Validity of notice under Indian Stamp Act post-SARFAESI auction clarified by High Court

The High Court of Madras held that the notice issued under Section 47(A) of the Indian Stamp Act after an auction conducted under SARFAESI Act was valid. The court determined that the authorised officer under SARFAESI Act cannot be classified as a civil or revenue court, collector, or revenue officer for stamp duty valuation purposes. The judgment emphasized the distinct roles of the parties involved in the auction process and upheld the validity of the notice issued for stamp duty valuation.

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Issues:
1. Validity of notice issued under Section 47(A) of the Indian Stamp Act after auction conducted under SARFAESI Act.
2. Whether the authorised officer under SARFAESI Act can be considered as a civil or revenue court, collector, or revenue officer for the purpose of stamp duty valuation.

Issue 1 - Validity of Notice under Indian Stamp Act:
The respondent, an auction purchaser under SARFAESI Act, sought registration of the certificate issued in her favor. A notice was issued under Section 47(A) of the Indian Stamp Act to show cause on the market value fixed. The appellant challenged this, arguing that the officer under SARFAESI Act is not equivalent to a Collector or Revenue Officer as per the Indian Stamp Act. The Single Judge allowed the writ petition, leading to the present appeal. The appellant contended that the notice was premature as the Collector should have given a hearing before issuing it. The Court held that the writ petition was not maintainable as the appellant should have first represented before the Collector and then challenged the order through the statutory forum.

Issue 2 - Classification of Authorised Officer under SARFAESI Act:
The respondent argued that the authorised officer conducting the auction under SARFAESI Act should be considered under Article 18 of the Indian Stamp Act for stamp duty valuation purposes. The Court analyzed the role of the authorised officer and concluded that such officers are agents of secured creditors and not equivalent to civil or revenue court, collector, or revenue officer as required under Article 18. The SARFAESI Act is a mechanism for recovery, and the lender, acting through the authorised officer, does not transform into a civil or revenue court. Therefore, the notice issued for stamp duty valuation was deemed valid, and the writ petition was dismissed.

In conclusion, the High Court of Madras ruled that the notice issued under Section 47(A) of the Indian Stamp Act after an auction conducted under SARFAESI Act was valid. The Court clarified that the authorised officer under SARFAESI Act cannot be considered as a civil or revenue court, collector, or revenue officer for stamp duty valuation purposes. The judgment emphasized the distinct roles and functions of the parties involved in the auction process and upheld the validity of the notice issued for stamp duty valuation.

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