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Official Assignee, Madras Vs. Inspector-general of Registration, Bangalore and anr. - Court Judgment

LegalCrystal Citation
SubjectCivil
CourtChennai High Court
Decided On
Case NumberPetition No. 55 of 1977 and Appln. No. 445 of 1979
Judge
Reported inAIR1981Mad54
ActsPresidency Towns Insolvency Act, 1909 - Sections 7, 17, 68 and 115; Karnataka Stamp Act, 1957 - Sections 3; Constitution of India - Article 254
AppellantOfficial Assignee, Madras
Respondentinspector-general of Registration, Bangalore and anr.
Appellant AdvocateParty in person;Adv. General for State
Respondent AdvocateN.R. Chandran, Adv.
Cases ReferredIn Abdul Khader v. Official Assignee. Madras
Excerpt:
civil - exemption - sections 7, 17, 68 and 115 of presidency towns insolvency act, 1909, section 3 of karnataka stamp act, 1957 and article 254 of constitution of india - whether sale deed executed by official assignee in favour of second respondent of factory and buildings and land situate in kolar liable to be exempted from stamp duty - in case of transfer of property vested with official assignee no stamp duty need to be paid - official assignee has got power to sell or mortgage whole or any part of property of insolvent wherever situate for purpose of realising property of solvent - all transfers, mortgages or assignments of insolvent's property wherever situated within presidency towns or outside exempt from stamp duty - karnataka stamp act provides for payment of stamp duty on all..........the ist respondent herein, has filed a counter-affidavit. he has contended that the presidency towns insolvency act is not applicable to any area other than presidency towns and therefore is not applicable to the state of karnataka. the transaction is governed by the provisions of the karnataka stamp act, 1967. the said act does not provide for any exemption being granted in favour of the sale deed executed by the official assignee.3. the short question that arises for consideration is whether the sale deed executed by the official assignee in favour of the 2nd respondent of the factory buildings and land situate in kolar within the karnataka state is liable to be exempted from stamp duty or not. i have heard the arguments of the learned advocate-general of madras to whom notice was.....
Judgment:
ORDER

1. Messrs Della Technical Service represented by its partners were adjudicated insolvents on its own petition by the order of this Court dated 8-7-1977. Consequent on the vesting of the property in the Official Assignee, the factory building and land belonging' to the insolvent and situate at Kumberahalli, Kasba Hubli, Kolar taluk bear S. N. 33/1, measuring about 2 acres and 11 guntas were sold in public auction by the official Assignee. The 2nd respondent herein, M/s. Usha Telehoist Ltd., was the highest bidder in a sum of Rupees 1,70,000/-. Hence the sale was confirmed in favour of the 2nd respondent. Accordingly, the Official Assignee executed a sale deed in favour of the 2nd respondent. The 2nd respondent presented the sale deed for registration before the Sub-Registrar, Kolar in Karnataka State. The Sub-Registrar, Kolar, refused to register die same on the ground that no stamp duty had been paid on the sale deed. The Sub-Registrar, Kolar, took the view that the registration of the sale deed of properties situate within the Karnataka State was governed by the pro- visions of the Karnataka Stamp Act, and inasmuch as the Karnataka Stamp Act does not can any provision for exemption of stamp duty in case of sales by the Official Assignee the document was liable to be stamped. In the circumstances, the Official Assignee has sought for the issue of necessary direction being issued to the Inspector General of Registration, Bangalore, to effect the registration of the sale deed executed by the Official Assignee in favour of the 2nd respondent

2. The Inspector-General of Registration, Bangalore, the Ist respondent herein, has filed a counter-affidavit. He has contended that the Presidency Towns Insolvency Act is not applicable to any area other than Presidency Towns and therefore is not applicable to the State of Karnataka. The transaction is governed by the provisions of the Karnataka Stamp Act, 1967. The said Act does not provide for any exemption being granted in favour of the sale deed executed by the Official Assignee.

3. The short question that arises for consideration is whether the sale deed executed by the Official Assignee in favour of the 2nd respondent of the factory buildings and land situate in Kolar within the Karnataka State is liable to be exempted from stamp duty or not. I have heard the arguments of the learned Advocate-General of Madras to whom notice was issued by this Court, Mr. N. R. Chandran on behalf of the Inspector-General of Registration, Bangalore, Mr. Dandapani for the 2nd respondent and the Official Assignee.

4. Section 115 of the Presidency Towns Insolvency Act provides as follows:

'Every transfer, mortgage, assignment, power of attorney, proxy paper, certificate, affidavit, bond or other proceedings, instrument of writing whatsoever before or under any order of the court and any copy thereof, shall be exempt from payment of any stamp or other duty whatsoever.'

