that Section 5 of the Indian Stamp Act 1899 would come into play where an instrument comprises more than one transaction, it being immaterial whether the transactions are of the same category or of different categories as held by the Supreme Court in the decision reported as AIR 1956 SC 35 Member Board of Revenue v. Arthur Paul Benthall .
34. But, it has to be highlighted that the transaction has to be more than one for Section 5 to apply. Where a creditor holding various debts assigns the same to a single assignee, it would be one transaction and thus Section 5 would have no applicability.
35. The appeal has to be dismissed thus, for three reasons. Firstly the reason that the appellant has been abusing the process of the law and regretfully, the Presiding Officer of the Debt Recovery Tribunal has helped the appellant to frustrate the process of the law. A person who abuses the process of the law, would be disentitled to seek any discretionary relief from a Court of Equity. Secondly, having acquiesced in the order dated 27.08.2010 by not challenging the same, no liberty be granted to the appellant to seek revival of WP(C) No.6877/2009, which was disposed of on the reason that the appellant had taken recourse to a civil remedy on the same subject matter, whatever may be the wrong in the order dated 27.08.2010, the appellant could not seek the revival of the writ petition and thus CM No.6843/2011 has to be dismissed in any case; and lastly the reason that there is no substance in the said writ petition either pertaining to the validity of the Deed of Assignment in the context of the challenge that it is a perjured document or with reference to it being inadequately stamped or in relation to the notification dated 12.01.2006 being illegal.
36. The appeal is dismissed imposing costs in sum of `1,00,000/- (Rupees One Lakh only) against the appellant to be deposited with the Delhi High Court Legal Service Committee, which costs would be in addition to the costs imposed by the learned Single Judge.
(PRADEEP NANDRAJOG) JUDGE (PRATIBHA RANI) JUDGE FEBRUARY 06, 2012 dkb Neelima Bagaria vs Gnct Of Delhi & Ors. on 6 February, 2012 Indian Kanoon - http://indiankanoon.org/doc/29286693/ 6