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TMI Blog2016 (3) TMI 1144X X X X Extracts X X X X X X X X Extracts X X X X ..... ial institutions such as banks, non-banking financial company, housing finance company or alike deal with large number of instruments. These instruments are in favour of or executed by such entities. It came to the notice of the State that in relation to such instruments and which are of the nature referred to in clause (a) to (g) of section 30, the proper stamp duty has not been collected. Therefore, section 30A was inserted by Maharashtra Act No.8 of 2013 with effect from 1st May, 2013. The Statement of Objects and Reasons to this amendment would indicate as to how there was a revenue loss. We find that both sections of the Maharashtra Stamp Act, 1958, and the Registration Act, 1908, read and understood so also interpreted in the above manner need not be struck down. While arriving at the above conclusion, we have taken the aid and assistance of the very principles which have been pressed into service by Mr. Tulzapurkar. We need not advert to each and every judgment relied upon by counsel. We have referred to the very principles and which are enunciated in the case of State of Madhya Pradesh vs. Rakesh Kohli & Anr. (2012 (5) TMI 262 - SUPREME COURT OF INDIA ) about constitutional ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... er and/or direction to declare that the Maharashtra Act No. X of 2012 insofar as it enacts Registration Act Amendments (Exhibit B) is ultra vires and void on account of not only being repugnant to sub-section (f) of Section 58 of the Transfer of Property Act but also being vague, arbitrary and irrational and be pleased to quash the same. (c) that this Hon'ble Court be pleased to issue a writ of Certiorari or a writ in the nature of Certiorari or any other appropriate writ, order and/or direction to quash and set aside the Circular dated August 8, 2013 (Exhibit C) issued by Respondent No.2 on account of the same being ultra vires, void and invalid and be pleased to quash the same. (d) for a writ of Mandamus or a writ in the nature of Mandamus or any other appropriate writ, order and/or direction from this Hon'ble Court directing the Respondents as well as their officers, servants and agents to refrain/abstain from taking any steps in furtherance or implementation or enforcement of the Maharashtra Tax Laws (Levy and Amendment) Act, 2013 insofar as it enacts the Stamp Act Amendment (Exhibit A). (e) for a writ of Mandamus or a writ in the nature of Mandamus or any other appr ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ch makes all the banks and financial institutions liable for payment of proper stamp duty on instruments specified under section 30(a) to (g) of the Stamp Act, creating a right in favour of such banks and financial institutions. 10. In view of the aforesaid arbitrary and unreasonable enactment, not only will all the banks and financial institutions be liable to make payment of proper stamp duty on instruments executed on or after 1st May, 2013, but in terms of sub-section (2) of the impugned section 30A, also verify that too by 30th September, 2013, whether adequate stamp duty has been paid on all instruments executed prior to the aforesaid date and are still effective. Furthermore banks and financial institutions are now obligated to determine whether proper stamp duty has been paid and in the event of deficit stamp duty, impound such instruments by 30th September, 2013 and send them to the Collector for recovery. 11. Moreover the unreasonable objective of respondent No.1 is evident from the fact that if the banks and financial institutions fail to impound such instruments, the banks and financial institutions will be liable to pay a penalty equal to the stamp duty payable on t ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... expected to be aware of or know the appropriate stamp duty payable on any instrument. In any event there is also no guidance awarded for such officer to check or cross verify his/her interpretation of relevant section of the Maharashtra Stamp Act. That apart the arbitrariness and irrationality of the said section is evident in view of the fact that the same does not provide for any consequence or mechanism in the event the adjudication by such officer of duty payable is incorrect or improper. 15. The petitioners further state that the effect of section 10D is that the officer so nominated assumes the role of an adjudicating authority as if such officer was himself empowered to decide what stamp duty would be applicable to the document produced before him. He has the power to interpret and decide the amount of applicable stamp duty and such the officer would then be able to bind the stamp authorities with his decision irrespective of whether or not it is accurate or erroneous. 16. The petitioner further states that since only a few banks so authorised would be empowered to carry out the activity of stamping documents under G.R.A.S. It is likely that the nominated officer who may ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... he Registration Authority. Accordingly, it is submitted that the section 89B amendments ought to be declared ultra vires and invalid on this ground as well. 18. It is pertinent to note that while section 89B amendment only stipulates that if the notice of intimation is not filed within 30 days of creation of a mortgage by way of deposit of title deeds, any further transaction undertaken by the mortgagor, where the mortgaged property is the subject matter, shall be void. On the other hand, the circular goes beyond the scope of section 89B amendment and stipulates that the failure by the mortgagor to file the notice of intimation within 30 days of creation of the mortgage, the mortgage cannot be enforced. The circular thus travels beyond the scope of what the legislature has intended to legislate by the section 89B amendment. 19. It is based on the above material that the provisions in the two different enactments are challenged and the aforequoted reliefs are claimed. Annexure-A to the writ petition is an extract of the amendment to the Maharashtra Stamp Act, 1958, incorporating section 30A in the Act. Then, Annexure B onwards is an extract of the relevant provisions of the Regist ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... are justified. 23. In paragraph 2 to 7 and 17 of the affidavit, this is what is stated : 23(a) At the outset, the petition is misconceived, does not disclose any cause of action against the Respondent Nos.1 to 3. I say that by this petition, the petitioners are challenging the validity of section 30A of the Maharashtra Stamp Act, 2013, which is annexed as Exhibit A at page 38 to the petition on the ground that it is violative of Article 14 of the Constitution of India since it is discriminatory in nature as it differentiates only bank and financial institutions from other commercial institutions for imposition of obligation and penalties in term of Maharashtra Stamp Act Amendment to pay proper stamp duty on the documents mentioned in section 30A of commencement of Maharashtra Tax Laws (Levy and Amendment) Act, 2013, if any, to collect it from other party and further to verify the adequacy of stamp duty paid on the instrument executed by or in favour of the financial institution prior to commencement of Maharashtra Tax Laws (Levy and Amendment) Act 2013 and upon identifying the said instrument with deficit stamp duty to impound the same without specifying ground of making such c ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... strument. The said amendment has come into force with effect from 1st May, 2013. I say that obligation on financial institutions and banks to impound document under amended Section 30A(2) of the Maharashtra Stamp Act is incidental to levy of stamp duty. The aforesaid obligation under section 30A(2) of Maharashtra Stamp Act is in respect of outstanding loan or alive loan which is still being administered by the bank and financial institution. 23(d) I say that under section 34 of the Maharashtra Stamp Act, 1958, instruments which are not stamped are not admissible in evidence in Court of law. Hence, the instrument created by or in favour of financial institutions creates right in their favour and if not properly stamped will not be enforceable in court of law. Therefore, to protect the interest of the financial institution and bank and further to see that proper stamp duty is paid, the obligation is cast on the financial institution to pay the stamp duty with liberty to collect the same from the borrowers. 23(e) I say that under Entry 63 of List-II of the Seventh Schedule to the Constitution of India, the State Government has power to enact the rates of stamp duty in respect of the ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... . I say that unreasonableness is not the same as hardship as alleged or at all. I say that it must be unreasonable in law and not in fact. I say that the stamp duty is a tax and hardship is not relevant in interpreting fiscal statutes are well known principles. In the field of taxation the legislature enjoys greater latitude for classification. 