Calcutta High Court (Appellete Side)
Sbpl Infrastructure Ltd & Anr vs State Of West Bengal & Ors on 24 September, 2018
Author: Arijit Banerjee
Bench: Arijit Banerjee
In The High Court At Calcutta
Civil Appellate Jurisdiction
Appellate Side
MAT 593 of 2018
CAN 4227 of 2018
CAN 6364 of 2018
CAN 6601 of 2018
SBPL Infrastructure Ltd & Anr.
-Vs.-
State of West Bengal & Ors.
With
MAT 624 of 2018
India Media Services Pvt. Ltd.
-Vs.-
SBPL Infrastructure Ltd. & Ors.
Coram : The Hon'ble The Chief Justice Jyotirmay
Bhattacharya
&
The Hon'ble Justice Arijit Banerjee
For the appellants : Mr. S. K. Kapur, Sr. Adv.
Mr. Ranjan Bhachawat, Sr. Adv.
Mr. Arindam Banerjee, Adv.
Mr. Sandip Agarwal, Adv.
Mr. Manoj Sharma, Adv.
Mr. Sarbapriya Mukherjee, Adv.
Mr. Ishaan Saha, Adv.
Mr. Ratul Das, Adv.
Mr. Tanay Agarwal, Adv.
For the State : Mr. Abhratosh Majumdar, Ld. AAG
Mr. T. M. Siddiqui, Adv.
Mr. Soumitra Mukherjee, Adv.
Mr. Nilotpal Chatterjee, Adv.
For the respondent No. 11 : Mr. Saktinath Mukherjee, Sr. Adv.
Mr. Jayanta Mitra, Sr. Adv.
Mr. Saptansu Basu, Sr. Adv.
Mr. Srijib Chakraborty, Adv.
Mr. P Sancheti, Adv.
Mr. A. Das, Adv.
Heard On : 03.07.2018, 09.07.2018, 16.07.2018, 30.07.2018 06.08.2018, 14.08.2018, 21.08.2018, 23.08.2018 30.08.2018, 12.09.2018, 17.09.2018, 18.09.2018 Judgment On : 24.09.2018 Arijit Banerjee, J.:-
(1) The short question that falls for determination in this appeal is whether or not an instrument, namely, a Nomination Agreement executed by and between the appellant/writ petitioner and the respondent no. 11 in the State of West Bengal on a non-judicial stamp paper of Rs. 10 and bearing endorsement of the Collector, Hyderabad, under Sec. 42 of the Indian Stamp Act, 1899 (in short the 'Stamp Act') is liable to be assessed for stamp duty in West Bengal as a conveyance under Art. 23 of Schedule 1A to the Stamp Act.
(2) In a litigation between the respondent no. 11, India Media Services Pvt. Ltd. (in short 'IMSPL') and the owners of a property known as 'Indian Express Building' situate at Hyderabad, a consent decree dated 17 March, 2004 was passed by this Court awarding the said property to IMSPL. By an agreement dated 5 December, 2005 described as a 'Nomination Agreement' (hereinafter referred to as the 'said agreement') executed in Kolkata by and between IMSPL and the appellant, the appellant was nominated by IMSPL to receive convenience of the said property in its name and it is recorded in the said agreement that the appellant accepted such nomination. (3) Section 42 of the Stamp Act in so far the same is relevant for the present purpose reads as follows:-
"S. 42. Endorsement of instruments in which duty has been paid under Section 35, 40 or 41.-(1) When the duty and penalty (if any), leviable in respect of any instrument have been paid under Section 35, Section 40 or Section 41, the person admitting such instrument in evidence or the Collector, as the case may be, shall certify by endorsement thereon that the proper duty or, as the case may be, the proper duty and penalty (stating the amount of each) have been levied in respect thereof, and the name and residence of the person paying them.
(2) Every instrument so endorsed shall thereupon be admissible in evidence, and may be registered and acted upon and authenticated as if it had been duly stamped, and shall be delivered on his application in this behalf to the person from whose possession it came into the hands of the officer impounding it, or as such person may direct:"
The said agreement bears an endorsement under Sec. 42 of the Stamp Act made by the Collector, Hyderabad on 4 June, 2014 certifying that the proper deficit stamp duty of Rs. 50,000/- and penalty of Rs. 1,000/- aggregating Rs. 51,000/-, has been levied in respect of the said agreement. It is not in dispute that the said amount of Rs. 51,000/- has been paid by the appellant. (4) Disputes and differences arose between the appellant and the IMSPL in relation to the said agreement which were referred to arbitration. IMSPL as the claimant before the sole Arbitrator prayed for cancellation of the Nomination Agreement. The appellant as the respondent in the arbitration proceeding prayed for specific performance of the said agreement. When the said agreement was produced before the learned Arbitrator in support of the appellant's claim of specific performance, it was found that stamp duty under Sec. 3 of the Stamp Act had not been paid at the place of execution of the document, i.e., Kolkata. The said agreement was impounded under Sec. 33 of the Stamp Act and was sent to the office of the Collector, Stamp Revenue, Kolkata for assessment of stamp revenue. (5) On 30 August, 2017 the said agreement was assessed to stamp duty for a sum of Rs. 11,26,39,488/- under Sec. 35 of the Stamp Act. Such assessment was challenged by way of two writ petitions being WP 23428 (W) of 2017 and WP 27751 (W) of 2017. By a judgment and order dated 24 November, 2017 the said assessment order was set aside by a learned Single Judge of this Court. The matter was remanded back to the Collector for assessment afresh. (6) Fresh hearing was held and was concluded on 4 December, 2017. Since no order was forthcoming from the Collector who had held the hearing and who was due to retire at the end of February, 2018, another writ petition was filed by the appellant herein being WP 3078 (W) of 2018. By an order dated 12 February, 2018 a learned Single Judge of this Court disposed of the writ petition by directing the Collector who had heard the matter to pass a reasoned order within a fortnight from the date of the order or before his retirement whichever was earlier.
(7) The concerned Collector, namely, one Don Bosco Lepcha retired upon reaching the age of superannuation on 28 February, 2018 without passing any order.
(8) On 23 March, 2018, the appellant filed a writ petition in this Court being WP 4475(W) of 2018 praying for inter alia, a declaration that the said Nomination Agreement is duly stamped and also a declaration that the said agreement is not covered under the provisions contained in Art. 23 of Schedule 1A to the Stamp Act as amended in the State of West Bengal. During the pendency of the said writ petition, one Manas Barman, Collector-in-Charge passed the final order on the aforesaid reference on 8 May, 2018, assessing the stamp duty for the said agreement at Rs. 3,79,39,028/- and penalty at 96 per cent of the stamp duty amounting to Rs. 3,64,21,466/- and directed that the total amount of Rs. 7,43,60,494/- was to be paid by the appellant as per Sec. 29 of the Stamp Act. By an application being CAN 3632 of 2018 filed in the writ petition the appellant challenged the said order.
