Trinity Securities Private Ltd v. Revenue Divisional Officer, Fort Kochi; Tahsildar, Kanayannur; Sub Registrar, Edappally; District Registrar, Ernakulam; Inspector General of Registration

## **IN THE HIGH COURT OF KERALA AT ERNAKULAM** ## **PRESENT:** ## **THE HONOURABLE MR.JUSTICE K.HARILAL** ## **TUESDAY, THE 9TH DAY OF FEBRUARY 2016/20TH MAGHA, 1937** **WP(C).NO. 22798 OF 2011 (Y)** **----------------------------** ## **PETITIONER:** **---------------** **TRINITY SECURITIES PRIVATE LTD; 171, MITTAL COURT, 'C' WING 17TH FLOOR, NARIMAN POINT, MUMBAI-400 021 REPRESENTED BY ITS DIRECTOR S.M.HEDGE.** **BY ADV. SRI.M.SASINDRAN** ## **RESPONDENT(S):** **--------------** **1. THE REVENUE DIVISIONAL OFFICER, FORT KOCHI-682 001.** **2. THE TAHSILDAR, TALUK OFFICE, KANAYANNUR 682 011.** **3. THE SUB REGISTRAR, EDAPPALLY, ERNAKULAM DISTRICT 682 024.** **4. THE DISTRICT REGISTRAR, ERNAKULAM-682 011.** **5. INSPECTOR GENERAL OF REGISTRATION, THIRUVANANTHAPURAM-695 001.** **BY GOVERNMENT PLEADER, SRI. C.JAYAKUMAR** **THIS WRIT PETITION (CIVIL) HAVING BEEN FINALLY HEARD ON 09-02-2016, THE COURT ON THE SAME DAY DELIVERED THE FOLLOWING:** **WP(C).NO. 22798 OF 2011 (Y)** ## **----------------------------** ## **APPENDIX** ## **PETITIONER'S EXHIBITS :** ## **----------------------** **EXT.P1 : TRUE COPY OF THE SALE CERTIFICATE ISSUED BY THE DEBT RECOVERY TRIBUNAL -I, MUMBAI IN RESPECT OF THE PROPERTY SITUATED IN PONEKKARA IN EDAPPALLY VILLAGE HAVING AN EXTENT OF 6 ACRE 92 CENTS. EXT.P2 : TRUE COPY OF THE JUDGMENT IN APPEAL NO.73/2007 OF DEBT RECOVERY APPELLATE TRIBUNAL, MUMBAI EXT.P3 : TRUE COPY OF THE ORDER OF THE RECOVERY OFFICER, DEBT RECOVERY TRIBUNAL-I, MUMBAI IN R.P. NO.241/2004 DT.16.9.08 EXT.P4 : TRUE COPY OF THE APPLICATION DT. 14.11.08 SUBMITTED BY THE PETITIONER. EXT.P5 : TRUE COPY OF THE REPORT SUBMITTED BY THE TAHSILDAR, KANAYANNUR DT.26.2.09 BEFORE THE REVENUE DIVISIONAL OFFICER, FORT KOCHI. EXT.P6: TRUE COPY OF THE LETTER ISSUED BY THE RECOVERY OFFICER, DEBT RECOVERY TRIBUNAL-I MUMBAI TO THE SUPERINTENDENT OF STAMP, COCHIN, KERALA DT.6.1.10. EXT.P7 : TRUE COPY OF THE PROCEEDINGS OF THE REVENUE DIVISIONAL OFFICER, FORT KOCHI DT.21.2.11.** **RESPONDENTS' EXHIBITS : NIL ----------------------** **//TRUE COPY//** **P.A. TO JUDGE** **DST** **K. HARILAL, J.** **= = = = = = = = = = = = = = = = = = W.P. (C) No. 22798 of 2011** **- - - - - - - - - -- - - - - - - - - - -** Dated this the 9th day of February, 2016 ## **J U D G M E N T** The petitioner was the purchaser of 6 Acres and 92 cents of property comprised in Survey Nos.73/10, 73/11A, 73/18B, 73/19, 73/20A and 73/17A1 in Ponekkara in Edappally North Village together with all buildings and improvements, in a recovery proceedings pending before the Debts Recovery Tribunal-I, Mumbai, against M/s.Poysha Industrial Company Limited. He has purchased the said property for a sum of Rs.4 Crores. The aforesaid sale is evidenced by Ext.P1 sale certificate. Consequent on the aforesaid sale, Ext.P1 was registered in favour of the petitioner as per Document No.191/07 of ## **W.P.(C) No. 22798 of 2011** ## **-: 2 :-** S.R.O., Edappally on 9.1.2007 by paying an amount of Rs.8 lakhs as registration fee. In addition to that, he has paid Rs.34 lakhs towards stamp duty. Thus, the petitioner has paid an amount of Rs.42 lakhs for the purpose of registration and payment of stamp duty. 2. While so, an application for setting aside the sale in favour of the petitioner covered by Ext.P1 sale certificate was moved by Attar Finance and Investment Company Pvt. Ltd. and others and the same was allowed by the Presiding Officer of the Debts Recovery Tribunal-I, Mumbai as per order dated 19.2.2007. The appeal No.73/07 filed before the Debts Recovery Appellate Tribunal, Mumbai against the above said order setting aside the sale was dismissed by Ext.P2 and the petitioner was directed to approach the Authorities concerned for refund of the stamp duty and registration charges. ## **W.P.