SRINIDHI INDUSTRIES LTD. Vs. THE SUB-REGISTRAR, MANAMADURAI

JUDGEMENT

(1.) The short point that arises for consideration herein is as to whether the document showing transfer of one Company on own to another Company under the Scheme of Rehabilitation is not an instrument and is not chargeable with any duty. The Petitioner herein is, as Public Limited Company, carrying on business in textile in Coimbatore and other places. There were two Textile Companies viz., Ayyappan Textile Limited and Varalakshmi Mills Limited, carrying on business in the same line situated in different places and both the Companies were managed by the same set of persons and the Board for Industrial and Financial Reconstruction (BIFR) under the Sick Industrial Companies (Special Provisions) Act, 1985 (hereinafter referred to as "SICA Act"). Both the Companies were declared as Sick Companies and a common Rehabilitation Scheme was explored by the Operating Agency, appointed by BIFR, by merging both the Sick Companies with the Petitioner Company and the Scheme of Merger was approved by BIFR and an Order of Merger of the two Sick Companies with the Petitioner-Company was also passed on 16.6.2008 by BIFR.

(2.) As per the Order of Merger dated 16.6.2008, the undertaking shall be without any further act, instrument or deed, stand transferred to and vested in the transferee Company to become the estate, assets, rights, title and interest of the transferee Company and all the estate, assets, right, title and interest accrued to and or acquired by the transferor Company after the appointed date and prior to the effective date shall be deemed to have been accrued to and or acquired for and on behalf of the transferee Company upon coming into the effect of the Scheme. After obtaining the order of merger passed by BIFR, the Petitioner approached the Registrar of the Company for striking off the names of the Sick Companies and the same was permitted on 6.6.2009. Thereafter, the Petitioner approached the Respondent-Sub-Registrar for the purpose of registration of BIFR Order, dated 16.6.2008, along with the annexure to the said Order, as contemplated under Section 18 of the Act. The document was presented for registration on 4.1.2010, whereas the Respondent refused to receive the same through his proceedings, dated 5.1.2010, which is impugned herein, on the ground that the document is not presented for registration along with Stamp duty for the value of the property and Registration fees. Aggrieved against the same, the Petitioner has come forward with the present Writ Petition for quashing the impugned Order and for directing the Respondent Sub-Registrar to accept the same for registration without demanding Stamp duty.

(3.) According to the learned Counsel for the Petitioner, there was no transfer taken place individually between the transferor Companies and transferee Company, and the property of the transferor Companies was sought to be transferred only by virtue of the order passed under Sections 18(1)(c) and 18(6-A) of the SICA Act to the transferee Company. It is further contended before this Court that under Clause 20(1) of the sanctioned Scheme, the Company would be exempted from free Stamp duty for transfer of assets pursuant to the proposed merger wherever applicable, as such the Petitioner is not bound to pay any Stamp duty.