23(g) I say that the obligation impounded by the Amendment to the Maharashtra Stamp Act by inserting section 30(A) has only laid down the responsibility of payment of stamp duty in respect of those documents and transactions to which the financial institution is a party. I say that the object of the Maharashtra Stamp Act is to collect proper stamp duty on the instrument or conveyance and the said Act is a fiscal measure enacted to secure revenue for the State and therefore, to enforce fiscal measure, the State for certain classes of instruments executed by certain classes of persons, has laid the obligation on the said class of persons for recovering the proper stamp duty in respect of documents and transactions to which they are parties and on failure has imposed penalty. 24. Thus, the affidavit seeks to justify the amendments by urging t ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... already held, the competence of the State to enact the Maharashtra Stamp Act, 1958, is not disputed. The power in that regard is to be found in Entry No.63 of List II, namely, the State List of the very schedule to the Constitution of India. That deals with rates of stamp duty in respect of documents other than those specified in the provisions of List-I. With regard to rates of stamp duty. 30. In such circumstances, it is not possible to agree with Mr. Tulzapurkar that the impugned amended provision in the Maharashtra Stamp Act, 1958, should be be struck down on the ground that the purports to take over or occupied the field occupied by the Banking Regulation Act, 1949. 31. The lead arguments were canvassed by Mr. Virag V. Tulzapurkar, learned senior counsel and he would submit that this provision is ultra vires Article 14 and 19(1)(g) of the Constitution of India. Mr. Tulzapurkar would submit that Maharashtra Stamp Act and its predecessor law, namely, Bombay Stamp Act, 1958 seeks to levy stamp duty on an instrument. The stamp duty is not on the transaction. Insofar as such levy is concerned and elaborating the challenge, Mr. Tulzapurkar relied upon the definitions in the Stamp ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... t by section 3 of the Act, the instruments chargeable with duty are set out. Chapter II, according to Mr. Tulzapurkar, has the broad heading Stamp Duties and under that sub-heading '(A) Of the Liability of Instruments to Duty' appears in section 3. Mr. Tulzapurkar submits that how an instrument would be charged with duty, namely, the nature thereof, how if a single transaction is embodied and contained in several instruments is a matter dealt with by section 4 and instruments relating to several distinct matters are dealt with by section 5. Mr. Tulzapurkar then invites our attention to the sections in this Chapter and would urge that the sub-headings of this would indicate as to how liability of instruments to duty of stamp and the mode of using them, of the time of stamping instruments, on valuations for duty are matters exclusively dealt with by the authorities under the Stamp Act. Mr. Tulzapurkar submits that by section 30 by whom the duties are payable are set out and after extensive reference to that Mr. Tulzapurkar would submit that insofar as any instrument described in the Articles of Schedule I and specified in clause A of section 30, the duty is payable particular ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... atory nature of the Stamp Act Amendment, the Stamp Act Amendment clearly violates Article 14 of the Constitution in as much as it differentiates and isolates only banks and financial institutions from other commercial entities for imposition of obligations and penalties in terms of the Stamp Act Amendment. There is no legally justifiable reason or ground as to why only banks, financial institutions and housing finance companies should be required to undertake the heavy responsibility of verifying payment of proper stamp duty and no other entities have any such obligation, with respect to future transactions and more so in case of past transactions and only with respect to those instruments which are falling in clauses (a) to (g) of Section 30 of the Stamp Act and not those which fall outside Section 30 of the Stamp Act and also the Stamp Act Amendments do not apply to those private parties or persons even though they execute the same type of instruments in their normal course of activities. (b) Further, it was held by the Supreme Court of India that "discretionary power may not necessarily be a discriminatory power but where a statute confers a power on an authority to decide matt ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... sure the payment of Stamp Duty is not a part of the banking business and the function of ensuring the payment of proper stamp duty cannot be and is not the activities of business or function which can be imposed on banks in as much as, by doing so, the banks will be forced to discharge functions contrary to Section 6 of the Banking Regulation Act. (d) Further, without prejudice to the aforesaid, assuming for the sake of argument that even if the State Legislature is competent to enact the said Stamp Act Amendment, the Stamp Act Amendment ought to be declared void and invalid on account of its inherent arbitrariness, vagueness and ambiguity. Section 30A of the Stamp Act as enacted imposes a liability on the banks and financial institutions to verify if the stamp duty paid on the instrument/documents executed before May 1, 2013 and effective , is proper and adequate. The Stamp Act Amendment does not prescribe any time limit within which the document executed has to be verified; rather it just classifies verification of all documents/instruments, which are effective. However, the Section 30A of the Stamp Act does not lay any grounds to determine what constitutes a document being "eff ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... uch instruments clearly would be an extremely expensive and impractical exercise for the banks and financial institutions. Such a harsh imposition would not only increase the unnecessary expense of the banks and financial institutions but also hamper the current on-going business of the banks, as they would have to dedicate a large part of their resources, manpower and time to perform such a cumbersome activity and time consuming exercise. Therefore, it is evident that such a retrospective liability is too severe and unreasonable and such imposition would cripple the business of the banks as the banks would now have to dedicate its resources and time primarily for verifying the requisite stamp duty payable on every instrument executed by the banks right from 1959 till date. The Supreme Court has taken the view that "in order to establish arbitrariness or unreasonableness, it does not become necessary to show that the business of the assesse would be completely crippled and have to close down in consequence of withdrawal of the relief with retrospective effect. It was asserted by the Apex court that the assesse would be seriously prejudiced in case of removal of the relief due to hi ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... right to recover the penalty so imposed upon banks for failure to impound the documents, from the borrowers/obligors even if a corresponding right is available to the banks under the agreements/documents in question. Accordingly, it is abundantly clear that the banks and financial institutions are heavily prejudiced because of the unreasonableness, arbitrariness and harshness inflicted by the Stamp Act Amendment. (h) It is urged that levy of tax, collection of tax levied and verification whether the payment of tax by the tax-payers is adequate and in accordance with law are the functions of the authorities of the Government which levies the tax and such functions cannot be delegated to the tax payer himself, in this case the banks and financial institutions. In the present case, in terms of the Stamp Act Amendment, the obligation to verify adequacy of stamp duty paid on a document executed in favour of any bank or financial institution and impound the document if duty paid is not adequate, is cast on the party to the contract namely, the bank or a financial institution. Exercise of such statutory powers by the bank or financial institution will adversely affect the other party to ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ocuments/instruments. In these circumstances, it is ex facie unreasonable, arbitrary and irrational for the Stamp Act Amendments to require the banks and financial institutions to impound all documents on which they consider insufficient stamp duty to have been paid, failing which the banks and financial institutions would be liable to a penalty equal to the stamp duty payable on such instrument, without a right to recover it from the borrower/obligor, as may otherwise be provided for in the agreement/ document. (j) The State Legislature has not considered the probability that since some of the documents/instruments are pertaining to transactions conducted in the past years and therefore, in all probability the borrowers may not even be available or traceable. Moreover, the Stamp