(C) No. 22798 of 2011** ## **-: 3 :-** 3. Thereupon, the petitioner approached Mumbai Debts Recovery Tribunal-I seeking an order directing to refund Rs.42 lakhs and the Tribunal passed Ext.P3 order stating that it is a fit case wherein Revenue Authorities may consider to refund registration charges and stamp duty and the petitioner was directed to approach Revenue Authorities claiming refund. On the basis of Ext.P3 order, the petitioner submitted Ext.P4 application before the District Collector, Ernakulam, requesting refund of the stamp duty to the tune of Rs.34 lakhs and registration charges to the tune of Rs.8 lakhs paid by him. Ext.P4 application was forwarded to the Tahsildar, Kanayannoor for necessary action. Thereafter, the 2[nd] respondent submitted Ext.P5 report to the Revenue Divisional Officer, Fort Kochi stating that the petitioner is entitled for refund of the stamp duty. That apart, the Recovery Officer of the Debts ## **W.P.(C) No. 22798 of 2011** **-: 4 :-** Recovery Tribunal-I, Mumbai also issued a Ext.P6communication to the Superintendent of Stamps,Cochin, Kerala directing to refund the stamp duty to the petitioner. Thus, the petitioner was under the bona fide belief that the respondents would refund the stamp duty and registration fees to the petitioner. But, to the utter dismay and shock of the petitioner, the 1[st] respondent rejected the application to refund the stamp duty and registration charges, by Ext.P7, on the ground that the District Registrar had informed the 1[st] respondent that there is no provision in the Kerala Stamp Act to refund the stamp duty and registration fee, in the case of a registered document. According to the petitioner, the denial of the claim to refund stamp duty and registration charges is absolutely arbitrary, illegal and unsustainable warranting interference of this Court under Article ## **W.P.(C) No. 22798 of 2011** ## **-: 5 :-** 226 of the Constitution of India. It is under this circumstance, the petitioner filed this writ petition with a prayer to issue a writ of certiorari calling for all records leading to Ext.P7 and quash the same and also to issue a writ of mandamus or direction commanding the respondents 1 and 4 to refund the stamp duty and registration charges amounting to Rs.42 lakhs to the petitioner forthwith. 4. Heard the learned counsel for the petitioner and the learned Government Pleader. 5. The learned counsel for the petitioner advanced arguments assailing the reasons whereby the petitioner's lawful claim has been rejected by the 1[st] respondent in violation of the direction issued by the Debts Recovery Tribunal-I, Mumbai to refund the stamp duty and registration charges to the petitioner. According to the petitioner, the sale ## **W.P.(C) No. 22798 of 2011** ## **-: 6 :-** was set aside for no fault of the petitioner and in Exts.P2 and P3 orders the petitioner's right to refund of stamp duty and registration fee is recognised and accepted by the Tribunal which set aside the sale. So, the denial of claim of the petitioner is arbitrary and illegal. 6. Per contra, the learned Government Pleader advanced arguments to justify the denial of the claim of the petitioner to refund stamp duty and registration charges. According to the learned Government Pleader, there is no provision in the Stamp Act to refund the stamp duty involved in a document which was registered. In the absence of a specific provision permitting the 1[st] respondent to refund the amount, the 1[st] respondent is justified in rejecting the claim of the petitioner. 7. In view of the rival submissions made at the Bar, the point to be considered is, whether the ## **W.P.(C) No. 22798 of 2011** **-: 7 :-** denial of the claim for refund of registration fee and stamp duty, to the petitioner is arbitrary and unreasonable, in view of the facts and circumstances of the case. 8. In the instant case, certain facts are seen undisputed. The petitioner was an auction purchaser, who purchased 6 Acre and 92 cents of property for an amount of Rs.4 Crores and he had expended Rs.42 lakhs towards stamp duty and registration charges of the said property. Unfortunately, pursuant to an application filed by one of the creditors of the debtor, the sale was set aside by the Debts Recovery Tribunal-I, Mumbai and the same was confirmed in appeal by the Debts Recovery Appellate Tribunal, Mumbai by Ext.P2 order. It stands undisputed that the sale was set aside for no fault of the petitioner. In the order setting aside the sale, the Tribunal specifically found that ## **W.P.