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THE INSPECTOR GENERAL OF REGISTRATION v. G. MADHURAMBAL

Supreme Court Of India

Nov 11, 2022

Judgment

CaseIQ

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Factual and Procedural Background

Several Special Leave Petitions (SLP(C) Nos. 16949/2022, 17063/2022, 17210/2022, 18325/2022 & 18331/2022) were filed by the Inspector General of Registration and another against the judgment dated 20-07-2022 rendered by the High Court of Judicature at Madras in Writ Appeal No. 681/2022. The High Court had granted relief to the respondents, G. Madhurambal and others, concerning the treatment of a sale certificate issued after an auction conducted under the SARFAESI Act. Dissatisfied, the petitioners approached the Supreme Court seeking leave to appeal. On 11-11-2022, a Bench comprising Hon’ble Mr. Justice Sanjay Kishan Kaul and Hon’ble Mr. Justice Abhay S. Oka heard the matter.

Legal Issues Presented

Whether a sale certificate issued under the SARFAESI Act constitutes a “conveyance” liable to stamp duty.
Whether such a certificate is compulsorily registrable under the Registration Act, 1908, or whether delivery of the validated certificate to the auction purchaser with intimation to the registering authority suffices.

Arguments of the Parties

The opinion does not contain a detailed account of the parties' legal arguments.

Table of Precedents Cited

Precedent	Rule or Principle Cited For	Application by the Court
Board of Revenue No. 2 of 1875 (In Re: Case Referred) – Madras High Court, 19-10-1875	A sale certificate is not a conveyance attracting stamp duty.	Relied upon to reinforce the long-standing position that no stamp duty is payable on a sale certificate.
Adit Ram v. Masarat-un-Nissa, Allahabad High Court (1883) – MANU/UP/0089/1883	A sale certificate is not an instrument covered by cl. (b) of s. 17 of Act III of 1877 and therefore is not compulsorily registrable.	Cited to show historical judicial consensus that registration of a sale certificate is unnecessary.
Esjaypee Impex Pvt. Ltd. v. Asst. General Manager & Authorised Officer, Canara Bank (2021) 11 SCC 537	Under s. 17(2)(xii) & s. 89(4) of the Registration Act, 1908, the authorised officer need only hand over a validated sale certificate to the purchaser and forward a copy for filing in Book I.	Treated as binding authority confirming that such filing is equivalent to registration, obviating further action.
Order in M.A. No. 19262/2021 in SLP(C) No. 29752/2019, Supreme Court, 29-10-2021	Reiterated that forwarding the validated sale certificate to the registering authority fulfils registration requirements.	Invoked to emphasise that the Supreme Court has recently reaffirmed the same principle.

Court's Reasoning and Analysis

The Court observed that the questions raised had been “repeatedly settled” for roughly 150 years. Relying on the cited line of authorities, the Bench held:

A sale certificate emerging from an auction does not amount to a conveyance and therefore does not attract stamp duty.
Section 17(2)(xii) read with Section 89(4) of the Registration Act, 1908 requires only that the authorised officer issue a duly validated sale certificate to the auction purchaser and forward a copy to the registering authority for filing in Book I; this step has “the same effect as registration.”

Given this settled legal position, the Court found no merit in the petitioners’ plea for interference. It also expressed disapproval of governmental authorities filing repetitive SLPs merely to obtain formal dismissal orders.

Holding and Implications

Holding: The Special Leave Petitions were DISMISSED; all pending applications were disposed of.

Implications: The petitioners must comply with the High Court’s directions within 15 days. Although no costs were imposed on this occasion, the Court warned that costs would be levied in future if similar unnecessary SLPs are filed. The decision does not create new precedent but reinforces the long-standing jurisprudence on the non-registrability and stamp-duty-free character of sale certificates.

Show all summary ...

