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TMI Blog2004 (4) TMI 319X X X X Extracts X X X X X X X X Extracts X X X X ..... s a conveyance and duty is payable thereon under article 23of Schedule IB to the Indian Stamp Act. The contention of the petitioner is that the instrument is a sale certificate within the meaning of article 18 of Schedule IB to the Stamp Act and is not a conveyance The difference between the duty payable in respect of these two instruments is that in the case of a conveyance the duty is payable on the amount shown as the sale consideration in the instrument or upon the market value of the property whichever is higher whereas in the case of a sale certificate the duty is payable on the purchase money shown in the instrument itself irrespective of the market value. The Assistant Commissioner (Stamp) by his order dated November 28,2002, held that the instrument in question was a conveyance and therefore, dutiable under item No. 23 and accordingly he found the instrument deficiently stamped. The order was challenged in revision by the petitioner before the Chief Controlling Revenue Authority which by the impugned order dated August 8, 2003, has remanded the case to the Assistant Commissioner (Stamp) with the direction that the plant and machinery be valued by a technical committee. I ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... the section obviously refers in the context to the role of the court and of the control it exercises over the liquidator under the preceding section 457 of the Act. Section 458 provides an exception to the requirement of sanction. There is no provision under the Companies Act conferring the power of sale upon the court. Rule 272 no doubt provides that unless the court otherwise orders, no property belonging to the company which is being wound up by the court shall be sold by the official liquidator without the previous sanction of the court, and every sale shall be subject to confirmation by the court but the rule makes it dear that the sale is to be made by the liquidator subject to sanction and confirmation by the court. We have already seen that the court can exempt the official liquidator from taking sanction. To appreciate the position the relationship of the liquidator in the winding up proceedings to the court in general would also require to be considered. The liquidator is appointed under section 448 of the Companies Act by the Central Government. The liquidator has to act under the control of the court but the acts performed by the liquidator are acts for which he has ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ect." It is on the execution of the sale deed by the liquidator that the title to the property of the company sold would pass on to the purchaser and not by the order of the court confirming the sale. This is unlike a sale by the civil court. Under Order 21, rule 92 of the Civil Procedure Code a sale becomes absolute when it is confirmed and the title relates back to the date of the sale under the deeming provisions of section 65 of the Civil Procedure Code. The sale certificate though a document of title is only an evidence of the sale and does not itself pass on any title vide Aft. Ram Sri v. Jai Lal, AIR 1947 All. 171; Makhan Lal Kela v. Baldeo Prasad, AIR 1938 All. 471. A sale by a civil court in execution proceedings is a court sale because title in the property stands transferred to the purchaser of immovable property by the order of confirmation made by the court. Sales of movable property by the executing court become absolute under Order 21, rule 77 of the Civil Procedure Code on payment of the purchase money and the officer holding the sale giving a receipt to the purchaser. Rule 272 of the Companies (Court) Rules requires confirmation of a sale by the court but ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... tance may be regarded as, a valid and binding contract between Mr. Kamlapat and the official liquidators, although the judges themselves took a great interest and an active part in the settlement of the terms." The Delhi High Court in Globe Financiers (P.) Ltd. v. Official Liquidator [1970] 40 Comp. Cas. 1161 has also held that the sale in liquidation is not a court sale but a sale by the official liquidator. The next question to be considered is whether the instrument which has been described as sale certificate by the official liquidator was an instrument falling under article 18, Schedule IB. It is indeed no doubt true that the official liquidator has been conferred with the power of sale under section 457 of the Companies Act and therefore, one requirement of article 18 that the officer selling by public auction must be so empowered is satisfied. However, there is no provision under which the official liquidator is empowered to issue a sale certificate. The difference between a sale certificate granted by a civil court under Order 21, rule 94 of the Civil Procedure Code and a conveyance is that a sale certificate by the civil court as we have noticed does not confer any ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 18 of empowerment by law to issue a sale certificate would serve no purpose. It was held in Makhan Lal Keta, AIR 1938 All. 471 that the ordinary manner in which a person can sell his property is by a sale deed. The power incidental under section 457(1)( e ) to the power of sale could be a power to execute a sale deed but not a sale certificate. The issuance of a sale certificate as a document evidencing title is an exception to the normal mode of sale of property, which is by a sale deed. That power has, therefore, to be specifically conferred by the statute to make the liquidator empowered by law within the meaning of article 18. As commonly understood a sale deed is executed by the owner or by his agent. Neither the court nor the Collector however is the owner of the property or the agent of the owner. They have been given statutory power to issue a sale certificate as a document of title. The position of the liquidator is different. He acts as the agent of the company, which is the owner of the properly. He can, therefore, execute a sale deed on behalf of the company and it is this capacity of the liquidator as an agent of the company, which has been recognised under section ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ese can be treated as 'surplusage'. It is not also possible to ignore the words expressly employed in the said clause or to explain them away on notions of one's own reasonableness". Sri R. N. Singh relied upon a decision of the apex court in Chairman and Managing Director, SIPCOT v. Contromix (P) Ltd. [1995] 84 Comp. Cas. 110 ; AIR 1995 SC 1632 in support of his contention regarding the wide meaning of public auction. I am of the view that the decision does not help the petitioner. In paragraph 12 of the decision the apex court says (page 116) : "Public auction after adequate publicity ensures participation of every person who is interested in purchasing the property and generally secures the best price. But many times it may not be possible to secure the best price by public auction when the bidders join together so as to depress the bid or the nature of the property to be sold is such that suitable bid may not be received at public auction. In that event, the other suitable mode for selling of property can be by inviting tenders". These words dearly indicate that sale by inviting tenders is a mode of sale different from a public auction. The question was considered by th ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ll take it for the shortest term; or where a contract is offered to the one who will perform it at the lowest price. And these appear fairly included in the term "auction" Abbott. Dutch auction ; A method of sale by auction which consists in the public offer of the property at a price beyond its value, and then gradually lowering the price until some one becomes the purchaser. Crandall v. State 28 Ohio St. 482. Public auction : A sale of property at auction, where any and all persons who choose are permitted to attend and offer bids. The phrase imports a sale to the highest and best bidder with absolute freedom for competitive bidding. State v. Millider 52 Mont. 562, 160 P. 513, 515. Though this phrase is frequently used, it is doubtful whether the word "public" adds anything to the force of the expression, since "auction" itself imports publicity. If there can be such a thing as a private auction, it must be one where the property is sold to the highest bidder, but only certain persons, or a certain class of persons, are permitted to be present or to offer bids. For what has already been discussed I am of the view that in this case there was no sale by publ ..... X X X X Extracts X X X X X X X X Extracts X X X X
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