Unstamped Sale Certificates Cannot Be Rejected for Filing, Aligning with Supreme Court Precedents
The Kerala High Court, in a full bench judgment, resolved a significant legal question concerning the applicability of stamp duty on sale certificates issued under the Securitisation and Reconstruction of Financial Assets and Enforcement of Security Interest Act (SARFAESI Act). The court held that such certificates are not liable for stamp duty unless presented for registration or used for other purposes. This decision aligns with established Supreme Court precedents, particularly the rulings in the Madhurambal and Ferrous Alloy Forgings cases.
The case, titled "State of Kerala v. Ramakrishnan Sunil Babu," addressed two critical issues: whether a sale certificate under the SARFAESI Act requires stamp duty and whether a registering officer can refuse to file an unstamped certificate in Book No.1 under Section 89 of the Registration Act, 1908. The court ruled in the negative for both issues, affirming that unstamped certificates must still be filed by the registering authority as mandated by law.
The judgment considered various statutory provisions, including the Kerala Stamp Act, 1959, and the Registration Act, 1908. It also took into account the precedential value of Supreme Court judgments, emphasizing that High Courts must adhere to these decisions as per Article 141 of the Constitution of India. The court noted that a certificate of sale is not an "instrument of transfer" and thus not compulsorily registrable, reinforcing the Supreme Court's stance that such certificates do not attract stamp duty unless used for registration or other purposes.
The decision brings clarity to the application of stamp duty on sale certificates, impacting how financial institutions and registering authorities handle these documents under the SARFAESI Act. It underscores the importance of adhering to Supreme Court precedents to maintain consistency in legal interpretations across the country.
Bottom line:-
Certificate of sale issued under the Securitisation and Reconstruction of Financial Assets and Enforcement of Security Interest Act (SARFAESI Act) is not liable to stamp duty unless presented for registration or used for other purposes. Further, registering authorities cannot refuse to file an unstamped copy of the sale certificate in Book No.1 under Section 89 of the Registration Act, 1908.
Statutory provision(s): Kerala Stamp Act, 1959 Section 3, Registration Act, 1908 Section 89, Section 17 of the Stamp Act, Article 141 of the Constitution of India.
State of Kerala v. Ramakrishnan Sunil Babu, (Kerala)(FB) : Law Finder Doc id # 2917914