ITEM NO.7 COURT NO.2 SECTION XII

S U P R E M E C O U R T O F I N D I A

RECORD OF PROCEEDINGS

Petition(s) for Special Leave to Appeal (C) No(s). 16949/2022 (Arising out of impugned final judgment and order dated 20-07-2022 in WA No. 681/2022 passed by the High Court Of Judicature At Madras)

THE INSPECTOR GENERAL OF REGISTRATION & ANR. Petitioner(s)

VERSUS

G. MADHURAMBAL & ANR. Respondent(s)

WITH

SLP(C) No. 17210/2022 (XII) (FOR ADMISSION and I.R. and IA No.145314/2022-EXEMPTION FROM FILING

C/C OF THE IMPUGNED JUDGMENT) SLP(C) No. 17063/2022 (XII) (FOR ADMISSION and I.R. and IA No.143981/2022-EXEMPTION FROM FILING

C/C OF THE IMPUGNED JUDGMENT) SLP(C) No. 18331/2022 (XII) (FOR ADMISSION and I.R. and IA No.156612/2022-EXEMPTION FROM FILING

C/C OF THE IMPUGNED JUDGMENT) SLP(C) No. 18325/2022 (XII) ( IA No.156504/2022-EXEMPTION FROM FILING C/C OF THE IMPUGNED

JUDGMENT)

Date : 11-11-2022 These petitions were called on for hearing today.

CORAM : HON'BLE MR. JUSTICE SANJAY KISHAN KAUL HON'BLE MR. JUSTICE ABHAY S. OKA For Petitioner(s) Mr. Amit Anand Tiwari, AAG Mr. Sabarish Subramanian, AOR

Mr. Vishnu Unnikrishnan, Adv.

Ms. Devyani Gupta, Adv.

Mr. P. Shankar, Adv.

Ms. Shivani Jena, Adv.

Mr. Naman Dwivedi, Adv.

For Respondent(s) Mr. K. V. Viswanathan, Sr. Adv. Mr. A. Radhakrishnan, AOR

Mr. P. krishnan, Adv.

Ms. Sri Ruma Sarasani, Adv.

UPON hearing the counsel the Court made the following

O R D E R

Learned counsel for the petitioner(s) has made a valiant endeavor to persuade us to interfere with the impugned judgment(s) but not successfully. It is logically so as this issue has been repeatedly settled and if one may say, a consistent view followed for the last 150 years. We may refer to the judgments by the Madras High Court in the Board of Revenue No.2 of 1875 (In Re: Case Referred) dated 19.10.1875 opining that a certificate of sale cannot be regarded as a conveyance subject to stamp duty, by the Allahabad High Court in Adit Ram v. Masarat-un-Nissa¹ opining that a sale certificate is not an instrument of the kind mentioned in clause (b) of Section 17 of Act III of 1877 and is not compulsorily registrable and this Court's view in Esjaypee Impex Pvt. Ltd. v. Asst. General Manager and Authorised Officer, Canara Bank² opining that the mandate of law in terms of Section 17(2)(xii) read with Section 89(4) of the Registration Act, 1908 only required the Authorised Officer of the Bank under the SARFAESI Act to hand over the duly validated Sale Certificate to the Auction Purchase with a copy forwarded to the Registering Authorities to be filed in Book I as per Section 89 of the Registration Act and order of this Court

1 Manu/UP/0089/1 883

2 (2 02 1) 11 SCC 537

in M.A. No.19262/2021 in SLP(C) No.29752/2019 dated 29.10.2021 opining that once a direction is issued for the duly validated certificate to be issued to the auction purchaser with a copy forwarded to the registering authorities to be filed in Book I as per Section 89 of the Registration Act, it has the same effect as registration and obviates the requirement of any further action. It is time that the authorities stop filing unnecessary special leave petitions only with the objective of attaining some kind of a final dismissal from this Court every time. Costs this time has been spared but will not be spared the next time. The needful be done in terms of the impugned judgment(s) within 15 days from today.

The special leave petitions are dismissed. Pending applications stand disposed of.

(RASHMI DHYANI PANT) (POONAM VAID)

COURT MASTER COURT MASTER