CRP/5601/2010 of L.G. Polymers India Private Limited, Vs The District Registrar and Collector under Section 47-A of on 31 December 2014

HONOURABLE SRI JUSTICE S.RAVI KUMARCIVIL REVISION PETITION No.5601 OF 2010--Dated 31122014

Between:

L.G.Polymers India Private Limited, a company.registered under the Companies Act, Visakhapatnam

...Petitioner.

And:

The District Registrar and Collector under Section-47A of the Indian Stamp Act, Visakhapatnam, office of.the District Registrar, Visakhapatnam …Respondent.

HONOURABLE SRI JUSTICE S.RAVI KUMARCIVIL REVISION PETITION No.5601 OF 2010ORDER:

This revision is against order dated 15-7-2010 inC.M.A.No.13 of 2007 on the file of Principal Senior CivilJudge, Visakhapatnam.

Brief facts leading to this revision are as follows:

The petitioner herein is a Private Limited Companyengaged in business of manufacture of polistrina. Itpurchased a running unit from McDowell companylimited. The sale consideration and value of thedocument is shown as Rs.21,00,00,000/-(Rupees twentyone crores only) on which stamp duty and registrationfees is paid. The Sub-Registrar of Gopalpatnam objectedand contended that the sale consideration isRs.95,86,01,000/- and stamp duty chargeable isRs.12,25,32,860/- and registration fees chargeable isRs.47,93,255/- and the deficit stamp duty and registrationfee payable is Rs.10,02,75,665/- and on that, he referredthe document to District Registrar-cum-Collector underSection 47 A of the Indian Stamp Act for determinationand the District Registrar-cum-Collector determined the stamp duty payable on the document asRs.12,46,18,130/- and registration fee at Rs.47,93,255/-and by deducting the stamp duty already paid, fixed deficitstamp duty and registration fee at Rs.10,23,60,935/- anddirected the revision petitioner to pay the said amount.

Aggrieved by the said fixation, the revision petitionerpreferred appeal under Section 47A of the Indian StampAct read with Rule 9 (2) of A.P.Stamp (Prevention of theundervaluation) Rules, 1975 to the appellate authoritywhich is the Principal Senior Civil Judge, Visakhapatnam. Learned appellate authority on a consideration ofcontentions and rival contentions of both parties,dismissed the appeal and confirmed the stamp duty andRegistration Fees fixed by the District Registrar-cum-Collector and aggrieved by the same, present revision ispreferred.

Heard both sides.

Learned Senior Counsel appearing on behalf ofrevision petitioner submitted that appellate authoritycommitted serious error in not looking into the recitals ofthe document and provisions of the Stamp Act. He furthersubmitted that under the document, immovable propertiesin an extent of 87.3464 hectors and buildings thereonwere only conveyed and their market value was onlyRs.21,00.00.000/- (Rupees twenty one crores only) andon that, revision petitioner paid the Stamp Duty andRegistration Fees but the registering authority also tookthe value of the movable assets, namely, plant,machinery, equipment, vehicles, furniture, fixtures andbook debts which were already transferred for which aseparate receipt was already obtained, but as per Section47, only in cases of under valuation, the Registeringauthority can call for payment of deficient stamp duty andin this case, there is no undervaluation of the property thatwas conveyed under the document.

He also submitted that the registering authority has to see what is conveyed under the sale deed, and stampduty has to be collected on it but it cannot collect stampduty on the basis of what ought to have conveyed or whatought to have been conveyed.

He submitted that if schedule 1 A and 47 A anddefinition of sale under the Transfer of Property Act areread together, the registering authority has to refer thedocument only in case of under valuation and theregistering authority has not questioned the value of landand Buildings Rs.21,00,00,000/-(Rupees twenty onecrores only) and the registering authority cannot insist thepetitioner to pay stamp duty on the value of movable,vehicles, book debts, machinery etc., in respect ofwhich, no conveyance is taken and if ultimately, thevendor questions conveyance of these items, the ultimatelooser or sufferer is purchaser vendee and it is not thelook out of the authority for the purpose of stamp duty andthe appellate authority completely lost sight of this aspect. He submitted the registering authority, has taken the totalconsideration including the value of vehicles, furniture,fixtures, machinery, book debts etc., which is incorrectand appellate authority confirmed the same. It issubmitted that the decision on which reliance was placedby the appellate authority is on a different putting and theappellate court committed error in accepting objection ofthe registering authority with regard to stamp duty andregistration fees and its order is to be set aside.

On the other hand, learned Advocate Generalsubmitted on behalf of respondent that the plant andmachinery is part of the transaction and even in theconveyance deed, there is a reference about these itemsand as per the agreement on the basis of which thisconveyance deed, is executed, clearly indicate that thetotal consideration is 96,00,00,000/- and the petitioner isexpected to pay stamp duty and registration fee on thatamount and the registering authority rightly objected about valuation, which was upheld by the appellate authority. He further submitted that the decision of the Honourable Supreme Court referred to in the order of the appellateauthority was rightly applied to the facts of case and thefacts in that decision are akin to the case on hand andthat there are no grounds to interfere with the order of theappellate authority. He also submitted that there is noillegality or material irregularity or lack of jurisdiction in theorder of the appellate authority and therefore, the revisionis devoid of merits.

