Review Petition Order for Pending Document P153/2016

What the proceedings decide

D.Dis No.16161/P1/2021 dated 4 June 2022 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 Mortgage Deed Cum Debenture Trust Deed executed by Repco Home Finance Ltd in favour of Catalyst Trusteeship Ltd to secure debentures worth Rs.200 crores.

The District Registrar, Chennai (Central), had treated the document as having two classifications, a mortgage deed under Article 40(b), and a power of attorney to sell immovable property granted for consideration under Article 48(e). On that basis, the District Registrar determined deficit stamp duty of Rs.8,00,00,000 and a penalty of Rs.2,000.

Who is affected

The decision directly affects Repco Home Finance Ltd, Catalyst Trusteeship Ltd and pending document P153/2016 at the Ashok Nagar Sub Registrar Office. It is also relevant to professionals examining mortgage or debenture trust documents that give a trustee powers to realise secured receivables after default.

Key findings

The Chief Controlling Revenue Authority and Inspector General of Registration reached the following conclusions:

• The trustee's authority was given for carrying out the trusts or obligations imposed on the company and for realising receivables.
• Other clauses showed that possession remained with the mortgagor.
• The trustee could take possession and sell the property only in the event of default and for the purposes of the trust.
• The trustee's power was therefore neither absolute nor final.
• The power was a legal remedy available upon default, rather than a separate power of attorney to sell immovable property granted for consideration.
• Pending document P153/2016 could not be classified under Article 48(e) on the reasoning adopted by the District Registrar.

Result and practical significance

D.Dis No.16161/P1/2021 allowed the revision petition and set aside the District Registrar, Chennai (Central)'s decision. The reasoning depended on reading the document's clauses together, including the terms governing possession, default, sale and realisation of receivables. The proceedings deal with this particular instrument and do not state that every mortgage containing trustee powers must receive the same classification.