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TMI Blog2015 (8) TMI 1524X X X X Extracts X X X X X X X X Extracts X X X X ..... ions referred to the High Court for its opinion and decision arise as under: (A) The deed of "indenture the deed of mortgage for delayed after assets" which was registered on 6.10.2009 vide Regn. No. 3375 registered at office of Sub-Registrar, Mundra (District Kachchh) by the applicant has paid Rs. 4,21,000/- whether as per provision of Sections 5, 3(a), 3(B) and the Schedule-1's Articles 6 and 36(b) the applicant is required to pay deficit stamp duty of Rs. 50,41,600/- or not. (B) The deed of "indenture the deed of mortgage for delayed after assets" which was registered on 6.10.2009 vide Regn. No. 3375, at the office of the Sub-Registrar, Mundra (District Kachchh) by the applicant is required to be considered as per Schedule 1's Articles 6 and 36 as per simple mortgage and whether the applicant is required to pay Rs. 4,21,600 or not? 4. The facts of the case lie in a narrow compass. 5. The Respondent is a Company named Coastal Gujarat Power Ltd. and it needed financial assistance for setting up an Ultra Mega Power Project in the area of Kutch-Bhuj and for that purpose it secured assistance from few lenders. The lenders i.e. financial institutions, which were thirteen ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... en the borrower and security trustee is independent of the relationship between the borrower and the lending banks. The relationship between the borrower and the security trustee is that of a mortgagor and mortgagee. By taking aid of the provision of the Indian Trust Act and after creation of a different valid trust deed and making payment of stamp-duty thereon in accordance with law, the State Bank of India became the security trustee of the lending Banks and held the mortgage for and on behalf of those beneficiaries. Therefore, by the instrument in question, either fictionally or otherwise, no separate or distinct matters or transactions are created. Thus, the applicant is the mortgagor and the S.B.I., in the capacity of a trustee, is the mortgagee. The instrument does not involve either "distinct matters" or "distinct transactions" so as to attract Section 5 of the Act. The Court found from the document in question that the State Bank of India is the only mortgagee under the instrument and no rights in the mortgaged property had been created in favour of secured parties or any other persons. 12. The High Court further opined that the principles laid down in The Member, Board of ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... unsel appearing for the Respondent, drew our attention to different clauses of mortgage deed and submitted that security created by the said mortgage in favour of the security trustee shall become enforceable only by security trustee upon the occurrence of event of default. According to the learned senior Counsel since no independent right has been created in favour of the lenders under the mortgage deed it cannot be held to be a separate and distinct transaction. According to Mr. Sundaram, Section 5 of the Act shall not have any application. Learned senior Counsel further referred to the relevant paragraph of the judgment of this Court in The Member, Board of Revenue v. Arthur Paul Benthall 1955 SCR 842 and submitted that the ratio decided in the said judgment fully applied in the present case. 17. It was further contended what has to be looked into for the purpose of stamp duty is the instrument, i.e., the Mortgage Deed, to see whether it dealt with distinct matters. The Mortgage Deed dealt with only one single matter, i.e., the mortgage of a single property with one mortgagee. Merely because there was beneficial interest for all the individual banks forming the consortium, this ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... referred to as borrower. 22. From the body of this agreement, it reveals that the borrower had requested the senior lenders i.e. thirteen banks/financial institutions to make available to the borrower loan details of which is more fully set out in Schedule II. Pursuant to the loan agreement entered into by the borrower and the senior lenders, each of senior lenders inter alia agreed to provide to the borrower credit and loan facilities to finance part of the project, costs of the project, more specifically set out in Schedule II. At this stage, we would like to extract herein Schedule II of the said Security Trustee Agreement: SCHEDULE II PART A LIST OF ECB FACILITY LENDERS PART B LIST OF RUPEE FACILITY LENDERS 23. It further appears from the Security Trustee Agreement that the entire financing of the project by Senior Lenders agreed to be secured by first ranking mortgage and pari passu charge/issuing of all the moveable properties of the borrower. Further a first ranking pari passu charge of all the borrowers account and each of the other accounts required to be created by borrower under any transaction document. 