2018 (8) TMI 2140 - HC - Indian Laws

Requirement to stamp sale certificate - requirement of registration of sale certificate - sale certificate should be treated only as a sale deed or not - to be classified under Article 18(c) of the Indian Stamp Act or not - writ petition was dismissed on the ground that the sale certificate was issued in the year 2008 and till 2013, the appellant had not chosen to register the same on the ground that it is not compulsorily registrable - HELD THAT - So far as the requirement of registration is concerned, there is no doubt that the sale certificate is not required to registration in view of Section 17(2)(xii) of the Registration Act - Though Section 17 refers to documents which are compulsorily registrable, sub-section (2) provides that nothing in clauses (b) and (c) of sub-section (1) would apply to the nature of the documents as set out thereafter and in clause (xii) in particular specifically stated that any certificate of sale granted to the purchaser of any property sold by public auction by a Civil or Revenue officer, as any sale certificate issued as per the provisions of the Security Interest (Enforcement) Rules 2002 in public auction, is deemed to be sale by the revenue. Thus the statute makes it very clear that the sale certificate issued need not be registered. Applicability of Indian Stamp Act, 1899 - HELD THAT - Though the sale certificate referred is not compulsorily registrable whether the stamp duty is payable on the same is relevant - So far as the certificate of sale itself is not compulsorily registrable document in view of Section 17(2)(xii) of the Indian Stamp Act, transfer of title in favour of the purchaser is not vitiated by non registration of the certificate. All that is required is to file a copy of the sale certificate as per Section 89 (4) of the Registration Act. Therefore, the refusal by the Sub Registrar to file sale certificate issued by the Recovery Officer by making necessary entries in the Book in accordance with sub-section (4) of Section 89 of the Registration Act is not justified. In B.Arvind Kumar Vs.Government of India and Others 2007 (5) TMI 657 - SUPREME COURT , it is held that a property sold in public auction pursuant to an order of the Court and once the sale is confirmed it becomes absolute and the title vests with the auction purchaser. The subsequent sale certificate issued to the purchaser is the evidence of such title which does not require registration under Section 17(2) (xii) of the Registration Act. In the case on hand also the property was purchased in public auction on 16.05.2008 and the sale certificate was issued on 31.08.2008. Therefore, the appellant/purchaser automatically becomes title holder of the property by virtue of the sale certificate. The payment of stamp duty on the sale certificate is not warranted as it is only a sale certificate issued which has to be filed or scanned in Book No.1 as per Section 89(4) of the Registration Act. The payment of stamp duty perhaps may arise only when the appellant wants to deal with the property by selling it. As long as the sale certificate remains as it is, it is not compulsorily registrable. If the appellant uses the document for any other purpose, then the requirement of stamp duty etc., would arise. Hence, the plea of the appellant is well within the statutory powers. The dismissal of the writ petition on the ground of delay and payment of stamp duty therefor does not arise and therefore, cannot be sustained - Appeal allowed.

Summary

Issues:
1. Registration of sale certificate issued by Repco Home Finance Limited under SARFAESI Act, 2002.
2. Classification of sale certificate under Indian Stamp Act, 1899.
3. Applicability of Section 17(2)(xii) of the Registration Act to sale certificates.
4. Requirement of stamp duty on sale certificate.
5. Filing of sale certificate under Section 89(4) of the Registration Act.

Analysis:

1. The appellant, as the successful bidder in a public auction, sought to register the sale certificate issued by Repco Home Finance Limited. Despite the optional nature of registration, the appellant wished to proceed with registration. The first respondent rejected the request, leading to the filing of a writ petition challenging the decision.

2. The impugned order classified the sale certificate as a sale deed, not falling under Article 18(c) of the Indian Stamp Act. The appellant contended that the sale certificate need not be registered based on Section 17(2)(xii) of the Registration Act, citing a previous court decision supporting this stance.

3. The court analyzed Section 17(2)(xii) of the Registration Act, which exempts certain documents, including sale certificates from registration requirements. The sale certificate issued by Repco Home Finance was deemed akin to a sale by revenue officers and thus not mandatorily registrable.

4. Regarding stamp duty, the court clarified that while the sale certificate was not compulsorily registrable, the transfer of title to the purchaser was valid. The appellant only needed to file a copy of the sale certificate as per Section 89(4) of the Registration Act, which mandates sending such documents to the registering officer.

5. The court emphasized that the refusal by the Sub Registrar to file the sale certificate was unjustified, as the statutory provisions required only the filing of a copy in Book No.1. Additionally, referencing a Supreme Court decision, the court affirmed that the sale certificate served as evidence of title without necessitating stamp duty payment unless the appellant intended to sell the property.

6. Ultimately, the court allowed the appeal, setting aside the earlier order and emphasizing that the sale certificate did not require stamp duty payment unless the appellant decided to deal with the property further. The decision highlighted the statutory provisions governing the filing of sale certificates and rejected the notion of delay or laches on the appellant's part.