Assignment of debt with existing mortgage security attracts prescribed assignment duty, not fresh property-based Panchayat or Municipal stamp duty.

Assignment of a bank's loan, rights and existing mortgage security to a reconstruction company does not create a fresh mortgage, charge or encumbrance over immovable property. The Panchayat and Municipal stamp-duty provisions governing specified transfers or mortgages of immovable property therefore do not apply to such an assignment. A notification under the Indian Stamp Act separately prescribes duty on loan securitisation or assignment of debt backed by immovable security, calculated on the loan or debt assigned rather than property market value. Requiring further mortgage-related duty would duplicate recovery and result in unjust enrichment; no duty beyond that payable under the assignment-deed notification is chargeable.

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Issues: Whether additional Panchayat and Municipal stamp duties could be levied on an assignment deed by which a reconstruction company acquired a bank's loan, security interests and rights under an existing mortgage.

Analysis: The original lender had created and registered the mortgage over the borrower's immovable property and paid the applicable stamp duties at that stage. The assignment deed did not create a fresh mortgage, charge or encumbrance over immovable property; it only transferred the lender's loans, rights, liabilities and underlying security interests to the reconstruction company. Section 75 of the M.P. Panchayat Raj Evam Gram Swaraj Adhiniyam, 1993 and Section 161 of the M.P. Municipalities Act, 1961 apply to instruments relating to the specified transfers or mortgages of immovable property. The notification issued under Section 9(1)(a) of the Indian Stamp Act, 1899 specifically fixed duty on securitisation of loans or assignment of debt with underlying immovable securities at 0.1% of the loan securitised or debt assigned, rather than by reference to the property's market value. Re-imposition of mortgage-related duty on the assignment would result in duplicate recovery and unjust enrichment.

Conclusion: No stamp duty beyond the amount already paid under the assignment-deed notification was chargeable from the petitioner; the demand founded on the Panchayat and Municipal duty provisions was unsustainable.

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