(9) By the impugned judgment and order dated 25 June, 2018 the said writ petition and the application were disposed of by the learned Single Judge. The operative portion of the impugned judgment and order reads as follows:-
"..........Hence, the liability of the petitioner to pay Stamp Duty in Kolkata cannot be denied. The argument of Mr. Kapoor on Section 42 of the Stamp Act 1899 is also answered accordingly. The endorsement made by the Collector at Hyderabad is relevant to the presentation of the document in the State of Telangana. The only question that remains is the quantum of Stamp Duty.
25. The next argument of the petitioner was on the merits of the impugned order. It was submitted that the order is perverse inasmuch as extraneous materials not produced by the parties have been relied upon by the Collector-in-Charge. It however appears to me that the method of assessment by reference to the valuation of the property as published by the Government of Telangana as on 2013 and the back calculation and the method adopted as also the quantum of Stamp Duty therefore needs to be looked into afresh. It is desirable that a higher authority in the Collectorate takes up the matter in appeal and re-examines the same.
26. It is true that the matter was fixed for consideration of interim reliefs. However in view of the extensive arguments made by the partners over 2 days, and in view of the observations made herein there is little left to be decided by this Court in the Writ application.
27. Hence it is ordered that the impugned order dated 8th May 2018 be referred to the Chief Controlling Revenue Authority, Kolkata, under Section 56 of the Indian Stamp Act, 1899 for taking a decision of all claims of the petitioner, in accordance with law. The said Chief Controlling Authority shall hear and dispose of the appeal after giving a personal hearing to the writ petitioner or its legal representatives and upon consideration of all materials placed by the Writ Petitioner and Collector Stamp Revenue, Kolkata.
28. As a condition precedent for consideration of the Reference by the Chief Controlling Revenue Authority and for using the document in evidence before any forum and for the impugned order being kept in abeyance the petitioner shall deposit 75% of the sum of Rs. 7,43,60,494/, being the sum adjudicated in the impugned order, with the Collector of Stamp Revenue, Kolkata. The payment of the amount indicated hereinabove shall be without prejudice to the petitioner's rights and contentions under the Law.
29. The said sum must be kept by the Collector in a separate interest bearing Fixed Deposit Account, in the name of his office, with any Nationalised Bank and the same shall abide by the result of the order of the Chief Controlling Revenue as aforesaid.
30. The proceedings before the Chief Controller shall be decided expeditiously not later than a period of 3 months from the date of receipt of a formal representation in writing by the writ petitioner, along with a copy of this order."
Being aggrieved the writ petitioner is before us by way of the present appeal.
Contention of the appellants:-
(10) Appearing for the appellant, Mr. S. K. Kapur, learned Sr. Counsel, referred to Clause 91 of List I (Union List) of Schedule VII and Clause 63 of List II (State List) of Schedule VII to the Constitution of India.
Clause 91 of the Union List pertains to rates of stamp duty in respect of bills of exchange, cheques, promissory notes, bills of lading, letters of credit, policies of insurance, transfer of shares, debentures, proxies and receipts. Clause 63 of the State List pertains to rates of stamp duty in respect of documents other than those specified in the provisions of the Union List with regard to rates of stamp duty. Mr. Kapoor submitted that by virtue of Clause 63 of the State List each State has amended the Stamp Act.
(11) Mr. Kapur referred to Section 3 of the Stamp Act and in particular to the proviso introduced by the Bengal Stamp (Amendment) Act, 1922. The said proviso reads as follows:-
"Provided also that, except as otherwise expressly provided in this Act, and notwithstanding anything contained in clause (a), (b) or (c) of this section or in Schedule I, the amount indicated in Schedule I-A to this Act, shall subject to the exemptions contained in that Schedule, be the duty chargeable under this Act on the following instruments mentioned in clauses (aa) and (bb) of this proviso, as the proper duty therefor respectively:
(aa) every instrument mentioned in Schedule I-A as chargeable with duty under that Schedule, which, not having been previously executed by any person, is executed in Bengal on or after the first date of April, 1922; and (bb) every instrument mentioned in Schedule I-A as chargeable with duty under that Schedule, which, not having been previously executed by any person, is executed out of Bengal on or after the first day of April, 1922, and relates to any property situated, or to any matter or thing done or to be done in Bengal, and is received in West Bengal."
(12) Mr. Kapur then referred to Schedule 1A to the Stamp Act which pertains to Stamp Duty payable on instruments in West Bengal. He referred to Articles 5(a) to 5(e). Articles 5(a), (b) and (c) clearly do not apply to the facts of this case. Article 5(d) pertains to agreements for sale or agreements for Lease-cum-Sale. The stamp duty prescribed for such an agreement is as prescribed for a conveyance in respect of the property in question. This would take us to Article 23. Article 23 contemplates properties situate firstly, within the limits of Kolkata Municipal Corporation (KMC) and Howrah Municipal Corporation (HMC); secondly, properties situate within any other Municipality apart from KMC and HMC; and thirdly, property situate at any other place not being a Municipality or the KMC or the HMC. Learned Senior Counsel submitted that the terms 'any other Municipality' or 'any other place' apart from any other Municipality or KMC or HMC, must be construed as meaning any other Municipality or any other place in West Bengal. Hence, Article 23 would not apply because the property is admittedly situate in Hyderabad. If that be so, we have to fall back upon the residuary provision in Article 5(e) which prescribes the stamp duty for all other documents as Rs. 10/-. Accordingly, the Nomination Agreement was executed on stamp paper of Rs. 10/-. In this connection Mr. Kapur also submitted that conveyance of the same property in question executed in Calcutta High Court between Indian Express and IMSPL was not stamped at all since the property was situate in Hyderabad.
(13) Learned Senior Counsel then submitted that West Bengal cannot charge stamp duty in respect of a property situate beyond its territorial limits. West Bengal cannot legislate for the whole of India. He referred to Article 245 of the Constitution of India which reads as follows:-
"A. 245. Extent of laws made by Parliament and by the Legislature of States--
(1)Subject to the Provisions of this Constitution, Parliament may make laws for the whole or any part of the territory of India, and the Legislature of a State may make laws for the whole or any part of the State.
(2)No law made by Parliament shall be deemed to be invalid on the ground that it would have extra-
territorial operation."
