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of <h1>Court rules transfer of assets between companies subject to stamp duty as conveyances under Stamp Act Article 23</h1> <h3>Sahayanidhi (Virudhunagar) Ltd. Versus A. RS Subrahmanya Nadar</h3> The Court determined that documents A-2 and A-3, relating to the transfer of assets and liabilities between companies under a court-approved arrangement, ... Amalgamation Issues:- Stamp duty chargeable on documents A-2 and A-3- Proper stamp duty payable on transfer deedsAnalysis:The case involved a reference under section 60 of the Indian Stamp Act regarding the stamp duty chargeable on two documents, A-2 and A-3, related to the transfer of assets and liabilities of a company. The Pudukottah Benefit Fund, Limited, faced financial difficulties and was ordered to be wound up. Subsequently, a scheme of arrangement was sanctioned by the Court for the transfer of assets and liabilities to another company, Central Finance Syndicate Limited, Erode. The issue raised was whether the transfers required stamp duty and if so, under which article of the Stamp Act.The Court delved into the provisions of section 153-A of the Companies Act, which allows for the transfer of assets and liabilities between companies as part of an arrangement approved by the Court. The Court noted that the transfers in question were not mere vouchers but independent transfers of property. The documents, A-2 and A-3, were analyzed to determine their stamp duty liability based on the substance of the transactions.The Court concluded that the transfers, as reflected in A-2 and A-3, fell within the definition of conveyance under Article 23 of Schedule I of the Stamp Act. The documents went beyond the Court's order and included additional obligations and considerations, making them subject to stamp duty as conveyances. The argument that the documents could be treated as deeds of composition under Article 22 was dismissed due to the specific circumstances of the transfers.Ultimately, the Court ruled that the District Munsif was not required to decide on the stamp duty payable on the documents. Instead, the documents were to be sent to the Collector for the determination of the proper duty and penalty. The Court's decision clarified the stamp duty liability of the transfer deeds and emphasized the importance of adhering to the Stamp Act's provisions in such transactions.
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