(C) No. 22798 of 2011** ## **-: 8 :-** the petitioner is entitled for refund of the statutory charges, stamp duty and registration charges paid by the petitioner since the petitioner is in no way responsible for setting aside the sale being a bona fide purchaser. Subsequently, by Ext.P3 order, the petitioner is again directed to approach the authorities concerned to refund the stamp duty and registration charges. Thus, it stands undisputed that the petitioner is not at all responsible for setting aside the same and the property has been sold again in re-auction, for a higher price to protect the interest of the creditors of the debtor from whom, the property was taken and put in auction. 9. Going by Ext.P7 order, it is seen that the claim for refund has been rejected on the sole reason that there is no provision in the Act to refund the stamp duty paid for a registered ## **W.P.(C) No. 22798 of 2011** ## **-: 9 :-** document. At the outset, it is pertinent to note that in the instant case, the stamp papers were not used and proper stamp duty of Rs.34,000/- has been paid for the instrument, as per chelan No.2043 dt. 09.01.2007, as per Section 32(1)(b) of the Act. It is true that there is no provision in the Act, to meet this particular situation. But, the absence of provision cannot be taken, as reason to deny legitimate right of the petitioner, and where there is no provision under specific law, the principles of equity, fairness and reasonableness will come into play. 10. The learned Government Pleader on instruction submitted that subsequently the sale was effected for Rs.19,17,00,000/- and the Government of Kerala has collected huge amount, by way of stamp duty and registration fee. At this juncture, it is pertinent to note that the earlier sale in favour of ## **W.P.(C) No. 22798 of 2011** ## **-: 10 :-** the petitioner was for Rs.4 lakhs only. Thus, the order setting aside the earlier sale, in favour of the petitioner resulted in unexpected enrichment of public revenue. But, at the same time, the petitioner cannot be put to suffer, by denying his legitimate right of refund. When the public revenue got benefited by re-sale, the petitioner cannot be made to suffer, for no fault of his own. The petitioner needs to be put back in the position he would have been, if he had not purchased the property in auction conducted by the Tribunal. The _bona fide_ purchasers can never be put to loss, when the auction was conducted by a court. Certainly, the principles of equity and fairness and reasonableness compel this Court, to allow the claim of the petitioner, particularly when the Government got a substantial amount, by the second sale. Moreover, the Tribunal, which set aside the sale, by **W.P.(C) No. 22798 of 2011** **-: 11 :-** Ext.P6 letter sent to the respondents, to refund the amount paid towards stamp duty and registration fee. 11. The above view is support by the decision of Karnataka High Court in _**M/s. Annapoorna Industries and another v. Syndicate Bank and Others**_ [AIR 1993 Kant.279], which reads as follows: _“auction purchase is entitled for refund of the stamp duty and registration charges. Since the acts of the court cannot cause prejudice to any party to auction purchaser also cannot be made to suffer for having taken as sale certificate by passing a stamp papers for 78,720 and spending another amount of Rs.13,165/- towards registration charges. These amounts need to be ordered to be refunded to the auction purchaser. It is the duty of the court to see that setting aside the sale of the auction purchaser does not hurt him or make him suffer loss or any other kind of injury. Therefore he needs to be put back in the position he would have been if he had not spend on taking a sale certificate as ordered by the Lower Court. Accordingly Inspector General of Stamps in the State shall refund the stamp duty of Rs.78,720/- and registration charges of Rs.13,165/spend on taking sale certificate to the auction purchaser eventhough there is no provision for such refund in the stamp Act._ ## **W.P.(C) No. 22798 of 2011** ## **-: 12 :-** In the above analysis, Ext.P7 will stand set aside. The 1[st] and the 4[th] respondent are directed to refund Rs.42,00,000/-(Rupees forty two lakhs only), which the petitioner had remitted towards stamp duty and registration fee, within a period of two months from the date of receipt of a copy of this judgment, to him. The petitioner is directed to send a copy of this writ petition also along with the copy of the judgment, to the 1[st] and the 4[th] respondents, forthwith. This writ petition is disposed of accordingly. Sd/- **K. HARILAL,** **JUDGE** DST //True copy// P.A. To Judge