He submitted that a State may make laws for the whole or any part of that State. No State law can have operation outside the territories of that State and to the extent any State law purports to operate beyond the boundaries of that State, the same will be invalid. This, however, is not the case with legislation made by the Parliament which can make laws for the whole or any part of the Indian Territory. Further, Art. 245 (2) clarifies that even if a Parliament made law purports to have extra-territorial operation, on that ground the law shall not be invalid.
(14) Mr. Kapur submitted that law for any particular plot of land must be lex situs i.e., law of the place where the land is situated. He submitted that as per Sec. 28 of the Registration Act conveyance in respect of the property in question is to be registered in Hyderabad by paying stamp duty applicable there. If the appellant has to pay stamp duty assessed by the Kolkata Colletorate which has been done on the basis that the Nomination Agreement is a conveyance, then, if the appellant succeeds in the arbitration and conveyance is executed in its favour in respect of the property in question, it will have to pay stamp duty again for registration of the conveyance in Hyderabad. This would amount to double taxation. Schedule 1A to the Stamp Act is a revenue provision and has to be strictly construed. Mr. Kapur also referred to a communication dated 19 April, 2017 from the Dy. Inspector General of Registration (Revenue), West Bengal to the Collector in Charge, Collector of Stamp Revenue, Kolkata to the effect that the concerned nomination deed pertains to property situated in Hyderabad and as such adjudication of stamp duty cannot be made in West Bengal. Mr. Kapur then referred to the principle called 'doctrine of territorial nexus' evolved by the Apex Court to find out whether or not the provisions of a particular State law have extra-territorial operation. In this connection he referred to the decision of the Apex Court in the case of Shrikant Bhalchandra Karulkar & Ors.-vs.-State of Gujarat & Anr., (1994) 5 SCC 459 and in particular paragraph 7 of the judgment which reads as follows:-
"7. It is no doubt correct that under Articles 245 and 246 of the Constitution of India the Legislature of a State can make laws for the State or any part thereof. It would be overstepping the limits of its legislative field when it purports to affect men and property outside the State. In other words the State Legislature has no legislative competence to make laws which have the extra-territorial operation. Meaning of the words "extraterritorial operation have been authoritatively laid down by this Court in various judgements. A State Legislature has plenary jurisdiction to enact laws in respect of subjects in Lists II and III, Seventh Schedule, Constitution of India. Such laws may be in respect of persons within the territory, of property- immovable or movable- situated within the State, or of acts and events which occur within its borders. So long as the law made by the State legislature is applicable to the persons residing within its territory and to all things and acts within its territory, it cannot be considered extraterritorial. This Court- over a period of three decades- has evolved a principle called "doctrine of territorial nexus" to find out whether the provisions of a particular State law have extra-territorial operation. The doctrine is well established and there is no dispute as to its principles. If there is a territorial nexus between the persons/property subject-matter of the Act and the State seeking to comply with the provisions of the Act then the Statute cannot be considered as having extra- territorial operation. Sufficiency of the territorial connection involves consideration of two elements, the connection must be real and not illusory and the liability sought to be imposed under the Act must be relevant to that connection. The Act has to satisfy the principles of territorial nexus which are essentially discernible from the factual application of the provisions of the Act."
(15) In support of his submission that once an endorsement is made under Sec. 42 of the Stamp Act upon payment of stamp duty and penalty, if any, the defect of the document being unstamped is permanently cured and the document becomes admissible for all times to come in all proceedings, Mr. Kapur relied on three decisions. Firstly, he referred to the decision of the Apex Court in the case of Hindustan Steel Ltd.-vs.-Messrs Dilip Construction Company, (1969) 1 SCC 597, wherein it was observed, inter alia, that the Stamp Act is a fiscal measure enacted to secure revenue for the State on certain classes of instruments. It is not enacted to arm a litigant with a weapon of technicality to meet the case of his opponent. In terms of Sec. 42(2), every instrument endorsed by the Collector under Sec. 42(1) shall be admissible in evidence and may be acted upon as if it has been duly stamped. Secondly, reliance was place on a Full Bench decision of the Lahore High Court in the case of Nand Lal-vs.-The Crown, ILR 21 Lahore 628. The question before the Full Bench was that assuming that a proper certificate was given under Sec. 41(1) of the Stamp Act in respect of a document, whether such certificate is final for all purposes or whether the Collector can reassess the document on the ground that there had been a mistake in the assessment and the instrument was really chargeable with a larger stamp duty. It was held that if the Collector certifies by endorsement on an instrument that it is duly stamped or that it is not so chargeable as the case may be, then such certificate is conclusive evidence of the matter stated therein. The certificate is final and the decision cannot be reviewed either by the Collector himself or by any other authority. Thirdly, Mr. Kapur relied on a decision of a Division Bench of the Madras High Court in the case of Y.A.A.V.R. Sethuraman Chettair-vs.- K.K.R.M.R.M. Ramanathan Chettiar (died), represented by his legal representatives, Muthiah Achi & Ors., 59 LW 280, wherein it was observed, inter alia, that when an instrument originally not sufficiently stamped is certified as duly stamped by a person duly authorised in that behalf on payment of the deficit duty as determined by him with or without a penalty, as the case may be, it may be acted upon 'as if it had been duly stamped' which means that the instrument bears a stamp of not less than the proper amount and that such stamp has been affixed in accordance with the law for the time being in force. In other words, the instrument, when certified as aforesaid, becomes effective and enforceable.
Contention of the State:-
(16) Mr. Majumdar, Learned Addl. Adv. General, appearing for the State referred to Sec. 2(6) of the Stamp Act which reads as follows:-
"'Chargeable' means, as applied to an instrument executed or first executed after the commencement of this Act, chargeable under this Act, and, as applied to any other instrument, chargeable under the law in force in India when such instrument was executed or, where several persons executed the instrument at different times, first executed".
(17) Learned Counsel submitted that stamp duty was chargeable on the document in question i.e., the Nomination Agreement on execution of the document. It is the situs of execution of the document that is relevant. Admittedly, the document was executed in Kolkata. He then referred to Sec. 2(12) of the Stamp Act which provides that 'executed' and 'execution', used with reference to instruments, mean 'signed' and 'signature'.
(18) Mr. Majumdar submitted that the writ petitioner submitted to the West Bengal jurisdiction. Only when the assessment was not favourable, the same is sought to be challenged. He submitted that Sec. 42 endorsement on the Nomination Agreement suffers from jurisdictional error since the Collector at Hyderabad had no authority to make such endorsement. It is only the revenue authority in West Bengal which has jurisdiction to make such endorsement. As such, the endorsement under Sec. 42 is void.