Act Amendment is unclear on what happens when a borrower of a bank, brings a document executed in another state to the State of Maharashtra and defaults in paying the differential amount of stamp duty, if any, within the prescribed time period. Now, since such document will fall under the ambit of the Stamp Act Amendment, it would be unreasonable and arbitrary to impose an obligation upon the banks to kno ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ace under the Stamp Act to which also adequately protects the interest of revenue of the State. Therefore, the Stamp Act Amendment enacted gives unbridled power to the State to impose further penalties over banks and financial institutions, irrespective of the fact that the banks and financial institutions may not be at fault. The Supreme Court has observed that "an instrument which is not duly stamped cannot be received in evidence by any person who has authority to receive evidence and it cannot be acted upon by that person or by any public officer. This is the penalty which is imposed by law on the person who may seek to claim any benefit under an instrument if it is not duly stamped. Once detected the authority competent to impound the document can recover not only duty but also penalty, which provision protects the interest of revenue. In the event there being a criminal intention or fraud, the persons responsible may be liable to be prosecuted. The availability of these provisons, in our opinion adequately protects the interest of revenue." It is further held by the Supreme Court that "Possessing a document not duly stamped is not by itself any offence. Under the garb of the ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... s that 'in case of documents executed before May 1, 2013 and are effective, it should be verified whether proper stamp duty has been paid or not. If it has not been paid, it should be ensured that proper stamp duty (which includes penalty, if any) is paid by September 30, 2013 by the partly liable to pay it. Else the documents have to be impounded and forwarded to the Collector of Stamps before September 30, 2013. Failure to do this would result in penalty (equal to Stamp Duty Payable) being levied on Banks/ FIs.',on the other hand, Section 30A provides that 'In respect of any such instrument executed before the date of commencement of the Maharashtra Tax Laws (Levy and Amendment) Act, 2013, and are effective and where proper stamp duty is not paid, then the financial institution shall impound such instrument on or before the 30th September, 2013 and forward the same to the Collector for recovery.' Section 30A further provides that 'Where the financial institution fails to impound such instrument as provided in sub-section (2), then the concerned financial institution shall be liable to pay a penalty equal to the stamp duty payable on such instrument.' As seen above, while the Ci ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ncial institution is created by the instrument referred to in clauses (a) to (g) of section 30, the liability contrary to the mandate of that section and ordinarily understood of paying stamp duty is foisted and thrusted upon the bank and financial institution. If that is not discharged then the bank may face several consequences, including penalties. Secondly, any instrument of the nature specified in sub-section (1) but effective before the commencement of the Maharashtra Tax Laws (Levy and Amendment) Act, 2013, and the proper stamp duty is not paid, the same would have to be impounded. Apart from the enormity and impracticality, the obligation and duty is so unreasonable that for the performing the same, the banks / financial institutions would have to undertake an adjudication. In that regard, he relied upon the words and phrases "in favour of or by any financial institutions such as bank etc." appearing in sub-section (1) of section 30A which creates any right in favour of any such financial institution and the words and phrases appearing in sub-section (2) of section 30A "effective and where proper stamp duty is not paid". Mr. Tulzapurkar would submit that failure to carry ou ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... rstood to be a civil liability. In the case of Director of Enforcement vs. MCTM Corporation Pvt. Ltd. AIR 1996, SC, 1100, the Supreme Court holds that breach of civil obligation also attracts penalty and when the law so enacts it is not understood to be a penalty in the sense of criminal law. Imposition of penalty for the breach of civil obligation laid down under the Act does not impose any "sentence" for the commission of any offence. The explanation "penalty" is a word of wide significance. Some times it means recovery of an amount as a penal measure even in civil proceedings. 38. Further elaborating this concept in a latter decision in the case of Pratibha Processors & Ors. vs. Union of India & Ors., AIR 1997 SC 138, the Hon'ble Supreme Court explains it thus : "fiscal statutes with import of the words "tax", "interest", "penalty" etc. are well known. They are different concepts. A penalty is ordinarily levied on an assessee for some contumacious conduct or for a deliberate violation of a particular statute" (see paragraph 13). Hence, it is not possible to agree with the learned senior counsel appearing for the petitioners that imposition of penalty would follow simply fo ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... r the commencement of the Registration (Maharashtra Amendment) Act, 2010 (Mah. X of 2012) with effect from 1st April, 2013. If these are the documents of which registration is made compulsory, then, they cannot be out of public domain. There is nothing secretive or clandestine about them. 41. Yet, what one finds by introduction of section 89-B and particularly sub-section (2) thereof is that non filing of a notice of intimation, of having mortgaged an immovable property by way of a deposit of title deeds, to the registering officer within the local limits of whose jurisdiction the whole or any part of the property is situate, as required by sub-section (1) of section 89-B, would make a subsequent transaction in relation to or affecting the immovable property which is the subject matter of the mortgage with a third party, void. That and limiting the rights of the third party in relation to such transaction is beyond the power of the State and by enacting such measures the State has taken away the rights of the subsequent mortgagee. By taking them away or limiting or restricting them the State is purporting to over-reach section 58 of the Transfer of Property Act, 1882. That Act do ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... d without adjudication cannot be exercised and the bank must necessarily undertake this exercise. Therefore, there cannot be a delegation or outsourcing of an adjudicatory function or power. Once there is a power in the financial institution to seize or take possession of an instrument then conferment of such a power and failure to exercise it resulting in penalty would denote as to how the amendments to the Stamp Act are completely unconstitutional or unworkable. 45. Mr. Kamdar, learned senior counsel appearing for the Indian Banks Association, while adopting the arguments submitted that classification of documents broadly made has been added to by an additional classification or sub-classification in terms of section 30A of the Maharashtra Stamp Act, 1958. He would submit that non recovery of stamp duty is not peculiar to the instruments in favour of banks and only including the banks within the ambit and scope of sub-sections (1) and (2) of section 30A would indicate that the classification is wholly arbitrary, discriminatory and unsustainable. There is absolutely no nexus with the object sought to be achieved. 