The Alappuzha Government Servants Co-Operative Bank Ltd. v. State of Kerala and Others

2024:KER:88040 WP(C) No.38702/2017 ..1.. **==> picture [58 x 57] intentionally omitted <==** ## **IN THE HIGH COURT OF KERALA AT ERNAKULAM** ## **PRESENT** ## **THE HONOURABLE MRS. JUSTICE SHOBA ANNAMMA EAPEN** **MONDAY, THE 25[TH] DAY OF NOVEMBER 2024 / 4TH AGRAHAYANA, 1946** ## **WP(C) NO. 38702 OF 2017** ## **PETITIONER:** **THE ALAPPUZHA GOVERNMENT SERVANTS CO-OPERATIVE BANK LTD.NO.A.208, LAJANATH WARD, ALAPPUZHA, REPRESENTED BY ITS SECRETARY** **BY ADVS. SRI.P.C.SASIDHARAN SRI.P.E.SAJAL** ## **RESPONDENTS:** - **1 STATE OF KERALA REPRESENTED BY THE SECRETARY TO GOVERNMENTCO-OPERATIVE DEPARTMENT, SECRETARIAT, THIRUVANANTHAPURAM PIN-695001** - **2 THE LAND REVENUE COMMISSIONER, COMMISSIONARATE OF LAND REVENUE, THIRUVANANTHAPURAM PIN-695001** - **3 THE DISTRICT REGISTRARGENERAL O/O.THE DISTRICT REGISTRAR, ALAPPUZHA PIN-688001** - **4 THE SUB REGISTRAR OFFICE OF THE SUB REGISTRAR, ALAPPUZHA PIN-688001** - **5 THE JOINT REGISTRAR OF CO-OPERATIVE SOCIETIES GENERAL, ALAPPUZHA PIN-688001** **BY ADV SRI.K.V.SOHAN, STATE ATTORNEY SRI.P.P.THAJUDEEN, SPECIAL GOVERNMENT PLEADER (COOPERATION)** **THIS WRIT PETITION (CIVIL) HAVING COME UP FOR HEARING ON 06.09.2024, THE COURT ON 25.11.2024 DELIVERED THE FOLLOWING:** 2024:KER:88040 WP(C) No.38702/2017 **==> picture [58 x 57] intentionally omitted <==** **==> picture [37 x 8] intentionally omitted <==** “CR” ## JUDGMENT “The writ petition raises the question, whether the Petitioner Society, as the buyer of the property is eligible for remission of stamp duty for registering the sale deed?” 2. This writ petition has been filed by the petitionersociety seeking a direction to the fourth respondent to register Ext.P2 sale deed, without insisting on stamp duty and to declare that they are entitled for remission of stamp duty for registering Ext.P2. 3. The petitioner is a cooperative society registered under the provisions of the Kerala Co-operative Societies Act, 1969. For expansion of its business, the society decided to acquire 22 cents of land near Vandanam Medical College; and as per Ext.P1 order dated 04.07.2017, sanction was accorded by the fifth respondent, the Joint Registrar of Cooperative Societies (General), for expending fund from the society. The property was sought to be purchased from three members of the society. Though sanction was accorded for purchasing 22 cents, Ext.P2 document in white paper was executed for purchase of 18.300 cents. When Ext.P2 document was presented for registration, the third respondent, the District Registrar (General), issued Ext.P3 2024:KER:88040 **==> picture [58 x 57] intentionally omitted <==** WP(C) No.38702/2017 **==> picture [37 x 8] intentionally omitted <==** notice dated 01.11.2017 to determine payment of stamp duty. Pursuant to Ext.P3 notice, the society submitted Ext.P4 written notes; and thereafter, the third respondent passed Ext.P5 order holding the society liable to pay 8% stamp duty along with a penalty. Challenging this, the petitioner has come up before this Court. 4. The respondents have not filed any counter affidavit in the writ petition. 5. I have heard the learned counsel appearing for the petitioner and the learned Special Government Pleader appearing for the respondents. 6. The learned counsel for the petitioner submitted that the petitioner is entitled for remission of stamp duty since the purchase is from the members of the society and the stamp duty is being paid by the petitioner herein, who is the purchaser of the property. 7. The learned Special Government Pleader, on the other hand, submitted that Ext.P5 was issued on the basis of the reference order of this Court in Sub Registrar, Palakkad & others v. Kerala State Co-operative Consumers Federation Ltd., Kochi [2015 (1) KHC 17 (FB)], wherein it was held that in cases where societies purchase properties, it 2024:KER:88040 **==> picture [58 x 57] intentionally omitted <==** WP(C) No.38702/2017 **==> picture [37 x 8] intentionally omitted <==** is not entitled for remission of stamp duty and the said view has been confirmed by the apex court in Kerala Land Reforms & Development Cooperative Society Ltd. v. District Registrar (General) & Another [2022 SCC OnLine SC 1407]. The learned Special Government Pleader further submitted that the petitioner purchased the property from its three members in their own capacity for the purpose of business of the society and since the petitioner society is not the executant of the sale deed, it is not entitled for remission of stamp duty as held in Sub Registrar, Palakkad (supra), which was confirmed by the apex court in Kerala Land Reforms & Development Co-operative Society Ltd. (supra). 