D.Dis No.16161/P1/2021, Review Petition on Document No.P-153/2016
The Chief Controlling Revenue Authority and Inspector General of Registration, Chennai, issued Proceedings D.Dis No.16161/P1/2021, dated 4 June 2022, concerning the stamp duty classification of a Mortgage Deed Cum Debenture Trust Deed registered as pending document No.P-153/2016 at the Ashok Nagar Sub Registrar Office. The proceedings allowed the revision petition filed by Repco Home Finance Limited and set aside the District Registrar, Chennai (Central) decision demanding deficit stamp duty of Rs.8,00,00,000 and a penalty of Rs.2,000.
What the proceedings decide
Proceedings D.Dis No.16161/P1/2021, dated 4 June 2022, decide whether pending document No.P-153/2016 should be treated both as a mortgage deed and as a power of attorney to sell immovable property granted for consideration. The Chief Controlling Revenue Authority and Inspector General of Registration concluded that the document could not be treated as a power of attorney for consideration under Article 48(e) of the Indian Stamp Act, 1899.
The revision petition was therefore allowed, and the District Registrar, Chennai (Central) order dated 26 March 2021 was set aside.
Document and parties involved
The decision concerns one Mortgage Deed Cum Debenture Trust Deed with these details:
- Document No.P153/2016 at the Ashok Nagar Sub Registrar Office.
- Executed on 7 October 2016.
- Executed by Repco Home Finance Limited, Chennai, in favour of Catalyst Trusteeship Limited, Pune.
- Secured debentures amounting to Rs.200,00,00,000.
- Bore stamp duty of Rs.40,000.
- Left possession of the property with the mortgagor unless a default occurred.
Why the earlier classification was rejected
The District Registrar had treated the instrument as having two features, a mortgage deed under Article 40(b), and a power of attorney to sell immovable property granted for consideration under Article 48(e). That classification resulted in a determination of Rs.8,00,00,000 as deficit stamp duty and Rs.2,000 as penalty.
The Chief Controlling Revenue Authority and Inspector General of Registration found that:
- The trustee’s authority was connected to carrying out the trust obligations and realising receivables.
- Other clauses showed that possession remained with the mortgagor.
- The trustee could take possession and sell only following default, for the purposes of the trust.
- The authority given to the trustee was neither absolute nor final.
- The power was a legal remedy available in case of default, rather than a separate power of attorney granted for consideration.
Who may find the decision relevant
The reasoning may be relevant to lenders, borrowers, debenture trustees and registration professionals examining mortgage and debenture trust documents containing enforcement powers. The express decision, however, concerns pending document No.P-153/2016 and the District Registrar’s classification of that document.
This summary is generated from the source document to help you find what is relevant. The PDF above is authoritative. For advice on your own property, use LandLens One or speak to a qualified professional.
Common questions
Was Repco Home Finance Limited required to pay the deficit stamp duty demanded by the District Registrar?
The Chief Controlling Revenue Authority and Inspector General of Registration set aside the District Registrar’s order that had determined deficit stamp duty of Rs.8,00,00,000 and a penalty of Rs.2,000 for document No.P-153/2016.
Why was the trustee’s power to sell not treated as a separate power of attorney for consideration?
The proceedings found that the trustee could exercise the power for realising receivables and carrying out the trust obligations, particularly following default. The power was neither absolute nor final and was treated as an enforcement remedy connected with the mortgage and trust.
Did possession of the mortgaged property pass to the trustee immediately?
No. The proceedings state that possession continued with the mortgagor and that the trustee could take possession for sale only in the event of default.
Does the decision apply to every mortgage deed containing a power of sale?
The decision expressly determines the classification of pending document No.P-153/2016. Its reasoning examines the particular clauses showing that the trustee’s power was limited to trust obligations, realisation of receivables and enforcement following default.
