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Ballyfabs International Limited & Another v/s The State of West Bengal & Others

    W.P.A. No. 7006 of 2020
    Decided On, 07 June 2022
    At, High Court of Judicature at Calcutta
    By, THE HONOURABLE MR. JUSTICE SABYASACHI BHATTACHARYYA
    For the Petitioners: Rupak Ghosh, Pradip Kr. Sarawagi, Advocates. For the Respondents: R4, Surajit Auddy, Swapnalekha Auddy, Ayan Banerjee, Advocates.


Judgment Text
1. The brief, undisputed facts of the case are as follows:

2. The petitioners purchased the property in a public e-auction conducted by the IDBI Bank under the provisions of the Securitization and Reconstruction of Financial Assets and Enforcement of Security Interest Act, 2002 (hereinafter referred to as “SARFAESI Act”) for a consideration of Rs.14,01,00,000/-.

3. In view of the Bank not being willing to execute a conveyance in the format suggested by the petitioners, petitioner no.1 filed a suit bearing CS No. 64 of 2018 for declaration and mandatory injunction to approve of the draft conveyance forwarded by the petitioners. In the suit, the Bank agreed to execute the conveyance and the learned Single Judge taking up the suit and connected application directed execution of the conveyance by the Registrar of Assurances.

4. Subsequently, the Registrar claimed that he was entitled to re-evaluate the property. Upon hearing the Registrar, the Trial Judge declined to give any further directions in the suit, since the Registrar was not a party thereto.

5. The petitioners preferred an appeal from the said order. The matter was ultimately referred on a question of law to a Division Bench of this court on August 14, 2020, which observed that the primary question raised regarding the stamp duty payable for such sale was not gone into and the petitioners were left free to avail other remedies.

6. The writ petition was filed for a direction on the Registrar of Assurances to accept the value mentioned in the sale certificate issued by the IDBI Bank Limited (respondent no.4), that is, Rs. 14,01,00,000/- and to assess the stamp duty and registration fee accordingly without initiating a fresh enquiry for re-evaluation.

7. The writ petition was taken up for hearing and, vide judgment and order dated February 19, 2021, was referred to a Larger Bench, to be constituted by the Hon’ble the Chief Justice, on the following question of law:

Whether a sale conducted by an Authorized Officer under the SARFAESI Act, 2002 is an open market sale and is thus excluded from the scrutiny contemplated in Section 47A of the Indian Stamp Act, 1899 (as amended in West Bengal).

8. Final judgment in the writ petition was, however, reserved till the decision of the Larger bench.

9. Subsequently, the Division Bench which was constituted accordingly, answered the reference, vide judgment and order dated April 22, 2022, in the following manner:

1. “The sale conducted by the authorized officer in exercise of the powers conferred under Rule 8 of the Security Interest (Enforcement) Rule, 2002 by public auction or by inviting tenders from the public would be regarded as the sale in the open market and the price so accepted shall be the price which it would fetch if sold in the open market under Section 47A of the Stamp Act. The sale must be conducted by making a wide publication at least in one newspaper widely circulated in the particular city/town/district where the property is situated.

2. The authorized officer shall not have any relation or connection with the intending purchaser.

3. Let the writ petition be placed before the Single Bench having determination for disposing of the writ petition in the light of the answers given to the reference.”

10. The sole question which arose for consideration in the writ petition was whether the e-auction sale, in which the petitioners purchased the property-in-question, was an open market sale within the purview of Section 16B of the Indian Stamp Act, 1899 (as amended in West Bengal), thus, exempting the instrument of such sale from assessment by the registering officer under the Registration Act, 1908, under Section 47A of the Indian Stamp Act (as amended in West Bengal).

11. In view of the Larger Bench having already answered the reference in the manner as indicated above, the writ petition has to be decided in consonance with and in the light of the said answer, since the question is no longer res integra.

12. In order to avoid unnecessary repetition, the detailed rationes decidendi of the judgments of the Division Bench and of this Court, are not being reproduced.

13. Accordingly, W.P.A. No. 7006 of 2020 is disposed of with the following directions:

A.) Respondent nos.2 and 3 are directed to accept the value mentioned in the Sale Certificate issued by the respondent no.4-Bank (being Annexure P-5 to the writ petition), that is, Rs. 14,01,00,000/- (Rupees Fourteen Crore One Lakh only) to be the “market value of the property” in respect of the immovable property, as indicated in Annexure P-5, for the purpose of assessing the Stamp Duty and Registration fee thereon, without undertaking any further enquiry under Section 47A of the Indian Stamp Act (as amended in West Bengal);

B.) The e-Assessment slips, being Annexures P-11 and P-13 to the writ petition, respectively for the amounts of Rs. 24,74,96,541/- and Rs. 37,45,05,089/-, are hereby quashed, along with all other consequential action;

C.) In terms of the Division Bench order dated April 22, 2022, passed in the connected reference, the sale conducted by the authorized officer in exercise of the powers conferred under Rule 8 of the Security Interest (Enforcement) Rule, 2002 by public auction or by inviting tenders from the public would be regarded as the sa

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le in the open market and the price so accepted shall be the price which it would fetch if sold in the open market under Section 47A of the Stamp Act. The sale must be conducted by publication at least in one newspaper widely circulated in the particular city/town/district where the property is situated and the authorized officer shall not have any relation or connection with the intending purchaser. 14. There will be no order as to costs. 15. Urgent certified copies of this order shall be supplied to the parties applying for the same, upon due compliance of all requisite formalities.
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