D.Dis.No. 13580/P1/2018, Bond Trust Deed Revision Petition
The Chief Controlling Revenue Authority and Inspector General of Registration, Chennai, issued D.Dis.No. 13580/P1/2018 dated 13 December 2023, allowing the revision petition filed by Mandava Holdings Private Limited concerning Document No. P.134/2017 at the Sub Registrar Office, Neelankarai. The proceedings set aside the District Registrar, Chennai South order demanding deficit stamp duty of Rs.5,61,60,000 and a penalty of Rs.5,000 because the bond trust deed could not also be treated as a power of attorney to sell immovable property granted for consideration.
What the proceedings decide
D.Dis.No. 13580/P1/2018 dated 13 December 2023 was issued by the Chief Controlling Revenue Authority and Inspector General of Registration, Chennai, under section 56(1) of the Indian Stamp Act, 1899. It concerns a bond trust deed executed on 10 January 2017 and presented as Document No. P.134/2017 at the Sub Registrar Office, Neelankarai.
The proceedings allow the revision petition filed by Mandava Holdings Private Limited and set aside the District Registrar, Chennai South order dated 29 January 2017.
The document and stamp duty dispute
Document No. P.134/2017 secured repayment to prospective holders of 14,000 bonds worth Rs.140 crore by mortgaging immovable property in favour of the bond trustee. The deed bore stamp duty of Rs.40,000.
The District Registrar had classified the deed as involving two distinct matters:
- A mortgage without possession under Article 40(b).
- A power of attorney to sell immovable property granted for consideration under Article 48(e).
On that basis, deficit stamp duty of Rs.5,61,60,000 and a penalty of Rs.5,000 were determined.
Why the earlier classification was rejected
The Chief Controlling Revenue Authority and Inspector General of Registration examined clause 7.11, which appointed the bond trustee as the issuer's attorney. The authority found that:
- The trustee could act as attorney only to carry out obligations owed to bondholders.
- The power was intended for situations such as default.
- The appointment was not an outright or absolute power of attorney to sell immovable property.
- Schedule IX merely listed existing encumbrances, including earlier bonds worth Rs.350 crore.
- Axis Trustee Services Limited was trustee for those bonds, not the lender that had advanced Rs.350 crore.
The deed therefore could not be treated as a power of attorney to sell immovable property granted for consideration under Article 48(e).
Who is affected
The decision directly affects the executants, Axis Trustee Services Limited, and the handling of Document No. P.134/2017 by the Sub Registrar Office, Neelankarai. It also explains how the authority distinguished a limited enforcement power held for bondholders from an absolute power to sell property.
No deficit stamp duty remained payable for the document. The Sub Registrar was directed to consider the petitioner's request for return of the document without registration by following the cited Registration Department standing order and table of fees.
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Common questions
Did the authority cancel the deficit stamp duty and penalty demand?
Yes. The revision petition was allowed and the District Registrar, Chennai South order requiring Rs.5,61,60,000 as deficit stamp duty and Rs.5,000 as penalty was set aside.
Was the bond trust deed treated as an absolute power of attorney to sell the property?
No. The authority found that the trustee's power was limited to carrying out obligations for the benefit of bondholders, including in events such as default, and was not an outright or absolute power to sell.
Did Axis Trustee Services Limited lend Rs.350 crore to the issuer?
No. The proceedings found that Schedule IX listed existing bonds worth Rs.350 crore and that Axis Trustee Services Limited acted as trustee, not as lender.
Could Mandava Holdings Private Limited request return of the document without registration?
Yes. As no deficit stamp duty remained payable, the Sub Registrar was directed to consider the request by following the Registration Department standing order and table of fees cited in the proceedings.
