Official guidance, Tamil Nadu land law
Revision Petition on Pending Document No. P.113/2021
The Chief Controlling Revenue Authority and Inspector General of Registration, Chennai, issued order number D.Dis.No.47309/P1/2021 dated 15 September 2022 concerning an Assignment Cum Novation Agreement registered as pending document number P.113/2021 at the Sub Registrar Office, Adayar. The order modifies the Sub Registrar's decision by limiting conveyance duty to the assigned debt of Rs.2 crores, while separately treating the security for the Rs.122.47 crore overdraft facility as an instrument covered by section 23-A and Article 5(j) of the Indian Stamp Act, 1899.
What the document concerns
Order number D.Dis.No.47309/P1/2021 dated 15 September 2022 was issued by the Chief Controlling Revenue Authority and Inspector General of Registration, Chennai, on a revision petition filed by Gita Power and Infrastructure Private Limited. The petition challenged the Sub Registrar Office, Adayar decision requiring deficit stamp duty of Rs.8,56,99,294 on pending document number P.113/2021.
The underlying Assignment Cum Novation Agreement was executed on 30 March 2021 by:
- OPG Power Generator Private Limited, as assignor.
- Gita Power and Infrastructure Private Limited, as assignee.
- Bhadreshwar Vidyut Private Limited, identified as borrower.
Transaction examined
Pending document number P.113/2021 recorded the assignment of OPG Power Generator Private Limited's right to collect Rs.2 crores from Bhadreshwar Vidyut Private Limited to Gita Power and Infrastructure Private Limited. The assignment consideration was Rs.2 crores.
The records also referred to an overdraft facility of Rs.122.47 crores from Punjab National Bank, secured by securities belonging to OPG Power Generator Private Limited. The document had borne stamp duty of Rs.30,000.
Findings and revised classification
The Chief Controlling Revenue Authority and Inspector General of Registration, Chennai, made the following findings:
- The document assigned debt of only Rs.2 crores, not the entire Rs.122.47 crores.
- The Rs.2 crore assignment was classifiable as a conveyance under Article 23, rather than as a transfer under Article 62(c).
- The document also served as a memorandum concerning the pledge of securities securing the Rs.122.47 crore overdraft facility.
- The High Court judgment cited by the petitioner did not support Article 62(c) classification because no earlier written mortgage document existed in this case.
- Conveyance stamp duty at 5 percent and registration fee at 4 percent applied to Rs.2 crores.
- Stamp duty of Rs.20 and registration fee at 1 percent applied to Rs.122.47 crores under section 23-A read with Article 5(j).
Who is affected
Order number D.Dis.No.47309/P1/2021 directly concerns the named companies and pending document number P.113/2021 at the Sub Registrar Office, Adayar. It is also relevant to professionals examining how a document combining a partial debt assignment and a pledge of securities was classified for stamp duty and registration fee purposes. The Sub Registrar was directed to issue revised orders in line with these findings.
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
Was stamp duty assessed on the full Rs.122.47 crore amount as a conveyance?
No. The Chief Controlling Revenue Authority found that the conveyance covered only the assigned debt of Rs.2 crores, not the full Rs.122.47 crores.
How was the Rs.2 crore debt assignment classified?
It was classified as a conveyance under Article 23, attracting 5 percent stamp duty and 4 percent registration fee on Rs.2 crores.
Did the authority accept classification under Article 62(c)?
No. The authority found that Article 62(c) did not apply because there was no earlier written mortgage document.
What treatment was given to the Rs.122.47 crore overdraft security?
The document was also treated as an instrument under section 23-A read with Article 5(j), attracting Rs.20 stamp duty and a 1 percent registration fee on Rs.122.47 crores.
