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P.S. Kailasam, Offg. C.J.

1. This is a reference under S. 57 of the Indian Stamp Act by the Chief Controlling Revenue authority. Board of Revenue, Madras. The respondent, the State Bank of India, presented on 15-11-1971, three draft documents. but we are concerned with only one for adjudication and levy of proper stamp duty under S. 31 of the Indian Stamp Act. The document with which we are concerned is a draft document styled as a deed of transfer proposed to be executed by the State Bank of India and the State Bank of Travancore by which the State Bank of India had agreed to transfer a sum of R. 50 lakhs to the State Bank of Travancore in view of cash credit advance sanctioned to XYZ Company Ltd. called the 'borrower' under a hypothecation agreement dated 1-11-1971. executed by the borrower in favour of the State Bank of India hypothecation agreement executed in favour of the State Bank of India as security for the repayment of the loan. At the time the deed of transfer was sought to be executed, a sum of Rs. 90 lakhs was due by the borrower to the State Bank of India under the hypothecation agreement. By the said deed of transfer which was sought to be adjudicated, the State Bank of India agreed with the State Bank of Travancore, to transfer to the said Bank a sum of Rs. 50 lakhs out of the said sum outstanding and due to itself by the borrower and the interest which will thereafter accrue at the rate of 2% above the said Bank of India advance rate of 10 1/2% per annum with all the rights, benefits, advantages and facilities relating to the proportionate part of the aforesaid security as mentioned in the deed of transfer. The Collector was of the opinion that the documents being for the transfer and retransfer of money respectively would be chargeable under Art. 62(c)(ii) of Schedule I to the Indian Stamp Act and that a sum of Rs. 22-50 would be leviable on each document. He was also of the opinion that if it were otherwise. the documents would have to be treated as agreements under Art. 5(c) of Schedule I of the Stamp Act and the stamp duty chargeable would be only Rs. 2-25. As the Collector had some doubts, he referred the matter to the Board of Revenue and the Board of Revenue informed the Collector that the document would fall under Art. 31 of Schedule I of the Indian Stamp act. Acting on the instructions issued by the Board of Revenue, the Collector by his proceedings dated 22-5-1972. adjudicated the document as an exchange dead under Art. 31 and directed that a stamp duty of Rs. 2,25,000 plus surcharge of 2 1/2% which came to Rupees 5625 totalling in all a sum of Rupees 2,30,625. had to be paid. On receipt of this order, the State Bank of India filed an application for referring the matter to the High Court under Sec. 57 of the Act for a decision. Accordingly, the Board has made this reference in the following terms: