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IN THE HIGH COURT OF ALLAHABAD
S. R. SINGH
DUNCANS INDUSTRIES LIMITED, KANPUR - Appellant
Versus
STATE OF UTTAR PRADESH - Respondents
C. M. W. P. 9170 Of 1995
Decided On : 07/07/1997
STAMP ACT - SECTION 47A - REFERENCE - JUSTIFICATION - TRANSFER OF PLANT AND MACHINERY - DETERMINATION - STAMP DUTY - CHARGABILITY - INTERPRETATION OF CONVEYANCE DEED - IMMOVABLE PROPERTY - ANNEXATION TO EARTH - INTENTION OF PARTIES - REVENUE AUTHORITY'S JURISDICTION - OBJECTIVE SATISFACTION - REASONABLE BELIEF - RELEVANT FACTORS.
Fact of the Case:
The petitioner challenged the legality and propriety of two orders - one levying stamp duty and penalty on a conveyance deed, and the other partly modifying the first order. The dispute arose from the transfer of a fertilizer business, including plant and machinery, from ICI India Ltd. to Chand Chhap Fertilizer and Chemicals Ltd. (CCFC). The Registering Authority referred the matter to the Collector under Section 47A(2) of the Stamp Act, 1899, believing that the market value of the property was not truly set forth in the deed.
Finding of the Court:
The court held that the Registering Authority was justified in making the reference under Section 47A(2) of the Act, as there were reasonable grounds to believe that the value of the property was not truly set forth in the deed. The court also found that the plant and machinery were transferred and title thereto vested in CCFC as a result of the conveyance deed, and therefore, stamp duty was chargeable in relation to the value of the plant and machinery as well.
Issues: 1. Whether the reference under Section 47A of the Stamp Act, 1899, was justified? 2. Whether the plant and machinery relating to the fertilizer factory were transferred by means of the conveyance deed?
Ratio Decidendi: 1. The court held that the Registering Authority has to satisfy itself that the value of the property or the consideration of it has not been truly set forth in the instrument and further that it will be "only an objective satisfaction" that the authority has to reach a reasonable belief that the value or consideration of the property conveyed has not been truly set forth in the instrument relating to the transfer of property. In the instant case, the court found that the Registering Authority had placed credence on relevant factors for reaching a belief that the value of the property had not been truly set forth in the deed of conveyance. 2. The court held that the plant and machinery in the instant case, were to be treated as immovable property and the submission made by the learned counsel to the controversy cannot be countenanced. The court further held that the right, title, and interest of the vendor in the plant and machinery of the Fertilizer Factory stood transferred to and vested in the Purchaser as a result of the conveyance deed and, therefore, the stamp duty would be chargeable in relation to the value of the plant and machinery as well.
Final Decision: The court dismissed the petition, holding that the reference under Section 47A of the Stamp Act, 1899, was justified, and that the plant and machinery were transferred and title thereto vested in CCFC as a result of the conveyance deed, and therefore, stamp duty was chargeable in relation to the value of the plant and machinery as well.
( 1 ) THE petitioner has approached this Court by means of the present petition, assailing the legality and propriety of the two orders -- one dated 20-2-1995 passed in proceeding under Section 47a (2) of the Stamp Act, 1899, by Additional District Magistrate (Finance and Revenue), Kanpur Nagar, levying stamp duty of Rs. 37,01,26,832-50/- and slapping a penalty of Rs. 30,53,167-50. 00 and the other dated 4-4-1995 passed by the Chief Controlling Revenue Authority in Stamp Revision No. 36 of 1995-96 Kanpur Nagar under Section 56 of the Stamp Act, preferred against the aforesaid order of the Additional Distt. Magistrate (Finance and Revenue), Kanpur Nagar. The revision has been allowed partly vide impugned order dated 4-4-1995 of the Chief Controlling Revenue Authority, setting aside the order passed by the Addl. District Magistrate (Finance and Revenue), Kanpur Nagar in so far as imposition of penalty was concerned and slightly modifying the order under revision as regards the stamp duty holding that the total stamp duty payable on the deed of conveyance dated 9 -6-1994 would be Rs. 36,68,08,887-50 -- at an estimated total value of Rs. 2,53,14,61,115/ -.
( 2 ) THE facts as are relevant to shed light on the controversy involved herein may be briefly stated and they are that an agreement of sale was executed on 11th day of Nov. 1993 between ICI India Ltd. , a company within the meaning of Companies Act, 1956 having its registered office at 34, Chowranghi Road, Calcutta and Chand Chhap Fertilizer and Chemicals Ltd. , a public company incorporated under the Companies Act, 1956 as a subsidiary of ICI, having its registered office at Panki Industrial Area, site No. 1 Udyog Nagar, Kanpur, whereby fertilizer Business of manufacture, marketing, distribution and sale of Urea Fertilizer, which was being carried on by ICI was agreed to be transferred on as is where is and as a going concern in favour of Chand Chhap Fertilizer and Chemicals Ltd. , Panki, Kanpur (in short CCFC) which has been re-christened and has come to be known as M/s. Duncans Industries Ltd. , Fertilizer Division, Kanpur Nagar, for a total sale consideration of Rs. 70 crore which was termed as slump price in the agreement, it was agreed that ICI would on the transfer Date, transfer the fertilizer Business by actual delivery of possession to CCFC in respect of such of the estates and properties mentioned in the agreement, as were capable of being transferred by actual and/or constructive delivery and in respect of estatesrequiring transfer by execution of documents, ICI would transfer the same by executing the necessary documents and vesting the title thereof in CCFC and it was further agreed and declared that the ownership in respect of assets and properties comprised in the fertilizer Business, to be transferred as per agreement, would be deemed to be vested in CCFC on and from the transfer Date which, according to the agreement, means ist Dec. 1993 or such other date as may be agreed to by and between ICI and CCFC". The term fertilizer Business as nailed down in the agreement, means and includes the following amongst other properties :" (i) Demised land being plot Nos. 2b and 5 and the sub-divided portion of plot No. 2 demarcated and admeasuring in the aggregate an area of 243. 4387 acres equivalent to 9,85,159,50 sq. mtrs. being the unshaded portion shown on the plan annexed hereto together with the buildings and structures thereon forming part of the fertilizer business as on the Transfer Date; (ii) freehold land and residential building thereon with the name chandralok, situate at plot No. 4/284, Parbati Bangla Road, Kanpur comprising 24 residential flats; (iii) freehold a land and residential building thereon with the name "chandrakala", situate at Navesheel Apartments, 56 Cantonment, Kanpur comprising a Guest House on the ground floor and 3 residential flats on the first floor; (iv) Plant and machinery relating to the Fertilizer Business including th
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