46. All the senior counsel appearing for the petitioners have reli ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ments and which are of the nature referred to in clause (a) to (g) of section 30, the proper stamp duty has not been collected. Therefore, section 30A was inserted by Maharashtra Act No.8 of 2013 with effect from 1st May, 2013. The Statement of Objects and Reasons to this amendment would indicate as to how there was a revenue loss. The State could not afford to loose revenue in the form of stamp duty on these instruments. The sweep of the banking transactions having increased manifold, large scale urbanization having taken place, banks deal in number of ways with its constituents, customers, clients and others, the services provided by the banking sector ever expanding that the instruments attracting stamp duty have increased. These instruments and for their sheer volume can be treated as a class apart. They can be brought by the Legislature under the umbrella of a provision like section 30A. Such provisions are in the nature of an exception. Such provisions do not impose any obligation or duty on the financial institutions in the nature of adjudication or taking a decision on the amount of duty payable, the instruments on which they are payable etc. The learned senior counsel ha ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... lector would proceed in terms of his powers under Chapter III or the further Chapters and recover the duty in accordance with law. There is absolutely no force in the contentions that the bank would be discharging any quasi judicial functions or exercising adjudicatory power or there is any outsourcing of the said adjudicatory powers in their favour. The impounding is only when on effective instruments, the proper stamp duty is not paid. The payment of stamp duty is evident and proof thereof is to be found on the face of the instrument itself. If the payment is made, then it is impressed with stamps. If it is not so impressed, then, only a look at the instrument would reveal the amount of duty with which it is chargeable and in terms of section 3 read with Schedule I to the Maharashtra Stamp Act, 1958. As simple as a task as this would enable the bank to impound the instrument. If there is any failure to impound such instrument as is provided in sub-section (2) only then the concerned financial institution is liable to pay penalty equal to the stamp duty payable on such instrument. It is not in every case that such a imposition would follow. Once a provision as sub-section (3) is ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ission that Section 30A creates a class or that such a class has no nexus with the object sought to be achieved. (e) Section 30A has to be seen to operate in a limited sphere of instruments. Although it refers to the instruments covered by Section 30 (a) to (g), it is concerned only with those instruments which create right in favour of the financial institutions. Hence, not every instrument which comes to a financial institution is covered by Section 30A. Only such instruments which create rights in favour of the financial institutions are required to be attended to by the financial institution for the purpose of ensuring that proper stamp duty is paid. (f) Since Section 30A(1) permits recovery from the person who should have paid the stamp duty, no prejudice is likely to be caused to the financial institution even if it is required to make good the Stamp Duty itself. (g) Section 30A(2) provides for a period within which the financial institution can impound instruments where proper stamp duty is not paid and forward them to the collector for recovery. The Petitioners' objection to this provision is that it is arbitrary because - (a) the range of documents that pass through the ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ence and any further enquiry that may be needed to determine whether the instrument is chargeable. It is not the intendment of the ammendment to confer any adjudicatory power much less impose a duty to adjudicate on the financial institutions. (l) The Petitioners' submission that the failure of the financial institution not to impound and forward an instrument within the period specified in Section 30A(2) which attracts penalty may be answered thus. In a given case, assuming the instrument is impounded after the date specified it would still be dealt with in terms of Section 37(2) which covers cases of instruments that have been impounded by financial institutions. The action to be taken is provided for by Section 39. It is for the Collector to deal with the collection of Stamp Duty. (m) Section 42 refers to taking of proceedings concerning payment of penalty not being a bar for prosecution. Section 43 refers to recovering the penalty by the person paying it from the persons who were bound to pay it in the first place. Section 46 concerns with recovery of penalty as arrears of land revenue. The scheme is therefore one which contemplates a legal process and would necessarily provi ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ommission of India contained in its 178th Report. 54. Thus, the learned Advocate General was supportive of the amendments and invited our attention to the scheme of both the Maharashtra Stamp Act, 1958 and the Registration Act, 1908. Alternatively and without prejudice he would submit that in the event this Court is of the view that sub-section (3) of section 30A which provides for penalty is harsh and that imposition may be excessive, this Court may read down the provision to the effect that imposition of penalty is not automatic. It would be imposed upon the satisfaction of any deliberate or intentional act and, in any event, it would not be imposed before a minimal hearing or opportunity to the affected party. It is also possible to seek the assistance from the Inspector General of Stamps and his intervention can be sought so that in terms of his supervisory and controlling powers, he can absolve the aggrieved party from penalty. Further, all factors and which are relevant and material while imposing penalties would have to be considered. According to him, all this is adequate protection and there is no need to strike down the provision and similarly with regard to section 89- ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ying on the mandate of Article 14 of the Constitution of India, even then they have never been discriminated against and nothing that the law does not envisage or provide for is called upon to be performed or discharged by them. Their banking business is unaffected and untouched. None interferes with the same, much less the State Government. It is their banking business which has resulted in multiple instruments being executed or brought in the State. It is such instruments which are openly and brazenly put in the market without any stamp duty being paid and impressed upon them. It is the transaction evidenced by these instruments which, therefore, does not come to the knowledge of the public for want of payment of stamp duty or for want of registration. Eventually, therefore, the banks would be at the receiving end and there is no discrimination, much less it is arbitrary or unreasonable or unfair in calling upon the banks to pay the stamp duty when all their rights are intact so also their remedies. Mr. Aney would submit that the petition deserves to be dismissed. 56. Mr. Aney, learned Advocate General, relies on the following judgments : (1) R.K. Garg vs. Union of India (1981 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... eved by incorporation and insertion of section 30A of the Maharashtra Stamp Act, 1958, is not clarified at all. It is, therefore, evident that people similarly situated have not been treated similarly. The individuals, mutual funds, insurance companies are left out though they can safely be brought in the purview of the broad term "corporates". Hence the banks have a legitimate right to complain. 59. Mr. Tulzapurkar reiterated the argument on legislative competence and brought to our notice Schedule VII List I Entry 45 of the Constitution of India. He also brought to our notice section 6(2) of the Banking Regulation Act once again to submit that requiring a bank to undertake a function alien to this provision in the Banking Regulation Act would mean that the Stamp Act goes much beyond its object and purpose and encroaches or interferes with the field reserved under the Banking Regulation Act. In such circumstances and when there is no answer to this, we should not sustain section 30A of the Maharashtra Stamp Act. Lastly, Mr. Tulzapurkar would submit that section 30A(2) must be struck down because it stipulates a date. By that date the impounding must be done. Else the consequences ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... onstrue section 30A with the aid of the definition of the term 'banker' for financial institutions are performing diverse functions and discharging various obligations, including acceptance for the purpose of lending and investment, deposit of money from the public. However, their activities and functions are not restricted to this at all. 65. Then the crucial term or word which is defined is "chargeable". That appears in section 2clause (d) and reads as under : "2. Definitions (a) … … … … (d) "chargeable" means, as applied to an instrument, executed or first executed after the commencement of this Act, chargeable under this Act, and as applied to any other instruments, chargeable under the law in force in the State when such instrument was executed or, where several persons executed the instrument at different times, first executed;" 66. A perusal of this definition would reveal as to how it is defined in its application to an instrument on which stamp duty is chargeable or executed or first executed after the commencement of this Act. 67. Then, the definition of the term "Collector" is section 2 clause (f) is material. That is reproduce ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... r liability is, or purports to be created, transferred, limited, extended, extinguished or recorded, but does not include a bill of exchange, cheque, promissory note, bill of lading, letter of credit, policy of insurance, transfer of share, debenture, proxy and receipt." 69. The submissions are belied by these definitions themselves for anything that the instrument bears would be an adhesive or impressed stamp of not less than the proper amount and that such stamp has been affixed or used in accordance with law for the time being in force in the State. The word 'impressed stamp' includes what falls in sub-clause (k) of section 2 and all this read together with the definition of the term "instrument" would reveal as to how stamp duty is payable not on the transaction, but on the instrument . Upon the stamp duty with which a particular instrument is chargeable after payment thereof it would be impressed with the impressed stamp and that would denote that it is duly stamped. The financial institutions have to verify and scrutinize this and proof of that is not available in terms above, they would have proceed according to the newly inserted provision. The empowered and author ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... further that no duty shall be chargeable in respect of- (1) any instrument executed by or on behalf of, or in favour of , the Government in cases, where, but for this exemption, the Government would be liable to pay the duty chargeable in respect of such instrument or where the Government has undertaken to bear the expenses towards the payment of the duty. (2) any instrument for the sale, transfer or other disposition, either absolutely or by way of mortgage or otherwise, of any ship or vessel, or any part, interest, share or property of or in any ship or vessel registered under the Bombay Coasting Vessels Act, 1838, or Merchant Shipping Act, 1958." 72. From a reading of section 3, it is apparent that it falls under sub-heading (A) "Of the Liability of Instruments to Duty" under Chapter II. Secondly, section 3 opens with the words: 'Subject to the provisions of the Maharashtra Stamp Act and exemptions contained in Schedule 1, the instruments of the description in that section shall be chargeable with duty of the amount indicated in Schedule 1 as the proper duty therefor respectively.' 73. Hence, no adjudicatory or quasi judicial exercise is contemplated by section 30A ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... at the proper duty is paid to the State Government through Government Receipt Accounting System (G.R.A.S.) in respect of such instruments, as may be specified in the notification passing through their system or related to their functioning of which registration is not compulsory. (2) The Chief Controlling Revenue Authority shall authorise a person nominated by such Department or body, etc.. as mentioned in sub-section (1) as a proper officer for defacing the challan and making the endorsement on such instruments. (3) It shall be the duty of the proper officer so authorised under sub-section (2) to make an endorsement on the instruments after defacing the challan, as follows :- "Stamp duty of Rs.______ paid in *cash / by demand draft /by pay order / e-Challan vide Receipt / Challan No._________/GRN No.______ CIN ________ dated the __________. Seal of the Office Signature of the Officer *Strike out whatever is not applicable.]" 76. It is apparent that by sub-section (1) of section 10 which opens with the words "Except as otherwise expressly provided in this Act", all duties with which any instruments are chargeable shall be paid, and such payments shall be indicated on such ins ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... set out in section 10B and duty to be paid in cash or by demand draft or by pay order by notary. These sections, namely, sections 10A and 10C are opening with the words "Notwithstanding anything contained in section 10" and section 10B opens with the words "Notwithstanding anything contained in this Act ". Section 10D which is then relevant, has already been reproduced by us above. 78. We do not think from a reading of these provisions that they are in any way onerous, arbitrary or excessive, much less violative of the mandate of Articles 14 and 300A of the Constitution of India. It does not oblige the bank to carry on any function or perform any duty de hors the Banking Regulation Act, 1949 for it only enables the State Government to issue notification in the Official Gazette directing that any State Government department, Institution of Local self-Government, Semi-Government Organizations, Bank or Non-banking Financial Institution or the body owned and controlled or substantially financed by the State Government or any class of them to ensure that the proper duty is paid to the State Government through G.R.A.S. in respect of such instrument as may be specified in the notificat ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... on 13, what we find is that instruments stamped with impressed stamps have to be written in such manner that the writing may appear on the face and if required on the reverse of such sheet so that it cannot be used for or applied to any other instrument. This, to our mind, completely falsifies the complaint by the banks and financial institutions that they would have to determine the proper rate of duty. By sections 14 and 14A it is apparent that only one instrument to be on same stamp and alterations in instruments also have to be charged in the manner set out in section 14A. Section 15 shows that instruments written contrary to sections 13, 14 or 14A would be termed as not duly stamped and then comes section 16, which reads as under : "16. Denoting Duty Where the duty with which an instrument is chargeable, or its exemption from duty, depends in any manner upon the duty actually paid in respect of another instrument, the payment of such last mentioned duty shall, if application is made in writing to the Collector for the purpose, and on production of both the instruments, be denoted upon such first mentioned instrument by endorsement under the hand of the Collector in such other ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... in the case of an instrument of exchange by the parties in equal shares; (e) in the case of an instrument of exchange by the parties in equal shares; (f) in the case of an instrument of partition by the parties thereto in proportion to their respective shares in the whole property partitioned, or, when the partition is made in execution of an order passed by a Revenue Authority or Civil Court or Arbitrator, in such proportion, as such Authority, Court or arbitrator directs; (f-a) in case of instruments of works contract as provided in Article 63 of SCHEDULE I, by the person receiving the contract. (g) in any other case, by the person executing the instrument. 30A. Duties payable by financial institution (1) Notwithstanding anything contained in section 30, where any instrument referred to in clauses (a) to (g) of section 30, is executed on or after the date of commencement of the Maharashtra Tax Laws (Levy and Amendment) Act, 2013, in favour of or by any financial institution, the liability to pay proper stamp duty shall be on such financial institution concerned without affecting their right, if any, to collect it from the other party. (2) In respect of any such instrument ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... efore, we see no reason to strike down this sub-section. It is in relation to limited instruments that the liability to pay stamp duty is of the banks / financial institutions and for good reasons. That is because the banks and financial institutions post urbanisation, industrialisation, liberalisation and privatisation era are handling and dealing in varied transactions evidenced by such instruments. Now, banking activity has undergone a radical change by passage of time. In the modern era banks and financial institutions are undertaking multiple assignments for their clients, customers and constituents and others located nationally and internationally. A large number of dealings and transactions so also services rendered by banks and financial institutions resulting in large number of instruments being executed in favour of or by any financial institution create a right in favour of such institutions. Therefore, to smoothen the process of collection of stamp duty and not to delay it, the State has decided to fix the liability to pay proper stamp duty on such financial institutions and the provision has taken care not to affect any right in such institutions to collect it from the ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... had to consider a challenge which was somewhat identical. Before us, there is no challenge to the machinery provisions in a taxing statute. The challenge is only to the mode of collection and recovery. Once far more latitude and freedom is available to the State in these matters, then, we do not see any substance in the challenge. The Supreme Court held thus : "9. Article 14 of the Constitution enjoin upon the State not to deny to any person 'Equality before law' or 'the equal protection of laws' within the territory of India. The two expressions do not mean the same thing even if there may be much in common. Section 1 of the XIV Amendment to U.S. Constitution uses only the latter expression whereas the Irish Constitution (1937) and the West German Constitution (1949) use the expression "equal before law" alone. Both these expressions are used together in the Universal Declaration of Human Rights, 1948, Article 7 whereof says "All are equal before the law and are