Court-sanctioned amalgamation orders can attract stamp duty as conveyances and instruments, subject to the 1937 remission notification.

An order sanctioning a reconstruction or amalgamation scheme under sections 391 and 394 of the Companies Act, 1956, is treated as an instrument and conveyance for stamp duty purposes in West Bengal because it operates to transfer assets and liabilities under the court-approved scheme. The reasoning is that the transfer has the trappings of a sale, with consideration reflected through share allotment and valuation-based exchange ratio. The absence of a specific schedule entry does not exclude stampability. The 16 January 1937 remission notification applies where its conditions are met, and the order cannot be acted upon unless duly stamped, subject to that remission.

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Issues: Whether an order sanctioning a scheme of reconstruction or amalgamation under section 394 read with section 391 of the Companies Act, 1956, is a conveyance and an instrument liable to stamp duty under the Indian Stamp Act as applicable in West Bengal, and whether the 1937 remission notification applies.

Analysis: A scheme sanctioned under section 391 and section 394 of the Companies Act, 1956, operates on the basis of an agreement between the transferor and transferee companies and results in transfer of assets and liabilities to the transferee company by virtue of the court's order. The transfer was held to have the trappings of a sale because consideration is provided by allotment of shares to the shareholders of the transferor company and the exchange ratio depends on valuation of assets and liabilities. The court order was treated as an instrument because it is the document by which rights and liabilities are created and transferred. On that reasoning, the order falls within the inclusive meaning of conveyance under the Indian Stamp Act. The court rejected the contention that the transfer was merely by operation of law or that absence of an express schedule entry excluded stampability. The remission notification of 16 January 1937 was held applicable where its conditions are satisfied.

Conclusion: An order sanctioning a scheme of reconstruction or amalgamation under section 394 of the Companies Act, 1956, is liable to stamp duty as a conveyance and instrument, save where the 1937 remission notification applies.

Final Conclusion: The sanction order cannot be acted upon unless duly stamped, and the registry was directed to ensure stamping before taking the order on record, while preserving the statutory remission available under the notification.

Ratio Decidendi: Where a court-sanctioned amalgamation or reconstruction scheme effects transfer of property and liabilities pursuant to an underlying agreement and the order itself is the operative document of transfer, the order is an instrument and a conveyance for stamp duty purposes.

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