C. S. P. SINGH, J. :- This is a reference under Section 57 of the Indian Stamp Act made at the instance of Somaiya Organics (India) Ltd.

2. The Godavari Sugar Mills Ltd. (which for convenience, will be referred to as 'the Godavari Sugar Mills') entered into a technical collaboration agreement with Messrs. Melle Besons, and it is said that in this connection pursuant to the resolution of its Board of Directors passed on October 23, 1964, the Godavari Sugar Mills obtained a deferred payment guarantee upto the limit of Rs.65,00,000/- from the Punjab National Bank Ltd. in favour of Messrs. Speichim Paris, on an equitable mortgage by deposit of title deeds of its property.

3. The Godavari Sugar Mills was the owner of property consisting of land and buildings which included a factory and residential accommodation for its employees. On March 2, 1962, the Godavari Sugar Mills resolved to sell the land, buildings and machinery to the Somaiya Organics (India) Ltd. (referred to hereinafter as 'Somaiya Organics') for a consideration of Rs.36,64,678/- and on May 20, 1968, a sale deed was executed pursuant to the resolution. The sale-deed recited that the land and buildings were conveyed for a consideration of Rs.7,76,000/- while the balance of Rupees 28,88,678/- represented the price of machinery, vehicles, stores and other goods, which were treated as movable items and the transfer of which had been completed by manual delivery. It was also recited that the entire property sold was free from charges or encumbrances. Treating the document to be a conveyance for a consideration of Rupees 7,76,000/- only, stamp duty of Rs.35,000/- was paid under Article 23, Schedule 1-B of the U.P. Stamps (Amendment) Act, 1962. Subsequently, it is said that the parties discovered that the recital that the property was free from charges and encumbrances was incorrect and it was recalled that an equitable mortgage with deposit of title deeds, had been created in favour of the Punjab National Bank Ltd. On September 17, 1963, the Board of Directors of the Godavari Sugar Mills held a meeting and pursuant to the resolution passed therein, a deed of declaration was executed by two directors on behalf of the Godavari Sugar Mills on October 28, 1968, reciting that the property mentioned in the sale deed of May 20, 1968, was subject to an equitable mortgage by deposit of title deeds in favour of the Punjab National Bank Ltd. Similarly, pursuant to a meeting held on September 17, 1968, of its Board of Directors. Somiya Organics executed a similar deed of declaration on October 28, 1968. Stamp duty of Rs.43.50 (sic) (3.50?) was paid on each of the two deeds of declaration.

4. Three documents, namely, the sale deed of May 20, 1968, and the two deeds of declaration dated October 20, 1968, were presented before the Sub-Registrar, Hate, district Deoria, for registration. He has impounded them under Section 33 of the Stamp Act and sent them to the Collector, Deoria under Section 38(2) of the Act for necessary action. He reported that on the basis of Section 4 and Section 24 of the aforesaid Act, the consideration of the sale-deed read with the two declarations should be deemed to be Rs.7,76,000/- plus Rs.120,00,000 plus Rs.65,00,000/- amounting in all Rs.1,92,76,000/- and that ad valorem duty should be calculated accordingly. The deeds of declaration should be treated as supplementary deeds on each of which a duty of Rs.4.50 and not Rs.3.50 was payable. Accordingly, he reported a total deficiency of Rupees 3,32,422/-. The Collector, Deoria was unable to arrive at any definite opinion in the matter, and consequently referred the case to the Chief Controlling Revenue Authority under Section 56(2) of the Stamp Act. The Chief Controlling Revenue Authority considered the matter and has now, with its opinion, referred the case to this Court. It has framed the following questions:-

(1) Whether in view of the above opinion of the Board, the principal sale-deed dated 20-5-1968 i