entitled without any discrimination to equal protection of the law." While ascertaining the meaning and content of these expression, however, we need not be constrained by the interpre ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... indirect taxes, since in the case of such taxes the real incidence is upon some other than upon the person who actually makes it over to the State, though, it is true, he cannot avoid the liability on the ground that he has not passed it on. In the matter of taxation it is, thus, not a question of power but one of constraints of policy-the interests of economy, of trade, profession and industry, the justness of the burden, its 'acceptability' and other similar considerations. We do not mean to say that taxation laws are immune from attack based upon Article 14. It is only that parliament and legislatures are accorded a greater freedom and latitude in choosing the persons upon whom and the situation and stages at which it can levy tax. We are not unaware that this greater latitude has been recognised in USA and UK even without resorting to the concepts of 'equality before law' or "the equal protection of laws" -as something that is inherent in the very power of taxation and it has been accepted in this country as well. (See in this connection the decision of Subba Rao, CJ., (as he then was) in Gorantia Butchavaa Chowdary & Ors. v. The State of A.P. & Ors., ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... he differentia of classification presupposes and proceeds on the premise that it distinguishes and keeps apart as a distinct class hotels with higher economic class hotels with higher economic status reflected in one of the indicia of such economic superiority. The presumption of constitutionality has not been dislodged by the petitioners by demonstrating how even hotels, not brought into the class, have also equal or higher chargeable receipts and how the assumption of economic superiority of hotels to which the Act is applied is erroneous or irrelevant." 14. We shall now proceed to examine the contentions before us in the light of the above principles, but before we do that we think it appropriate to remind ourselves of the following dictum : "...in the ultimate analysis, we are not really to concern our selves with the hollowness or the self-condemnatory nature of the statements made in the affidavits filed by the respondents to justify and sustain the legislation. The deponents of the affidavits filed into court may speak for the parties on whose behalf they swear to the statement. They do not speak for the Parliament. No one may speak for the Parliament and Parlia ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ding the legislature to have declared in the very first instance (i.e. at the time of 1978 Amendment Act) that the admission system was to continue in force now only in the corporation areas but also in five kilometer radius (belt) abutting each of those areas. The only question then would have been, as not it is, whether such a course brings about an unreasonable classification or whether it amounts to treating unequals on a uniform basis." 87. These principles which we have reproduced above from the judgment of the Hon'ble Supreme Court in Srinivasa (supra) and those referred therein are from times immemorial. Once it is not obligatory upon the legislature to choose only one mode of collection and recovery and there is a wide choice in that behalf, then, any other basis or choice can be adopted. It could be a question not of power but one of convenience. It is in these circumstances that collection by one more mode has been resorted to. If that is how it has been done, then, we cannot approach the challenge differently. 88. To ensure that stamp duty is collected expeditiously, the State may device a scheme and pick and choose persons or instruments by applying broad princi ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ine what is proper stamp duty and secondly in determining whether the instrument creates any right in favour of the financial institution it would necessitate scrutinizing the underlying transaction, there are no grounds assigned. 90. We would analyze these reasons and assigned so strenuously by the senior counsel. We have already indicated and with sufficient reasoning of our own that the banks do not have to determine and decide the proper stamp duty. That is already decided and determined by the statute. It cannot be left to anybody's whims and fancies what is the quantum of tax or duty. The charging section is absolutely clear when it says that certain instruments are chargeable to stamp duty, their description and the rate of duty with which they are charged are both set out in a comprehensive schedule and there is sufficient guide in the enactment itself as to how the calculation and computation has to be made and done. If the Legislature has spoken so very clearly, then, we do not see how the petitioners can complain. Apart therefrom, the liability to pay stamp duty on certain instruments and of the nature specified in sub-section (1) does not mean that the stamp duty a ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... hypothecation, pawn or pledge, a writing to bind oneself such as indemnity bond, further charge, mortgage, transfer of debentures being marketable securities, transfer of any interest secured by a bond or mortgage, conveyance, lease etc., then, we do not see how any detailed analysis, much less an adjudication is called for. The banks and financial institutions are sufficiently familiar with such instruments and the obligations created thereby. There is nothing to shock or surprise them for they handle and deal with such instruments day in day out. They pass through them as well. It is, therefore, no ground to urge that the bank would have to determine whether the instrument creates any right in its favour or not. The bank or person proceeded against in terms of section 30-A can, in a given case, seek the opinion of the Collector as to the duty, if any, with which or the Article of Schedule I under which it is chargeable and pay a fixed fee and leave it to the Collector to determine the duty, if any, with which or the Article of Schedule I under which in his judgment the instrument is chargeable. This is what is adjudication as to proper stamps and contemplated by sub-section (1) o ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... cing of the adjudicatory function done by the State. The State has not delegated any such power nor has divested itself of it. The impounding has to be done by the banks / financial institutions of an instrument which is in operation and existing in fact. If that instrument is not cancelled, then, it has to be impounded and forwarded to the Collector for recovery. It is clear that such a power to impound has already been conferred in terms of section 33 upon every person having by law or consent of parties authority to receive evidence and every person in charge of public office except an officer of police before whom any instrument chargeable in his opinion with duty is produced or comes in the performance of his functions. If it appears to him that such instrument is not duly stamped he can impound the same and section 33(1) uses the phraseology "irrespective of whether the instrument is or is not valid in law". For that purpose by subsection (2) of section 33, a specific power to examine every instrument so chargeable and so produced or coming before him in order to ascertain whether it is stamped with the stamp of the value or description required by law for the time being in f ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... amanatha Aiyar, 3rd Edn. Reprint 2007 (Book 2). The meaning of this term as judicially understood is set out thus : "Failure means 'a falling short', 'deficiency' or 'lack'." It has also referred to a judgment of Allahabad High Court in the case of Ram Kishore vs. Bimla Devi, AIR 1957, All. 658. 