BILL FORGE PRIVATE LIMITED Vs. STATE OF KARNATAKA

JUDGEMENT

(1.) WRIT petition by a company registered under the Companies Act, 1956, who is a borrower of certain amount from the fourth respondent Corporation Bank. The nature of the transaction between the Bank and the petitioner appears to include the loan sanctioned by the Bank in favour of the petitioner after obtaining title deeds of the properties o the petitioner as deposits by way of security.

(2.) THE petitioner claims to be aggrieved by the provisions of the Karnataka Stamp (Amendment) Act, 2006 as amended by Karnataks Act No. 7 of 2006 which has come into effect from 1-4-2006 particularly the amendment in terms of Section 3 of the Amending Act, amending the provisions of Article 6 in Schedule to the Act by adding an explanation which reads as under:3. Amendment of the Schedule.-- (1) in Article 6, in Clause (1), in Sub-clause (b), in column (3), the following explanation shall be inserted, namely.-- Explanation.--For the purpose of Clause (1), notwithstanding anything contained in any judgment, decree or order of any Court order of any authority, any letter, note memorandum or writing relating to the deposit of title deeds whether written or made either before or at the time when or after the deposit of title deeds is effected, and whether it is in respect of the security for the first loan or any additional loan or loans taken subsequently, such letter, note, memorandum or writing shall, in the absence of any separate agreement or memorandum of agreement relating to deposit of such title deeds, be deemed to be an instrument evidencing an agreement relating to the deposit of title deeds.

(3.) SUBMISSION of Sri Bhagwat, learned Counsel for the petitioner is that the legislative changes has a history; that a similar attempt to levy stamp duty in respect of such transactions were subject-matter of litigation and ended in judgment dated 22-11-1973 rendered by the Full Bench of this Court in the case of Murugharajendra Co. v. Chief Controlling Revenue Authority and Ors. 1974 (1) Kar. L.J. 177 (DB), holding that a letter that was the subject-matter in the judgment which had been construed as mortgage deed and liable to duty under Article 6 of the Schedule to the Act was not one such and therefore no duty was required to be paid on such a letter; that in the present case also, there is no mortgage deed as such nor any instrument as defined under Section 2(1)(j) of the Act, but by reference to the explanation to Article 6 of the Schedule to the Act, the Bank having apprised the petitioner of its possible liability to pay stamp duty, the petitioner has approached this Court seeking certain relief.