Karnataka High Court
L. And T. Komatsu Limited vs Senior Sub-Registrar And Ors. on 2 December, 2003
Equivalent citations: AIR2004KANT308, AIR 2004 KARNATAKA 308, 2004 AIR - KANT. H. C. R. 1632
Author: D.V. Shylendra Kumar
Bench: D.V. Shylendra Kumar
ORDER D.V. Shylendra Kumar, J.
1. Petitioner is a company registered under the Companies Act, 1956. Petitioner has called in question (1) the order passed by the first respondent the Sub-Registrar, Yelahanka, Bangalore, dated 1-4-1998 passed in No. IMP 1/98-99. whereby he has impounded the Deed of Transfer dated 11-3-1998 which had been presented for registration on that day in exercise of his powers under Section 33 of the Karnataka Stamp Act, 1957 ('the Act', for short) and has forwarded the same to the District Registrar and Deputy Commissioner of Stamps, Bangalore Urban District, Bangalore, the second respondent to this writ petition, for realisation of the deficit stamp duty and other incidental action (copy at Annexure-H), (2) the order dated 21-9-1998 passed in No. DR : DRI : 1:98-99 (copy at Annexure-K) passed by the second respondent District Registrar and Deputy Commissioner of Stamps, Bangalore Urban District, Bangalore, on such reference to him and whereby the second respondent has called upon the petitioner to pay a deficit stamp fees of Rs. 20,42,95,000/- along with a fine of Rs. 1,00,000/- as also (3) the order dated 15-4-2000 passed by the third respondent the Chief Controlling Revenue Authority and Commissioner of Stamps, in No. SAP:6:98-99 (Copy at Annexure-M) affirming the order passed by the second respondent while exercising revisional powers under Section 53(1) of the Act in the revision petition that had been preferred by the petitioner.
2. Petitioner has sought for quashing of these orders and consequential mandamus to direct the first respondent Registering Authority to register the deed of transfer dated 11-3-1998 (copy at Annexure-F) and to return the same to the petitioner after due registration and other incidental reliefs.
3. The facts leading to these orders are not in dispute. The subject-matter property, the land, building, structures etc., which are transferred under the deed of transfer dated 11-3-1998 are all owned by M/s. Larsen and Toubro Ltd., a reputed Engineering Company and who had their independent division known as "Construction Equipment Manufacturing Business Division" manufacturing engineering construction equipments located at the plot situated on the West side of Bangalore -- Bellary Road at Byatarayanapura village. This entire unit was sought to be sold/transferred to a new Company known as Larsen & Toubro Komatsu Ltd., a Company registered under the Indian Companies Act as mentioned earlier. The terms of transfer are as agreed to between the, two companies as per an agreement dated 30-7-1997 (copy at Annexure-A). It is the case of the petitioner that in pursuance of this agreement, a part of the properties of M/s. Larsen & Toubro Ltd., namely the land, building and structures on the factory premises was sought to be transferred and is transferred as per the Transfer Deed dated 11-3-1998. The Transfer Deed makes a reference to the agreement dated 30-7-1997. The Deed of Transfer recites that the transferor conveys the piece and parcel of property being land and building and other structures bearing S. Nos. 88 to 104 of Byatarayanapura village, Yelahanka Hobli, Bangalore North Taluk, referred to as the schedule property absolutely in favour of transferee under the deed and that for the purpose of stamp duty and registration, this property is valued at Rs. 59,31,00,000/-. The schedule itself reads as under :--
"The Schedule above referred to :
ALL THAT piece and parcel of non-agricultural industrial land and factory buildings with messuages and tenements standing thereon surrounded by pacca boundary wall, admeasuring in aggregate 67 acres and 101/2 guntas, situated on the West side of Bangalore Bellary Road at Byatarayanapura village in Survey Nos. 88 to 104, Yalahanka Hobli, Bangalore North Taluk, measuring 2.72,211 Sq. Mts. bearing the following descriptions:
Survey Nos. Extent A-G
88 (part) 1-00
89/1 1.32
89/2 0.32
90 5.35
91 0-35
92/1 0-29
93/1, 2, 3, 4, 5 5-17
94/1, 2, 3, 4 3-23
95/1-2 3-30
96/1-2 6-20
97/1-2-3 4-12
98/1 (Part) 7-03
98/2, 3 & 4
99 5-35
100/1 (Part) 0-31
101/1A 0-25
101/1 (Part) 0-24 1/2
101/2 (Part) 0-11
101/3 (Part) 1-30
102/1, 2, 3 6-18
103 4-32
104/1, 2, 3, 4 4-16
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TOTAL A67 - 101/2 G
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Comprising buildings thereon with total built-up area of 59,595.11 Sq. Mts. AND Bounded on the :
EAST Partly by Bangalore-Bellary Road and partly by land in Survey Nos. 104, 5, 6 etc. WEST Partly by cart track, partly by remaining land bearing Survey No. 88 (Part) and partly by Bangalore-Hindupur Railway line, NORTH Partly by remaining land bearing Survey No. 98/1 (part), 101/1A (part) 101/2 (part), 101/3 (part) SOUTH Partly by cart track and partly by land bearing Survey No. 92/2, 94/5, 105/ 6A-7.
