Summary
The Supreme Court held that an auction purchaser is not required to pay stamp duty for issuance of a sale certificate following a court-confirmed auction: title passes on confirmation of sale, the certificate is only evidence of title, is not compulsorily registrable, and need only be forwarded to the Sub-Registrar for filing; stamp duty arises only if the purchaser presents the original certificate for registration or uses it for another purpose.
Issues
- Whether a successful auction purchaser must deposit stamp duty before a sale certificate is issued to it, having regard to the Stamp Act and the Registration Act.
- Whether the High Court should have declined writ jurisdiction because the respondent had not appealed the Company Judge's order on which the Registrar's direction was based.
Provisions considered
- Order XXI Rules 92 and 94, Code of Civil Procedure, 1908Title to auctioned property passes when the sale is confirmed under Rule 92; the certificate under Rule 94 is only a formal declaration of that confirmation which neither creates nor extinguishes title and so does not attract stamp duty applicable to an instrument of sale. (¶¶ 14, 17)
- Section 17(2)(xii), Registration Act, 1908A certificate of sale granted to a purchaser at a public auction by a civil or revenue officer is excluded from the documents requiring compulsory registration under Section 17(1)(b) and (c). (¶¶ 15, 16, 17, 18)
- Section 89(4), Registration Act, 1908The auction purchaser is entitled to the original sale certificate, and a copy is to be sent to the Sub-Registrar for filing in Book 1; such filing suffices and has the same effect as registration. (¶¶ 18, 19, 20)
- Schedule I, Articles 18 and 23, Indian Stamp Act, 1899Stamp duty under these Articles is attracted only when the auction purchaser presents the original sale certificate for registration or uses it for some other purpose, not on its mere issuance. (¶ 20)
- Article 226, Constitution of IndiaThe availability of an appeal against the Company Judge's order did not oust the High Court's writ jurisdiction, exhaustion of remedies being a rule of policy and discretion. (¶ 21)
Held
- Title to property sold in a court auction passes on completion of the sale and its confirmation after objections are disposed of; the sale certificate is merely evidence of that title and does not itself transfer it. (¶¶ 14, 16, 17)
- A sale certificate issued pursuant to a confirmed auction sale is not compulsorily registrable; forwarding a copy to the registering authority for filing under Section 89(4) of the Registration Act is sufficient, and a certificate of sale is not a conveyance subject to stamp duty. (¶¶ 17, 18, 19, 20)
- Stamp duty under Articles 18 and 23 of Schedule I to the Stamp Act becomes payable only when the auction purchaser presents the original certificate for registration or uses it for some other purpose; so long as the certificate remains as it is, no stamp duty is required for its issuance. (¶ 20)
- An alternative remedy does not by itself divest the High Court of its power under Article 226; the exhaustion rule is one of policy, convenience and discretion, and the High Court's view that the controversy warranted writ jurisdiction would not readily be interfered with (Radha Krishan Industries v. State of H.P., (2021) 6 SCC 771). (¶ 21)
Result
Appeal by the State dismissed; High Court's directions to hand over the original sale certificate, send a copy to the Sub-Registrar under Section 89(4), and refund the stamp duty deposited were left undisturbed.