Important Point-The powers and functions conferred upon the assignee in the attorney document are crucial to decide the liability to pay the stamp duty.

(PER : HONOURABLE MR.JUSTICE M.R. SHAH)

1.0. Present Stamp Reference under Section 54(1)(a) of the Bombay Stamp Act, 1958 (hereinafter referred to as “Stamp Act”) is made by the Chief Controlling Revenue Authority, Gujarat State, Gandhinagar for the opinion of this Court with respect to the following questions.

“(A) Whether the objection raised by the Account General, Ahmedabad in audit para, in the year 2008 is proper or not, as per Article 45(F) of the Bombay Stamp Act, 1958 or not?

(B) Whether the Asset Reconstruction Company (India) Limited is liable to pay stamp duty of Rs.24,94,100/i.e. 4.9% stamp duty as per Article 20(A) of the Bombay Stamp Act or not?”

2.0. Facts leading to the present reference in nutshell are as under:

2.1. That one Jai Bharat Steel Company (hereinafter referred to as “said company”) obtained a loan from the Oriental Bank of Commerce, New Delhi (hereinafter referred to as “Bank”) for an amount of Rs.5.09 Crores. That after execution of the necessary documents, the said loan was disbursed in favour of the said company. It appears that thereafter the said company did not repay the loan amount due and payable to the Bank. That therefore the Bank executed an Assignment Agreement dated 18.11.2008 in favour of Asset Reconstruction Co. (India) Ltd., (hereinafter referred to as “ARCIL”) Bombay – a company incorporated under the Companies Act, 1956 and registered under the Securitization and Reconstruction of Financial Assets and Enforcement of Security Act, 2002 (hereinafter referred to as “SARFAESI Act”). That the said Assignment Agreement was executed by the Bank in favour of the ARCIL, which was registered before the Sub-Registrar, Bharuch on 18.11.2008 by Registration No.8175. That with respect to the aforesaid document / Deed of Assignment, proceedings under Section 31 of the Stamp Act for the purpose of adjudication of the aforesaid deed had taken place. The Additional Superintendent of Stamps, Gujarat State, Gandhinagar passed an order dated 23.10.2008 and thereafter the aforesaid Deed of Assignment was executed.

2.2. It appears that during the audit of the office of Sub-Registrar, Bharuch by the office of the Accountant General (A.G.), Ahmedabad, the audit party raised objection in respect of the said Deed of Assignment dated 18.11.2008. That the audit party raised following objections.

“During the test check of documents registered during the year 2008 by Sub-Registrar, Bharuch, it was noticed in 4 documents styled and registered as ‘Assignment Agreement’ that ‘debt’ of various banks was sold to Asset Reconstruction Company (India) Ltd. As per recitals of the documents, the seller as the true, legal and beneficial owner of the loans, in the ordinary course of its business, unconditionally and irrevocably sold, assigned, transferred, released to and upto the purchaser all the loans forever pursuant to Section 5(1)(b) of the SARFAESI Act and all purchaser shall be deemed to be full and absolute legal owner, and the only person legally entitled to the loans or any thereof and to recover and receive all amounts due. Further, the sellers had simultaneously executed an irrevocable power of attorney in favour of the purchaser to sell, transfer, pledge, dispose off, create lien over the specified shares or any part thereof and to take all the actions, deeds, writings as may be necessary in this regard including but not limited to sign necessary forms, to hand over the necessary certificates to the buyers pay commission or brokerage, if any, etc. Besides, it was declared by the seller that power of attorney was given by it in consideration of the purchaser paying to the seller purchase consideration as per the terms of the assignment agreement. From the above, it could be seen that the documents fall under two description specified in Schedule-I of the Stamp Act that (i) deed of assign wherein the