8. I have considered the rival contentions and arguments advanced on both sides. It is an admitted fact that in the case on hand, the society is the purchaser of the property. The owners of the property are stated to be the members of the society. The members execute the sale deed in favour of the society, not for and on behalf of the society, but in their own individual capacity. In Sub Registrar, Palakkad (supra), the Full Bench of this Court held as follows: > “20. It is true that when a property is purchased in terms of the provisions contained in Section 30 of the Kerala Stamp Act, unless otherwise so provided in an agreement between the parties, the liability to pay stamp duty is that of the grantee who is the purchaser. Therefore, in a case where a society purchases an immovable property, in terms of the provisions contained in Section 30 of the Stamp Act, the liability to pay stamp duty is that of the society and as provided in Section 40 of the 2024:KER:88040 WP(C) No.38702/2017 ..5.. **==> picture [58 x 57] intentionally omitted <==** Kerala Act, to get the benefit of remission, the society should be liable to bear the stamp duty. 21. However, both under Section 40(1)(a) of the Kerala Act and Clause 1(a) of SRO No.75/60, the benefit of remission is allowed only in respect of documents executed by or on behalf of the society or by its officer or member. In cases where societies purchase properties, in view of Section 55 of the Transfer of Property Act, since the executant of the instrument is not the society but the vendor of the property, the requirement of execution of the instrument by or on behalf of the society as provided in Section 40(1)(a) of the Kerala Act and Clause 1(a) of SRO No.75/60 is not satisfied. 22. It was argued that in view of Section 30 of the Kerala Stamp Act, if, by an agreement, a society undertakes the liability to bear the stamp duty, it should be entitled to the benefit of exemption. It may be possible for a society to undertake the liability to bear the stamp duty. But such a society can get the benefit of exemption only if Section 40(1)(a) of the Kerala Act is attracted. Therefore, by a mere agreement between the society and another, the stamp duty due to be paid to the Government cannot be avoided. 23. It was contended that Section 40(1)(a) provides for benefit in favour of member and that SRO No. 75/60 also provides member in his own capacity or/and in the capacity of a guardian of minor as the beneficiaries of the notification. First of all, we have already stated that the notification cannot be understood divorced from the statutory provisions of Section 40(1)(a). If that be so, in the absence of any further enabling provisions, the Government could not have made the member in his own capacity and/or in the capacity of a guardian of minor as the beneficiaries of exemption or remission of stamp duty. Here, the provisions of the notification understood in teh context of Section 40 of the Kerala Act makes it clear that the member mentioned therein should be acting on behalf of the society and executing an instrument in that capacity to claim the benefit of exemption as provided therein. Therefore, if a member of the society is executing a document in his own capacity or in the capacity of a guardian of a minor, he cannot avail the benefit of remission of stamp duty.” ## 9. In Kerala Land Reforms & Development Co-operative Society Ltd. (supra), the apex court, after elaborate consideration of the issue, held as follows: 2024:KER:88040 WP(C) No.38702/2017 **==> picture [58 x 57] intentionally omitted <==** **==> picture [37 x 8] intentionally omitted <==** “19. The appellants herein are claiming remission of stamp duty on the respective instruments/sale deeds, the particulars of which are reproduced hereinabove. In two cases, the sale deeds are executed by the members in favour of the society and in rest of the cases, the sale deeds are executed by the society in favour of respective members. The respective appellants are claiming the benefit of remission of stamp duty under clause 1(a) of SRO 75/60. It is the case on behalf of the appellants that despite the repeal of the Travancore Act, 1951 and the Madras Act, 1932, SRO 75/60 which was issued under the aforesaid Acts is saved. However, as rightly interpreted and held by the Full Bench of the High Court, the notification issued under the repealed Acts shall be saved to the extent “so far as may be”. Therefore, on true interpretation of Section 110(2) of the Kerala Act, 1969, the provisions of the repealed Acts and/or the notifications and/or orders issued under the repealed Acts is/are saved and/or deemed to have been issued under the Kerala Act, 1969 to the extent the same is not at variance or inconsistent with the provisions of the Kerala Act, 1969. The following chart would demonstrate to what extent clause 1(a) of SRO 75/60 is inconsistent with Section 40 of the Kerala Act, 1969: |S.R.O.