HC stays orders to release sale deeds in cases of deficit stamp duty

Move expected to augment revenue to public exchequer

In a move that could help in augmenting revenue to public exchequer, the Madras High Court Bench here has stayed operation of its own orders which held that Registration Department officials had no authority to withhold release of original sale deeds even on the charge of payment of deficit stamp duty.

Passing interim orders on two writ appeals filed by the department, a Division Bench of Justices V. Ramasubramanian and V.M. Velumani stayed orders passed by a single judge on March 3 to release the sale deeds with an endorsement that the stamp duty with respect to the market value of the property had not been paid in full.

In its grounds of appeal, the department stated that releasing the original sale deeds without payment of stamp duty in full would pave way for many illegalities besides causing monetary loss to the government.

“If an instrument, for which due stamp duty has not been paid, is returned to the registrant, it may be used as evidence in court of law and it will amount to fraud,” the appellant claimed.

The department also stated “such unduly stamped instrument may be used for obtaining loan from lending institutions and conveying the underlying property which may result in cheating of lending institutions or the subsequent purchaser. Further, there is no provision in the Stamp Act to return a document pending action under Section 47A(1) for payment of deficit duty.”

The appellant also recalled that it was in 2008 that for the first time, a single judge of the High Court directed the Registration Department to return the original sale deeds to the registrants and then pursue action under Section 47A (1). Subsequently, the judgement was followed by many other judges and a number of registrants succeeded in taking possession of their documents.

Circular

On February 26, 2013, the then Inspector General of Registration (IGR) Dharmendra Pratap Yadav issued a circular to curb such practice. Following it up, the incumbent IGR S. Murugaia issued another circular on April 4 this year, directing the Sub-Registrars to go in appeal against orders passed by single judges to release such documents and hence the present writ appeals.