(19) Learned Counsel then submitted that one cannot read the words 'in West Bengal' either in Art. 23(b) or in Art. 23(c) of Schedule IA to the Stamp Act. The property in question is situated either within the territorial limits of a Municipality or within the territorial limits of any other local body in Telangana. Hence, either Art. 23(b) or Art. 23(c) will apply. Art. 5(e) is a residuary article which will apply only when no other Articles apply. However, Art. 5(d) and consequently Art. 23 squarely apply as the document in question is in essence an agreement for sale. As regards extra-territorial operation of the West Bengal amendment to the Stamp Act, Mr. Majumdar submitted that under Sec. 18(3) of the Indian Independence Act, 1947, the British laws were allowed to continue to operate. The 1947 Act was repealed by Art. 395 of the Constitution. However, Art. 372(1) of the Constitution provides that notwithstanding the repeal by the Constitution of the enactments referred to in Art. 395 but subject to the other provisions of the Constitution, all the laws in force in the territory of India immediately before the commencement of the Constitution shall continue in force therein until altered or repealed or amended by a competent legislature or other competent authority. The West Bengal amendment to the Stamp Act was of 1922, that is, pre-constitutional. Hence, the same was continued by the Indian Independence Act, 1947 and, thereafter, by Art. 372(1) of the Constitution. Explanation II of Art. 372 provides that any law passed or made by a Legislature or other competent authority in the territory of India which immediately before the commencement of the Constitution had extra-territorial effect as well as effect in the territory of India shall, subject to any such adaptations and modifications as aforesaid, continue to have such extra-territorial effect. This, according to Mr. Majumdar, preserves the extra-territorial effect of the West Bengal amendment to the Stamp Act. He also referred to Art. 13(3)(b) of the Constitution which provides that 'laws in force' includes laws passed or made by a Legislature or other competent authority in the territory of India before the commencement of the Constitution and not previously repealed, notwithstanding that any such law or any part thereof may not be then in operation either at all or in particular areas. (20) Learned Counsel then referred to Sec. 17 of the Stamp Act which provides that all instruments chargeable with duty and executed by any person in India shall be stamped before or at the time of execution. He submitted that execution of the document is the taxable event and not the transaction to which the document relates. Hence, stamp duty is payable on a document in accordance with the law of the State where the document is executed. In this connection he referred to the decision of the Apex Court in the case of New Central Jute Mills Co., Ltd. & Anr.-vs.-State of West Bengal & Ors., AIR 1963 SC 1307. In particular reliance was placed on paragraphs 14 and 20 of the judgment which read as follows:-
"14. Primarily, the liability of an instrument to stamp duty arises on execution. Execution in India itself made the instrument liable to stamp duty under Section 3(a) as it stood before the amendment. Under Section 3(c) execution out of India, where the instrument relates to property situated or any matter or thing done or to be done in India together with the further fact that the instrument is received in India, made the instrument chargeable with duty. In amending the Stamp Act what the State legislatures substantially did was to treat the particular State as equivalent to India. Thus, after the amendment by the U.P legislature the position in law is that execution of an instrument in Uttar Pradesh is made the primary dutiable event and liability to stamp duty arises on such execution. Apart from that, liability also arises where the instrument though executed out of Uttar Pradesh relates to property situated or any matter or thing done or to be done in Uttar Pradesh and is received in Uttar Pradesh. It may be mentioned that the changes in the law made by the other State legislatures are exactly similar.
"20. The result of this will be that if an instrument after becoming liable to duty in one State on execution there becomes liable to duty also in another State on receipt there, it must first be stamped in accordance with the law of the first State and it will not require to be further stamped in accordance with the law of the second State when the rate of that second State is the same or lower; and where the rate of the second State is higher, it will require to be stamped only with the excess amount and that in accordance with the law and the rules in force in the second State."
(21) Mr. Majumdar then referred to the decision of the Apex Court in the case of Hindustan lever & Anr.-vs.-State of Maharashtra & Ors., (2004) 9 SCC 438, wherein it was observed in the context of the Bombay Stamp Act that the duty charged by the State Legislature is on the execution of the instrument. The measure of charging the stamp duty may be fixed or ad valorem which is to be determined by the legislature. Learned Counsel also relied on a Full Bench decision of the Bombay High Court in the case of The Chief Controlling Revenue Authority, Maharashtra State, Pune & Anr.-vs.-M/s. Reliance Industries Limited, Mumbai & Anr., AIR 2016 Bom 108, wherein at paragraph 20 of the reported judgment it was observed that as per the scheme of the Bombay Stamp Act, it is the instrument which is chargeable to duty and not the transaction and, therefore, even if, the scheme may be the same that is transaction being the same, if the scheme is given effect to by a document signed in the State of Maharashtra it is chargeable to duty as per rates provided in Schedule I. As per the scheme of the Act, the taxable event is the execution of the instrument and not the transaction. If a transaction is not supported by execution of an instrument, there will not be a liability to pay stamp duty. Therefore, essentially the duty is leviable on the instrument and not on the transaction.
(22) Mr. Majumdar then referred to the non obstante clause in the West Bengal amendment to Sec. 3 of the Stamp Act and relied on the decision of the Apex Court in the case of Assistant General Manager, Central Bank of India & Ors.-vs.-Commissioner, Municipal Corporation for the City of Ahmedabad & Ors., (1995) 4 SCC 696, in support of his submission that a non obstante clause has overriding effect. Referring to the averments in paragraph 5 of the writ petition, Learned Counsel submitted that although the instrument in question is described as Nomination Agreement, in fact, it is an agreement for purchase of a property. Nomenclature of a document is not decisive. The substance of the document is to be considered to ascertain the nature of the document. Hence, Entry 5(d) of Schedule IA to the stamp Act would apply. Learned Counsel finally referred to the decision of the Apex Court in the case of National Mineral Development Corporation Ltd.-vs.-State of M.P and Anr., (2004) 6 SCC 281, and in particular referred to paragraph 23 of the reported judgment wherein it was observed inter alia that for the purpose of levying any charge not only is the charge to be authorised by law, it has also to be computed. The charging provision and the computation provision may be found at one place or at two different places depending on the draftsman's art of drafting and methodology employed. In the later case, the charging provision and the computation provision, though placed in two parts of the enactment, shall have to be read together as constituting one integrated provision. The charging provision and the computation provision may differ qualitatively. In case of conflict, the computation provision shall give way to the charging provision. In case of doubt or ambiguity the computing provision shall be so interpreted as to act in aid of charging provision. If the two can be read together homogeneously then both shall be given effect to, more so, when it is clear from the computation provision that it is meant to supplement the charging provision and is, on its own, a substantive provision in the sense that but for the computation provision the charging provision alone would not work. The computing provision cannot be treated as mere surplusage or of no significance; what necessarily flows therefrom shall also have to be given effect to. Learned Counsel submitted that Section 3 of the stamp Act which is the charging provision must be read together with the computation provisions which are Article 5(d) read with Article 23 of Schedule IA to the stamp Act.
