The main legal point established in the judgment is the supremacy of the State Act over the Central Law in granting stamp duty exemption to Co-operative Societies under Section 51 of the Tamil Nadu Co-operative Societies Act, 1983, and the role of the State Government in remitting stamp duty.

(Petition filed under Article 226 of the Constitution of India for the issuance of writ of certiorarified mandamus to call for the entire records in so far relate to impugned order passed by the 2nd respondent in his proceedings I.No.36/2004, dated 11.10.2004 and quash the same, consequently, directing the respondents to return the original sale deed registered on 7.5.2004 in Document No.P200400056 (Book 1), dated 7.5.2004.)

The petitioner Society, which is a Primary Agricultural Co-operative Bank registered under the Co-operative Societies Act, has filed this writ petition for quashing the order dated 11.10.2004 passed by the second respondent in proceedings I.No.36/2004 and directing the respondents to return the original sale deed registered on 7.5.2004 as pending document No.56 of 2004.

2. The brief facts are as follows :-

An arbitration proceedings was initiated against the former Secretary of the petitioner society, as he had misappropriated the Bank’s funds, and an award was passed. Since such amount had remained unpaid, the petitioner filed application under Rule 126 of the Tamil Nadu Co-operative Societies Rules, 1988 for attachment and sale of immovable property belonging to such employee. The petitioner Bank itself participated in the auction and it was the highest bidder. Auction sale in favour of the petitioner was confirmed by the Deputy Registrar of Co-operative Societies under Rule 129. The document in favour of the petitioner was presented before the second respondent on 7.5.2004 for registration. An application under section 51 of the Tamil Nadu Co-operative Societies Act (hereinafter referred to as “the Act”) was filed claiming exemption on payment of stamp duty in accordance with the notification issued under Section 51 of the Tamil Nadu Co-operative Societies Act. However, under the impugned order, the second respondent indicated that the document in question was not entitled for exemption from payment of stamp duty.

3. It is the contention of the petitioner that in accordance with Section 51 of the Act, notification dated 10.9.1966 had been issued, the second respondent should have granted exemption.

4. A counter affidavit has been filed on behalf of the respondents. In such counter affidavit it has been stated that the Tamil Nadu Co-operative Societies, 1983 is a State Act and the Indian Stamp Act, 1899 is a Central Act, and, therefore, Section 51 of the Tamil Nadu Co-operative Societies Act cannot override the provisions of the Indian Stamp Act, and unless there is specific exemption accorded to the class of documents under Section 9(1)(a) of the Indian Stamp Act, the instrument in question is liable to stamp duty as per Section 3 read with Article 23 of Schedule-1 of the Indian Stamp Act. It is further stated that notification dated 29.6.1966 is not applicable to the present case as, in the present case, the purchase of the property is not relating to the business of the petitioner’s society. A plea is also taken that the petitioner has not exhausted the remedies available under Sections 40 and 56(1) of the Indian Stamp Act, and, therefore, the writ petition under Article 226 of the Constitution is not maintainable.

5. The provisions contained in Section 51 of the Tamil Nadu Co-operative Societies Act is to the following effect :-

“51. Powers to exempt from stamp duty and registration fee.- The Government, by notification,may, in the case of any registered society or class of registered societies, remit-

(a) the stamp duty not being the stamp duty referred to in clause (a) of subsection (2) of section 9 of the Indian Stamp Act, 1899 (Central Act II of 1899), with which, under any law for the time being in force, on instruments executed by or on behalf of or in favour of a registered society or by an officer or member and relating to the business of such society or any class of such instruments or decisions, awards or orders of the Registrar or arbitrators under this Act are respectively chargeable