IN WITNESS WHEREOF the Parties hereunto have executed these presents in the presence of the witnesses attesting hereunder."
4. When this instrument was presented for registration before the first respondent Senior Sub-Registrar, Belahanka, Bangalore Urban District, Bangalore, Stamp Duty payable on an instrument of conveyance in respect of the property valued at the amount of Rs. 59,31,00,000/- had been paid and registration was sought for as per the provisions of the Registration Act. It is at this stage that the Registering Authority, purporting to be in exercise of his powers under Section 32 of the Act, sought to impound the document. The Registering Authority was prima facie of the view that under the Deed of Transfer, several plants and machineries that were in the premises and embedded to the earth are also sought to be transferred; that such plants and machineries having been fixed and embedded to the earth form part of the immovable property and stamp duty and registration fee were payable on the value of the plant and machinery but the instrument having recited or mentioned that the value was only attributable to the land and building and the machineries having not been valued at all, it amounted to non-payment of duty payable on the value of the plant and machinery and that it was very obvious that even as per the agreement dated 30-7-1997 that the entire property was being transferred as a going concern for a consideration of Rs. 210,64,00,000/- as revealed from the very documents relied upon and not disputed by the petitioner and the difference of value being Rs. 1,51,33,00,000/- which had been deliberately suppressed, the duty payable on this value of Rs. 1,51,33,00,000/- was Rs. 20,42,95,500/- at 13.5% of stamp duty and further Rs. 3,02,66,000/- being the registration fee payable at 2% having not been paid, it was necessary to realise these amounts and for such purposes, the instrument and connected records were being transferred to the second respondent District Registrar and Deputy Commissioner of Stamps, Bangalore Urban District, Bangalore, for realisation of the duty and also for collection of registration fees.
5. The second respondent was of the opinion that on a perusal of the Deed of Transfer as well as the earlier agreement dated 30-7-1997 for transfer of the entire unit, the plant and machinery affixed to the earth in the factory premises on S. Nos. 88 to 104 of Byatarayanapura village should be treated as immovable property and as such the Deed of Transfer should be understood to be an instrument of conveyance transferring title in respect of property worth Rs. 210,64,00,000/- and accordingly the petitioner was required to pay stamp duty on the difference of valuation between this amount and the value as indicated in the instrument itself which was to the extent of Rs. 1,51,33,00,000/- and after deducting the duty already paid, the balance duty payable on the value of the property transferred under the instrument being Rs. 20,42,95,500/-, in exercise of his powers under Section 39B of the Act, ordered that this deficit stamp duty is to be recovered, as also a sum of Rs. 1,00,000/- levied by way of penalty which is required to be paid by the petitioner and called upon the petitioner to pay the entire amount of Rs. 20,42,95,500/- within a period of thirty days from the date of receipt of the order.
6. Petitioner being aggrieved by this order, had preferred a revision petition to the third respondent under Section 53(1) of the Act. The Revisional Authority who was of the view that the order passed by the Deputy Commissioner was required to be confirmed, which was an appropriate order according to the Revisional Authority on a perusal of the Form No. 34A which had been submitted by the petitioner to the Income-tax Authorities under Section 230A of the Income-tax Act, and was also of the view that what was transferred under the instrument was not merely the property mentioned in the schedule, but also movables and immovables which were originally contemplated and declared to the Income-tax Authorities while seeking for permission for transfer and as mentioned in the Business Transfer Agreement dated 30-7-1997.
7. The contentions on behalf of the petitioner before the Revisional Authority, that what was transferred under the Deed of Transfer is only the land, building and structures on the survey numbers referred to in the schedule and nothing beyond, was rejected. Reliance was sought to be placed on behalf of petitioner before the Revisional Authority on a judgment of the Supreme Court that a mere reference to an earlier transaction in a document does not amount that the very transaction was also incorporated into the document, was rejected by the Revisional Authority as he was of the opinion that what was conveyed was the property mentioned in the schedule which clearly recited that it included the factory buildings with messuages and tenements and even in the earlier portion of the instrument there was reference to the appurtenants to the land which was being transferred under the Deed of Transfer. Petitioner being aggrieved by these orders, has presented this writ petition questioning the legality of these orders.
8. It is mainly contended that the orders impugned are one without jurisdiction; that the authorities have wrongly invoked the provisions of Section 33 of the Act; that the authorities are also not authorised to exercise the functions that they have purported to exercise; that the authorities have misread the Deed of Transfer; that there was no occasion for the transferor to transfer any of the movables in favour of the petitioner under the Deed of Transfer as the movable had already been transferred even prior to the execution of the Deed of Transfer; that there was no compulsion in law on the petitioner to acquire title to the immovable only through an instrument in writing nor was there any requirement for registration of any such instrument; that the instrument in question never sought to transfer any of the movables inclusive of the plant and machinery and at any rate the valuation of the property conveyed under the instrument had been correctly mentioned and proper stamp duty and proper registration fee had already been paid and that the orders are required to be quashed and suitable directions are sought to be issued.
