TaxTMI 
TaxTMI 
2023 (12) TMI 1514
X X X X Extracts X X X X
X X X X Extracts X X X X
....r Section 5 of the SARFAESI Act, any asset reconstruction company may acquire financial assets of any Bank or financial institutions which are classified as Non-Performing Asset. The petitioner got assigned debts along with the right to proceed against the underlying security interest as envisaged under Section 5 of the SARFAESI Act from the State Bank of Travancore, the Federal Bank Ltd and the South Indian Bank Ltd. The petitioner sought to register the assignment deeds in favour of it [Exts. P2 to P4] with the Sub Registrar, Ernakulam (respondent No.5). The petitioner submitted before the Sub Registrar that in view of Section 5(1A) of the SARFAESI Act and 8F of the Indian Stamp Act, 1899, no stamp duty is payable to assignment deeds. Respondent No.5 referred the matter to respondent No.3, the District Registrar (General)/District Collector, Ernakulam, for adjudication. Respondent No.3 passed Exts.P9, P10 and P11 orders holding that as the Kerala Stamp Act, 1959, does not fix stamp duty for assignment agreement, the deeds come under 'conveyance' as provided in Section 2(d) of the Kerala Stamp Act. Respondent No.3 further found that stamp duty, as provided in Article 21 of....
X X X X Extracts X X X X
X X X X Extracts X X X X
....ra Bank Ltd. v. State of U.P. and others [AIR 2018 All 182], M/s Easun Products of India Pvt. Ltd v. The Inspector General of Registration and Chief Controller of Revenue Authority and others [MANU/TN/3590/2020] Edelweiss Asset Reconstruction Company Ltd Vs. State Punjab and others [MANU/PH/2164/2021] and Kota Mahindra Bank Ltd v. Chief Controlling Revenue Authority & Inspector General of Registration Chennai and others [2022(6) MLJ 454] in support of his contentions. 4. The learned Special Government Pleader appearing for the State resisted the contentions and submitted the following :- Section 2(d)(iv) of the Kerala Stamp Act would take in the assignment deeds in question. Article 55(c) of the Kerala Stamp Act, 1959, has no application insofar as the assignment deeds are concerned. The said article relates to any interest secured by a bond, mortgage deed or policy of insurance. In the present case, there is no mortgage deed. The debt was created by way of deposit of title deeds wherein there is no mortgage deed. The decisions relied on by the Senior counsel are in the context of the Indian Stamp Act, 1899, the relevant provisions of which are not in pari materia with the co....
X X X X Extracts X X X X
X X X X Extracts X X X X
.... Stamp Act, 1959. 10. The learned Senior Government Pleader submitted that there is a fundamental difference in the term 'conveyance' used in the Indian Stamp Act, 1899 and the Kerala Stamp Act, 1959. 11. For convenience of analysis, the relevant Sections and Articles in the Kerala Stamp Act and Indian Stamp Act are extracted below :- The Kerala Stamp Act,1959 2 .... (d) "conveyance" includes, -- (i) a conveyance on sale; (ii) every order made under Section 232 of the Companies Act, 2013, (Central Act 18 of 2013) in respect of amlagamation or reconstruction of companies ; (iii) every order made by the Reserve Bank of India under Section 44A of the Banking Regulation Act, 1949(Central Act 10 of 1949); and (iv)every other instrument, by which property, whether movable or immovable or any interest in any property is transferred inter vivos and which is not otherwise specifically provided for by the Schedule. The Indian Stamp Act, 1899 2..... (10) "Conveyance" includes a conveyance on sale and every instrument by which property, whether movable or immovable, is transferred inter vivos and which is not otherwise specifical....
X X X X Extracts X X X X
X X X X Extracts X X X X
....mortgage deed. In that context, the Full Bench of the Allahabad High Court held that transfer of debts along with underlying securities would be chargeable under Article 62(c). In Easun Products of India Pvt. Ltd (Supra) also, the Madras High Court considered a transfer of a right to recover the secured debt which arose from a mortgage deed, and the Court held that as per Article 62(c) of Schedule 1 of the Indian Stamp Act, 1899, the duty payable is chargeable as provided therein. In Kota Mahindra Bank Ltd v. Chief Controlling Revenue Authority (supra), the Madras High Court considered the interest secured under a mortgage deed. In the case of Edelweiss Asset Reconstruction Company Ltd (supra), the Punjab and Haryana High Court considered the interest and rights possessed by the financial institution in the mortgaged properties described in a deed. 14. In the present case, the transfer of interest is not the one secured by a mortgage deed. The borrower and the bank entered into a contract on deposit of title deeds regarding the properties mortgaged. 15. The learned Government Pleader relied on Rachpal Mahraj v Bhagwandas Daruka and others [1950 SCC 195] and Obla Sundaracharia....
X X X X Extracts X X X X
X X X X Extracts X X X X
....reditor as evidencing the creation of the mortgage was compulsorily registerable under Section 17 of the Registration Act, 1908. The Supreme Court considered the question : did the parties intend to reduce their bargain regarding the deposit of the title deeds to the form of a document? Following Obla Sundarachariar (Supra) the Supreme Court held thus :- "9. Turning now to the memorandum before us, it is clear, on the face of it, that the parties did not intend thereby to create the charge. The document purports only to record a transaction which had been concluded and under which the rights and liabilities had been orally agreed upon. No doubt it was taken by the respondents to show that the title deeds of the appellant's properties were deposited with them as security for the moneys advanced by them, and to obviate a possible plea that the deeds were left with them for other purposes, as indeed was contended by the appellant in his written statement, taking advantage of the non-registration of the memorandum in question. But that is far from intending to reduce the bargain to writing and make the document the basis of the rights and liabilities of the parties. In agr....
X X X X Extracts X X X X
X X X X Extracts X X X X
....e on securities/assignment of debt whether secure or insecure by a charge over movable or immovable properties, limiting the benefit to Asset Reconstruction Company (India) Ltd. (ARCIL). Sanction is also accorded to constitute an empowered committee with the Principal Secretary (Taxes) as convenor, Additional Chief Secretary (Finance), Principal Secretary (Industries) as members to consider the cases of ARCIL and make recommendation/suggestion thereof to Government." 24. It is discernible from the decision of the Government that as no stamp duty is specifically fixed for the assignments in favour of asset reconstruction companies registered under the SARFAESI Act, the Government intends to incorporate necessary amendment under the Stamp Act to cover the transaction under consideration. The High Power Committee deliberated on the issue. However, no positive steps have been taken by the Government in this matter. The right of the petitioners to register the documents cannot be deferred until the steps initiated by the Government are materialised. In similar fact situations, this Court in W.P. (C) No. 22357 of 2015 and W.P.(C) No. 22551 of 2016, the assignment deeds relating to the....