5. It is therefore clear on the language S. 115 of the Presidency Towns Insolvency Act that in the case of a transfer of a property that is vested with the Official Assignee, no stamp duty need be paid as per the provisions of the Stamp Act. But the contention advanced on behalf of the Inspector-General of Registration, Bangalore, is that the Presidency Towns Insolvency Act is not applicable to the State of Karnataka. There is nothing in the Act to say that the provisions of the Act do not extend to areas situate outside the Presidency Towns. Therefore, when S. 115 speaks of a transfer by the Official Assignee, under orders of the Court, it can only mean transfer of the property of the insolvent which had vested with the Official Assignee. Therefore, on the face of it, S. 115 takes within its ambit the transfer of properties of the insolvent wherever situate and which has become vested with the Official Assignee consequent on the order of adjudication. In this view, the transfer effected by the Official Assignee of a property situate outside the presidency towns shall be exempt from stamp duty under S. 115 of the Presidency Towns Insolvency Act. There is no provision in the Act which limits the applicability of the provisions of the Act only to the presidency towns. Section 17 provides that on the making of an order of adjudication, the property of the insolvent wherever situate shall vest in the Official Assignee and shall become divisible among his creditors. It follows that consequent on the passing of an order of adjudication the properties of an insolvent situate outside the limits of the presidency towns also vests in the Official Assignee. Section 7 of the Act confers power on the court to decide all questions whatsoever whether of law or fact which may arise in any case of insolvency coming within the cognisance of the court or which the court may deem it expedient or necessary to decide for the purpose of doing complete justice or making a complete distribution of property in any such cases. In Abdul Khader v. Official Assignee. Madras, ILR 40 Mad 810: AIR 1917 Mad 832, it has been held by this Court that under Section 7 of the Presidency Towns Insolvency Act, this Court in the exercise of its insolvency jurisdiction has jurisdiction to adjudicate on claims relating to immovable property situate outside the limits of its ordinary original civil jurisdiction. A Full Bench of this Court in Kancherla Krishna Rao In re, ILR 51 Mad 540: AIR 1928 Mad 732, has held that Sec. 7 of the Presidency Towns Insolvency Act confers jurisdiction on the High Court in garnishee proceedings even when the garnishee lives outside the territorial jurisdiction. It is therefore clear that claims as regards the property situate outside the jurisdiction of this Court could be decided by this Court. Section 68 in so far as it is material for our present purpose provides as follows:

'Subject to the provisions of this Act, the Official. Assignee shall, with all convenient speed, realise the property of the insolvent, and for that purpose may, (a) sell all or any part of the property of the insolvent and (b) mortgage or pledge any part of the property of the insolvent for the purpose of raising money for the payment of his debts or for the purpose of carrying on the business.'

Under Section 68, the Official Assignee has got the power to sell or mortgage the whole or any part of the property of the insolvent wherever situate for the purpose of realising the property of the insolvent. In those circumstances, the transfer, mortgage or assignment referred to in Sec. 115 relates to a transfer, mortgage or assignment of insolvent's property wherever situate and which have become vested with the Official Assignee. Section 115 cannot be so interpreted as to mean that only such transfer, mortgage or assignment of properties of the insolvent situate within the presidency towns shall alone be exempt from stamp duty. I am therefore definitely of the view that under S. 115 all transfers, mortgages or assignments of insolvent's property wherever situate, within the Presidency Towns or outside, shall be exempt from stamp duty or' other duty whatsoever.

6. However, the situation becomes complicated by reason of the fact that the Karnataka' Stamp Act, 1957, provides for the payment it of stamp duty on all transfers of property situate within the State of Karnataka and the Act does not grant any exemption in the, case of transfers effected by the Official Assignee in respect of properties situate within the State of Karnataka. The question that arises therefore is whether the Presidency Towns -Insolvency Act shall prevail over the Karnataka Stamp Act. Mr. N. R. Chandran, learned counsel for the first respondent contended that Item No. 44 in the Concurrent List related to stamp duties other than duties or fees collected by means of judicial stamps, but not including rates of stamp duty. According to the learned counsel Section 115 of the Presidency Towns Insolvency Act which grants exemption from payment of stamp duty in respect of the transfers executed by the Official Assignee fell within Item 44 of the Concurrent List. The State of Karnataka in enacting the Karnataka Stamp Act has followed the procedure laid down under Art. 254 of the Constitution of India. The Act had been reserved for the consideration of the President and had received his assent. Where a law made by the Legislature of a State with respect to one of I the matters enumerated in the Concurrent List contains any provision repugnant to the provisions of an earlier law made by Parliament or an existing law with respect to that matter then, the law so made by the Legislature of such State shall, if it has been reserved for the consideration of the President and has received his assent, prevail in that State In this view, the learned counsel submitted that the Karnataka Stamp Act should prevail over the Presidency Towns Insolvency Act and that consequently the sale deed executed by the Official Assignee in favour of the 2nd respondent must be stamped in accordance with the provisions of the Karnataka Stamp Act. On the other hand, the Official Assignee and the learned Advocate General contended that Item No. 9 of the Concurrent List related to Bankruptcy and Insolvency. Consequently there cannot be any repugnancy between the Karnataka Stamp Act and the Presidency Towns In solvency Act. Though S. 115 of the Presidency Towns Insolvency Act dealt with the grant of exemption from payment of stamp duties in the case of transfer, mortgage and assignments of land by the Official Assignee, the pith and substance of the legislation being bankruptcy and insolvency, the fact that in some respect the Presidency Towns Insolvency Act entrenches upon Item No. 44 of the Concurrent List which has been occupied by the State of Karnataka will not render it invalid. The provision contained in S. 115 granting exemption from stamp duty in respect of transfers executed by Official Assignee squarely falls within the law of bankruptcy and only incidentally touches Item No. 44 of the Concurrent List. Viewed in this light, there is no repugnancy at all between the Presidency Towns Insolvency Act and the Karnataka Stamp Act. Both operate in different fields, I am therefore of the view that no stamp duty is liable to be paid as per the provisions of the Karnataka Stamp Act on the sale deed executed by the Official Assignee in favour of the Property situate at Kumbarahalli, Kasba Hubli, Kolar taluk, bearing S. No. 33/1, measuring about 2 acres and 11 guntas belonging to the insolvent and vested in the Official Assignee. The application is allowed and there will be a direction as prayed for. No costs.

7. Application allowed.


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