Sale Certificate

What this document is

The Inspector General of Registration and Chief Controlling Revenue Authority, Chennai, in proceedings Pa.Mu.745/P1/2019 dated 20.01.2023, passed a final order on a revision petition relating to document P52/2018 of Arani Sub Registrar Office. The document under dispute is titled Sale Certificate, dated 18.6.2018, executed by State Bank of India in favour of திருமதி.தி. கலைவாணி. The order dismisses the revision petition and confirms the earlier order of the District Registrar, North Chennai.

What the dispute was about

The buyer had presented a bank-issued Sale Certificate with:

• document value of Rs.39,00,000
• stamp duty paid of Rs.1,95,020
• deficit stamp duty and penalty fixed by the District Registrar of Rs.77,980 and Rs.1,000

The case turned on how the Sale Certificate should be classified for stamp duty.

• The document holder treated it as falling under Article 18 and paid 5 percent stamp duty.
• The Sub Registrar held that it could not be treated that way because it was not a sale certificate issued after auction by a civil court, revenue court, Collector or revenue officer.
• The Sub Registrar instead treated it under Article 23, impounded it under Section 33 of the Indian Stamp Act, and sent it to the District Registrar.
• The District Registrar then fixed deficit stamp duty and penalty under Section 40(1)(b).

What happened during the revision

During the pendency of the revision petition, the document holder paid the deficit stamp duty and deficit registration fee under protest. After that, the document was registered as No.1917/2022 on 12.4.2022.

At the hearing on 16.11.2022, the petitioner's side argued that:

• for immovable properties auctioned by nationalised banks, stamp duty and registration fee were not required
• a sale certificate issued by a bank officer should be treated like one issued by a civil or revenue court
• penalty should not have been imposed

What the authority decided

The Inspector General relied on the Full Bench ruling quoted in the proceedings, which states that a Sale Certificate issued by the authorised officer of a bank is liable for stamp duty under Article 18-C read with Article 23 of Schedule 1 of the Indian Stamp Act. The proceedings also note that the later judgment cited by the petitioner only says stamp duty and registration fee do not arise when a copy is sent for filing in Book I under Section 89(4) of the Registration Act.

The authority therefore held that:

• when the original sale certificate is presented for registration by the auction purchaser, stamp duty and registration fee are payable
• the bank-issued Sale Certificate in this case is chargeable with stamp duty
• the penalty cannot be challenged merely on the ground raised by the petitioner, because Section 40(1)(b) allows penalty
• the District Registrar's order is accepted and the revision petition is dismissed

Who this affects

This is relevant to buyers of property sold through bank auction in Tamil Nadu, especially where the bank issues a Sale Certificate and the purchaser presents the original for registration. It shows that, in the facts recorded here, the Registration Department treated such a bank-issued Sale Certificate as liable to stamp duty, registration fee, and penalty for deficit stamp duty.