D.Dis No.16162/P1/2021, Review Petition Order, 2022
The Chief Controlling Revenue Authority and Inspector General of Registration, Chennai, issued order D.Dis No.16162/P1/2021 dated 10 August 2022, allowing Repco Home Finance Limited's revision petition concerning document P215/2016 at the Ashok Nagar Sub Registrar Office. The authority classified the Mortgage Deed Cum Debenture Trust Deed only as a simple mortgage and set aside the District Registrar, Chennai (Central), decision that also treated it as a power of attorney for consideration and demanded deficit stamp duty of Rs.4,00,00,000 and a penalty of Rs.2,000.
What the proceedings concerned
Order D.Dis No.16162/P1/2021 dated 10 August 2022 was issued by the Chief Controlling Revenue Authority and Inspector General of Registration, Chennai, under the Indian Stamp Act, 1899. It concerned pending document P215/2016, presented at the Ashok Nagar Sub Registrar Office on 29 December 2016.
The document was a Mortgage Deed Cum Debenture Trust Deed executed by Repco Home Finance Limited, Chennai, in favour of Catalyst Trusteeship Limited, Pune. It secured debentures of Rs.100,00,00,000, and the deed bore stamp duty of Rs.40,000.
Why additional stamp duty was demanded
The registering officer considered wording in clause 11 as allowing Catalyst Trusteeship Limited to deal with or sell trust properties even before an event of default. The document was therefore impounded and sent to the District Registrar, Chennai (Central).
The District Registrar decided that the instrument had two characteristics:
- A mortgage deed.
- A power of attorney to sell immovable property granted for consideration.
Based on that classification, the District Registrar determined deficit stamp duty of Rs.4,00,00,000 and a penalty of Rs.2,000.
Findings on revision
Repco Home Finance Limited argued that the deed had to be read as a whole and that the trustee's powers applied only when specified conditions occurred. It also argued that the District Registrar's proceedings were initiated too late and that the secured amounts had been repaid, with satisfaction of charge letters issued.
After considering clauses 11 and 12 together, the Chief Controlling Revenue Authority found that:
- The relevant powers could be enforced only with the concurrence of the borrower company.
- The powers operated only in the event of default.
- The trustee's power was neither absolute nor final.
- The power was only a legal remedy available following default.
The instrument was therefore classified only as a simple mortgage, not as a power of attorney for consideration. The revision petition was allowed, and the District Registrar's decision was set aside.
Who may find it relevant
Order D.Dis No.16162/P1/2021 is relevant to parties, trustees and professionals dealing with mortgage and debenture trust deeds containing conditional powers over immovable property. Its reasoning shows that clauses must be read together to determine whether a trustee has an immediate, absolute power to sell or only a remedy available after default.
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
Did the authority uphold the Rs.4,00,00,000 deficit stamp duty demand?
No. The Chief Controlling Revenue Authority allowed the revision petition and set aside the District Registrar's decision that imposed deficit stamp duty of Rs.4,00,00,000 and a penalty of Rs.2,000.
Was the deed treated as a power of attorney to sell immovable property?
No. After reading clauses 11 and 12 together, the authority concluded that the trustee's power was conditional and available only in the event of default, so the deed was not treated as a power of attorney for consideration.
How was the Mortgage Deed Cum Debenture Trust Deed finally classified?
It was classified only as a simple mortgage under the Indian Stamp Act, 1899.
Does the decision concern every mortgage deed in Tamil Nadu?
The proceedings specifically concern document P215/2016 at the Ashok Nagar Sub Registrar Office. The conclusion was based on the combined wording of clauses 11 and 12 of that document.
