2023 (8) TMI 1632 - HC - Indian Laws

Entitlement to sale certificates filed in Book No. 1 u/s 89(4) of the Registration Act 1908 - purchase of properties through public auctions conducted under the SARFAESI Act - HELD THAT - Section 78 of the Act empowering the State Government to prepare a table of fees on various items like for the registration of documents for searching the Registers etc. Accordingly in respect of registration of documents in Books 1 and 4 i.e. under Section 89(4) of the Act the revised table of fees prepared under Section 78 of the Act and approved by the State Government was published for general information in accordance with the provisions of Section 79 of the Act where there are several schedules given now after schedule 4 a new schedule i.e. 4A has been inserted by virtue of the said amendment. Under this new schedule 4A filing a sale certificate under sub-section (2) or sub-section (4) of Section 89 of the Act requires a fee i.e. Rs. 11/-for every rupees hundred or part thereof on the market value of the property. That means 11% of fee to be paid by every sale certificate holder who seeks for filing of the same either under Section 89(2) or under Section 89(4). In the G.O. No. 28 dated 28.03.2023 as quoted herein above the Government has stated that the Inspector General of Registration has stated that the Hon ble Supreme Court of India has ordered to file the sale certificate issued by the authorised officer of the bank under Section 89 of the Registration Act 1908 without insisting stamp duty and registration fee. Therefore the Inspector General of Registration has proposed to levy filing fee for the sale certificate which is sent for filing whether issued by the Civil Court or Revenue Officer or Authorised Officer of the Bank under Section 78 of the Registration Act 1908 - in the notification annexed to the G.O it has been made clear that the amendment hereby made shall come into force on 23rd March 2023. Therefore only from the date of issuance of the G.O. No. 28 this amendment would come into effect i.e. prospectively. Conclusion - The sale certificates issued by authorised officers under the SARFAESI Act are not compulsorily registrable and should be filed in Book No. 1 without the imposition of additional stamp duties or registration charges. Petition allowed.

Summary

ISSUES PRESENTED and CONSIDERED

The primary issue considered by the Court was whether the petitioners, who purchased properties through public auctions conducted under the SARFAESI Act, were entitled to have their sale certificates filed in Book No. 1 under Section 89(4) of the Registration Act, 1908, without the imposition of any stamp duty. Additionally, the Court considered whether the petitioners were entitled to a refund of any excess stamp duty and registration charges paid under protest.

ISSUE-WISE DETAILED ANALYSIS

Relevant Legal Framework and Precedents

The legal framework primarily involved the Registration Act, 1908, particularly Section 17(2)(xii) and Section 89(4), along with the Indian Stamp Act, 1899. The Court also considered precedents, including the Supreme Court's decision in Esjaypee Impex Pvt. Ltd. v. Asst. General Manager and Authorised Officer, Canara Bank, which clarified that sale certificates issued by authorised officers under the SARFAESI Act should be filed in Book No. 1 without requiring compulsory registration or the imposition of higher stamp duties.

Court's Interpretation and Reasoning

The Court noted that the issue was not novel and had been addressed in numerous judgments. The Supreme Court in Esjaypee Impex Pvt. Ltd. had settled the law, stating that sale certificates issued by authorised officers under the SARFAESI Act are not compulsorily registrable and should be filed in Book No. 1 as per Section 89(4) of the Registration Act. The Court emphasized that the authorised officer of the bank is considered a Revenue Officer under the relevant legal provisions.

Key Evidence and Findings

The Court found that the petitioners had participated in public auctions and were issued sale certificates as evidence of their purchases. These certificates were either refused filing in Book No. 1 or were registered only after the payment of excessive stamp duties and registration charges. The Court noted that the Supreme Court had consistently held that such certificates do not require registration and should not attract the same stamp duties as other conveyance documents.

Application of Law to Facts

The Court applied the Supreme Court's ruling in Esjaypee Impex Pvt. Ltd. to the facts of the case, determining that the sale certificates should be filed in Book No. 1 without the imposition of additional stamp duties or registration charges. The Court also noted that any excess amounts paid by the petitioners should be refunded with interest.

Treatment of Competing Arguments

The State argued that the sale certificates were liable for stamp duty under Articles 18(c) and 23 of the Indian Stamp Act and that an unstamped sale certificate would not confer any rights. The Court rejected these arguments, relying on the Supreme Court's decision, which clarified that authorised officers under the SARFAESI Act are considered Revenue Officers, and their issued certificates are not subject to the same registration and stamp duty requirements.

Conclusions

The Court concluded that the petitioners were entitled to have their sale certificates filed in Book No. 1 without the imposition of additional stamp duties or registration charges. The Court ordered the refund of any excess amounts paid by the petitioners, along with interest.

SIGNIFICANT HOLDINGS

Preserve Verbatim Quotes of Crucial Legal Reasoning

The Court cited the Supreme Court's decision in Esjaypee Impex Pvt. Ltd., which stated: "The mandate of law in terms of Section 17(2)(xii) r/w Section 89(4) of the Registration Act, 1908, only requires the authorised officer of the bank under the SARFAESI Act to hand over the duly validated sale certificate to the auction purchaser with a copy forwarded to the Registering Authorities to be filed in Book No. 1 as per Section 89 of the Registration Act."

Core Principles Established

The Court reaffirmed the principle that sale certificates issued by authorised officers under the SARFAESI Act are not compulsorily registrable and should be filed in Book No. 1 without the imposition of additional stamp duties or registration charges. The Court also established that any excess amounts paid in such cases should be refunded with interest.

Final Determinations on Each Issue

The Court determined that the petitioners' sale certificates should be filed in Book No. 1 without additional charges and ordered the refund of any excess amounts paid. The Court also addressed a recent amendment by the Tamil Nadu Government imposing a filing fee, noting that it would not affect the present cases as the amendment was prospective.