The exemption from stamp duty for asset reconstruction agreements applies only under the Indian Stamp Act, not the Kerala Stamp Act, denying total exemption sought by the petitioners.

JUDGMENT :

T.R. RAVI, J.

1. The writ petitions have been filed by the Asset Reconstruction Company, having a certificate of registration under Section 3 of the Securitisation and Reconstruction of Financial Assets and Enforcement of Security Interest Act, 2002 (for short 'SARFAESI Act'), from the Reserve Bank of India (for short 'RBI'). Ext.P1 is the certificate of registration. The petitioner in W.P. (C)No.18051 of 2024 entered into an asset reconstruction agreement with the Karnataka Bank Ltd. on 04.03.2024 and the petitioner in W.P.(C)No.23003 of 2024 entered into an asset reconstruction agreement with the Federal Bank Ltd. on 26.03.2024, copies of which have been produced as Ext.P2 in both the writ petitions. The agreements are as required under Section 5 (1)(b) of the SARFAESI Act. The agreements are drawn up on stamp paper worth Rs.1 lakh. Relying on Exts.P4, P5, and P6 judgments of this Court and G.O.(Ms.)No.9/2010/TD dated 13.1.2010, the petitioner presented the agreements for registration before the Registering Authority offering to pay Rs.25,000/- as registration fee. The Registering Authority declined registration for the reason that the stamp duty and the registration fee paid were not correct. The writ petitions have been filed in the above circumstances, seeking directions to the 4^th respondent to register Ext.P2 assignment agreements.

2. A statement has been filed on behalf of the respondents. It is contended by the respondents that in the light of the law declared by this Court in Ext.P4 judgment in W.P.(C)No.19371 of 2017, Ext.P2 instrument is chargeable to duty as prescribed under Article 21 of the KERALA STAMP ACT , 1959 at the rate of 8% of the purchase consideration and not a fixed stamp duty of Rs.1 lakh. It is the case of the respondents that Ext.P2, by its nature, would come within the definition of the word 'conveyance' as defined in Section 2(d)(iv) of the KERALA STAMP ACT , 1959, and since it does not answer to any of the category of instruments covered by Article 55 of the KERALA STAMP ACT , it is chargeable under Article 21(2) of the Act. Reliance is also placed on Ext.P4 judgment to submit that Section 5 (1A) of the SARFAESI Act read with Section 8(f) of the Indian STAMP ACT , 1899 cannot be relied on to claim exemption from payment of stamp duty. It is also submitted that G.O. (Ms.)No.9/2010/TD dated 13.1.2010 is no longer relevant since the Constitutional Court has already declared the law.

3. Heard Sri V.V. Asokan, Senior Advocate, instructed by Sri Sunil Shankar, Advocate, on behalf of the petitioners and Sri Mohammed Rafeeq, Special Government Pleader on behalf of the respondents.

4. On the pleadings and the arguments raised, the following questions arise for decision:

(i) Whether an Asset Reconstruction Agreement entered into under Section 5 (1)(b) of the SARFAESI Act between a bank and an asset reconstruction company can be subject matter of levy of stamp duty, in the teeth of Section 5 (1A) of the SARFAESI Act?

(ii) If the answer to question No.(i) is in the affirmative, can the State levy stamp duty in excess of Rs.1 lakh and registration fee in excess of Rs.25,000/-, in the light of G.O. (Ms.)No.9/2010/TD dated 13.1.2010 and Exts.P4, P5 and P6 judgments?

The counsel on either side addressed arguments referring to the entries contained in Lists I, II, and III of the 7^th Sc