Submission on behalf of the Respondent No. 11 (IMSPL):
(23) Appearing on behalf of the respondent number 11, Mr. Jayanta Kumar Mitra, Learned Senior Advocate, formulated 5 propositions:-
(a) The primary dutiable event is the execution of the Nomination Agreement, (b) Liability to pay stamp duty arose in the State where the instrument was executed i.e. West Bengal (c) The liability having arisen in West Bengal, it can only be discharged in accordance with the stamp laws applicable in West Bengal (d) An instrument can be said to be duly stamped only if it bears the stamp of the amount and description in accordance with the law of West Bengal where the instrument was executed (e) If the real property is in another State, the liability to pay stamp duty arises first under the stamp laws of the first State i.e West Bengal and the second liability arises under the laws of the second State i.e Telangana when the instrument is received there.
Learned Senior Counsel submitted that all these propositions are to be found in the cases of New Central Jute Mills Co. Ltd. & Anr. (supra) and The Chief Controlling Revenue Authority, Maharashtra State, Pune & Anr. (supra).
(24) Mr. Mitra referred to Sec. 17 of the Stamp Act and submitted that the stamping of the instrument has to be before or at the time of the execution of the instrument. This is a statutory mandate. An instrument that is chargeable with stamp duty, cannot be executed in one State and then subsequently taken to another State and stamped there. He submitted that the Nomination Agreement under consideration is one for sale, assignment, indemnity and nomination rolled into one. It has to be stamped as if it was a conveyance in accordance with Art. 23 of Schedule 1A to the Stamp Act. There is no scope for applying Art. 5(e) of Schedule IA. Once the instrument is covered by Art. 5(d) of Schedule IA and one is taken to Art. 23, there is no looking back. One cannot then come back to Art. 5(e). According to Mr. Mitra Art. 23(b) or Art. 23(c) of Schedule IA would apply. Arts. 23(b) and 23(c) will have to be given an expansive meaning. The said Articles cannot be read to be restricted to territories in West Bengal. He pointed out that in Art. 23A, West Bengal is mentioned, but not so in Art. 23.
(25) On extra-territorial operation of a statute, Mr. Mitra referred to the 7 Judges' decision of the Apex Court in the case of Bengal Immunity Company Limited-vs.-State of Bihar & Ors., AIR 1955 SC
661. Relying on paragraphs 106 and 107 of the said judgment he submitted that a law enacted by the State in respect of a matter assigned exclusively to its jurisdiction stands on the same footing as a law passed by the Parliament on a matter within its jurisdiction. Both the legislators derive their authority from the same source, i.e., The Government of India Act, 1935 or the Constitution of India. Under these statues, the State is not subordinate to the Centre, its authority being supreme in respect of the matters entrusted to it. A subordinate legislature has plenary powers in respect of the topics assigned to it and this principle will apply as much to the State with reference to the matters enumerated in the State List as to the Centre with reference to the topics mentioned in the Union List and the Concurrent List. If legislation with extra-territorial operation is within the competence of the Union, it is equally within the competence of the State. The words 'extra-territorial operation' are used in two different senses as connoting firstly, laws in respect of acts or events which take place inside the State but have operation outside, and secondly, laws with reference to the nationals of a State in respect of their acts outside. In its former sense, the laws are strictly speaking intra-territorial though loosely termed 'extra-territorial' and that under Art. 245(1) it is within the competence of the Parliament and of the said legislatures to enact laws with extra-territorial operation in that sense. The words 'laws with extra-territorial operation' in Art. 245(2) must be understood in their second and strict sense as having reference to the laws of a State for their nationals in respect of acts done outside the State. He submitted that the West Bengal amendment to the Stamp Act may have extra-territorial operation in the first sense which is quite permissible and would not invalidate the said provisions of law. (26) Mr. Mitra then referred to the decision of the Apex Court in the case of State of Bombay-vs.-R.M.D. Chamarbaugwala & Anr., AIR 1957 SC 699, which is on the concept of territorial nexus and extra- territorial operation of a statute. The Apex Court observed that the doctrine of territorial nexus is well-established and there is no dispute as to the principle. If there is a territorial nexus between the person sought to be charged and the State seeking to tax him, the taxing statute may be upheld. Sufficiency of the territorial connection involves a consideration of two elements, namely, the connection must be real and not illusory and the liability sought to be imposed must be pertinent to that connection. It is of no importance on the question of validity of the statute that the liability imposed is or may be altogether disproportionate to the territorial connection. If the connection is sufficient in the sense mentioned above, the extent of such connection affects merely the policy and not the validity of the legislation. The question whether in a given case there is sufficient territorial nexus is essentially one of fact.
(27) Mr. Mitra then referred to Secs. 45 and 56 of the Stamp Act. Sec. 45 pertains to the power of the Revenue Authority to refund the penalty of excess duty in certain cases. Sec. 56 provides inter alia that the power exercisable by a Collector shall be subject to the control of the Chief Controlling Revenue Authority. Further, if any Collector, acting under Secs. 31, 40 or 41, feels doubt as to the amount of duty with which any instrument is chargeable, he may draw up a statement of the case and refer it, with his own opinion thereon, for the decision of the Chief Controlling Revenue Authority. Such authority shall consider the case and send a copy of its decision to the Collector who shall proceed to assess and charge the duty, if any, in conformity with such decision. Mr. Mitra submitted that either the Collector or the Chief Controlling Revenue Authority should assess the stamp duty in the present case. The facts and figures are with them. They are experts in the field. The Writ Court is not the proper forum for assessing the stamp duty. The High Court in exercise of its power under Art. 226 should not act as the assessing authority. Referring to the impugned judgment and order, Mr. Mitra submitted that the Learned Single Judge also felt that assessment of stamp duty is not within the Court's domain. Hence, he referred the matter to the Chief Controlling Authority under Sec. 56 of the Stamp Act. How a statutory provision has been understood and implemented by the authorities in the past would throw some light on interpretation of such provision. Hence, the matter should be referred to the revenue authority for assessment of the stamp duty. Mr. Mitra also submitted that by the order under challenge in this appeal both the writ petition and CAN 3632 of 2018 were disposed of. The CAN had additional parties and additional prayers. This could not be done without amending the writ petition. This is a glaring irregularity.
(28) Mr. Mitra also referred to Sec. 57 of the Stamp Act which provides essentially that the Chief Controlling Revenue Authority may state any case referred to it under Sec. 56(2) or otherwise coming to its notice and refer such case, with its own opinion thereon to the High Court which shall be decided by not less than three Judges of the High Court.