94. Even in common parlance and going by the dictionary meaning it means the omission of expected or required action. Therefore, if that cannot be attributed then the penalty may not be necessarily imposed. Everything ultimately depends upon the facts and circumstances of each case and merely because the failure to impound attracts penalty ipso facto does not render the substantive provision or the penalty provision unconstitutional. Even in a taxing statute, one finds such provisions and in plenty. It is argued that the imposition of penalty is for failure to perform any quasi judicial or adjudicatory function. That is not so as held above. It is a failure to impound the instrument and to forward it to the Collector for recovery and collection of revenue. If that is an obligation and function to be performed by others also and such a provision was already enacte ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... d detailed action on par with the other provisions in the Stamp Act. All that the bank is required to do is to impound the instrument so long as it is effective. The bank can ascertain from the instrument itself whether proper stamp duty is not paid and if that is so, it shall impound it. We have already outlined the difference between examination and impounding of an instrument which is an exercise contemplated by section 37 wherein the concerned officer or person has to record an opinion that the instrument is not duly stamped and that is irrespective whether the instrument is or is not valid in law. In the case before us under sub-section (2) not every old or ancient instrument, as is complained, would have to be impounded. Such instruments may not be effective for they have worked themselves out by passage of time. The transaction recorded in the same may itself be not subsisting or is over long back. Then, such instruments may not impact anything as could be termed as creating any right in favour of any bank / financial institution. If such instrument is not impounded, then, in a given case and depending on other facts and circumstances, the bank / financial institution may be ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... one injury is committed that cannot be perpetuated for all times to come. Thus the argument that these amendments have no nexus with the object sought to be achieved deserves to be rejected for its foundation is totally faulty and unsound. The object sought to be achieved is apparent and clear, namely, augmentation of revenue and collection thereof expeditiously. If the Legislature as a matter of broader policy thinks and views the large volume of documents and instruments dealt with by the banks and treats them as a class, then, that classification cannot be interfered with, leave alone nullified on the specious ground and as urged by Mr. Tulzapurkar. It is not necessary for the Legislature to demarcate or specify and with details as to how many instruments passing through the banks and financial institutions or favouring them or creating a right which is subsisting in their favour are to be dealt with differently. If on a broad policy, the State justifies selecting the instruments pertaining to banks and those creating rights in their favour then we do not see any negation or violation of the mandate of Article 14. First of all we see no discrimination but a different treatment ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... the admission in evidence of the instrument not duly stamped as well as to its being acted upon, and the Legislature has by S. 36 in the conditions set out therein removed the bar only against admission in evidence of the instrument. The argument ignores the true import of Section 36. By that section an instrument once admitted in evidence shall not be called in question at any stage of the same suit or proceeding on the ground that it has not been duly stamped. Section 36 does not prohibit a challenge against an instrument that it shall not be acted upon because it is not duly stamped, but on that account there is no bar against an instrument not duly stamped being acted upon after payment of the stamp duty and penalty according to the procedure prescribed by the Act. The doubt, if any, is removed by the terms of Section 42(2) which enact, in terms unmistakable, that every instrument endorsed by the Collector under Section 42(1) shall be admissible in evidence and may be acted upon as if it had been duly stamped. 5. The Stamp Act is a fiscal measure enacted to secure revenue for the State on certain classes of instruments: it is not enacted to arm a litigant with a weapon of tec ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... affecting the immovable property which is the subject matter of the mortgage, with a third party; such a transaction shall be void and the third party shall be entitled to refund of any amount paid by him together with interest at twelve per cent from the date of payment and also to compensation for any damages suffered by him, from the transferor. (3) The amount recoverable by such transferee as specified in sub-section (2) shall be a charge on the interest of the mortgagor, in the mortgaged property: Provided that, nothing in this section shall apply to the instruments of agreement relating to mortgage by deposit of title deeds which are duly registered as per the provisions of this Act." 101. The reasons for such amendment are essentially contained in the 178th Report of the Law Commission of India. The extract thereof is annexed as Annexure 9 to the affidavit-in-reply. The reasons are then elaborated in paragraphs 26 to 30. These read as under : "26. I say that the most important thing is to understand that the purpose of Registration Act which protects not only the claimant's 'Right in Persona' and 'Right in Rem', but also to protect the right of oth ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... on which the property rights exist. The tremors could pass on to financial markets; Innocent third parties might end up purchasing properties which have already been mortgaged. The seriousness of the problem has increased manifold in the recent years due to rapid urbanization. 28. I say that in a rural setting, people know the real right-holders of the property and the charges created therein. An urbanized environment relies mostly on documents. In that scenario, hiding certain rights over a particular property, whether intentionally or unintentionally, by not registering related documents on time, will sound death-knell to the stability of property system as well as financial system. Emerging materialism in the society and rapidly increasing real estate rates have compounded the problem further. 29. I say that keeping this in view, with the intention protecting the interests of banks and Financial institutions as well as society at large, Law Commission had recommended compulsory intimation of equitable mortgage to the Sub-Registrar office. A few states including Madhya Pradesh and Tamil Nadu have implemented these provisions already. 30. I say that going a step ahead and for t ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e a notice before the registering officer or officers may not invite other consequences, with which we are not concerned. It is only in case where the mortgagor who has mortgaged the property but has not filed a notice within the stipulated period entering into any transaction relating to or affecting the immovable property which is the subject matter of a mortgage with a third party that invites the consequences and the restriction on the rights of the third party. 104. What we find is that this failure invites these consequences because it is not just a subsequent mortgage which would invite the consequences, but any transaction in relation to or affecting the immovable property which is the subject matter of mortgage and with a third party which would invite them. 105. Mr. Tulzapurkar's arguments overlook these wide words and their amplitude. He would urge that there could be a sale of the property by the mortgagor subject to the mortgage or there could be a lesser right or interest created, namely, a lease or there could be a simple act of putting the third party in possession. He would submit that these are transactions relating to or affecting the immovable property in ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... f 2001 refers to Conference of Chief Ministers and Finance Ministers of States and the conclusions arrived at therein, inter alia, the registration of the Power of Attorney which is in the nature of a contract to sell immovable property be made compulsory and consequential amendments be made in the Registration Act, 1908, the Transfer of Property Act, 1882 and the Indian Stamps Act, 1899. After this we have noticed as to how the States gave effect to these recommendations in consonance with the conclusion at the Conference and in Part III which is titled as "Of Registrable Documents" added clauses (f), (g) and (h) in sub-section (1) of section 17. Therefore, an agreement relating to the deposit of title deeds where such deposit has been made by way of security for the repayment of a loan or an existing or future deed is compulsorily registrable. 