9. Sri. R.N. Narasimhamurthy, learned Senior Counsel appearing for the petitioner has, while drawing the attention of the Court to the very instrument and the points therein, has submitted that the instrument very clearly recites that what is sought to be conveyed under the Deed is only the land, building and structure; that there was no ambiguity or confusion; that there was nothing more that is sought to be conveyed under the instrument; that the instrument had been properly stamped; that the value of the properties that were transferred under the instrument having been clearly mentioned to be at Rs. 59,31,00,000/-, proper duty on this valuation had been paid; that there was no occasion at all for the authorities -to invoke the provisions of Section 33 and this was not a case of either non-payment or deficit payment of duty and has submitted that the instrument in fact had been duly stamped.
10. In this regard, learned Senior Counsel has drawn my attention to the provisions of Section 33 of the Act which reads" as under :--
"33. Examination and impounding of instruments :--
(1) Every person having by lawor consent of parties authority to receive evidence, and every person in charge of a public office, except an officer of police, be fore whom any instrument, chargeable in his opinion, with duty, is produced or comes in the performance of his functions, shall if it appears to him that such instrument is not duly stamped, impound the same.
(2) For that purpose every such person shall examine every instrument so chargeable and so produced or coming before him in order to ascertain whether it is stamped with a stamp of the value and description required by the law in force in the State of Karnataka when such instrument was executed or first executed :
Provided that--
(a) Nothing herein contained shall be deemed to require any Magistrate or Judge of a Criminal Court to examine or impound, if he does not think fit so to do, any instrument coming before him in the course of any proceeding other than a proceeding under Chapter XII or Chapter XXXVI of the Code of Criminal Procedure, 1898;
(b) In the case of a Judge of the High Court, the duty of examining and impounding any instrument under this section may be delegated to such officer as the Court appoints in this behalf.
(3) For the purposes of this Section, in cases of doubt, the Government may determine--
(a) what offices shall be deemed to be public offices; and
(b) who shall be deemed to be persons in charge of public offices."
Learned Senior Counsel has also referred to the definition of "conveyance" under Section 2(1)(d) of the Act and the meaning of the phrase "duly stamped" as occurring in Section 2(1)(e) of the Act, which reads as under :--
"Section 2(1)(d) : 'Conveyance' includes--
(i) a conveyance on sale,
(ii) every instrument
(iii) every decree or final order of any Civil Court,
(iv) every order made by the High Court under Section 394 of the Companies Act, 1956 in respect of amalgamation of companies, by which property, whether moveable or immovable or any estate is transferred to, or vested in, any other person, and which is not otherwise specifically provided for by the schedule;
Section 2(1)(e) "duly stamped" as applied to an instrument bears an adhesive or impressed stamp of not less than the proper amount and that such stamp has been affixed or used in accordance with the law for the time being in force in the territories of the State of Karnataka;"
and the provisions providing for follow up action in respect of an instrument which has been impounded by a Registering Authority. In this regard, learned Senior Counsel has drawn my attention to the provisions of Section 39 of the Act which reads as under :--
"39. Deputy Commissioner's power to stamp instruments impounded :--
(1) When the Deputy Commissioner impounds any instrument under Section 33, or receives any instrument sent to him under Sub-section (2) of Section 37, not being an instrument chargeable with a duty not exceeding fifteen paise only or a mortgage of crop (Article 35(a) of the Schedule) chargeable under Clause (a) or (b) of Section 3 with a duty of twenty five paise, he shall adopt the following procedure :--
(a) if he is of opinion that such instrument is duly stamped, or is not chargeable with duty, he shall certify by endorsement thereon that it is duly stamped, or that it is not so chargeable as the case may be;
(b) if he is of opinion that such instrument is chargeable with duty and is not duly stamped he shall require the payment of the proper duty or the amount required to make up the same, together with a penalty of five rupees; or if he thinks fit, an amount not exceeding ten times, the amount of the proper duty or of the deficient portion thereof, whether such amount exceeds or falls short of five rupees :
Provided that, when such instrument has been impounded only because it has been written in contravention of Section 13 or Section 14, the Deputy Commissioner may, if he thinks fit, remit the whole penalty prescribed by this Section.
(2) Subject to any orders made under Chapter VI, every certificate under Clause (a) of Sub-section (1) shall, for the purpose of this Act be conclusive evidence of the matters stated therein.
(3) Where an instrument has been sent to the Deputy Commissioner under Sub-section (2) of Section 37, the Deputy Commissioner shall, when he has dealt with it as provided by this section, return it to the Impounding Officer."
