Himachal Pradesh High Court
Mohan Singh Guleria vs State Of H.P. & Ors on 8 October, 2020
Bench: Tarlok Singh Chauhan, Jyotsna Rewal Dua
IN THE HIGH COURT OF HIMACHAL PRADESH, SHIMLA.
CWP No. 221 of 2019 Reserved on: 05.10.2020 .
Decided on: 08.10.2020
Mohan Singh Guleria ...Petitioner
Versus
State of H.P. & Ors. ...Respondents
__________________________________________________________________________ Coram:
Hon'ble Mr. Justice Tarlok Singh Chauhan, Judge. Hon'ble Ms. Justice Jyotsna Rewal Dua, Judge.
Whether approved for reporting? 1 NO.
For the Petitioner : Mr. Tara Singh Chauhan, Advocate.
For the Respondents : Mr. Ashok Sharma, A.G. with Mr. Vikas Rathore, Mr. Vinod Thakur, Mr. Shiv Pal Manhans, Addl. A.Gs., Ms. Seema Sharma, Mr. Bhupinder Thakur & Mr. Yudhvir Thakur, Dy.A.Gs., for respondents-State.
(Through Video Conferencing) Tarlok Singh Chauhan, Judge The instant petition has been filed for the grant of following substantive reliefs:-
(i) That the respondents especially respondent No. 3 may be directed to register the sale certificate and enter mutation qua sale of the land in question in a time bound manner without insisting for affixation of stamp duty.
(ii) That the respondent No. 3 may be directed to perform his statutory duties in pursuance to Section 17(2)(xii) of the Registration Act, 1908.
2. The facts are not disputed and lie in a narrow compass.
1Whether reporters of the local papers may be allowed to see the judgment? yes ::: Downloaded on - 08/10/2020 20:21:16 :::HCHP 2
3. The petitioner participated in an auction conducted by the HDFC Bank under the provisions of Securitization and .
Reconstruction of Financial Assets and Enforcement of Security Interest Act 2002 (for short "SARFAESI Act") and under Section 13 read with Rules 8 and 12 of the Security Interest (Enforcement) Rule 2002.
4. Since, the petitioner was the highest bidder and fulfilled all the eligibility criteria as laid down by the HDFC Bank, the sale was confirmed in his favour for a sum of Rs.
4,50,00,000/- (Rupees Four Crores and Fifty Lacs Only) vide sale certificate dated 21.12.2017.
5. The petitioner approached the third respondent for registration of the sale deed, who orally refused to register the same in absence of the requisite stamp duty, constraining the petitioner to file the instant petition.
6. The petition is resisted by the respondents on the ground of maintainability on the plea that stamp duty and registration fee is not exempted for registration of sale certificate vide notification No. Rev.1-9(Stamp)3/79/2010-II, dated 12.01.2012. Another ground raised in the reply for opposing the petition is that the sale certificate issued by the Recovery Officer under SARFAESI Act does not amount to transfer of the property. It is only a document issued by the duly authorized statutory authority evidencing the factum of a ::: Downloaded on - 08/10/2020 20:21:16 :::HCHP 3 statutory sale. It is the certification of the lawful transfer of the authority to transfer the interest in the property movable or .
immovable that is subjected to such statutory proceedings.
Hence, the stamp duty is to be levied under Article 18 of the Indian Stamp Act, 1899 and Article 1 of the Sections 68 and 79 of the Registration Act, 1908.
We have heard learned counsel for the petitioner and learned Advocate General.
7. Section 17 of the Registration Act, reads as under:-
"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 or 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) lease 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 ::: Downloaded on - 08/10/2020 20:21:16 :::HCHP 4 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:
Provided that the State Government may, by 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.
for consideration, (1A) The documents containing contract to transfer any immovable property purpose of Section 53A of the Transfer of Property Act, 1882 (4 of 1882) shall be registered if they have been for the executed on or after the commencement of the Registration and Other Related laws (Amendment) Act, 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 instrument 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 creating, 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 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 ::: Downloaded on - 08/10/2020 20:21:16 :::HCHP 5
(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 proceedings; 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, Loans 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
(xi) any endowment on a mortgage-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.
::: Downloaded on - 08/10/2020 20:21:16 :::HCHP 6(3) Authorities to adopt a son, executed after the 1st day of January, 1872, and nor conferred by a will, shall also be registered."
.
8. Even the aforesaid Section though mandatory in nature provides which of the documents are compulsorily to be registered, but it does not include sale by auction and sale certificate issued by the concerned authority including confirmation of the sale which are outcome of auction proceedings conducted in terms of the Court's order. The provision is speaking one and without any ambiguity, thus, registration was not required.