<br>1(a)|No. 75 of 1960 clause|Kerala State Co-Operative States<br>Act 1969 Sec. 40|Kerala State Co-Operative States<br>Act 1969 Sec. 40| |---|---|---|---| |1|instruments executed by<br>or on behalf of any<br>registered Co-operative<br>Society;|1|instrument executed by or<br>on behalf on behalf of a<br>Society;| |2|instruments executed by<br>any officer of such<br>society|2|By an officer or member<br>thereof| |3|Instrument executed by<br>an member in his own<br>capacity or/and in the<br>capacity of a guardian of<br>minor|3|—--------| |4|relating to the business<br>thereof|4|Relating to the business<br>of such society| |5||5|In cases where, but for<br>such remission the<br>society, officer of<br>member, as the case may<br>be, would be liable to pay<br>such stamp duty;| 2024:KER:88040 WP(C) No.38702/2017 ..7.. **==> picture [58 x 57] intentionally omitted <==** 20. From the aforesaid, it is apparent that the instruments executed by a member in his own capacity or/and in the capacity of a Guardian of a minor, which was there in clause 1(a) of SRO 75/60 is missing insofar as Section 40 of the Kerala Act, 1969 is concerned. Section 40 of the Kerala Act, 1969 further provides that only in cases where, but for such remission the society, officer or member, as the case may be, would be liable to pay such stamp duty. As per Section 40 (1)(a), the stamp duty chargeable under the Kerala Act, 1959 in respect of any instrument executed by or on behalf of a society or by an officer or member thereof and relating to the business of such society….. and in cases where, but for such remission the society, officer or member, as the case may be, would be liable to pay such stamp duty, there shall be remission of stamp duty. Thus, as clause 1(a) of SRO 75/60 is inconsistent with the relevant provisions of the Kerala Act, 1969, more particularly Section 40 thereof, the said order is not saved and cannot be said to be deemed to have been issued under the Kerala Act, 1969 (Section 110(2) of the Kerala Act, 1969) as has been contended on behalf of the appellants. Therefore, considering the express provision contained in Section 40(1)(a) of the Kerala Act, 1969, a member of the society executing the document in his own capacity or in the capacity of a Guardian or a minor shall not be entitled to the benefit of remission of stamp duty.” ## 10. In Kerala Land Reforms & Development Co-operative Society Ltd. (supra), the apex court has concluded that considering the express provision contained in Section 40(1)(a) of the Kerala Act, 1969, a member of the society executing the document in his own capacity or in the capacity of a Guardian or a minor shall not be entitled to the benefit of remission of stamp duty. 11. In the present case, the document is being executed by the members of the society in their own capacity as is reflected from Ext.P2. The sale deed is not executed by or on behalf of a society or by an officer or member thereof relating to the business of the society, and 2024:KER:88040 **==> picture [58 x 57] intentionally omitted <==** WP(C) No.38702/2017 **==> picture [37 x 8] intentionally omitted <==** hence the society is not eligible for remission of stamp duty. After careful consideration, I conclude that the petitioner is not eligible for remission of stamp duty on the instrument/sale deed in question. Therefore, I hold that the petitioner is liable to pay the stamp duty as demanded by the third respondent in Ext.P5 order. Accordingly, the writ petition is dismissed. Sd/SHOBA ANNAMMA EAPEN JUDGE bka/- 2024:KER:88040 WP(C) No.38702/2017 **==> picture [58 x 57] intentionally omitted <==** ..9.. ## **APPENDIX OF WP(C) 38702/2017** ## **PETITIONER EXHIBITS** **EXHIBIT P1: TRUE COPY OF THE ORDER NO.C.R.B 95/2017/K.DIS DATED 4.7.2017 EXHIBIT P2: TRUE COPY OF THE DOCUMENT DATED 9.10.2017 PREPARED IN WHITE PAPER EXHIBIT P3: TRUE COPY OF THE NOTICE DATED 1.11.2017 EXHIBIT P4: TRUE COPY OF THE WRITTEN NOTIES OF SUBMISSION DATED 4.11.2017 EXHIBIT P5: TRUE COPY OF THE ORDER DATED 25.10.2017 EXHIBIT P6: TRUE COPY OF THE JUDGMENT IN WPC NO.20164/2010**