The main legal point established in the judgment is that a sale conducted by the authorized officer under the SARFAESI Act through public auction or by inviting tenders from the public is considered a sale in the open market and excluded from the scrutiny under Section 47A of the Indian Stamp Act.

JUDGMENT :

HARISH TANDON, J.

1. The Single Bench while dealing with the instant writ petition noticed several decisions of a Co-ordinate Bench rendered in cases of Vitarich Agro Food India Ltd. vs. State of West Bengal, W.P. No. 1236 of 2017, Glovi Infracon LLP vs. Inspector General of Registration and CSR and Another, 2017 SCC Online Cal. 9368, VPH Real Estate Private Ltd. and Another vs. Directorate of Registration and Stamp Revenue, Finance Department and Others, W.P. No. 1069 of 2015, wherein it is held that the authorized officer under the Securitization and Reconstruction of Financial Assets and Enforcement of Security Interest Act, 2002 (hereinafter referred to as “SARFAESI Act”) conducting a sale of the mortgaged property is not a court sale or a sale conducted by an authorized officer of the Court or a company sale, but rendered the dissenting view upon interpreting the provisions contained in Section 47A and Section 2 (16B) of the Indian Stamp Act and Section 3 of the West Bengal Stamp (Prevention of Undervaluation Instruments) Rules, 2001 holding that once the sale is affected by an authorized officer under SARFAESI Act by making wide publication in the widely circulated newspapers shall be regarded as the open market sale and, therefore, the registering authority cannot have any reason to believe that the sale price has been shown under-valued having not sold in the open market. The Single Bench referred the matter to the Chief Justice for following reference:

“Whether the sale conducted by an authorized officer under SARFAESI Act, 2002 is an open market sale and is, thus, excluded from the scrutiny contemplated under Section 47A of the Indian Stamp Act, 1899 (as amended in West Bengal).”

2. The Chief Justice has referred this matter to this Bench to answer such aforesaid reference.

3. Since the reference is required to be answered by this Bench, it would be necessary to broadly state the salient facts involved in the instant case.

4. Twelve acres of land comprised in several dag nos. in Mouza Gangarampur, P.S. Bisnupur, District 24 Parganas (South) together with the structures, factories, shades, gudams, bunglows, offices and houses originally belonged to JJ Exports Ltd. The said owner mortgaged the aforesaid property with the IDBI Bank Ltd. but later on, failed to repay the loans which constrained the said bank to activate the provisions contained in SARFAESI Act, 2002. The possession of the mortgaged property was taken under the provision of the said Act on July 14, 2017. The first notice was advertised in various newspapers by the bank on August 25, 2017 but did not find any offer. Even the Second advertisement dated November 3, 2017 could not fetch any buyer. However, the third advertisement published on December 31, 2017 could fetch a buyer i.e. Petitioner no. 1 who offered to purchase the mortgaged property at Rs.4 crores 10 thousand for the movable assets and Rs. 14 crores 1 lakh for immovable assets. The sale was confirmed and the sale certificate was issued on 19.1.2018 followed by the delivery of possession. The Petitioner no. 1 demanded the bank to execute the deed of conveyance to perfect the sale so conducted but the dispute arose over the terms and conditions incorporated in the draft conveyance deed. This led to the institution of Civil Suit being CS no. 64 of 2018 in the Original Side of this court seeking reliefs against the bank to approve the draft conveyance deed. An interlocutory application being GA no. 820 of 2018 was taken out in the said suit for temporary mandatory injunction upon the bank to approve the draft deed of conveyance forwarded under the covering letter dated 20th February, 2018 which was taken up on 16.4.2018 wherein the direction was passed upon the bank to disclose discrepancies in the proposed deed of conveyance. Apropos such direction the bank suggested the changes which they intend to incorporate in the proposed deed of conveyance and the same was accepted by the Petitioner no.