2022 (1) TMI 1469 - HC - Indian Laws

Deficit of stamp duty and penalty - purchase of immovable property - HELD THAT - There is no doubt in this case that the market value was the bid of the Petitioner as accepted by the Justice Lodha Committee and that the sale was confirmed at the amount of the Petitioner's bid by SEBI. In this view of the matter, there is no question of the stamp authorities determining any other value. The only value to be accepted is Rs. 1,66,57,920/-. The stamp duty on this is Rs. 9,99,475/-. There is no question therefore of allowing the stamp authorities to demand any other amount. There is certainly no question of a penalty. The Stamp duty will be paid by the Petitioner within two weeks from today - there will be no order as to costs.

Summary

Issues:
Dispute over stamp duty and penalty for the purchase of immovable property by a limited liability partnership firm from a public limited company under the oversight of SEBI and Justice Lodha Committee.

Detailed Analysis:

1. Background and Facts:
The Petitioner, a limited liability partnership firm, successfully bid Rs. 1,66,57,920/- for the purchase of immovable property previously owned by a public limited company, PACL Limited. The property was part of the recovery process overseen by SEBI and the Justice Lodha Committee. The bid amount exceeded the reserve price set by the Committee.

2. Payment and Sale Confirmation:
The Petitioner paid 25% of the bid amount initially and later the full amount. SEBI confirmed the sale and issued a Sale Certificate. The Petitioner also paid the full stamp duty on the accepted consideration.

3. Demand Notice and Objection:
The Respondent later demanded additional stamp duty and penalty from the Petitioner, which was objected to by the Petitioner. The Petitioner argued that the market value had already been determined by the Justice Lodha Committee and should not be reassessed by the stamp authorities.

4. Legal Precedent and Decision:
The Court referred to the decision in Pinak Bharat and Co & Anr vs Anil Ramrao Naik 2019 SCC OnLine Bom 527, stating that when property is sold by a government body at a predetermined price, that price is considered the true market value. The Court affirmed that the bid accepted by the Justice Lodha Committee represented the market value in this case.

5. Court's Ruling:
The Court held that the stamp authorities should accept the bid amount as the market value, which was Rs. 1,66,57,920/-. The stamp duty was calculated at Rs. 9,99,475/-, and there was no basis for demanding any additional amount or imposing a penalty. The Court granted the writs requested by the Petitioner and ordered the Respondent to complete the registration formalities.

6. Conclusion:
The Court made the rule absolute in favor of the Petitioner, directing the Respondent to accept the specified stamp duty amount and complete the registration process. The Petitioner was given two weeks to pay the stamp duty. No costs were awarded, and compliance with the order was mandated upon the production of a digitally signed copy.