The submission of the learned Senior Counsel is that the provisions of Section 33 of the Act are attracted only to a situation where the stamp duty paid on the instrument is deficient even as per the valuation indicated in the very instrument and on applying the proper duty payable in respect of the type of instrument. Learned Senior Counsel submits that having regard to the scope of enquiry contemplated under Section 39 of the Act, it is very obvious that the Deputy Commissioner is required to form his opinion as to the payment of proper stamp duty or otherwise only on the information available in the very instrument itself and as no opportunity is contemplated to the person who will be called upon to pay the deficit stamp duty if any in exercise of the powers under Section 39 of the Act, there is no scope for receiving any evidence from outside or enquiring into that; that the Deputy Commissioner having acted upon the material which had been collected by the Registering Authority, particularly the information contained in the very instrument by calling for not only the agreement dated 30-7-1997, but also the Form-E declaration given by the transferor before the Income-tax Authorities in Form 34-A, the formation of opinion before the Deputy Commissioner is vitiated for adopting a procedure not contemplated under Section 39 of the Act itself; even the reasoning given by the first respondent Registering Authority for impounding as also by the Deputy Commissioner and the Revisional authorities, that the plant and machinery being embedded to the earth and forming part of the building as it become part of the immovable property sought to be conveyed under the instrument and on which duty is payable, is a perverse finding not based on permissible material on record. In this regard, learned Senior Counsel has submitted that the very premise of the authorities for calling upon the petitioner to pay additional duty is on an inference contrary to the very recitals found in the instrument itself and the exercise of power being on such an assumption, is bad in law. It is also submitted that the contents of the instrument which is clear by itself, had also been made further clearer by their reply dated 23-3-1998 filed before the first respondent Registering Authority in response to the notice dated 13-3-1998. The petitioner had made it very clear that no part of plant and machinery was being transferred under the Deed of Transfer and that in fact it had already been transferred earlier. In this regard learned Counsel submits that the stand was affirmed before the second respondent District Registrar and Deputy Commissioner of Stamps as per the statement of objections dated 9-6-1998 (copy at Annexure-J). Learned Senior Counsel draws the attention of the Court to para beginning with "At the outset ......" and submits that it is the clear and consistent case of the petitioner that no part of the plant and machinery that were attached to the earth or otherwise were sought to be transferred under the Deed of Transfer dated 11-3-1998 and the assumption of jurisdiction of the authorities on a premise that it purports to transfer even the plant and machinery also in itself is a fallacious premise and as such the order suffers from want of proper assumption of jurisdiction.
11. Learned Senior Counsel for petitioner has also submitted that even assuming for argument's sake that he is conceding that the value of the property that is transferred under the Deed of Transfer dated 11-3-1998 is not merely a sum of Rs. 59,31,00,000/-but something more, based on the premises that the plant and machinery embedded to the earth forms part of the building and becomes immovable property and as such duty was payable in respect of such valuation also as is reasoned by the authorities, even then, it is only a case which could attract the provisions of Section 45A of the Act and not a case for exercising jurisdiction or power under Section 33 of the Act. In this regard, learned Senior Counsel has placed reliance on a reported judgment of a learned single Judge of this Court in the case of Huleppa Balappa Karoshi v. Sub-Registrar, Chikodi, (1996) 5 Kant LJ 605. Placing reliance on this decision which had been rendered in the context of interpretation of the provisions of Sections 2(e), 33, 37(2), 39 and 45A of the Act, learned Senior Counsel submits that in that case this Court has held that the meaning of the word "duly stamped" and the requirement was that the (i) stamp must be of the proper amount; (ii) should bear the proper description of stamp; (iii) the stamp must have been affixed or used according to law for the time being in force. It is only the first requirement that is in issue here -- that the stamp must be of the proper amount, could be determined only with reference to the value as mentioned in the instrument and as to whether requisite stamp duty payable in respect of such valuation as per the relevant article has been paid or not was the scope of enquiry for exercise of power under Section 33 of the Act, It is submitted that not mentioning the proper value of the property cannot be subject-matter of enquiry under Section 33 of the Act as has been held by this Court in this decision and submits that the ratio of this decision squarely applies to the facts of the present case. Learned Counsel submits that the valuation of the property conveyed under the Deed of Transfer having been clearly and categorically mentioned to be Rs. 59,31,00,000/- and the requisite stamp duty on that having been paid and there being no dispute on this, there was no occasion for any enquiry in the exercise of jurisdiction under Section 33 of the Act and assuming that the authorities could have disputed this valuation, at the best it could have been a case for action under Section 45A of the Act and not under Section 33 of the Act. In this regard, learned Senior Counsel has further submitted that when once it becomes obvious that the authorities had exercised the jurisdiction on an erroneous assumption or an erroneous premise, it is incumbent upon this Court to quash such orders in exercise of certiorari jurisdiction and consequential directions to be issued.
12. In so far as the prayer for consequential direction namely issue of a mandamus to the respondents to not only register the document but also return the document, learned Senior Counsel has submitted that though there are certain amendments that have been effected to the provisions of the Act, in so far as the manner of dealing a document presented for registration by the Registering Authority namely the provisions of Section 45A of the Act as amended by Act No. 24 of 1999, which has been given effect to from 18-8-1999. in the present case, the instrument having been presented for registration on 11-3-1998 i.e. before the provisions of this amending Act has come into force, the law as it existed at the time of presentation of the instrument should be applied and necessary directions issued to the Registering Authority in this regard. The difference that is brought about by this amendment is that while prior to the amendment a Registering Authority was to first effect registration of the document and then if he had reason to believe that the value of the property mentioned in the instrument was not the correct value, could have referred the same to the Deputy Commissioner for determination of the proper value and realisation of the deficit duty, subsequent to this amendment, such a reference could be made even before registration and the registration can be kept pending awaiting determination of the proper value of the property, the subject-matter of transaction.
