Payment of stamp duty essential on document of transfer.

VISWANATHA SASTRI, J.

This is a reference under Section 60 of the Indian Stamp Act by the learned District Munsif of Sattur raising two questions with reference to the stamp duty chargeable on two documents filed in his Court. These documents have been marked for the purposes of identification as A-2 and A-3. The facts that have led up to this reference are these. The Pudukottah Benefit Fund, Limited, a company carrying on chit fund business in as many as 114 branches scattered throughout the southern districts of this Province, got into financial difficulties and was ordered to be wound up by an order of this Court dated 12th January, 1948, in O.P. No. 190 of 1947, a petition filed by the creditors of the company. By its order dated 16th November, 1948, in O.P. No. 301 of 1948, this Court sanctioned a scheme of arrangement under Section 153-A of the Companies Act. The order of this Court provided that for the purpose of carrying out the said scheme the Official Liquidators of the Pudukottah Benefit Fund, Ltd., should transfer its assets and liabilities to another limited company the Central Finance Syndicate Limited, Erode, styled in the order as the transfer company. Clauses 1 to 4 of the scheme approved by this Court in its order in O.P. No. 301 of 1948 were in these terms : -

(1) The Central Finance Syndicate Limited, Erode, the proposed transferee company shall take over by transfer the whole of the undertaking and the property of the Pudukottah Benefit Fund, Limited and be liable for all the liabilities of the said Pudukottah Benefit Fund, Limited

(2) The said syndicate will conduct and run not only the chits discontinued prior to liquidation but will continue the business in the same manner as the Pudukottah Benefit Fund, Limited, would have done but for the intervention of the liquidation proceedings(3) The said Syndicate will float a number of joint stock companies for taking over the assets and liabilities of each branch or group of branches of the Pudukottah Benefit Fund, Limited, and to carry on the business as before of each such branch or group of branches

(4) The said Syndicate shall and hereby undertakes to pay the creditors from time to time within two years at least a minimum of eight annas in the rupee in full satisfaction of the debts due to them from the assets received from the newly formed companies and also by sale or transfer of the assets

Pursuant to the scheme and the order of this Court approving of it, the Official Liquidators transferred the assets and liabilities of the Pudukottah Benefit Fund Limited, to the Central Finance Syndicate Limited, Erode, under a deed of indenture, dated 10th January, 1949, referred to as A-2 in the order of reference. The Central Finance Syndicate Limited, Erode, floated joint stock companies in some of the places where the branches of the Pudukottah Benefit Fund Limited, had been functioning for the purpose of taking over the assets and liabilities of those branches. The Sahayanidhi (Virudhunagar) Limited, was one such company and the assets and liabilities of the Virudhunagar branch of the Pudukottah Benefit Fund, Limited, were transferred to it by the Central Finance Syndicate Limited under a deed of indenture, dated 4th February, 1929, referred to as A-3 in the order of reference. The assets so transferred consisted mostly of book debts and promissory notes of persons who had bid at the auctions and taken the chit money with a liability to pay future instalments of subscriptions. The Sahayanidhi (Virudhunagar) Limited, instituted suits for the recovery of money due on promissory notes executed by the subscribers and O.S. No. 59 of 1949 out of which this reference arises was one of such suits. In the course of this suit, the question of the proper stamp duty payable on the documents referred as A-2 and A-3, the deeds of transfer of assets and liabilities effected by the Official Liquidators in favour of the Central Finance Syndicate Limited and by the Centr