9. The issue raised in this petition is no longer res integra and is squarely covered by the judgment of the Hon'ble Supreme Court in Som Dev and others vs. Rati Ram and another (2006) 10 SCC 788 and thereafter in a subsequent judgment B. Arvind Kumar vs. Govt. of India and others (2007) 5 SCC 745 which judgments, in turn, have been considered by learned Division Bench of this Court in Valley Iron & Steel Company Ltd. vs. State of Himachal Pradesh and other (2016) 5 ILR 1639, and the relevant observations are as under:-
"24. Learned Senior Counsel appearing on behalf of the writ petitioner argued that the authorities concerned have refused to register the sale and make the entries in the revenue records on the ground that the necessary ::: Downloaded on - 08/10/2020 20:21:16 :::HCHP 7 permission was to be obtained as per the mandate of Section 118 of the Act.
.
25. It is also contended that the sale certificate and the confirmation of sale issued by the authorities, i.e. Annexures P6 and P8, are necessary to be registered before the authority concerned in terms of the mandate of Section 17 of the Registration Act, 1908 (for short "the Registration Act"), which is not legally correct.
26. Section 17 of the Registration Act, though mandatory in nature, provides which of the documents are compulsory to be registered. It does not include sale by auction and sale certificate issued by the concerned authorities including confirmation of sale, which are outcome of the auction proceedings conducted in terms of Court orders. The provision is speaking one and without any ambiguity. Thus, registration was not required.
27. The Apex Court in the case titled as B. Arvind Kumar versus Govt. of India and others, 2007 5 SCC 745 , held that a sale certificate issued by a Court or an officer authorized by the Court does not require registration. It is apt to reproduce para 12 of the judgment herein:
"12. The plaintiff has produced the original registered sale certificate dated 29.8.1941 executed by the Official Receiver, Civil Station, Bangalore. The said deed certifies that Bhowrilal (father of plaintiff) was the highest bidder at an auction sale held on 22.8.1941, in respect of the right, title, interest of the insolvent Anraj Sankla, namely the leasehold right in the property described in the schedule to the certificate (suit property), that his bid of Rs. 8,350.00 was accepted and the sale was confirmed by the District Judge, Civil and Military Station, Bangalore on 25.8.1941. The sale certificate declared Bhowrilal to be the owner of the leasehold right in respect of the suit property. When a property is sold by public auction in pursuance of an order of the court and the bid is accepted and the sale is confirmed by the court in favour of the purchaser, ::: Downloaded on - 08/10/2020 20:21:16 :::HCHP 8 the sale becomes absolute and the title vests in the purchaser. A sale certificate is issued to the purchaser only when the sale becomes absolute. The sale certificate is merely the evidence of such title. It is well .
settled that when an auction purchaser derives title on confirmation of sale in his favour, and a sale certificate is issued evidencing such sale and title, no further deed of transfer from the court is contemplated or required. In this case, the sale certificate itself was registered, though such a sale certificate issued by a court or an officer authorized by the court, does not require registration. Section 17(2)(xii) of the Registration Act, 1908 specifically provides that a certificate of sale granted to any purchaser of any property sold by a public auction by a civil or revenue officer does not fall under the category of non testamentary documents which require registration under subsec. (b) and (c) of sec. 17(1) of the said Act. We therefore hold that the High Court committed a serious error in holding that the sale certificate did not convey any right, title or interest to plaintiff's father for want of a registered deed of transfer."
28. The same principle has been laid down by the Apex Court in the case titled as Som Dev and others versus Rati Ram and another, 2006 10 SCC 788 . It would be profitable to reproduce para 15 of the judgment herein:
"15. Almost the whole of the argument on behalf of the appellants here, is based on the ratio of the decision of this Court in Bhoop Singh v. Ram Singh Major, 1995 5 SCC 709 , . It was held in that case that exception under clause (vi) of Section 17(2) of the Act is meant to cover that decree or order of a Court including the decree or order expressed to be made on a compromise which declares the preexisting right and does not by itself create new right, title or interest in praesent in immovable property of the value of Rs.100/ or upwards. Any other view would find the mischief of avoidance of registration which requires payment of stamp duty embedded in the decree or order. It would, therefore, be the duty of the Court to examine in each case whether the parties had preexisting right to the immovable property or whether under the order or decree of the Court one party having right, title or interest therein agreed or suffered to extinguish the same and created a right in praesenti in immovable property of the value of Rs.100/ or upwards in favour of the other party for the first time either by compromise or pretended consent. If latter be the position, the document is compulsorily registrable. Their Lordships referred to the decisions of this Court in regard to the ::: Downloaded on - 08/10/2020 20:21:16 :::HCHP 9 family arrangements and whether such family arrangements require to be compulsorily registered and also the decision relating to an award. With respect, we may point out that an award does not .
come within the exception contained in clause (vi) of Section 17(2) of the Registration act and the exception therein is confined to decrees or orders of a Court. Understood in the context of the decision in Hemanta Kumari Debi v. Midnapur Zamindari Co. Ltd., 1919 AIR(PC) 79 and the subsequent amendment brought about in the provision, the position that emerges is that a decree or order of a court is exempted from registration even if clauses (b)and (c) of Section 17(1) of the Registration Act are attracted, and even a compromise decree comes under the exception, unless, of course, it takes in any immovable property that is not the subject matter of the suit."
