D.Dis.No. 13580/P1/2018, Revision Petition on Bond Trust Deed
The Chief Controlling Revenue Authority and Inspector General of Registration of the Tamil Nadu Registration Department issued Proceedings D.Dis.No. 13580/P1/2018 on 13 December 2023, allowing a revision petition concerning Bond Trust Deed Document No. P.134/2017 at the Sub Registrar Office, Neelankarai. The proceedings set aside the District Registrar, Chennai South decision to treat part of the deed as a power of attorney to sell immovable property for consideration, and found that no deficit stamp duty remained payable on the document.
What the proceedings decide
The Chief Controlling Revenue Authority and Inspector General of Registration of the Tamil Nadu Registration Department issued Proceedings D.Dis.No. 13580/P1/2018 on 13 December 2023. The authority allowed the revision petition filed by M/s. Mandava Holdings Private Limited and set aside the District Registrar, Chennai South order concerning Document No. P.134/2017 at the Sub Registrar Office, Neelankarai.
The document was executed on 10 January 2017 as a Bond Trust Deed. It secured repayment to prospective holders of 14,000 bonds worth Rs.140 crore by mortgaging immovable property in favour of the bond trustee.
Earlier stamp duty decision
The District Registrar, Chennai South had classified the Bond Trust Deed as covering two distinct matters:
- A mortgage without possession.
- A power of attorney to sell immovable property granted for consideration.
The deed bore stamp duty of Rs.40,000. The District Registrar determined deficit stamp duty of Rs.5,61,60,000 and a penalty of Rs.5,000.
The power of attorney classification was based mainly on clause 7.11, which appointed the bond trustee as the issuer's attorney, and Schedule IX, which listed existing encumbrances, including bonds worth Rs.350 crore for which Axis Trustee Services Limited was trustee.
Findings on the trustee's powers
The Chief Controlling Revenue Authority and Inspector General of Registration found that clause 7.11 allowed the trustee to act as attorney only to carry out the issuer's obligations for the benefit of bondholders, including in events such as default. The authority concluded that the clause did not grant an outright or absolute power to sell immovable property.
The authority also found that Schedule IX merely listed existing encumbrances. Axis Trustee Services Limited acted as trustee for the earlier bonds and was not shown as the lender of Rs.350 crore.
Key outcomes were:
- The deed could not be treated as a power of attorney to sell immovable property granted for consideration.
- The District Registrar's classification on that basis was not sustainable.
- The revision petition was allowed and the District Registrar's order was set aside.
- No deficit stamp duty remained payable for Document No. P.134/2017.
Who is affected
Proceedings D.Dis.No. 13580/P1/2018 directly concern the named Bond Trust Deed, its executants, M/s. Axis Trustee Services Limited as claimant, and the Sub Registrar Office, Neelankarai. The Sub Registrar was directed to consider the petitioner's request to return the document without registration by following the cited Registration Department standing order and fee-table provision.
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Common questions
Was the Bond Trust Deed treated as a mortgage without possession?
The District Registrar classified it as a mortgage without possession and also as a power of attorney to sell immovable property for consideration. The revision decision rejected the additional power of attorney classification.
Does any deficit stamp duty remain payable on Document No. P.134/2017?
No. Proceedings D.Dis.No. 13580/P1/2018 state that no deficit stamp duty remains payable for the document.
Why was the trustee's authority not treated as an absolute power to sell?
The authority found that the trustee could act as the issuer's attorney only to perform obligations for the benefit of bondholders, including in events such as default. It was therefore not an outright or absolute grant of power to sell immovable property.
Can the impounded document be returned without registration?
The Sub Registrar was directed to consider the petitioner's request for return of the document without registration, following the Registration Department standing order and fee-table provision identified in the proceedings.
