A scheme of arrangement involving amalgamation or demerger qualifies as an instrument under the Indian Stamp Act, subject to applicable stamp duties.

1. Heard S / Sri A. M. Singhwi, T.P. Singh, Rakesh Dwivedi, Senior Advocates and S / Sri Manish Goyel, S.D. Singh, Ritvik Upadhyay, V.K. Upadhyay, Vishal Kakkar, Shahid Rizvi, Rakesh Ranjan, Tripathi B.G. Bhai Advocates for the petitioner and Sri Sanjay Goswami, learned Standing Counsel for the respondents.

2. On a difference of opinion between brother Yatindra Singh, J., and brother Ran Vijay Singh, J., in six connected writ petitions M/s. Hero Motors Ltd; Dhampur Sugar Mills Ltd; M/s. Amar Ujala Publications Ltd; M/s. Telesia Trading and Finance Ltd; M/s. Prudential Merchants and Traders Ltd and M/s. Padamshree Projects, this matter has been referred for opinion to me. In the other writ petitions the question involved was the same and as such it appears the Division Bench before which these cases were being heard has tagged those cases with M/s. Hero Motors or other connected cases in which there was a difference of opinion between Brother Yatindra Singh, J., and Brother Ran Vijay Singh, J. The question substantially involved in these writ petitions has been stated by brother Yatindra Singh, J., as follows : -
"Whether any stamp duty can be charged under, Art.23 of Schedule 1 - B of the Indian Stamp Act as applicable in our State (the U. P. Stamp Act) on the scheme of arrangement sanctioned by the court, which may be de - merger of going concern with another company or amalgamation / merger of one company with another company".

3. Three points for determination were framed by brother Yatindra Singh, J., in his judgment and have been answered by the two learned Judges:
(i) Whether the writ petitions are liable to be dismissed on the ground for alternative remedy?
(ii) Whether the scheme of arrangement, sanctioned by the court, (which includes a scheme of de - merger and merger of the going concern with another company and a scheme for amalgamation / merger of a company with another company) is an instrument and a conveyance within the meaning of the U.P. Stamp Act?
(iii) In case the answer to the aforesaid point is in the affirmative then, whether such scheme is covered by Art.23 of Schedule
1 - B of the UP Stamp Act?

4. Both the Judges have taken the view that the writ petition could not be dismissed on the ground of alternative remedy. On the second point also; both the Judges were agreed that the scheme of arrangement sanctioned by the Court is a conveyance and an instrument within the meaning of S.2 (10) and 2 (14) of the Stamp Act as applicable in Uttar Pradesh. The difference of opinion is on the third point. Brother Yatindra Singh, J., has taken the view that the scheme of arrangement is not covered by Art.23, Schedule 1 - B of the Stamp Act whereas in the opinion of brother Ran Vijay Singh, J., it is covered under that Article. It is only this third point upon which I have to give an opinion.

5. The facts of the various connected writ petitions have been set out in the judgment of brother Yatindra Singh, J., and brother Ran Vijay Singh, J., and it is not necessary to repeat them.

6. S.3 is the charging section of the Stamp Act. Under this provision, the instruments mentioned in Schedule 1, 1 - A or 1 - B are chargeable to duty. In order to appreciate the controversy it is necessary to refer to the definition of 'conveyance' under S.2 (10) and of 'instrument' under S.2(14) of the Stamp Act as well as to Art.23 Schedule 1 - B