The valuation from a public auction as per SARFAESI provisions cannot be reassessed under the Indian Stamp Act.

ORDER

The petitioner is a purchaser of the properties in S.Nos.121/1, 121/2, 121/3, 121/4, 122/1, 122/2, 122/4, 122/5, 122/6, 122/7, 127/2, 127/3, 127/6, 127/7A, 127/7B, 118/2, 118/3, 118/6, 118/7 and 109/3 situated at Kalaiyarkovil Taluk, Sivagangai District. The property originally belonged to one Kalaiyarkovil Milk Processing Private Limited. The said Company had taken loan from Indian Overseas Bank, Karaikudi Branch. They defaulted in payment of the loan. Hence, the properties were brought to auction pursuant to the bank invoking SARFAESI proceedings.

2. In the said proceedings, the writ petitioner participated and knocked all the properties at Rs.2,63,94,390/-. Sale certificate was also issued by the Authorised Officer of the Indian Overseas Bank on 22.03.2024. The sale certificate was presented for registration on 25.09.2024 and registered as Doc. No.5233/2024. In the sale certificate, the value of the building is mentioned as Rs.1,05,05,590/-.

3.Though the document was registered, it was not returned by the respondent. On enquiry, the petitioner came to know that the Executive Engineer had assessed the building at Rs.3,34,36,067/-. Consequently, he was called upon to pay the deficit stamp duty of Rs.25,27,354/-. Challenging the same, the present writ petition.

4. I heard Mr.T.Antory Arulraj for the petitioner and Mr.Veerakathiravan, learned Additional Advocate General appearing for State.

5. The plea of the respondent is that the valuation of the building is less than what has been assessed, it can rightfully be done in case it is a private treaty or sale by one private party in favour of other. The sale certificate in question is not one born out of a private treaty. It is pursuant to a public auction conducted by Indian Overseas Bank invoking the provision of SARFAESI Act . Prior to the property was sold under SARFAESI Act , the bank would have scrupulously followed SARFAESI Act and Rules made thereunder.

6.In terms of Rule 8(5) r/w 9 of the SARFAESI Rules, the Authorised Officer is called upon to obtain valuation of the property from an approved valuer and only thereafter, he is entitled to get the property for sale. Therefore, there is no question of re-looking at the valuation that has already been fixed by the competent authority exercising the power conferred on him under parliamentary legislation.

7. Apart from this, a Division Bench of this Court in Vijayalakshmi Marketing vs. State of Tamil Nadu reported in (2024)4 MLJ 754 has held that Section 47A of the Indian Stamp Act cannot be invoked in matters relating to public auction. The Division Bench categorically held that where a sale is held by public auction carried out through the process which is transparent, Section 47A of the Act is inapplicable. The Division Bench has followed the earlier judgment of the Supreme Court in the case of V.N.Devadass vs. Chief Revenue Control Office-cum-Inspector and others reported in (2009)7 SCC 438

8. As the law has already been declared, I am not in a position to sustain the impugned order. Hence, the writ petition is allowed and the impugned order passed by the second respondent, dated 02.12.2024, is set aside.

9.The learned Additional Advocate General states that the registered sale certificate will be furnished within a period of four weeks. The statement is recorded.

10.I am not dealing with the prayer for return of excess stamp duty alleged to have been paid. That is a separate cause of action. It is open to the petitioner to initiate such proceedings as open to him, after the original is retune