Case Note & Summary
The petitioner, M/s. WinnQuiz Company Limited, filed a writ petition challenging an order of the Debts Recovery Tribunal (DRT) dated 16 August 2010. The DRT had impounded a Memorandum of Entry dated 30 May 1997 under Section 33(1) of the Bombay Stamp Act, 1958, and directed the respondent Bank of Baroda to pay stamp duty of Rs. 50,000 and a penalty of Rs. 1,00,000 under Section 34 of the Act. The Memorandum of Entry evidenced a mortgage by deposit of title deeds of a residential flat at Pedder Road, Mumbai, and was executed at Kolkata. The Bank had initially approached the Collector of Stamps, Mumbai, for adjudication of stamp duty, but the Collector closed the case on 11 August 2010 on the ground that the instrument was executed outside his jurisdiction. The Bank then filed an application before the DRT seeking an order for payment of stamp duty. The petitioner opposed, arguing that the instrument was not admissible in evidence due to non-payment of stamp duty and that the Tribunal had power to impound it under Section 33. The DRT accepted the Bank's request and impounded the document, holding that since the adjudicating authority had refused to adjudicate, the Tribunal was duty bound to impound it. The High Court upheld the DRT's order, finding no error in the exercise of power under Section 33(1) and the direction for payment of stamp duty and penalty.
Headnote
A) Stamp Act - Impounding of Instruments - Section 33(1) Bombay Stamp Act, 1958 - Power of Court to Impound - The Debts Recovery Tribunal, being a court, has the power to impound an instrument that is insufficiently stamped when produced before it, even if the instrument was executed outside the state of Maharashtra, provided it is brought into the state for the purpose of evidence. The Tribunal correctly exercised its power under Section 33(1) to impound the Memorandum of Entry dated 30 May 1997 and directed payment of stamp duty and penalty under Section 34. (Paras 1-3)
B) Stamp Act - Adjudication of Stamp Duty - Sections 31, 32 Bombay Stamp Act, 1958 - Refusal by Collector - Where the Collector of Stamps refuses to adjudicate stamp duty on the ground of lack of jurisdiction, the court before which the instrument is produced is duty bound to impound it under Section 33(1) and deal with it under Section 34. The DRT's order directing payment of stamp duty of Rs. 50,000 and penalty of Rs. 1,00,000 was upheld. (Paras 1-3)
Issue of Consideration
Whether the Debts Recovery Tribunal has the power to impound a Memorandum of Entry executed outside Maharashtra under the Bombay Stamp Act, 1958, when the Collector of Stamps refused adjudication for lack of jurisdiction.
Final Decision
The High Court dismissed the writ petition, upholding the DRT's order dated 16 August 2010 impounding the Memorandum of Entry and directing payment of stamp duty of Rs. 50,000 and penalty of Rs. 1,00,000 under the Bombay Stamp Act, 1958.
Law Points
- Bombay Stamp Act
- 1958 applies to instruments executed outside Maharashtra if brought into the state for evidence
- Section 33(1) empowers courts to impound insufficiently stamped instruments
- Section 34 provides for penalty
- DRT is a court for purposes of impounding
- Memorandum of Entry evidencing deposit of title deeds is chargeable to stamp duty.
Case Details
2011 LawText (BOM) (06) 18
Writ Petition No. 7670 of 2010
Dr. D.Y. Chandrachud, Anoop V. Mohta
Mr. S.U. Kamdar, Sr. Advocate with Ms. Pooja Patil and Mr. C.M. Jadhav i/by M/s. Mahesh Menon & Co. for the Petitioner; Mr. Anant B. Shinde for Respondent No.1; Ms. Aparna D. Vhatkar, AGP for Respondent No.5
M/s. WinnQuiz Company Limited
The Authorized Officer, Bank of Baroda & Ors.
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Nature of Litigation
Writ petition challenging order of Debts Recovery Tribunal impounding a Memorandum of Entry under Bombay Stamp Act.
Remedy Sought
Petitioner sought to quash the DRT order directing payment of stamp duty and penalty.
Filing Reason
Petitioner contended that the DRT had no power to impound the document as it was executed outside Maharashtra and the Collector had refused adjudication.
Previous Decisions
DRT order dated 16 August 2010 impounding the Memorandum of Entry and directing payment of stamp duty of Rs. 50,000 and penalty of Rs. 1,00,000.
Issues
Whether the DRT has power to impound an instrument executed outside Maharashtra under the Bombay Stamp Act.
Whether the DRT's order directing payment of stamp duty and penalty was valid.
Submissions/Arguments
Petitioner argued that the Memorandum was executed at Kolkata and not within the jurisdiction of the Collector of Stamps, Mumbai, and therefore the DRT could not impound it.
Respondent Bank argued that the instrument was produced before the DRT and the Tribunal was duty bound to impound it under Section 33(1) as the Collector had refused adjudication.
Ratio Decidendi
The Debts Recovery Tribunal, being a court, has the power under Section 33(1) of the Bombay Stamp Act, 1958 to impound an instrument that is insufficiently stamped when produced before it, even if the instrument was executed outside the state, provided it is brought into the state for the purpose of evidence. The refusal of the Collector to adjudicate stamp duty on the ground of lack of jurisdiction does not preclude the court from exercising its power to impound.
Judgment Excerpts
The Tribunal by its order dated 16 August 2010, accepted the request of the Bank to impound the document under Section 33(1) of the Bombay Stamp Act, 1958 holding that since the adjudicating authority has refused to adjudicate upon the stamp duty, the Tribunal is duty bound to impound it.
The stamp duty provided in respect of a Memorandum evidencing a deposit of title deeds was `50,000/ at the material time. The Tribunal called upon the bank to pay a stamp duty of `50,000/ together with a penalty of `1,00,000/ under Section 34.
Procedural History
The petitioner filed an application under Section 17 of the SARFAESI Act before the DRT. During proceedings, the respondent Bank relied on a Memorandum of Entry dated 30 May 1997. The Bank approached the Collector of Stamps, Mumbai, for adjudication of stamp duty, but the Collector closed the case on 11 August 2010 for lack of jurisdiction. The Bank then filed an application before the DRT, which on 16 August 2010 impounded the document and directed payment of stamp duty and penalty. The petitioner challenged this order by way of writ petition before the Bombay High Court.
Acts & Sections
- Bombay Stamp Act, 1958: 33, 34, 31, 32
- Securitisation and Reconstruction of Financial Assets and Enforcement of Security Interest Act, 2002: 17
