Stamp duty cannot be demanded for mere recording of sale certificates issued by civil courts or public auction officials, rules Madras High Court

The sale certificate would not fall under the purview of conveyance requiring payment of stamp duty, says the judge.  

The Madras High Court on Monday held that registration of sale certificates, issued by courts or authorised officers who conduct public auction of immovable properties, is not mandatory and therefore Sub Registrars cannot demand stamp duty for merely recording those certificates in their books.

Justice N. Sathish Kumar pointed out that Section 89 of the Registration Act of 1908 mandates the courts as well as the authorised officers in-charge of public auction to forward the certificates of sale to the jurisdictional Sub Registrars and imposes a duty upon the latter to record it in Book No.1

Since the requirement had been imposed by force of law, the sale certificate would not fall under the purview of conveyance requiring payment of stamp duty, the judge said while disposing of a batch of writ petitions filed against collection of stamp duty and registration charges.

Justice Kumar, however, sounded a word of caution that if the sale certificates are not registered, on payment of necessary stamp duty as well as registration charges, they would carry no evidentiary value and could not be submitted in any forum to establish title over the property.

Further, the forum concerned could order impounding of such unregistered sale certificates, the judge warned. He clarified that the certificate holders would have to pay only stamp duty and registration charges to get the documents registered. They need not pay surcharge/transfer duty.

The judge also held that the term ‘Revenue Officer’ found in Section 89 of the Registration Act would include the authorised officers who conduct public auctions under the Securitization and Reconstruction of Financial Assets and Enforcement of Security Interest (SARFAESI) Act of 2002.

Answering yet another legal question, the judge made it clear that Section 47A of the Registration Act, which empowers a Sub Registrar to refer a document to the Collector if there were any doubts regarding undervaluation of a property, could not be invoked in the case of sale certificates.

Giving reasons for taking such a decision, the judge said, the transfer of an immovable property by issuing a sale certiticate was a transfer by the operation of law and therefore the rigours of Section 47A could not be applied to it. It would be sufficient to pay stamp duty for the amount mentioned in the certificate.