ROYAL OVERSEAS KHOSA PANDO Vs. STATE OF PUNJAB

JUDGEMENT

(1.) THIS petition filed under Article 226 of the Constitution prays for quashing order dated 29.4.2005 (Annexure P-2) passed by the Additional Deputy Commissioner-cum-Collector, Moga in pursuance to the proceedings initiated under Section 3 of the Indian Stamp Act, 1899 (for brevity 'the Act'). The Collector has held that on the basis of instructions dated 11.9.1979 (R-1), any mortgage without delivery of possession and deposit of title deed to secure loan is assessable under Section 9(1)(a) of the Act. Accordingly, a deficiency of Rs. 1,39,800/- has been determined and direction for recovery of the same from the petitioner has ordered.

(2.) BRIEF facts of the case are that the petitioner is a firm which has dealing with the Oriental Bank of Commerce Branch, Dhalle Ke Tehsil District, Moga (for brevity 'the bank'). The firm entered into an agreement for availing the facility of loan to the extent of Rs. 80 lacs (30 lacs as cash credit + Rs. 50 lacs as term loan) subject to the condition that it was to return loan amount along with interest and other expenses and it was also to deposit title deeds of properties collateral security for the loan with the bank. The details of the title deed has been given in the agreement title dated 27.12.2000 registered vide Wasika No. 5394 by the office of the Sub- Registrar, Moga in favour of the petitioner firm for a total consideration of Rs. 2,25,000/-. Likewise, title deed dated 27.12.2000 registered vide Wasika No. 4924 by the office of Sub Registrar, Moga against a consideration of Rs. 1,55,000/-. There were other properties mentioned in the Schedule (Annexure P-1)as well. It is well known that an equitable mortgage is created by surrendering the title deeds for securing the bank loan. The aforementioned document was got registered in favour of the bank on 18.11.2003. The audit raised an objection vide their audit note pointing out deficiency of stamp duty to the tune of Rs. 1,39,800/-. Accordingly, Sub-Registrar, Moga-Respondent No. 2 sent his report to the Additional Deputy Commissioner-cum-Collector, Moga-respondent No. 4, who upheld the demand. It has been pointed out in his order dated 29.4.2005 (Annexure P-2) that the petitioner had affixed stamp duty valuing Rs. 20,200/- at the time of getting the document attested. He referred to notification dated 7.11.1979 issued by the Revenue Department to support the view that any mortgage without possession by deposit of title deed or any loan secured by a mortgage without possession was assessable to stamp duty as per the provisions of Section 9(1)(a) of the Act. Therefore, he upheld the demand of Rs. 1,39,800/- and ordered recovery of aforementioned amount from the petitioner. The order of the Collector was challenged in an appeal and the Commissioner, Ferozepur Division, Ferozepur upheld the view taken by the Collector. Para 5 of the order passed by the Commissioner reads as under :-

(3.) MRS . Charu Tuli, learned State counsel has however, pointed out that notification dated 11.9.1979 is in operation and reference to notification dated 7.11.1979 has erroneously been made. According to the learned State counsel, once a document is offered for registration, then under the Registration Act, 1908, the stamp duty and registration fee is charged as per the provisions of the Act. She has banked upon Section 9(1) of the Act to submit that stamp duty and registration fee is normally leviable. According to the learned State counsel, the view taken by the Collector as well as by the Commissioner, Ferozepur Division, Ferozepur, deserves to be upheld and the petition is liable to be dismissed. She has emphasised that circular dated 11.9.1979 (R-1) is confined only to purchase of inputs like crop loan on fertilizers, insecticides, pesticides, weedicides and seeds.