Madras High Court: In this common judgment for writ appeals filed under Clause 15 of the Letter Patent, the Division Bench comprising N. Sathish Kumar* and M. Jothiraman, JJ., dismissed the appeal and held that on presentation of sale certificates for registration, which were issued by operation of law in the exercise of statutory functions, the question of referring it under Section 47-A, Stamp Act, 1899, for determination of market value of such property and the proper duty payable thereon, does not arise. Section 47-A only applies to instruments of conveyance and such sale certificate is not conveyance as it does not involve a transfer inter vivos.
Background
The respondents purchased the properties through public auctions conducted by the appellants where the sale certificates were issued either under Securitisation and Reconstruction of Financial Assets and Enforcement of Security Interest Act, 2002 (SARFAESI Act) by the authorised officer, the Insolvency and Bankruptcy Code, 2016 (IBC), or through the liquidation process. When the sale certificates were presented for registration, registration was refused, and the matter was referred under Section 47-A, Stamp Act, 1899, on the ground of undervaluation of the properties. Such act of the appellants was challenged by respondents in a writ petition, where the writ petition was allowed and the orders of the registering authorities was quashed.
Assailing that order, the present writ appeal was filed by the appellants. This is a common judgment for multiple writ appeals involving the same issue.
Issue
Whether, once a sale certificate issued by operation of law under the SARFAESI Act, the Insolvency and Bankruptcy Code, or a public auction conducted by the Court Monitoring Cell, is presented for registration, the registering authority has the power to refer such documents under Section 47-A, Stamp Act, 1899?
Contentions
It was the contention of the appellants that Schedule I, Section 18, Stamp Act, 1899, applies only to a certificate of sale granted to the purchaser of any property sold by public auction by a civil or Revenue Court or other Revenue Officer and only in such cases stamp duty is payable as on a conveyance, calculated on the market value equal to the amount of the purchase money. The sale certificates issued under proceedings under the SARFAESI Act, the IBC, or pursuant to any public auction conducted by a court appointed Receiver, would not fall within the ambit of Schedule I, Section 18, Stamp Act, 1899, and therefore, registration of the sale document is mandatory. And that the registering authorities have the power to refer the matter to Collector under Section 47-A, Stamp Act, 1899.
As per appellants, the sale certificate creating any right or liability falls within the ambit of an instrument, so the registering authority, after registering such instrument may refer the same to the Collector for determination of the market value of such property as while registering, he had reason to believe that market value of the property had not been truly set forth in the instrument.
The sale certificate issued by the authorised officer of the bank cannot be equated with the sale certificate issued by a civil or Revenue Court and a sale made by the Official Liquidator is not a transfer by operation of law.
On the other hand, the respondents contended that as per Section 47-A, Stamp Act, 1899, the registering authority has no power to refer the sale certificate. Once the sale certificate is issued by operation of law, the proper stamp duty payable under Section 18, Schedule I, Stamp Act, 1899, is conveyance.
Analysis
It was observed by the Court that as per the decisions of Supreme Court, the sale certificate under SARFAESI Act, does not require registration. Moreover, when the property was purchased in open market, by the orders of BIFR (Board for Industrial and Financial Reconstruction) and AAIFR (Appellate Authority for Industrial and Financial Reconstruction) on the basis of value fixed by the Assets Sales Committee, so the question of non-disclosure of correct price in order to evade stamp duty does not arise and therefore, Section 47-A, Stamp Act, 1899 has no application.
The Court took note of the judgment in Registrar of Assurances v. ASL Vyapar (P) Ltd., (2024) 17 SCC 572, where it was held by the Supreme Court that the provisions of Section 47-A, Stamp Act, do not apply to a public auction carried out through court processes or a court appointed Receiver, as such a process is the most transparent means of determining the correct market value of the property.
The Court noted that the term “Revenue Officer” must not be interpreted restrictively. Since the sale conducted through due process of law, whether by authorised officer or Liquidator, is a compulsory sale by operation of law, therefore, the term “Revenue Officer” shall be liberally construed to include an authorised officer under SARFAESI, liquidation or IBC proceedings. If an officer exercises the power of compulsory sale under a statute, such as, under SARFAESI proceedings, for the recovery of public money by way of compulsory sale, such an officer would certainly fall within the ambit of the expression “Revenue Officer”.
The Court further noted that when the property is transferred inter vivos, only then it will come within the ambit of conveyance. The stamp duty on a sale certificate, shall be payable as on a conveyance for a market value equal to the amount of the purchase money only. However, a sale certificate is not a transfer inter vivos, but a consequence of a statutory process by operation of law. Therefore, it cannot be construed as a conveyance so as to attract the provisions of Section 47-A, Stamp Act, 1899.
On the point of Registering Officer referring the document to the Collector, the Court held that only when there is a transfer by inter vivos, does the question of referring the document for determination of the market value arise. Moreover, Section 17(2)(xii), Registration Act, 1908, makes it clear that a certificate of sale granted to the purchaser of any property, sold by public auction by a Civil or Revenue Officer, does not require compulsory registration.
Therefore, the Court held that since Section 47-A, Stamp Act, 1899 applies only to instruments of conveyance, and a sale certificate issued by operation of law is not a conveyance, as it does not involve a transfer inter vivos; a sale certificate issued by operation of law cannot be equated with a conveyance or treated as one, for the purposes of invoking Section 47-A, Stamp Act, 1899.
[Inspector General of Registration v. Riddhi Siddhi Cotex (P) Ltd., 2026 SCC OnLine Mad 3822, decided on 15-4-2026]
*Judgment authored by: Justice N. Sathish Kumar
Advocates who appeared in this case:
For Appellants: Veera Kathiravan, F. Deepak, P.S.Raman(Advocate General)
For Respondents: S.Lakshmi Narayanan, B.Saravanan, B.Vinoth Kumar, Suresh, S.Ramsundarvijayraj
