CHEMICALS LIMITED Vs. REGISTRAR OF COMPANIES

JUDGEMENT

(1.) This application for the issue of a writ of certiorari or mandamus, as the case may be, raises the question whether the Assistant Registrar of Joint Stock Companies had exercised his jurisdiction properly in impounding the document and adjudicating the stamp duty thereon. The petitioner entered into an agreement on March 21, 1954, with Raka Corporation Ltd., Madras, a private limited company registered under the Indian Companies Act, 1913, agreeing to appoint the later as its sales agent and sole distributors on certain terms, which it is unnecessary for the purposes of this writ to consider. Pursuant to sections 109 and 277(D) of the Companies Act, the particulars of the intending charge which the agreement created were furnished to the Assistant Registrar, Eluru, West Godavari District. The agreement dated May 21, 1954, was also sent to him as per his directions. The Assistant Registrar required particulars of the transactions and in reply to his reference dated July 6, 1954, the applicant submitted that as a sale agency agreement, stamp duty was payable under article 4 of the Schedule I-A, as such it was duly stamped with Rs. 1-8-0. In further reply to his reference dated August 5, 1954, the Assistant Registrar was also informed that no possession of goods was given or intended to be given by the agreement in question. The Assistant Registrar thereafter communicated to the applicant the order that "the document is a hypothecation of moveables for Rs. 50, 000 falling under article 33 of Schedule 1-A of the Indian Stamp Act, 1899. The document is therefore chargeable with a stamp duty of Rs. 750. But since the document bears stamp duty of Rs. 1-8-0 Rs. 748-8-0 and a penalty of Rs. 5 and report the name and address of the payer." In a subsequent order dated November 27, 1954, from the Assistant Registrar to the company in answer to the representation contained in the letter dated November 25, 1954, stating that it had consulted their legal adviser who had advised that the document in question is not a mortgage and only a sales agency agreement requiring a stamp of Rs. 1-8-0, it was stated that the Assistant Registrar had consulted the Inspector-General or Registration to whom the matter was sent for authoritative opinion and that he had in his proceedings 473 Gl. dated September 2, 1954, ordered that the document should be classified as a hypothecation of moveables and that the document treated as deficiently stamped has been impounded under the provisions of stamp law and consequently the Registrar directed the deficit stamp duty to be paidThe order of the assistant Registrar is challenged on the ground that (a) under the Stamp Act he had no authority to adjudicate and demand payment : all that he can do under article 33 was to impound the document and send it to the Collector. (b) If it is held that the Assistant Registrar was the Collector and he felt a doubt, he was not authorised to consult the Inspector-General of Stamps under section 56(2) as he was not the Chief Controlling Authority within the meaning of section 3(1) of the General Clauses Act, and (c) that the applicant was not given an opportunity to represent his case. Having regard to these submissions learned advocate for the applicant contends that the order is one without jurisdiction and, therefore, must be quashed.

(2.) The first respondent in his counter stated that the Assistant Registrars of Companies, Andhra State, are competent to impound and adjudicate the document by virtue of the powers delegated to them under the Board Resolution No. 1818 dated November 29, 1945, that the Assistant Registrar was competent to impound and adjudicate the document as the powers of the Collector under section 38(2) were delegated to the District Registrars who were appointed ex-officio Assistant Registrars of the Joint Stock Companies. Further it was contended that the Inspector-General of Registration was competent to pass orders in view of B.P. Misc. 340 dated March 1, 1946, and Board Resolution 1818 dated November 29, 1945. It was also stated that by virtue of powers conferred under section 2(9) the State Government had delegated the power under the Stamp Act to the Board of Revenue in G.O. 2911, Separate Revenue, dated 6th October, 1914, under which the following officers have been appointed as Collectors in respect of the powers conferred under section 2(9) of the Stamp Act within the limits of their respective jurisdictions; all Tahsildars, Deputy Tahsildars in independent charge and the Assistant Tahsildar of Trichnopoly; all registering officers appointed under Act III of 1877 and all District Registrars, all Sub-Collectors, Head Assistant Collectors and Deputy Collectors who are first class Magistrates in charge of divisions. For the aforesaid reasons it was contended that the ex-officio Assistant Registrar of Joint Stock Companies did not act without jurisdiction, nor was he in error in referring the matter to the Inspector-General of Registration. It was further contended that the applicant was given opportunity as is shown by the correspondence between the applicant and the Assistant Registrar and the allegation in this behalf by the applicant was untenableIn order to appreciate these contentions, it is necessary to examine the following provisions of the Stamp Act.

(3.) In case the Collector has any doubt as to the amount of duty chargeable on the instrument, he can draw up a statement of case and refer it with his opinion thereon for the decision of the Chief Controlling Revenue Authority, which under section 3(10) of the General Clauses Act in the States having a Board of Revenue is the Board; and such authority shall then consider the case and send a copy of its decision to the Collector who shall proceed to assess and charge the duty in conformity with such decision, vide Section 56(2) and (3). Further, the Chief Controlling Authority under section 57 in cases referred to it under section 56(2) or otherwise coming to its notice has been vested with the power to refer such cases with its own opinion to the High Court and the High Court under section 57(2) will adjudicate upon the matter. This, in short, is the scheme of the above referred provisionsIt may further be stated that section 2(9) of the Stamp Act defines a Collector as including a Deputy Commissioner and any officer whom the Collecting Government may, by notification in the Official Gazette, appoint in this behalf. The State Government has delegated the power to appoint Collectors under the Act to the Board of Revenue under G.O. 2911 Separate Revenue dated 6th October, 1914. The Board pursuant to the delegated powers has by resolution No. 1818 dated November 29, 1945, appointed the District Registrars as ex-officio Assistant Registrars of the Joint Stock Companies under the Indian Companies Act. There is, therefore, no question of the District Registrars who were acting as ex-officio Assistant Registrars of Joint Stock Companies not being empowered to exercise the powers vested in the Collector under the provisions of the Stamp Act and it is in exercise of these powers that the document in question was impounded. The only question therefore is whether the ex-officio Assistant Registrar of Joint Stock Companies followed the procedure laid down by the provisions of the Stamp Act. In my view, this procedure has not been followed. Admittedly the document was referred to the Inspector General of Registration, because the ex-officio Assistant Registrar seems to have entertained a doubt as to the nature of the document and the article under which the stamp duty is leviable thereon. Once he entertains a doubt in this behalf, he was bound to refer the matter with his opinion thereon for the decision of the Chief Controlling Authority which in this case is the Board of Revenue. This he did not do; but instead, he referred the matter to the Inspector General of Stamps and Registration and acted upon his decision. There appears to be no under which the powers of the Chief Controlling Authority could be delegated to the Inspector-General or to any other person, nor has the State Government purported to delegate the same. Learned Government pleader has drawn attention to notification B.P. Misc. No. 340 dated March 1, 1946, which is in the following terms"page 8 : Note 2 under section 2(9) -