13. In this regard learned Senior Counsel for petitioner has drawn my attention to the provisions of Section 49 of the Registration Act, 1908 and has submitted that till such registration as the petitioner does not derive valid title to the properly in question and has the effect of affecting the title of the petitioner to the property itself, which is a substantial right, the law as it prevailed at the time of presentation of the document for registration alone, namely the provisions of Section 45A of the Act as amended by Act 24 of 1999 should be applied. Accordingly it is submitted that mandamus can be issued to the Registering Authority to register the document and return the same to the petitioner.
14. The writ petition is contested on behalf of the respondents. Statement of objections on behalf of respondents has been filed. It is urged that the writ petition is not tenable; that the writ petitioner is not entitled for the relief sought for in the writ petition. It is also urged that the value of the property that is conveyed under the Deed of Transfer dated 11-3-1998 is Rs. 210,64,00,000/- as is obvious from the value mentioned in the agreement dated 30-7-1997 and it is the version of the respondents that the entire properties that were agreed to be sold under the agreement dated 30-7-1997 has been conveyed under the Deed of Transfer dated 11-3-1998. A reference to the agreement dated 30-7-1997 in the Deed of Transfer is pointed out as a circumstance to indicate that what is transferred under the Deed of Transfer is the very property that was the subject-matter of agreement dated 30-7-1997. The recitals in the Deed of Transfer are relied upon for this conclusion. It is asserted that the properties conveyed under the Deed of Transfer has not been properly valued; that the full value of the property conveyed is not indicated in the Deed of Transfer; that it is sought to be shown as though the value of the property is only a sum of Rs. 59,31,00,000/- by referring to the land, building and structures alone, whereas what is actually transferred is the land, building, structures as well as the plant and machineries. The demand for payment of deficit stamp duty on the valuation of the properties as mentioned in the agreement dated 30-7-1997 is sought to be supported on such reasoning. The development with regard to obtaining of permission by the petitioner from the Income Tax Authorities under the provisions of Section 269 UL(1) and 269 UC (1) of the Income-tax Act is indicated as another circumstance to support the view that what is conveyed under the Deed of Transfer is the entire property mentioned in the agreement itself. In view of such circumstance, it is asserted that the value of property actually transferred under the Deed of Transfer is Rs. 210,64,00,000/- and stamp duty on this valuation is required to be paid by the petitioner. The Statement of objections seeks to support the impugned orders also on the ground that the stamp duty that was payable is on the entire value of the property conveyed under the Transfer Deed inclusive of movables also in which event the valuation at a sum of Rs. 210,64,00,000/- is sought to be justified as the correct valuation. It is asserted that the stamp duty paid on the instrument is not the proper stamp duty; that the provisions of Section 33 of the Act are attracted and that the authorities have rightly passed the orders impugned in the writ petition. In so far as the manner of enquiry required to be conducted under Section 39 of the Act by the Deputy Commissioner is concerned, a reference is made to Rule 15A of the Karnataka Stamp Rules, 1958 ('the Rules' for short). Gathering of information with regard to proper value of the property sold or conveyed under the Deed of Transfer by looking into the contents of the agreement dated 30-7-1997 and also by getting information from the Income Tax authorities and using such information for the purpose of passing the orders, is justified by reference to the provisions of Rule 15A of the Rules. It is also stated in the statement of objections that the Deed of Transfer itself describes the plant and machinery and other movables as appurtenances to the schedule property. The levy of penalty of a sum of Rs. 1,00,000/-is also justified with reference to Section 39(i)(b) of the Stamp Act. Statement of objections also makes a reference to a Notification dated 10-4-1989 issued by the State Government investing powers on the Sub-Registrars for the purposes of the Act. Similar delegation of powers in favour of the District Registrars under the Notification dated 10-4-1989 bearing No. RD 236ESR 88 is also referred to. A copy of this Notification is produced as Annexure-R4 to the statement of objections. The version of the petitioner that movables had already been transferred before the presentation of the Deed of Transfer dated 11-3-1998 for registration is denied. A reference to the business Transfer Agreement dated 30-7-1997 in the Deed of Transfer is relied as a strong and clinching circumstance in favour of the stand of respondents that the entire properties mentioned in this agreement is sought to be transferred under the Deed of Transfer. It is finally asserted that as the parties had not discharged their obligation of giving complete and true details of consideration for which the properties had been conveyed under the Deed of Transfer though was required under Section 28 of the Act, action under Section 33 of the Act was initiated and that it is a justifiable action and the decision of the respondents is sought to be defended. Accordingly it is prayed that the writ petition be dismissed.