29. A question arose before the Madras High Court in a case titled as K. Chidambara Manickam versus Shakeena & Ors., 2008 AIR(Mad) 108 , whether the sale of secured assets in public auction which ended in issuance of a sale certificate is a complete and absolute sale or whether the sale would become final only on the registration of the sale certificate? It has been held that the sale becomes final when it is confirmed in favour of the auction purchaser, he is vested with rights in relation to the property purchased in auction on issuance of the sale certificate and becomes the absolute owner of the property. The sale certificate does not require any registration. It is apt to reproduce paras 10.13, 10.14, 10.17 and 10.18 of the judgment herein:-
"10.13 PartIII of the Registration Act speaks of the Registration of documents. Section 17(1) of the Registration Act enumerates the documents which require compulsory Registration. However, subsection (2) of Section 10 sets out the documents to which clause (b) and (c) of subsection (1) of Section 17 do not apply. Clause (xii) of subsection (2) of Section 17 of the Registration Act reads as under:
"Section 17(2)(xii) any certificate of sale granted to the purchaser of any property sold by public auction by a Civil or Revenue Officer."::: Downloaded on - 08/10/2020 20:21:16 :::HCHP 10
10.14 A Division Bench of this Court in Arumugham, S. v. C.K. Venugopal Chetty,1994 1 LW 491 , held that the property transferred by Official Assignee, under order of Court, does not require registration under Section 17 .
of the Registration Act. The Division Bench has held as follows:
"Under Ex. D7, the Court permitted the Official Assignee to transfer to the guarantor the assets of the insolvent that are in excess. Being a transfer by order of Court, the document does not require registration under S. 54 of the Transfer of Property Act, since S. 2(d) of the Transfer of Property Act says that nothing in the Act (except S. 57 and Chapter IV) applies to transfers by orders of Court. The document in question does not require registration and there was a valid conveyance of the 2nd defendant's 1/4th share to G."
xxx xxx xxx 10.17 The ratio laid down by the Division Bench of this Court in Arumugham, S. v. C.K. Venugopal Chetty and the Supreme Court in B. Arvind Kumar v. Government of India, referred supra, squarely applies to the case on hand and we, therefore, have no incertitude to hold that the sale which took place on 19-12-2005 has become final when it is confirmed in favour of the auction purchaser and the auction purchaser is vested with rights in relation tot he property purchased in auction on issuance of the sale certificate and he has become the absolute owner of the property. Further, as held by the Division Bench of this Court in Arumugham, S. v. C.K. Venugopal Chetty and the Supreme Court in B. Arvind Kumar v. Government of India, referred supra, the sale certificate issued in favour of the appellant does not require any registration in view of Section 17(2)(xii) of the Registration Act as the same has been granted pursuant to the sale held in public auction by the authorised officer under SARFAESI Act.
10.18 The finding of the learned single Judge that the sale is not complete without registration of sale certificate, therefore, not sustainable in law and the same is liable to be set aside."
10. Despite the issue in question being squarely covered by the aforesaid judgment, which was rendered, as far back on 20.10.2016, we really fail to understand why after the ::: Downloaded on - 08/10/2020 20:21:16 :::HCHP 11 pronouncement of the judgment, respondent No. 1 did not issue necessary clarification on this subject to all concerned.
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11. Had it been done, the petitioner would not have been compelled to indulge in otherwise avoidable and unwarranted litigation.
12. In normal circumstances, this would have been a fit case to impose heavy costs on the respondents, however, taking into consideration that this is the first lapse on the part of the respondents, we refrain from doing so.
13. In view of the aforesaid discussion, we find merit in this petition and the same is accordingly allowed. Respondent No. 3 is directed to register sale deed and enter mutation qua sale of the land in question, that too, without insisting for affixation of stamp duty, within a period of four weeks.
14. In the meanwhile, respondent No. 1 shall also issue necessary notification/circular/order clarifying the legal position in tune with the judgment rendered by this Court in Valley Iron case (supra).
For compliance, list on 09.11.2020.
(Tarlok Singh Chauhan)
Judge
(Jyotsna Rewal Dua)
08th October, 2020 Judge
(sanjeev)
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