Back
IN THE HIGH COURT AT CALCUTTA
DEBANGSU BASAK, MD. SHABBAR RASHIDI, JJ.
The State of West Bengal & Ors. – Appellants
Versus
M/s. Tekpan Food & Herbal Park LLP & Anr. – Respondents
M.A.T. 1320 of 2022 With CAN 1 of 2022, CAN 2 of 2023, CAN 3 of 2024
Decided on : 08-08-2024
Condonation - Application for Condonation of Delay - Indian Stamp Act, 1989, Section 47A; West Bengal Stamp (Prevention of Under Valuation of Instruments) Rules, 2001 - The court condoned the delay in filing the appeal, emphasizing the importance of open market sales and the criteria for determining market value under the Indian Stamp Act.
Fact of the Case:
The case involves an application for condonation of delay in filing an appeal against an order related to the registration of a deed of assignment concerning immovable property sold by a Company Court. The property was sold to a company, which later assigned its rights to the respondents without proper documentation.
Finding of the Court:
The court found that the sale conducted by the Company Court was valid and protected under the ratio of previous judgments, but the subsequent transaction between the original purchaser and the respondents did not meet the criteria for an open market sale, thus the respondents were not entitled to the same benefits.
Issues: Whether the provisions of the Indian Stamp Act and the Undervaluation Rules apply to the transaction between the original purchaser and the respondents, and whether the market value determined by the registering authority was valid.
Ratio Decidendi: The court held that the sale conducted by the Company Court qualifies as an open market sale, but subsequent transactions not conducted under the same criteria do not benefit from the same legal protections.
Result: The impugned order dated June 22, 2022, is set aside.
JUDGMENT :
DEBANGSU BASAK, J.
In Re: CAN/3/2024
1. CAN/3/2024 is an application for condonation of delay.
2. Department reports delay of 18 days in making and filing the appeal.
3. For the ends of justice, the causes shown in the application for condonation of delay are accepted as sufficient and the delay in making and filing the application is condoned.
4. CAN/3/2024 is allowed.
5. By consent of the parties the appeal is taken up for final hearing.
6. Appeal is at the behest of the State and directed against an order dated June 22, 2022 passed in W.P.A. 5350 of 2021.
7. Learned Junior Standing Counsel appearing for the State submits that, an immovable property in respect of which a company (now in liquidation) was possessing leasehold interest was put up for sale along with other assets of the company (in liquidation) by the Official Liquidator. He draws the attention of the Court to sale notice issued by the Official Liquidator, in this regard.
8. Learned Junior Standing Counsel submits that, one Chaudhry & Sons (Forgings) Private Limited participated in the sale of the assets of the company (in liquidation) along with the other bidders. Such Chaudhry & Sons (Forgings) Private Limited was declared as the highest bidder. He refers to the order confirming the sale in favour of the Chaudhry & Sons (Forgings) Private Limited dated May 7, 2007, passed by the Company Court.
9. Learned Junior Standing Counsel submits that, thereafter for a period of about 12 years, Chaudhry & Sons (Forgings) Private Limited did not obtain any document executed by the Official Liquidator with regard to the transfer of the immovable property concerned. Chaudhry & Sons (Forgings) Private Limited was put in possession of the property concerned on June 8, 2007 by the Official Liquidator. Sale according to him stood completed in favour of the Chaudhry & Sons (Forgings) Private Limited at least on June 8, 2007 where it was put in possession and on payment of entire consideration.
10. Learned Junior Standing Counsel submits that subsequently the Company Court passed an order dated February 28, 2019 allowing nomination in favour of the present respondents. Thereafter, the present respondents applied for registration of a deed of assignment. Such application for registration was considered where the registering authority ascribed the market value of the immovable property sought to be assigned.
11. Learned Junior Standing Counsel submits that although Chaudhry & Sons (Forgings) Private Limited can claim the benefit of the ratio laid down in 2010 (3) Cal LT 119 (State of West Bengal vs. Sati Enclave Pvt. Ltd. & Ors.), the benefit of such ratio is not available to the respondents. He contends that the transaction of assignment between the Chaudhry & Sons (Forgings) Private Limited and the respondents herein is not an open market sale. It was not undertaken by the Company Court or any officer authorized by it. Wide publicity was not given prior to entering into such transaction.
12. Learned Junior Standing Counsel relies upon (2022) SCC Online Calcutta 863 (Ballyfabs International Limited vs. State of West Bengal & Ors.) and submits that Sati Enclave Pvt. Ltd. (supra) considered in Ballyfabs International Limited (supra). It considered the sale undertaken under the Securitization and Reconstruction of Financial Assets and Enforcement of Security Interest Act, 2002.
13. Learned Senior Advocate appearing for the respondents submits that the respondents are the assignees of an immovable property put up for sale by the Company Court. The Company Court allowed the assignment in favour of the respondents by an order dated February 28, 2019. Therefore, the respondents are entitled to the benefits of the ratio of Sati Enclave Pvt. Ltd. (supra).
14. Learned Senior advocate appearing for the respondents submits that in the event Chaudhry & Sons (Forgings) Private Limited applied for registration in 2019, then such purchaser was entitled to the benefit of Sati Enclave Pvt. Ltd. (supra).
The court clarified that only sales conducted by the Company Court with proper publicity and without connections to the purchaser are protected under the Indian Stamp Act.
Stamp duty – In case of a public auction monitored by court, discretion would not be available to Registering Authority under Section 47A of Indian Stamp Act, 1899.
The main legal point established in the judgment is that an e-auction sale conducted under the SARFAESI Act is considered an open market sale and is excluded from the scrutiny under Section 47A of th....
Market value for stamp duty must reflect the actual rights transferred, not limited landlord interests.
The judgment established that the sale conducted by the AO under the SARFAESI Act is equivalent to a sale in the open market and exempt from scrutiny under Section 47A of the 1899 Act.
Agreement to sell – If instead of separate instruments, distinct matters are made subject matter of one instrument, liability to pay duty would be still found within four walls of Section 5 of Stamp ....
Unregistered documents do not confer ownership of immovable property; valid title requires registration under the Transfer of Property Act.
An indispensable Tool for Legal Professionals, Endorsed by Various High Court and Judicial Officers
Please visit our Training & Support
Center or Contact Us for assistance
Scan Me!
India’s Legal research and Law Firm App, Download now!
For Daily Legal Updates, Join us on :
Back to top