15. Sri M. N. Ramanjaneya Gowda, learned Government Advocate has vehemently urged that the impugned orders are valid in law; that the authorities have rightly invoked the provisions of Section 33 of the Act for realisation of deficit stamp duty which had not been paid by the petitioner when the instrument was presented for registration and that the very recitals in the Deed of Transfer fully justify the action initiated by the respondents in passing the impugned orders. Learned Government Advocate in this regard has drawn my attention to the description of the property in the schedule to Deed of Transfer and also to the affidavit dated 14-2-1998 sworn to by one J. P. Naik, Old Time Director of M/s. Larsen & Toubro Ltd., the vendor, a copy of which is produced as Annexure-E to the writ petition itself. Learned Government Advocate has also drawn my attention to the master plan appended to the Deed of Transfer which is a detailed Layout plan of the entire factory with the plant and machineries indicating the location of different machineries inside the factory premises. The description in the schedule to the property that is conveyed under the Deed of Transfer to be as "All that piece and parcel of non-agricultural industrial land and factory buildings with messuages and tenements standing thereon............." is relied upon as a strong indicator to say that the Deed of Transfer includes movables and plants and machineries also. Learned Government Advocate submits that though the purport of the Deed of Transfer is recited to be one for transferring the land, building and structures, what is actually transferred under the Deed is not merely the land, building and structures, but also plant and machineries and all other movables referred to in the agreement dated 30-7-1997 and while the Deed specifies the valuation of the land, building and structures alone, the value of plant and machinery and other movables is deliberately omitted and as the property conveyed under the instrument had not been actually valued, but only a part of the property had been valued and stamp duty paid only on such part of the property, the deficit stamp duty payable on the valuation of the other parts of the property conveyed under the Deed of Transfer is sought to be collected under the provisions of Section 33 and such action is fully justified as the present case is clearly a case of non-payment of proper stamp duty. Learned Government Advocate has also drawn my attention to the impugned orders and has submitted that the orders have given valid reasons for the conclusion and for raising the demand for payment of deficit stamp duty and also for levying penalty.
16. The learned Government Advocate has also sought to distinguish the decision relied upon by the learned Counsel for the petitioner namely the case of Huleppa Balappa Karoshi v. Sub-Registrar, Chikodi (1996) 5 Kant LJ 605. It is the submission of the learned Government Advocate that in that case the Court did notice that the consideration mentioned in the Agreement for conveying the property was a sum of Rs. 13,000/- and the value for which the property had been conveyed was also for Rs. 13,000/- and as such stamp duty that was payable on the instrument as per the valuation mentioned in the instrument had been paid. But the valuation itself was not the proper valuation but was far less than the market value of the property on which duty was payable. It is under such circumstances this Court held that the provisions of Section 33 of the Act are not attracted in that case and as by then the provisions of Section 45A of the Act had not come into vogue, there was no occasion for the Registering Authorities to realise or take action for payment of stamp duty on the market value of the property by invoking the provisions of Section 45A of the Act. Learned Government Advocate submits that as in the present case the very agreement having recited that the value of the properties sought to be conveyed by the vendor in the favour of the petitioner being a sum of Rs. 210,64,00,000/- while in the Deed of Transfer the value having been reduced to Rs. 59,31,00,000/-, the deficit stamp duty on the difference in such valuations can be recovered by invoking the provisions of Section 33 of the Act and as such the ratio laid down in Huleppa Balappa Karoshi's case is not applicable to the facts of the present case. While drawing reference to para 14 of the decision in Karoshi's case, learned Government Advocate submits that the instrument in the present case having not been duly stamped and such an instrument having been presented for registration, the action on the part of the Registering Authority in not registering the same but forwarding it to the Deputy Commissioner under Section 37(2) of the Act for payment of proper duty and also for levying the penalty is perfectly justified and the action on the part of the respondents should be upheld and writ petition dismissed.
17. I have given my anxious consideration to the petition pleadings, the assertions in the statement of objections, submissions of the learned Senior Counsel appearing for the petitioner and the learned Government Advocate appearing for the respondents.
18. Let me deal with the contentions urged on behalf of the petitioner in this order. It is firstly urged that the respondents did not have jurisdiction to initiate action under Section 33 of the Stamp Act in the context of the presentation of the instrument by the petitioner for registration before the first respondent. In so far as the question of jurisdiction is concerned, jurisdiction is conferred on the authorities under the provisions of the statute. It is essentially the provisions of the statute that confers particular jurisdiction on an authority, The, question is as to whether the first respondent had jurisdiction to act under the provisions of Section 33 of the Act is essentially dependent on the provisions of Section 33 of the Act which confers such jurisdiction. The fact situation conferring jurisdiction is as to whether the first respondent is one such officer who has been entrusted with the jurisdiction to act when the officer comes across an instrument which is not duly stamped. Though the submission of Sri R. N. Narasimhamurthy, learned Senior Counsel appearing for the petitioner is that the essential requirements for assuming jurisdiction under this provision by an officer is the existence of a not duly stamped instrument before him and if the instrument is not one which can be characterised as not duly stamped, the officer does not assume jurisdiction, I am not inclined to accept this submission. I say so because the conferring of jurisdiction to exercise power under Section 33 of the Act is in respect of such class of officers who are officers before whom is produced an instrument of that nature while they are discharging their duties. It cannot be gainsaid that the Registering Authority is an officer before whom is presented an instrument for registration, may be one duly stamped or not duly stamped. The factum of an instrument being duly stamped or not duly stamped is not the criteria for conferring jurisdiction on the Registering Authority, but the factum that such officer is an officer before whom is produced an instrument while he is in the discharge of his duties. It is within the jurisdiction of the Registering Authorities to always inspect as to whether an instrument that is presented before him is duly stamped or not duly stamped and if he is of the opinion that it is not duly stamped, he can always impound the same. If an officer of such nature and power, on a given occasion also impounds an instrument which is also duly stamped, then it can only be a case of improper exercise of the power or jurisdiction conferred on him and it is not a case of acting without jurisdiction. It cannot be characterised that the Registering authority has acted without jurisdiction in initiating action under Section 33 of the Act as he was prima facie of the opinion that the instrument had not been duly stamped. But the manner of exercise of power or jurisdiction by the officer conferred with such jurisdiction can also be a question that may have to be looked into when it is alleged that such power or jurisdiction has not been exercised either in the proper manner or for the reasons mentioned in the very statute conferring such power or jurisdiction.
