The sale certificate issued under the SARFAESI Act does not require registration, but it is subject to stamp duty and transfer duty.

ORDER :

D.V.S.S. Somayajulu, J.

1. This writ petition has been filed by the petitioners seeking the following relief:

"To issue a writ, order or direction one more particularly in the nature of a Writ of Mandamus declaring the action of 1 and 2nd Respondents in collecting Rs. 60,005/- towards Transfer Duty 1.5% as contrary to Article 16 of Indian Stamp Act 1899 in respect of Sale Certificate dated 16.08.2018 registered vide Document No. 3577/2018 before the Sub-Registrar, Tirupati Rural and consequently direct 1st and 2nd Respondents to refund Rs. 60,005/- paid by the petitioners and .."

2. The petitioners before this Court are purchasers of the property in a public auction conducted by a Nationalized Bank under the Securitization and Reconstruction of Financial Assets and Enforcement of Security Interest Act, 2002 (for short 'the SARFAESI Act). The auction was confirmed in their favor and a Sale Certificate was also issued. Physical possession of the property was also delivered. The petitioners presented the Sale Certificate for registration but the 2nd respondent refused to receive the document on the ground that transfer duty is not paid. The case of the petitioners is that they tried to reason with the respondent stating that the sale was conducted by auction by the State Bank of India under the SARFAESI Act, and hence, the same does not amount to transfer of property and that transfer duty is also not payable. Despite the same, it is stated that the 2nd respondent insisted on payment of the transfer duty. Petitioners state that under these circumstances they were compelled to pay the amounts as demanded. After the registration was completed, they made a number of representations seeking refund of the transfer duty paid at "1.5%". The respondents did not agree for the same and the representations were un-answered. Therefore, the writ was filed seeking the relief of refund of the excess 1.5% that has been collected. Since the submissions were made in this writ petition orders are being pronounced in this petition and the same will apply to the other two writ petitioners in WP. Nos. 7308 and 7310 of 2020, who have raised identical legal issues in their writs.

3. The learned Government Pleader appeared for the respondents and filed a counter affidavit wherein it was stated that the petitioners are not entitled to the refund; for the reasons mentioned therein.

4. Sri P. Badarinath, learned counsel for the petitioners argues that when a sale is conducted by public auction by a Court or other Officer the same cannot be treated as a transfer of property to attract stamp duty/registration/transfer duty etc. It is his contention that the Sale Certificate issued in this case does not even require registration, but petitioners by way of caution have opted for the registration. He also contends that a Certificate of Sale cannot be treated as a document actually affecting a transfer of property and therefore, the collection of transfer duty at 1.5% is contrary to law. He relies upon the judgments of the Hon'ble Supreme Court of India reported in B. Arvind Kumar v. Government of India (2007) 5 SCC 745 and a judgment of a learned single Judge of the combined High Court in WP. Nos. 17600 of 2011 and 32791 of 2013 and argues that as there is no "sale" in the strict sense of the word through the instrument, and that transfer duty is not payable. He, therefore, seeks for refund.

5. In reply to this, learned Government Pleader for Registration and Stamps argues that there is a clear case of under valuation under section 47-A of the Indian Stamp Act, 1899. He also states that the provisions of Article 16 of Schedule 1-A of the Indian Stamp Act are not applicable to the case on hand as the sale is under the SARFAESI Act by an authorized officer and not by a Civil Court/Revenue Officer. He also relies upon a Government memo dated 22.06.2012 which states that sale of an asset under the SARFAESI Act by a secured creditor is a "sale" of property only and