International Asset Reconstruction Company Pvt. Ltd vs State of Jharkhand And Ors

Heard Mr. Dr. Maurya Vijay Chandra, learned counsel for the petitioner and Mr. Sreenu Garapati, learned A.C. to S.C. (Mines)-II.

The petitioner in writ application has prayed for a declaration that the Deputy Collector (Stamps), Bokaro has no authority under the Indian Stamp Act, 1899 to adjudicate on the amount of stamp duty payable on any instrument, specifically the instrument which is mentioned in the writ application and further declaration has been sought for whether respondent no.3 has authority under the Indian Stamp Act 1899 to adjudicate on the amount of registration fee payable on any instrument, as also for quashing the direction issued by respondent no.3 vide letter no.49 dated 29.03.2010 by which respondent no.3 has adjudged the Stamp Duty payable on the agreement for acquisition of Non-Performing Assets of Allahabad Bank, Main Branch, Bokaro Steel City to be 4.2% of the sanctioned loan amount and the registration fee for the registration of the said agreement with 2% of the sanctioned loan amount, and the petitioner has also prayed for direction upon respondent no.4 to register the agreement dated 29.07.2009 between Allahabad Bank and the petitioner-company for the acquisition of the Non-Performing Assets of Allahabad Bank, Bokaro.

The factual aspects of the case reveal that the petitioner-company had entered into an agreement to acquire two Non-Performing Assets belonging to Allahabad Bank at Bokaro. The petitioner is aggrieved by the fact that an order was passed by respondent no.3 on 29.03.2010 by which the stamp duty payable on the agreement to acquire a Non-Performing Asset of a Bank has been made at 4.2% of the sanctioned loan amount. It appears that an agreement between Allahabad Bank, Bokaro Steel City, Jharkhand and the petitioner-company was entered into on 29.07.2009 in terms of Section 5(1)(b) of the Securitization and Reconstruction of Financial Assets and Enforcement of Security Interest Act, 2002. It also appears that as per the agreement, Allahabad Bank had assigned two loan accounts of Bokaro to the petitioner acting in its capacity as Trustee for total consideration of Rs.2,25,85,252/-. It further appears that total loan disbursed by the bank to two borrowers was to the tune of Rs.4,84,12,000/- and receivable amount from two borrowers on the date of assignment was to the tune of Rs.6,41,00,000/-. The agreement which was entered into between Allahabad Bank, Bokaro and the petitioner-company was produced before the Sub-Registrar, Bokaro, who expressed his view that stamp duty treating the agreement as an instrument of conveyance be paid on the instrument. On account of difference of opinion between the petitioner-company and the Sub-Registrar, an application was filed before the Collector, Bokaro to adjudicate upon the proper stamp duty payable under the Indian Stamp Act, 1899. The matter was kept pending and subsequently the opinion of the Government Pleader, Bokaro was sought for and ultimately the order dated 29.03.2010 was passed by respondent no.3.

It has been submitted by the learned counsel for the petitioner that respondent no.3 was not authorized to adjudge the stamp duty in terms of declaration under Sections 31 and 56 of the Indian Stamp Act, 1899. It has further been submitted that in terms of Section 2(9) of the Indian Stamp Act, Collector has been defined and in absence of any notification, the impugned order dated 29.03.2010 could not have been passed by respondent no.3. Learned counsel further submitted that the impugned order dated 29.03.2010 suffers from paucity of reasons and in such situation, the same deserves to be quashed and set aside. It has also been submitted that if some clarification was required by the Collector, the matter could have been referred to the Chief Controlling Revenue Authority in terms of Section 56(2) of the Indian Stamp Act, but the entire exercise done by respondent no.3 appears to be de hors the provisions of Indian Stamp Act, 1899.

Mr. Sreenu Garapati, learned A.C to S.C. (Mines)-II, on the other hand submitted that as per notification dated 08.01.2000, the stamp duty adjudged at 4.2% of the sanctioned loan amount was just and proper.

On perusal of the impugned order dated 29.03.2010, there appears to be absolutely no reason as to on what basis the stamp duty at 4.2% has been charged upon the instrument. In the counter affidavit while referring to notification of the State Government dated 08.01.2000, it has been stated that the order dated 29.03.2010 seems to have been passed by respondent no.3 by incorporating certain reasons, which could not find place in the impugned order.

Section 2(9) of the Indian Stamp Act, 1899 defines the Collector and the Deputy Commissioner and any officer authorized by the State Government in the notification in the Official Gazette, appointed in this behalf.

However, learned counsel for the petitioner submitted that the power was not vested in respondent no.3 in terms of any notification issued by the State Government and the same has not been controverted in the counter affidavit.

It would thus appear that respondent no.3 was not authorized in terms of Section 2(9) of the Indian Stamp Act to have adjudged the stamp duty at 4.2% on instrument. The adjudication as to proper stamp has been envisaged under Section 31 of the Indian Stamp Act and so far as Section 56 of the Indian Stamp Act is concerned, the same reveals that if there appears to be any doubt on the part of the Collector in terms of Section 31 of the Act with respect to amount of duty with which any instrument is chargeable, he may draw up a statement of the case and refer it with his opinion thereon for the decision of the Chief Controlling Revenue Authority.

Learned counsel for the petitioner while placing reliance on Sections 2(9), 31 and 56 of the Indian Stamp Act, 1899 submitted that all these provisions have not at all been considered and, therefore, the order passed by respondent no.3 was not in accordance with law.

It would therefore appear that respondent no.3 was not authorized by the State Government to adjudicate on the stamp duty and apart from the same, there does not appear to be any reason in the impugned order dated 29.03.2010 which would make it sustainable in the eye of law.

Accordingly in view of the above discussions, the order dated 29.03.2010 passed by respondent no.3 is, hereby, quashed and set aside with a further direction to the petitioner to approach the authority in terms of the provisions of the Indian Stamp Act, 1899 as well as Securitization and Reconstruction of Financial Assets and Enforcement of Security Interest Act, 2002.

This writ petition is, accordingly, disposed of.