19. Here, the submission of the learned Senior Counsel for the petitioner is that there was no occasion for the Registering Authority to initiate action under Section 33 of the Act as the instrument had been duly stamped and that it was not a case of an instrument not duly stamped. The role of an officer functioning under Section 33 of the Act is confined to examination of the instrument which has been presented before him and if it is chargeable to stamp duty to ascertain as to whether it is stamped with a stamp of the proper value and description required by law. The Registering authority only does this and nothing more. In this regard, though the learned Senior Counsel for the petitioner has submitted that there was no scope for the Registering Authority to have travelled beyond the contents of the very instrument to ascertain as to whether it was duly stamped or not and has submitted that collection of outside material like the agreement dated 30-7-1997 and the information from the Income Tax Authorities was not justified and goes beyond the scope of the provisions of Sub-section (2) of Section 33 of the Act and this is countered on behalf of the respondents by drawing attention to Rule 15A of the Rules, I am of the view that as the essential requirement is to ascertain as to whether the instrument when executed had been stamped with stamp of commensurate amount and as per the law, so long the enquiry is confined to this aspect of the matter and so long as the principles of natural justice are also observed, it cannot be said that the functioning of the officer under Section 33 of the Act is beyond the scope of Sub-section (2) of Section 33 of the Act. In the present case, the information gathered being only by looking into the very agreement dated 30-7-1997 that is referred to in the Deed of Transfer and pursuant to which the very instrument has been executed and the information gathered from the Income Tax Authorities being only such information which had been provided by the petitioner and the vendor of the petitioner, it cannot be said that the Registering Authority, while acting under Section 33 of the Act, has acted on any irrelevant or extraneous material in forming the opinion that the instrument had not been duly stamped, Prima facie as this was the only requirement and the authority was only to forward the instrument on impounding to the competent authority to adjudicate as indicated in Section 37 of the Act and by the Deputy Commissioner as provided under Section 39 of the Act, the initial act cannot be characterised as one without jurisdiction.
20. The real question is as to whether the impounding of the instrument under Section 33 of the Act can conclude the aspect that it is not duly stamped as against the petitioner. If it is to be held that the initial action by the Authority acting under Section 33 of the Act in itself concludes this aspect, then the assumption of the jurisdiction even on the fact situation as revealed from the very instrument, is a matter that requires examination at this stage itself. If not, this aspect can be examined even at the stage when the Deputy Commissioner deals with an impounded document under Section 39 of the Act. It is essentially the Deputy Commissioner while functioning under Section 39 of the Act who determines as to whether such instrument is either duly stamped, in which event he will certify so by an endorsement on the very instrument or if he is of the opinion that it is not duly stamped, he will call upon the person liable to pay duty to pay the proper duty or the deficit duty along with penalty. Therefore, it is the opinion of the Deputy Commissioner that ultimately matters and who has to form such opinion by himself and not being simply guided by the fact that the Registering Authority has impounded the document. Therefore, it is at the stage of exercise of power by the Deputy Commissioner under Section 39 of the Act the nature of the instrument, the contents of an instrument, whether it is properly stamped and what is the property actually conveyed under the instrument, are required to be examined. It is in this regard that it become necessary to look into the very instrument and examine the opinion formed by the Deputy Commissioner for purposes of such function.
21. The Deputy Commissioner has opined under the impugned order at Annexure-K, that on a combined reading of the agreement and the Date of Transfer, it is obvious that the plant and machinery which are embedded to the earth on the lands in S. Nos. 88 to 104 of Byatarayanapura village are also immovable properties and duty was to be paid on such plant and machinery also. It is for this very reason that the Deputy Commissioner was of the opinion that the value of the property conveyed under the instrument was Rs. 210, 64,00,000/- and as the stamp duty paid was on the valuation of Rs. 59,31,00,000/-, there was deficit payment of stamp duty.
22. The Revisional Authority, while examining the correctness or otherwise of this order of the Deputy Commissioner, by his order dated 15-4-2000 (Annexure-M), has gone a little further and has held that the usage of the word "appurtenances" in the Deed of Transfer is a clear indication that what is transferred under the instrument is not only the land, building or structure, but also the plant and machinery and other movables which are 'appurtenances' to the schedule property. The Revisional Authority has relied on the circumstance that though the Deed of Transfer has recited that the movable assets referred to in the agreement dated 30-7-1997 has already been delivered and made over and the receipt of which had been acknowledged by the transferee separately and which version was disputed by the Registering authority and the Deputy Commissioner as not correct, the fact of non-production of any separate deed evidencing the transfer of movables earlier, as a circumstance to disbelieve the version of the petitioner and to accept the version of the Registering Authority and to affirm the order of the Deputy Commissioner.
