Stamp procedure and assignee locus in recovery proceedings cannot be decided summarily without following the proper statutory process and trial.

A Tribunal cannot summarily reject recovery proceedings on the ground that assignment and loan documents are insufficiently stamped without following the statutory procedure under the Gujarat Stamp Act; the impounding and reference process must be carried out in the manner prescribed, and the Tribunal lacked jurisdiction to bypass it. The Tribunal also could not decide at the threshold that the assignee lacked locus to pursue recovery under the RDB Act and SARFAESI Act merely because the assignment was in favour of a trust, as the nature of the assignment and maintainability raised contested legal and factual issues requiring trial. The impugned orders were quashed and the original applications restored for decision on merits, with all defences kept open.

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Issues: (i) Whether the Tribunal could dismiss the original applications at the threshold on the ground that the assignment agreement and loan documents were insufficiently stamped and therefore inadmissible in evidence, and simultaneously direct the stamp authorities to impound and adjudicate those instruments. (ii) Whether the Tribunal could decide, at the threshold and without trial, that the assignee had no locus to continue the recovery proceedings under the RDB Act and the SARFAESI Act because the assignment was in favour of a trust.

Issue (i): Whether the Tribunal could dismiss the original applications at the threshold on the ground that the assignment agreement and loan documents were insufficiently stamped and therefore inadmissible in evidence, and simultaneously direct the stamp authorities to impound and adjudicate those instruments.

Analysis: The governing provisions of the Gujarat Stamp Act require the document to be produced before the authority, followed by examination, impounding, and then reference to the Collector in the prescribed manner. Where an instrument is said to be insufficiently stamped, the statutory procedure cannot be bypassed by first rejecting the claim and then issuing directions to the stamp authorities. The Tribunal had neither the original documents before it in the manner required for such exercise nor jurisdiction to adopt a summary procedure unknown to the Stamp Act. The directions to the Collector and the Chief Controlling Revenue Authority were therefore outside jurisdiction.

Conclusion: The finding on insufficiency of stamp duty and the consequential directions to the stamp authorities were unsustainable and were set aside.

Issue (ii): Whether the Tribunal could decide, at the threshold and without trial, that the assignee had no locus to continue the recovery proceedings under the RDB Act and the SARFAESI Act because the assignment was in favour of a trust.

Analysis: The question whether the assignment vested rights in ARCIL, in the trust, or in ARCIL in a representative capacity raised contentious legal and factual issues that required examination at trial. The effect of substitution already allowed under the statutory framework and the interaction between the RDB Act and the SARFAESI Act also required detailed consideration. The Tribunal erred in deciding maintainability and locus at the threshold, particularly on materials and objections that had not been crystallised in the pleadings in the proper manner.

Conclusion: The threshold finding that ARCIL had no locus to prosecute the original applications was not justified.

Final Conclusion: The impugned orders were quashed and the original applications were restored to the Tribunal for decision on merits in accordance with law, with all defences left open.

Ratio Decidendi: A Tribunal cannot finally reject a recovery proceeding on stamping or assignee-locus objections without following the statutory stamp procedure and without adjudicating contested assignment and maintainability issues at the proper stage of trial.

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