(29) Learned Sr. Counsel also referred to a decision of a learned Single Judge of this Court in the case of Dr. Swapnadin Lahiri-vs.- Tridib Das Roy, (1999) II CWN 527, wherein it was observed inter alia that in view of the explanation added to Art. 5 of Schedule IA to the Stamp Act, even in case of a mere agreement for sale where there is no promise to deliver possession immediately after or before execution of the agreement, even if it is a mere agreement to transfer or deliver possession of immovable property with an intention to transfer right, interest or title to such property at any future date by executing a separate conveyance, such agreement is to be stamped as if it is a conveyance as mentioned in Art. 23 of the said Schedule. We have considered the said decision. There is no quarrel with the proposition of law laid down therein but in our opinion, this decision is of not much relevance to the points involved in this case.
(30) Regarding Sec. 42 of the Stamp Act, Mr. Mitra submitted that this provision would have come to the writ petitioner's aid had stamp duty been paid on the Nomination Agreement in accordance with the West Bengal Stamp Laws. Sec. 42 cannot be read in isolation. It has to be read along with Sec. 3 and Sec. 17 of the Act. Regarding the decision in Nand Lal (supra), he submitted that the issue of territorial nexus was not discussed in that case. Regarding the decision in Hindustan Steel Ltd. (supra), he submitted that the issue in that case was completely different which was although an instrument which is not stamped as required by the Stamp Act, may, on payment of stamp duty and penalty, be admitted in evidence, whether or not such an instrument can be acted upon. He submitted that this decision has no relevance to the facts of the present case.
As regards the letter dated 19 April, 2017 written by the Dy. Inspector General of Registration (Revenue), West Bengal to the Collector in Charge, Calcutta of Stamp Revenue, Calcutta, referred to above, Mr. Mitra submitted that this letter cannot be read in isolation. He referred to the order of the learned Arbitrator dated 8 July, 2017 whereby the original of the Nomination Agreement was impounded by the learned Arbitrator and sent to the Collector of Stamp Revenue, Calcutta for assessment of stamp duty. He then referred to a letter dated 1 August, 2017 written by the Collector of Stamp Revenue, Calcutta to the Commissioner & Inspector General (Registration and Stamps), Telengana, requesting the addressee to inform the Collector about the present market value of the properties mentioned in the Schedule to the Nomination Agreement since the land in question is situated in Telengana.
Appellants in reply:-
(31) In reply, Mr. Kapur, learned Sr. Counsel submitted that the principal prayer in the writ petition is for a declaration to the effect that the West Bengal Revenue Authorities cannot impose stamp duty on the Nomination Agreement. This is a question of law and should be decided by this Court. He further submitted that Art. 23 of Schedule IA to the Stamp Act should be read down as otherwise the Bengal Amendment to the Stamp Act will be rendered unconstitutional by purporting to have operation outside the State.
(32) As regards the decision of the Apex Court in Bengal Immunity Company Limited (supra), learned Sr. Counsel submitted that the paragraphs relied upon by learned Counsel for the respondent no. 11 are part of the dissenting judgment of a learned member of the bench.
Four learned Judges out of seven declined to answer the question of extra-territoriality. Hence, this decision is no authority on the point of extra-territorial operation of a statute.
(33) Mr. Kapur further submitted that in the case of amalgamation, etc., of two companies if the transferor company has properties in various States including West Bengal, then, only the property of the transferor company which is situate in West Bengal is chargeable to stamp duty in West Bengal as provided by Art. 23A of Schedule IA to the Stamp Act. This is obviously because of the principle of territorial nexus.
(34) After Mr. Kapur, Learned Sr. Counsel concluded his submission in reply, Mr. Mukherjee, Ld. Sr. Counsel appearing for the respondent no. 11, urged another point in support of his submission that a State law can have extra territorial operation. He referred to Sec. 30B of the Registration Act, 1908 which is a West Bengal amendment. The said Section reads as follows:-
"30B. Special power of registration in certain cases by Registrar of Assurances, Calcutta._Notwithsanding anything contained elsewhere in this Act, the Registrar of Assurances, Calcutta, may without regard to the situation in any part of India outside the State of West Bengal of the property to which a document relates, receive and register the document where such document is in the nature of_
(a)A mortgage bond executed by an employee of a Government, a statutory body or a local authority in favour of such Government, statutory body or local authority as security for advances taken by such employee for house-building purposes; or
(b) A reconveyance executed by a Government, a statutory body or a local authority in favour of employee of such Government, statutory body or local authority on repayment of the advances taken by such employee for house-building purposes."
He submitted that Sec. 30B(b) contemplates that the Registrar of Assurances, Calcutta may receive and register a document which is in the nature of a re-conveyance of a property notwithstanding that the property may be situate anywhere in India outside the State of West Bengal. He then referred to Art. 54 of Schedule IA to the Stamp Act which pertains to re-conveyance of mortgaged property. Art. 54(a) provides that if the consideration for which the property was mortgaged does not exceed Rs. 1000/-, a deed of reconveyance of such property would attract the same duty as a conveyance (Art. 23) for the amount of such consideration as set forth in the reconveyance. He submitted that a reconveyance of a property situate anywhere outside the State of West Bengal would still attract Art. 23 and hence, the argument that Art. 23 only pertains to properties situate in West Bengal as fallacious. He further submitted that the Stamp Act is a taxing statute and nothing can be added to the provisions contained therein. In this connection he relied on extracts from 'Principles of Statutory Interpretation' by G.P. Singh, 13th Ed., (2012) in support of his submission that a taxing statute is to be strictly construed. Nothing is to be read into, nothing is to be implied. He also relied on the decision of the Apex Court in the case of M/s. Polestar Electronic (Pvt.) Ltd.-vs.-Additional Commissioner, Sales Tax & Anr., (1978) 1 SCC 636, in support of such submission.
(35) In response, Mr. Bhachawat, Ld. Senior Adv., appearing for the appellants submitted that a provision in the Registration Act cannot have any relevance for the purpose of interpreting a provision of the Stamp Act. Further, Sec. 30B of the Registration Act gives a special power of registration in certain cases to the Registrar of Assurances, Calcutta. It starts with the words 'notwithstanding anything contained elsewhere in this Act'. This does not mean that it has any overriding effect as far as other statutes are concerned.
Court's View:
(36) The primary prayers in the writ petition on which the impugned order was passed are for a declaration that the Nomination Agreement in question is duly stamped and also for a declaration that the said agreement is not covered by Art. 23 of Schedule IA to the Stamp Act.
