"CR"

1. The Federal Bank, a secured creditor in terms of the Securitisation and Reconstruction of Financial Assets and Enforcement of Security Interest Act, 2002, hereinafter, the "SARFAESI Act", exercised its rights under that Act as regards a secured debt, through its authorised officer, and the secured asset was sold to the petitioner and certificate of sale issued to him in terms of Rule 9 (6) of the Security Interest (Enforcement) Rules, 2002, for short, the "Enforcement Rules". Is duty in the form of surcharge payable on that certificate of sale under Section 270 of the Kerala Municipality Act, 1994, hereinafter, the "Municipality Act" and the Kerala Municipality (Assessment of Duty on Transfer of Property) Rules, 2003, for short, the "Duty Rules"?

2. Petitioner, the holder of the certificate of sale, contends that a conjoint reading of Section 270 (1) (ii) of the Municipality Act and the Duty Rules would show that a certificate of sale does not attract such duty and there is no power authorizing its levy and collection. The respondents contend that certificates of sales exempted in terms of the Duty Rules are only those granted to purchasers of properties sold by public auction of a Civil or Revenue Court or by the Government, Collector or other Revenue Officer, which fall in Article 16 under the Scheduleto the Kerala Stamp Act, 1959, hereinafter, called the "Stamp Act", and that certificates of sales issued by authorised officers of secured creditors under the SARFAESI Act and the Enforcement Rules do not qualify for such exemption. It is also pleaded that the sale certificate in question was never produced before the registering authority; that there were only enquiries as to the amounts leviable for such registration; and therefore it has to be treated that the registration of the certificate of sale in question has since become barred. Consideration by Court

3. Section 270 (1) (ii) of the Municipality Act, in so far as it is relevant, provides that there shall be levied a duty on transfer of property in the form of a surcharge on the duty imposed by the Stamp Act on every instrument of "sale of immovable property" which relates to immovable property situated within a Municipal area, at such rate as fixed by the Government, which shall not exceed five per cent of the "amount or value of the consideration for the sale, as set forth in the instrument". By virtue of the saving clause contained in section 575 of the Municipality Act, the Government notification under the prior enactment fixing the rate of such levy at 5% continues to apply.

4. Sub-section (3) of section 270 of the Municipality Act provides that the Government may make rules, not inconsistent with the Act, for regulating the collection of the duty, the payment thereof to the Municipalities concerned and the deduction of expenses incurred by the Government in the collection thereof. Exercising that and also quoting section 565, which empowers the Government to make rules generally and regarding various enumerated matters, the Duty Rules were made to regulate the collection of duty under the those rules, including by empowering the registering officers and other officials to impound deeds, etc. Duty Rules impose certain duties and responsibilities on registering officer, including the power to impound a deed where necessary details as Rival contentions required in Section 28 of the Stamp Act read with clause (a) of sub-section 2 of Section 270 of the Municipality Act have not been separately set forth in it when presented for registration and to do certain acts thereupon. The term "Deed' is defined in Rule 2(c) of the Duty Rules as follows:

"'Deed' means description of an instrument of sale, exchange, gift, mortgage, lease-perpetual or otherwise, release etc. of immovable property for which duty on transfer shall be leviable under section 270 of the Kerala Municipality Act, 1994 (20 of 1994) but does not include the deeds of sale of hereditary r