107. Then comes section 18 which speaks of documents of which registration is optional. Therein clause (cc) was inserted by Act 33 of 1940. Therefore, instruments transferring or assigning any decree or order of a court or any award when such decree or order or award purports or operates to create, declare, assign, limit or extinguish, whe ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... Once the document is registered and the above information is provided, then, it would alert everybody else and sufficiently. After Part IV come Part V and Part VI and which would enable us to hold that to facilitate registration, the law has made several enabling provisions. These confer powers of varied nature on the officers in charge of implementing and enforcing the Act. A perusal of Part V and Part VI, including compulsory affixing of photographs, would enable this Court to further conclude that in the Registration Act, apart from section 89-B in relation to compulsory registrable documents, there are sufficient safeguards. In relation to those documents as well and upon such enquiries and satisfaction of officers, Part X has been inserted in the Act which deals with the effects of registration and non-registration. Therein appear sections 47 to 49 and which deal with time from which registered document operates, registered documents relating to property when it takes effect against oral agreements and section 49 sets out the effect of non registration of documents required to be registered. Sections 48 and 49 read as under : "48. Registered documents relating to property w ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... affect any immovable property comprised therein or confer any power to adopt or be received as evidence of any transaction affecting such property or conferring such power unless it has been registered. However, the proviso to section 49 must be noted and that relates to an unregistered document affecting immovable property and required by the Registration Act, 1908, or the Transfer of Property Act, 1882, to be registered but not registered may still be received as evidence of a contract in a suit for specific performance under Chapter II of the Specific Relief Act, 1963, or as evidence of any collateral transaction not required to be effected by a registered instrument. Hence, "affecting the immovable property" and "relating to the immovable property" are the words employed by the Legislature, namely, the Parliament in sections 48, 49 and equally by section 50 which reads as under : "50. Certain registered documents relating to land to take effect against unregistered documents:- (1) Every document of the kinds mentioned in clauses (a), (b), (c) and (d) of section 17, sub-section (1) and clauses (a) and (b) of section 18, shall, if duly registered, take effect as regards the pr ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... title deeds would have to be considered. The latter one of filing of notice of intimation within the meaning of section 89-B(1) not being complied with, the consequences cannot be so drastic as are highlighted before us by Mr. Tulzapurkar and others. We cannot agree with them that the words and expression in sub-section (2) of section 89-B "such a transaction shall be void" would mean giving a go-by to all the rights and liabilities arising out of mortgages of immovable property and charges as enumerated in Chapter IV of the Transfer of Property Act, 1882. Clause (f) of section 58 which was added by Act 20 of 1929 in the Transfer of Property Act, 1882, refers to a mortgage by deposit of title deeds and concerns a person in any of the towns, namely, the towns of Calcutta, Madras and Bombay and any other town which the State Government concerned by notification in the official gazette specify. Such a person delivering to a creditor or his agents documents of title of immovable property with intent to create a security thereon, that act or transaction is called as mortgage by deposit of title deeds. Then, follow several provisions in that Act itself, namely, Transfer of Property Act, ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... .P. Singh, this principle has been enunciated and by referring to several judgments of the Hon'ble Supreme Court of India and the Courts abroad. 113 It may be that this principle has certain limitations. However, to highlight them if the grammatical construction leads to some absurdity or some repugnance or inconsistency with the rest of the instrument, it may be departed from so as to avoid that absurdity and inconsistency. This principle has been further amplified and elaborated in the case of Tirath Singh vs. Bachinttar Singh reported in AIR 1955, SC 830. 114 The other principle is with regard to the presumption that a statute is intended to be just and reasonable. The law does not compel the doing of impossibilities. Similarly, if the acts which are referred to in the enactment are of a third person, then, any lapses or deliberate attempts to avoid the compliance with law should not visit somebody who has absolutely no control with extreme or drastic consequences. In other words, when the natural construction leads to some general hardship or injustice and some other construction is reasonably open, then, the natural construction may be departed from. On this principle, t ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ble it is then excused. The principle that is evolved is to be found in the decision reported in AIR 1997 SC 1879 Biharilal vs. Bhuri Devi . That principle is enunciated as under : ".... … … … … … This view obviated the inconvenience and injustice to innocent persons which the Federal Court felt in J.K. Gas Plant Manufacturing Co. Ltd. v. The King Emperor (1947)FCR 141 at 156, 157) and at the same time protects Government. We feel that some reasonable meaning must be attached to Article 299 (1). We do not think the provisions were inserted for the sake of mere form. We feel they are there to safeguard Government against unauthorised contracts. If in fact a contract is unauthorised or in excess of authority it is right that Government should be safeguarded. On the other hand, an officer entering into a contract on behalf of Government can always safeguard himself by having recourse to the proper form. In between is a large class of contracts, probably by far the greatest in numbers, which though authorised, are for one reason or other not in proper proper form. It is only right that an innocent contracting party should not suffer because of this a ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... word "void" is not daterminative of its legal impact. The word "void" has a relative rather than an absolute meaning. It only conveys the idea that the order is invalid or illegal. It can be avoided. There are degrees of invalidity, depending upon the gravity of the infirmity, as to whether it is, fundamental or otherwise and in this case, the only complaint about the initiation of the suo moto proceedings by Board was, that it was not initiated on intimation by the State Land Board about the nonfiling of the statement as required by Section 85(7) of the Kerala Land Reforms Act. In our opinion, this is not a case where the infirmity is fundamental. It is unnecessary to consider the matter further. 7. In Halsbury's Laws of England, 4th edition, (Reissue) Volume 1(1) in paragraph 26, page 31, it is stated, thus:- "If an act or decision, or an order or other instrument is invalid, it should, in principle, be null and void for all purposes: and it has been said that there are no degrees of nullity. Even though such an act is wrong and lacking in jurisdiction, however, it subsists and remains fully effective unless and until it is set aside by a court of ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 1949 [charge sheet No. 14 (2)] to the Tribunal. Therefore, the Court held that prima facie there was room to hold that case No. 17. which was affected by the charge sheet No. 14 (2) was never properly made over to the Tribunal and the trial of the accused in that case was, therefore, without jurisdiction. But the matter was carried in appeal before the High Court of Hyderabad and the convictions and sentences were confirmed. It was urged before the Supreme Court that notwithstanding the decision rendered by the High Court in appeal since the decision of the Tribunal was without jurisdiction, the detention was invalid. In repelling this piea, Fazl Ali, J. observed at page 225, thus:- "Evidently, the appellate Ct. in a case which properly comes before it on appeal, is fully competent to decide whether the trial was with or without jurisdiction, & it has jurisdiction to decide the matter rightly as well as wrongly. If it affirms the conviction and thereby decides wrongly that the trial Ct. had the jurisdiction to try and convict it cannot be said to have acted without jurisdiction and its order cannot be treated as a nullity." "It is well settled that if a Ct. acts wi ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... nt upon the context. As a result of the above discussion we find that both sections of the Maharashtra Stamp Act, 1958, and the Registration Act, 1908, read and understood so also interpreted in the above manner need not be struck down. 119 While arriving at the above conclusion, we have taken the aid and assistance of the very principles which have been pressed into service by Mr. Tulzapurkar. We need not advert to each and every judgment relied upon by counsel. We have referred to the very principles and which are enunciated in the case of State of Madhya Pradesh vs. Rakesh Kohli & Anr. (supra) about constitutional validity of taxing statutes. 120 We are not in agreement with Mr. Tulzapurkar that the provisions of the Stamp Act and particularly, section 30A need to be struck down on the anvil that they violate the mandate of Articles 14, 19(1)(g) and 300A of the Constitution of India. We do not think that section 30A is in any way on par with section 73 of the Andhra Act which was under consideration in the case of District Registrar and Collector, Hyderabad vs. Canara Bank AIR 2005 SC 186. 121 Nonetheless, none of the principles that we have referred above would run counter t ..... X X X X Extracts X X X X X X X X Extracts X X X X
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