23. It is a well settled principle of interpretation that in understanding a Deed or a document, particularly a document conveying title, it should be read as a whole and the property transferred under the instrument is the property which is expressly recited as to be transferred under the instrument itself. The question of payment of stamp duty under the Act is essentially dependent on the nature of the instrument namely the nature of the transaction and what is conveyed or transferred under the instrument. It is not in dispute that the instrument is one of conveyance as understood within the meaning of Section 2(1)(d) of the Act and attracting stamp duty under Article 20 of the schedule to the Act. Then the next question will be what is the subject matter of conveyance. It is only on this aspect there is dispute.
24. The instrument very clearly recites that what is conveyed is the land, building and structures. The instrument also refer to the earlier agreements dated 30-7-1997 and under the agreement, the entire factory so sought to be sold or conveyed and as part of that agreement under the present Deed, the land, building and structure, portion of which is sought to be conveyed. The instrument itself recites that the movables had already been transferred and given possession of also etc. It is also expressly mentioned that the value of the land, building and structure which is conveyed under the Deed of Transfer is a sum of Rs. 59,31,00,000/- and the stamp duty paid on the instrument is on such valuation. It is in this regard Sri R. N. Narasimhamurthy, learned Senior Counsel appearing for the petitioner submits that when there was no compulsion on the petitioner either to have a written Deed of Transfer in respect of the movables and when once it is the case of the petitioner that the movables had been independently transferred and possession also taken by the petitioner and the very instrument recites that what is transferred now is only the land, building and structure valued at Rs. 59,31,00,000/- there was no occasion at all to come to any other conclusion other than that the property conveyed under the instrument is only the land, building and structure valued at Rs. 59,31,00,000/- and nothing else.
25. What is to be looked into in the instrument for the purpose of enquiry under Section 33 of the Act is as to whether the stamp duty payable on the instrument and on the valuation of the subject matter has been paid or not. If the instrument is accepted at its face value, the stamp duty paid even according to the respondents, is the correct stamp duty and it is an instrument which is duly stamped. But what the respondents have done is that the version of the instrument itself is disbelieved and the instrument is interpreted and understood as an instrument conveying properties of the value of Rs. 210,64,00,000/-. No doubt respondents have sought to place reliance on the recitals in the agreement dated 30-7-1997 for transfer, for such conclusion. But it is not open to the authorities acting under Section 33 of the Act to interpret a document or understand a document in such a manner as to discard the express recitals therein and substitute their own understanding of the recitals and arrive at a conclusion that the value mentioned is not the proper value of the property conveyed and as such it is not duly stamped. This is not the function of an officer exercising power or jurisdiction under Section 33 of the Act or under Section 39 of the Act, The power under Section 33 of the Act is not one for interpretation of a document, but one for inferring as to whether proper stamp duty on the nature of the transaction has been paid. May be a transaction in the nature of conveyance being wrongly described as a transaction in the nature of a mere lease or a mortgage and stamp duty paid on such an instrument becomes subject matter of Section 33 of the Act, but not on the understanding that the value of the subject matter and the very subject matter has not been properly described. The clear intention under the instrument being one to convey the property comprising land, building and structures, stamp duty payable is only on the value of these properties and nothing more. The interpretation sought to be placed on the instrument for exercise of power under Section 33 of the Act was not one which is either tenable or acceptable on the face of the recitals in the instrument itself or and said to constitute a justifiable fact situation for exercise of power under Section 33 of the Act and for pursuing further action.
26. In the circumstances, I am of the opinion that the respondents were not justified in invoking the provisions of Section 33 of the Act for the orders passed under Annexure 'H' bearing No. IMP 1/98-99 dated 1-4-1998 passed by respondent No. 1, Annexure 'K' bearing No. DR:DRI:1:98-99 dated 21-9-1998 passed by Respondent No. 2 and confirmed as per order Annexure 'M' dated 15-4-2000 in No. SAP:6;98-99 passed by respondent No. 3 The action on the part of the respondents in passing these orders cannot be sustained in law and accordingly these orders are quashed by issue of a writ of certiorari.
27. The next question is as to whether any consequential directions are to be issued.
28. The fact that the provisions of Section 45A of the Act has undergone certain changes and that it is within the power of a Registering Authority to keep the registration pending and refer the matter to the Deputy Commissioner for determination of the proper value of the subject matter, is not a development that can have a bearing on this issue. What was in issue in this writ petition was only the exercise of power under Section 33 of the Act. When once it is held that the exercise of such power under Section 33 of the Act and for passing the impugned orders is bad in law, the Registering Authority is bound to take further action in accordance with the provisions of the Registration Act for registering the instrument and the follow up action.
29. Accordingly, a writ of mandamus is issued to the first respondent for Registering the instrument in question in accordance with law and to take such action as is provided in law for such purposes,
30. Writ petition is allowed. Rule issued and made absolute.
31. Liberty reserved to the respondents and the State Government to take such other action as is contemplated in law if any other provisions of the Act are attracted to the facts of the case.