There is a further prayer for directing the respondents to return to the appellants the original copy of the Nomination Agreement. The Ld. Single Judge in effect held that the said agreement is insufficiently stamped and accordingly referred the matter to the Chief Controlling Revenue Authority, Calcutta under Sec. 56 of the Stamp Act for taking a decision regarding the stamp duty payable. If the appellants are correct in their submission that the said agreement is duly stamped and not covered by Art. 23 of Schedule IA to the Stamp Act, then the Ld. Single Judge should not have referred the matter to the Chief Controlling Revenue Authority, Calcutta nor should have directed that for using the said document in evidence before any forum the appellants shall deposit 75 per cent of the sum of Rs. 7,43,60,949, being the sum adjudicated by the Collector of Stamp Revenue, Calcutta.
(37) The Collector who passed the final assessment order which was impugned before the Ld. Single Judge was not the same person who had heard the parties. It is completely unacceptable that one person holding the office of Collector hears the concerned parties and another person, being his successor in the same post without hearing the parties, passes the assessment order. This is inconceivable. The order of Manas Barman, the Collector who passed the final assessment order is completely indefensible. To be fair to the respondents they were also ad idem on this point. The said assessment order is set aside.
(38) Now, coming to the moot point of whether the agreement in question is sufficiently stamped or not, the appellants argued that Rs. 10/- was the stamp duty payable and the agreement was accordingly executed on a non-judicial stamp paper of Rs. 10/-. Their alternative agreement was that, in any event, the issue of assessment of stamp duty cannot be reopened since the said agreement bears endorsement of the Collector at Hyderabad under Sec. 42 of the Stamp Act. (39) The respondents argued that the said agreement would attract stamp duty as per Art. 23 of Schedule IA to the Stamp Act read with Art. 5 thereof. We will proceed on the basis that the agreement is one relating to sale or lease-cum-sale of immovable property. If that be so, prima facie Art. 5(d) of Schedule IA is attracted. The proper stamp duty prescribed for such a document is the same duty as is prescribed for a conveyance (Art. 23). Art. 23, as noted hereinabove, contemplates properties situate within the territorial limits of firstly, KMC or HMC; secondly, within the territorial limits of Municipal Corporation or Municipality or a notified area other than those included in the first category; and thirdly, properties situate in the areas other than those included in the first two categories. The argument of the respondents that Municipal Corporation or Municipality or a notified area mentioned in Art. 23(b) or other areas mentioned in Art. 23 (c) will include any area in India is not acceptable to us. Schedule IA to the Stamp Act is a State amendment. The State can legislate in respect of any activity happening or any person residing within its territorial limits. A State legislation cannot have extra territorial operation. It is impossible for us to accept the respondents' submission that by the State amendment, the State can charge stamp duty in accordance with Art. 23 of Schedule IA for conveyance in respect of properties situate outside the State, be it Kashmir or be it Kerala. This would militate against Art. 245 of the Constitution of India which clearly states that a Parliamentary legislation will not be invalid on the ground that it purports to have extra territorial operation. However, as regards State legislation, there is no such saving provision (40) In Nautam Prakash DGSVC, VADTAL & Ors.-vs.-K.K. Thakkar & Ors., (2006) 5 SCC 330, the Apex Court observed that the office for administration of the Trust in question was situate in the State of Gujarat. Only some properties of the Trust were situate in Maharashtra. The Trust was registered in Baroda. The Apex Court held that in terms of Clause 4 (b) of the Bombay Charity Commissioner (Regional Re-Organization) Order, 1960 the jurisdiction of the Assistant Charity Commissioner, Greater Bombay was confined only to the management of the property situate within the State of Maharashtra. It was further observed that the legislature of a State while enacting a law is required to maintain the territorial nexus. Only in certain cases, extra-territoriality may be accepted. Ordinarily, therefore, the legislation enacted by a State will be applicable only within the territorial limits thereof. There is a general presumption that the legislature does not intend to exceed its jurisdiction. It was further observed, whether in the area of international law or domestic law, lex situs, has to be determined in the context of the proper law applicable thereof, be it in the realm of contract or otherwise. Thus, it is clear that the State can legislate with respect to property situate within its territorial limits or with respect to persons residing in that State, but not beyond that. In Shrikant Bhalchandra Karulkar (supra), the Apex Court observed, inter alia, that the State would be over-stepping the limits of its legislative field when it purports to affect men and property outside the State.
(41) Mr. Mitra, Ld. Senior Counsel, appearing for the respondent no. 11 relied on the Apex Court decision in Bengal Immunity Company Ltd. (supra) to support his submission that a State law can have extra territorial operation where the law is in respect of acts or events which take place inside the State but have operation outside. Mr. Kapur, Ld. Senior Counsel, pointed out that the said observation relied on by Mr. Mitra is part of a dissenting judgment of a learned Member of the Bench. He pointed out that four learned Judges out of seven did not answer the question of extraterritoriality. Hence, the said decision does not help Mr. Mitra. We have gone through the said decision and we find that Mr. Kapur is right.
(42) The decision in the case of State of Bombay-vs.-RMD Chamarbaugwala (supra) also does not help the respondents. We do not find sufficiency of territorial connection between the State of West Bengal and a property situate in Hyderabad. There is no real connection for the State to charge stamp duty on the basis that the Nomination Agreement is a conveyance of a property situate in Hyderabad. Mere execution of the Nomination Agreement in West Bengal in respect of a property situate in Hyderabad would not, in our considered view, attract Art. 23 of Schedule IA to the Stamp Act. (43) Learned Counsel for the respondents submitted that execution of the document is the primary chargeable event in so far as the stamp duty is concerned. Hence, stamp duty will be attracted in accordance with Schedule IA of the Stamp Act. In this connection, reliance was placed on the Apex Court decision in the case of New Central Jute Mills Co. Ltd. & Anr. (supra). We are not for a moment saying that no stamp duty is payable on the said Nomination Agreement. According to us, Art. 23 of Schedule IA is not attracted. What is applicable is Art. 5 (e) which is the residuary article, which prescribes the stamp duty of Rs. 10/-.
(44) It is also pertinent to note that a communication dated 19 April, 2017 was sent by the Dy. Inspector General of Registration (Revenue), West Bengal to the Collector-in-Charge of Stamp Revenue, Calcutta stating therein that the concerned Nomination Agreement relates to property situate in Hyderabad and as such adjudication of stamp duty cannot be made in West Bengal. It was only subsequently when the Ld. Arbitrator impounded the said agreement and sent the same to the Collector for assessment of proper stamp duty that the stand of the State changed.
