Registration — Public auction — Sale certificate sent to the Registrar for filing in Book No. 1 would not attract stamp duty — Registration Act, 1908, S. 17 & S. 89.

[Shree Vijayalakshmi
Chartiable Trust v. Sub-Registrar, (2010) 155 Comp. Cas. 549 (Mad.)]

The petitioner was the
successful bidder of the property of the company in liquidation sold in public
auction in accordance with the directions of the winding-up Court. Possession of
the property was given to the petitioner and a certificate of sale was issued by
the official liquidator. The office of the official liquidator sent a copy of
the certificate of sale to the office of the Sub-Registrar of file it in Book
No. 1 as required u/s.89 of the Registration Act, 1908. The Sub-Registrar
directed the petitioner to pay a sum of Rs.10,39,122 towards deficit stamp duty
for entering the certificate in Book No. 1. The aforesaid order was challenged
in a writ petition.

The Madras High Court held
that the documents mentioned in S. 17 of Registration Act, 1908, are to be
registered by the Registrar as per the procedures mentioned in S. 52 to S. 67 of
Part XI of the Registration Act, 1908. On the other hand the procedure for
filing copy of the sale certificate finds place in S. 89 of the Act. Hence both
procedure are different. For registration, stamp duty is a must, whereas for
filing no stamp duty is necessary.

The Court further observed
that the Legislature consciously used the word ‘registrar’ in S. 17, whereas the
word ‘file’ was employed in S. 89 of the Act. Only when the purchaser goes for
registration of sale certificate issued by the Court Officer, Article 18 of
Schedule 1 of the Indian Stamp Act, 1899, would be attracted and stamp duty is
to be paid in accordance with Article 23 treating it as conveyance, i.e., market
value of the property. When the instrument is not submitted for registration and
is being sent to the Registrar only for the purpose of filing in Book No. 1, it
does not attract any stamp duty.

The Court auction sale
certificate sent to the Registrar for filing in Book No. 1 would not attract
stamp duty. In view of S. 17(2) and S. 89 of the 1908 Act, the Sub-Registrar had
no power and jurisdiction to demand stamp duty. Hence the order was liable to be
set aside.