24. For the aforesaid purpose, the Senior Lenders and the i ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... itle and interest of the Borrower in respect of the immovable property situated in situated in district Mundra in the State of Gujarat more particularly described in Schedule 2 hereinunder written (the "delayed After Acquired Assets") together with all buildings erections and constructions of every description which are standing erected or attached or shall at any time hereafter during the continuance of the Security hereby lands and premises or any part thereof and all rights to use common areas and facilities and incidentals attached hereto, together with all trees, fences, hedges, ditches, ways sewers, drains, waters, watercourses, liberties, privileges, easements and appurtenances whatsoever to the said lands, hereditaments or premises or any part thereof whether presently in existence or in the future belonging to or in anyway appurtenant thereto and all the estate, right title, interest property claim and demand whatsoever of the Borrower into and upon the same which description shall include all properties of the above description whether presently in existence constructed or acquired hereafter (the "Mortgaged Properties"). To have and to hold all and singular the Mortgaged ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... the Security Trustee may (but is not obligated to) pay such amounts, on behalf of the Borrower. Any money paid by the Security Trustee as aforesaid, shall constitute a part of the Mortgage Debt. 28. From the facts discussed and narrated hereinabove, it is manifest that the instrument of mortgage came into existence only after separate loan agreements were executed by the borrower with the lenders with regard to separate loan advanced by those lenders to the Respondent borrower. The mortgage deed which recites at length as to how and under what circumstances property was mortgaged with the security trustee for and on behalf of lender bank. 29. When several matters are contained in one instrument, what stamp is payable thereon in England has been dealt with and Halsbury's Law of England 4th Edition volume 44 paragraph 613 at page 399 is quoted herein below: 613. Instrument relating to several matters. Except where there is statutory provision to the contrary, an instrument containing or relating to several distinct matters is to be separately charged, as if it were a separate instrument, with stamp duty in respect of each of the matters, and an instrument made for any consid ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ion 5 deals only with the instrument which comprises more than one transaction and it is immaterial for the purpose whether those transactions are of the same category or of different categories. 32. It appears from the trustee document that altogether 13 banks lent money to the mortgagor, details of which have been described in the schedule and for the repayment of money, the borrower entered into separate loan agreements with 13 financial institutions. Had this borrower entered into a separate mortgage deed with these financial institutions in order to secure the loan there would have been a separate document for distinct transactions. On proper construction of this indenture of mortgage it can safely be regarded as 13 distinct transactions which falls Under Section 5 of the Act. 33. Both the learned Counsel put reliance on the five Judges Constitution Bench judgment of this Court in the Case of The Member, Board of Revenue v. Arthur Paul Benthall (supra). The said case originated from a reference made to the High Court of Calcutta by the Revenue Authorities seeking opinion with regard to the stamp duty payable in the instrument. The Respondent in that case was at the material ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... When two words of different import are used in a statute in two consecutive provisions, it would be difficult to maintain that they are used in the same sense, and the conclusion must follow that the expression "distinct matters" in Section 5 and "description" in Section 6 have different connotations. 35. Their Lordships further held that: When a person possesses both a personal capacity and a representative capacity, such as trustee, and there is a delegation of power by him in both those capacities, the position in law is exactly the same as if different persons join in executing a power in respect of matters which are unrelated. There being no community of interest between the personal estate belonging to the executant and the trust estate vested in him, they must be held to be distinct matters for purposes of Section 5. The position is the same when a person is executor or administrator, because in that capacity he represents the estate of the deceased, whose persona is deemed to continue in him for purposes of administration. 36. We have also gone through the provisions contained in Sections 33, 39, Article 6 and 6(b) of the Act as also Bombay Stamp (Gujarat Second Amendm ..... X X X X Extracts X X X X X X X X Extracts X X X X
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