A sale certificate issued upon auction does not attract stamp duty under the Kerala Stamp Act unless it creates or transfers rights at the time of issuance, and mere filing does not constitute registration.

D r. A.K. Jayasankaran Nambiar, J.

As these writ appeals preferred by the State involve a common issue, they are taken up together for consideration and disposed by this common judgment. The issue that arises for consideration is whether a sale certificate, issued by a bank/revenue authority to a purchaser of immovable property, pursuant to a sale conducted at the instance of a bank/financial institution/court/revenue authority of the property of a revenue defaulter, will attract the levy of stamp duty under the Kerala Stamp Act, 1959 ?

2. The writ petitions, from which these appeals arise, were filed by various Banks/Financial Institutions/Auction purchasers who were informed that stamp duty would have to be paid on the sale certificates issued by/to them. It was the registering authority under the Registration Act, 1908 who informed them of this requirement, when the sale certificate in question was sent to the said authority for filing in Book No.1 as required in terms of Section 89 (4) of the Registration Act. The writ court, by the judgments impugned in these appeals, allowed the writ petitions by holding that the sale certificates issued to auction purchasers were not instruments that attracted the levy of stamp duty and, further, that the obligation of the registering authority under Section 89 (4) of the Registration Act was only to file a copy of the sale certificate in Book No.1 and he could not insist on a payment of stamp duty on the original of the document as a condition for discharging his statutory duty. It is against the said findings that the State is in appeal before us.

3. The submissions of Sri. Mohammed Rafiq, the learned Special Government Pleader (Taxes) appearing on behalf of the State, briefly stated, is as follows:

● A certificate of sale is a title deed that records and evidences the right of ownership of immovable property in favour of the purchaser; the discharge of liability to pay the sale price; the acknowledgment of receipt of the sale price by the secured creditor; the factum of handing over possession of the property to the purchaser; the declaration as to the right of the purchaser to hold the property free from encumbrances and the termination of security interest held by the secured creditor over the property. The sale certificate is therefore an instrument within the meaning of the term under Section 2 (j) of the Stamp Act.

● In Article 16 of the Schedule to the Stamp Act, a 'certificate of sale' is mentioned as an instrument chargeable to duty at the same rates as applicable to conveyances on consideration equal to the purchase money. The specific inclusion of the certificate of sale as an instrument in the Schedule is a legislative choice, and on a conjoint reading of Section 2 (j) and Section 3 (a) of the Stamp Act read with Article 16, there cannot be any doubt as regards whether a certificate of sale qualifies as an instrument chargeable to stamp duty. It is also significant that a certificate of sale issued by the Income Tax Recovery Officer is liable to stamp duty as is a certificate issued by the Recovery Officer [DRT][See IN RE: Interplay between Arbitration Agreements under Arbitration and Conciliation Act, 1996 and Stamp Act, 1899 – [(2024) 6 SCC 1