D.Dis.No.19287/P1/2018, Revision Petition on Document No.P.21/2015
The Chief Controlling Revenue Authority and Inspector General of Registration, Chennai, issued proceedings D.Dis.No.19287/P1/2018 dated 23 May 2024 on Sahyadri Industries Limited's stamp duty revision petition concerning mortgage document No.P.21/2015 at the Sub Registrar Office, Perundurai. The proceedings find that the District Registrar, Erode, was not justified in treating the document as both a mortgage with possession and a separate power of attorney for consideration, but the supplied text does not include the final direction on the stamp duty payable.
What the proceedings cover
Proceedings D.Dis.No.19287/P1/2018 dated 23 May 2024 were issued by the Chief Controlling Revenue Authority and Inspector General of Registration, Chennai, under section 56(1) of the Indian Stamp Act, 1899. They examine a revision petition filed by Sahyadri Industries Limited against the District Registrar, Erode's decision concerning document No.P.21/2015 at the Sub Registrar Office, Perundurai.
The document was executed on 16 April 2015 as a composite deed of mortgage of further charge. Sahyadri Industries Limited was the mortgagor and borrower, while Cosmos Co-operative Bank Limited, Pune, was the mortgagee and lead bank.
District Registrar's decision
The District Registrar, Erode, treated document No.P.21/2015 as covering two distinct matters:
- A mortgage with possession under Article 40(a).
- A power of attorney to sell immovable property for consideration under Article 48(e).
- Deficit stamp duty of Rs.9,13,00,000 and a penalty of Rs.20,000 were demanded.
- The deed had borne stamp duty of Rs.40,000.
Findings in the revision proceedings
The Chief Controlling Revenue Authority and Inspector General of Registration examined the deed as a whole and found:
- Clause 17 prevented the mortgagee from taking custody of the mortgaged properties until an event of default occurred.
- The possession rights described in clause 18(iii) could be exercised only under the conditions contained in the mortgage deed.
- The authority granted by clause 26 was intended to carry out the mortgage obligations and give effect to the mortgagee's rights.
- The power granted under clause 26 was not an independent or unrelated power of attorney.
- The District Registrar's classification under both Article 40(a) and Article 48(e) was therefore described as untenable.
Multiple lenders
Proceedings D.Dis.No.19287/P1/2018 also record that the Rs.114.15 crore credit facility came from six banks, with Cosmos Co-operative Bank Limited acting as lead bank. Referring to a Supreme Court decision involving multiple lenders, the authority noted that a mortgage securing loans from different financial institutions may represent distinct transactions for stamp purposes. The supplied extract ends before stating the final duty calculation or operative direction.
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Common questions
Does this proceeding apply to every simple mortgage in Tamil Nadu?
No general rule for every simple mortgage is stated. Proceedings D.Dis.No.19287/P1/2018 examine the particular wording and lending arrangement in document No.P.21/2015.
Was the bank given immediate possession of the mortgaged property?
The authority found that clause 17 prevented the mortgagee from taking custody until an event of default. The possession provision could operate only under the conditions contained in the deed.
Was clause 26 treated as a separate power of attorney for consideration?
No. The authority found that the power in clause 26 existed to carry out the mortgage and was not an independent power unconnected with the mortgagee's rights.
Did the authority cancel the entire deficit stamp duty demand?
The supplied text finds the District Registrar's dual classification untenable, but it ends before giving the final duty calculation or operative direction. It also raises the issue of separate transactions because six banks provided the credit facilities.