Now the point that would arise for my considerationin this revision is whether the order impugned is legal,correct and proper?POINT:

Admittedly, McDowell and Company Limitedexecuted sale deed in favour of revision petitioner hereinand as per the orders of this court in C.R.P.No.4222 of2008 dated 18-8-2008, appellate authority recorded theevidence of both parties and marked documentsproduced on behalf of both parties and on a considerationof the same passed the impugned order.

Now the main contention of the revision petitioner isthat registering authority has to collect stamp duty andregistration charges only on the land and building and itcannot insist the petitioner to pay stamp duty andregistration fee in respect of movables like plant,machinery and vehicles etc., According to advocate for petitioner, under thedocument, only land and buildings are conveyed and forthe consideration paid towards those properties only, thepetitioner is liable to pay stamp duty and registration feeand in respect of those properties, it is not the contentionof the respondent that the value of those properties isunder valued. He further submitted that the registeringauthority has to consider the sale consideration paid forthe property conveyed under the document i.e., land and building and they cannot collect stamp duty andregistration fee on the total value which includesmoveables, for which, no stamp duty is required.

Appellant herein filed a writ before this court seekingdirection to permit the petitioner herein to deposit deficitstamp duty and registration fee in two instalments to thecredit of C.M.A. and on such deposit to direct theregistering authority to release the sale deed and thiscourt granted such permission and the petitioner hasdeposited the entire deficit stamp duty and registration feeassessed by the registering authority and on suchdeposit, conveyance deed was registered and deliveredto petitioner herein.

Admittedly, petitioner has purchased a running unitfrom McDowell and company Limited. It is also not indispute that the total amount paid for the entire unit is97,30,00,000/- and after deducting value of Mumbaiproperty net consideration is Rs.95,86,01,000/-.

I n DUCCANS INDUSTRIES LIMITED VS. STATE

OF U.P. AND ORS. ([[1]]) Honourable Supreme Court hadan occasion to deal with the method that has to beadopted for the purpose of levy of stamp duty and fixationof correct valuation. In that case also, a running unit waspurchased and transfer of the unit on “as is where isbasis” i.e., entire fertilizers business including plant andmachinery, land and buildings thereon were purchased.

In that case also, there was an agreement on thebasis of which a sale and conveyance deed wasexecuted. Honourable Supreme Court examined thequestion whether a machinery which is embodied in theearth is a movable property or an immovable property.Hon’ble Supreme Court held that it depends on facts andcircumstances of each case.

The Honourable Supreme Court, on a perusal ofconveyance deed, in that case held as follows:

“We are of the considered opinion that the vendor as per the conveyance deed dated 9-6-1994has conveyed the title, it had not only in regard tothe land in question but also to the entire fertilizerbusiness in “as is where is” condition including theplant and machinery standing on the said land. Therefore, the authorities below were totallyjustified in taking into consideration the value ofthese plant and machineries along with the value ofthe land for the purpose of the Act.”

In our case also, as seen from the conveyancedeed in clause 12, delivery of possession of land,machinery, equipment, furniture, fixtures and vehicle etc.,were also referred to in the document and the value ofwhich was not separately mentioned and the totalconsideration paid includes for these items also.

The conveyance deed in this case not onlyconveyed land and buildings but the entire business unitin “as is where is”condition including plant machinery etc.,Therefore, registering authority is totally justified in takinginto consideration the value of the plant, machinery andfixtures etc., for the purpose of stamp duty.

In DUCCANS INDUSTRIES LIMITED VS. STATEO F U.P. AND ORS.(1[st] cited) also, theHonourableSupreme Court by considering the recitals in thedocument, held that stamp duty and Registration Fees isalso payable for the plant machinery etc., As rightlypointed out by learned advocate General, the facts of thiscase are similar to the facts before the Supreme Court inthe above referred decision and the learned appellateauthority rightly applied the principle laid down byHonorable Supreme Court in the above referred decisionto the facts of present case in upholding the objection ofthe registering authority.

Conclusion

Learned Senior Civil Judge-cum-appellate authorityelaborately discussed each and every aspect both factualand the legal and came to a right conclusion and there isno material irregularity or illegality in the findings of theappellate authority to be interfered by this court by exercising revisional powers.

For these reasons, it is held that the DistrictRegistrar–cum–Collector rightly objected for registeringthe document and the appellate authority rightly upheldthe objection.

In the result, this Civil Revision Petition is dismissed.As a sequel to the disposal of this revision, theMiscellaneous Petitions, if any, pending, shall standdismissed.

_______________________

JUSTICE S.RAVI

KUMAR

--Dated 31122014.Dvs

HONOURABLE SRI JUSTICE S.RAVI KUMAR

CIVIL REVISION PETITION No.5601 OF 2010

Dvs

[1]AIR 2000 SC 355

--Dated 31122014