Proceedings of the Chief Controlling Revenue Authority and Inspector General of Registration, D.Dis.No.47309/P1/2021
The Chief Controlling Revenue Authority and Inspector General of Registration, Chennai, through D.Dis.No.47309/P1/2021 dated 15 September 2022, decided a stamp duty revision concerning an Assignment Cum Novation Agreement registered as pending document P113/2021 at the Sub Registrar Office, Adayar. The proceedings modified the Sub Registrar's order by finding that only Rs.2 crores, not the full Rs.122.47 crores, was conveyed, while separately treating the document as recording pledged securities connected with the full borrowing.
What the proceedings decide
The proceedings of the Chief Controlling Revenue Authority and Inspector General of Registration, Chennai, in D.Dis.No.47309/P1/2021 dated 15 September 2022 concern an Assignment Cum Novation Agreement executed on 30 March 2021. OPG Power Generator Private Limited assigned to Gita Power and Infrastructure Private Limited the right to collect Rs.2 crores from Bhadreshwar Vidyut Private Limited.
The Sub Registrar, Adayar, had treated the document as a conveyance involving the entire borrowing of Rs.122.47 crores and ordered payment of deficit stamp duty of Rs.8,56,99,294. The Chief Controlling Revenue Authority modified that decision.
Who is affected
D.Dis.No.47309/P1/2021 directly affects the parties to pending document P113/2021 at the Sub Registrar Office, Adayar:
- OPG Power Generator Private Limited, described as assignor.
- Gita Power and Infrastructure Private Limited, described as assignee.
- Bhadreshwar Vidyut Private Limited, described as borrower.
The reasoning may also be relevant to professionals examining documents that both assign part of a debt and record securities pledged for a larger borrowing. The classification depends on what the document actually records.
Key findings
The Chief Controlling Revenue Authority and Inspector General of Registration reached the following conclusions:
- The document assigns debt of only Rs.2 crores, although the underlying overdraft facility was Rs.122.47 crores.
- The subject matter of the conveyance is therefore Rs.2 crores, not Rs.122.47 crores.
- The assignment could not be classified under Article 62(c), because no earlier written mortgage document existed.
- The document also serves as a memorandum recording securities pledged by OPG Power Generator Private Limited in favour of Punjab National Bank for the Rs.122.47 crore overdraft facility.
- The conveyance component falls under Article 23, attracting 5 percent stamp duty and 4 percent registration fee on Rs.2 crores.
- The pledged security component falls under section 23-A read with Article 5(j), attracting Rs.20 stamp duty and 1 percent registration fee on Rs.122.47 crores.
Result
D.Dis.No.47309/P1/2021 directs the Sub Registrar, Adayar, to issue revised orders based on the dual classification. It rejects the earlier conclusion that conveyance duty was payable on the entire Rs.122.47 crores.
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 the entire Rs.122.47 crore loan assigned under the agreement?
No. The Chief Controlling Revenue Authority found that the agreement assigned only Rs.2 crores. The Rs.122.47 crores was the amount of the underlying overdraft facility.
Did the authority confirm the deficit stamp duty of Rs.8,56,99,294?
No. The Chief Controlling Revenue Authority modified the Sub Registrar's decision and directed the Sub Registrar, Adayar, to pass revised orders.
How was the Assignment Cum Novation Agreement classified?
It was treated as having two components, a conveyance under Article 23 concerning Rs.2 crores, and an instrument under section 23-A read with Article 5(j) concerning securities pledged for Rs.122.47 crores.
Why was Article 62(c) not applied?
The authority found that Article 62(c) required an earlier document that qualified as a mortgage deed. No such earlier written document existed in this case.