(45) In course of argument, Mr. Kapur, Ld. Senior Counsel, had called upon learned Counsel for the State to demonstrate a single instance where an agreement for sale executed in West Bengal in respect of a property situate outside West Bengal has been charged with stamp duty in accordance with Art. 23 of Schedule IA to the Stamp Act. The State was unable to show even one such instance. IMSPL (respondent no. 11) has filed two applications under O. 41 R. 27 of the CPC. The first of those applications is CAN 6364 of 2018. Documents have been annexed to the said application to show that even for conveyance executed in West Bengal in respect of properties situate outside West Bengal, stamp duty has been charged in accordance with Art. 23 of Schedule IA. We have gone through such documents. The first document is a conveyance of a property situate in Patna. The said conveyance is registered in West Bengal on a non-judicial stamp paper of Rs. 10/-. The second document is a conveyance dated 2 March, 1995 in respect of a property situate at Rash Behari Avenue, Kolkata. The third document is a sale deed executed on non-judicial stamp paper of Rs. 10/- in respect of a property in Uttar Pradesh. The fourth document is an indenture of sale in respect of a property situate in Uttar Pradesh executed on stamp paper of Rs. 1575/-. The last document which is dated 29 July, 1989 is a deed of sale dated 29 July, 1989 in respect of a property situate in Mathura. It is not clear from the copy of the sale deed annexed to the application as to how much stamp duty was paid on such sale deed. None of the said documents establishes that for an agreement of sale in respect of property situate outside West Bengal, stamp duty for the purpose of registration has been charged in accordance with Art. 23 of Schedule IA to the Stamp Act. In any event, payment of higher stamp duty than is required by a party in respect of an indenture in a given case would not change the law.
The respondent no. 11 has filed another application being CAN 6601 of 2018 praying for a direction on the State to produce all records lying in the office of Registrar of Assurances, Kolkata relating to the documents/instruments registered after 31 January, 1994 till date at the Office of the Registrar of Assurances, Kolkata relating to property situated outside the State of West Bengal. We see no reason to pass any order on such application. The court is not going to fish out any evidence for a party. As noted above, in spite of being called upon by the appellants, the State could not show one instance where stamp duty has been charged by the State in relation to an agreement for sale pertaining to a property situate outside West Bengal, in accordance with Art. 23 of Schedule IA to the Stamp Act. (46) Learned Counsel for the respondents argued that Art 23A which pertains to conveyance in respect of amalgamation, merger, etc., envisages transfer of a property situate in West Bengal. However, no such mention of 'West Bengal' is there in Art. 23. Hence, the words 'West Bengal' should not be read into Art. 23. We are not able to accept this submission. We look at it in a different way. Art. 23A contemplates that stamp duty can only be charged when a property of the transferor company is located in the State of West Bengal. The said provision does not levy stamp duty in respect of properties of a company that may be situate outside the State of West Bengal. This also supports our view that the State did not intend to charge stamp duty in accordance with Art. 23 of Schedule IA to the Stamp Act in respect of registration of a conveyance or agreement of sale pertaining to a property situate outside West Bengal.
(47) There is no doubt that the State can charge stamp duty for registration of any instrument pertaining to transfer of a property in accordance with Art. 23 so long as the property is situate within the territorial limits of the State. However, it is not possible for us to accept the submission that the State of West Bengal can charge stamp duty in accordance with Art. 23 in respect of an agreement of sale executed in West Bengal in respect of property anywhere in India. This would also lead to gross injustice to a citizen. If A and B enters into an agreement of sale in respect of a property in Pondicherry and if for registration of such agreement they have to pay the same stamp duty as is applicable for conveyance in accordance with Art. 23, it will lead to double taxation since when the property is actually sold and conveyance is executed and registered, the purchaser will have to pay full stamp duty applicable for a conveyance in Pondicherry in view of the provision of Sec. 28 of the Registration Act. Such a situation cannot be countenanced.
(48) For the reasons indicated above, we are of the view that Art 23 of Schedule IA to the Stamp Act does not apply to the Nomination Agreement in question. It is Art. 5(e) of Schedule IA which is attracted and accordingly the Nomination Agreement is duly stamped. (49) Coming to the second question, we are of the view that once the Nomination Agreement bears the endorsement under Sec. 42 of the Stamp Act, the issue of assessment of stamp duty cannot be reopened. We have discussed above the decision of the Apex Court in the case of Hindustan Lever & Anr. (supra), the decision of a Full Bench of the Lahore High Court in the case of Nand Lal (supra) as well as the decision of the Madras High Court in the case of YAAVR Sethuraman Chettair (supra), all of which support the view we are taking. The Stamp Act is a central legislation having all India operation. Once the defect of an instrument being unstamped or insufficiently stamped is cured following the procedure under Sec. 42 of the Stamp Act, it shall be admissible in evidence and may be registered and acted upon and authenticated as if it had been duly stamped. No territorial restriction is indicated in Sec. 42. The defect is cured once and for all and the instrument is admissible in evidence and can be acted upon anywhere within the territory of India. It is irrelevant as to the Collector of which State has issued the certificate under Sec. 42. In our view, once the Collector of a State certifies by endorsement on an instrument that proper duty, or proper duty and penalty, as the case may be, have been levied in respect of an instrument, then, notwithstanding the State where the instrument was executed, the instrument becomes admissible in evidence and may be registered and acted upon and authenticated as if it had been stamped from the very inception. It is a legal fiction which has to be given full effect. (50) We are not impressed with the argument of the respondent no. 11 on the basis of Sec. 30B of the Registration Act. It is a special power granted to the Registrar of Assurances, Kolkata as an exceptional case. The facts of the present case do not come within the purview of the said Section. Further, the said provision does not have any bearing on the Stamp Act.
(51) For the reasons aforestated, this appeal succeeds. The order impugned is set aside. The writ application is allowed. The respondents are directed to handover the original of the Nomination Agreement to the appellant company within seven days from date. It is declared that the Nomination Agreement is sufficiently stamped and admissible in evidence and may be registered and acted upon. (52) MAT 593 of 2018 along with CAN 6364 of 2018 and CAN 6601 of 2018 are accordingly disposed of. There will be no order as to costs. (53) In view of the judgment passed in MAT 593 of 2018, MAT 624 of 2018 is also accordingly disposed of. MAT 624 of 2018 would also be governed by the judgment delivered in MAT 593 of 2018. (54) Urgent certified photocopy of this judgment and order, if applied for, be given to the parties upon compliance of necessary formalities. I Agree.
(Jyotirmay Bhattacharya, CJ.) (Arijit Banerjee, J.) Later:
After the judgment is delivered, prayer is made on behalf of the respondent no. 11 for stay of operation of the judgment and order for four weeks, though the State Government has not prayed for stay of operation of the judgment and order. However, to give an opportunity to the respondent no 11 to approach the higher forum, there will be stay of operation of this judgment and order for a period of two weeks from date.
(Jyotirmay Bhattacharya, CJ.) (Arijit Banerjee, J.)