State of Punjab & Anr. Vs Ferrous Alloy Forgings Private Limited (Supreme Court of India)
The matter arose from the winding up of M/s Punjab United Forge Limited under the Companies Act, 1956. The Company Judge of the Punjab and Haryana High Court permitted the Industrial Finance Corporation of India (IFCI) to sell the mortgaged and hypothecated assets. In the auction, the highest bid for the immovable properties and movable assets was accepted, and the sale was confirmed by the High Court. Although the successful bid had initially been made by a sister concern, the respondent sought execution of the conveyance deed in its own favour on the ground that it had paid the entire sale consideration and that both companies had the same Board of Directors and Chairman. While the Company Judge declined the request, the Division Bench allowed the appeal on 22 October 1997. Thereafter, the respondent applied under Order XXI Rule 94 of the Code of Civil Procedure, 1908 for issuance of a sale certificate covering both movable and immovable properties.
Read Punjab & Haryana High Court Judgmentin this case: Court Auction Sale Certificate Can Be Issued Without Prior Stamp Duty: P&H HC
The Company Judge disposed of the application on 13 April 1999 by holding that stamp duty was payable on the immovable properties sold in auction, including land, buildings and permanently affixed machinery, while directing exclusion of the value of movable assets for computation of stamp duty. After the respondent filed an affidavit valuing the immovable assets at Rs.54.67 lakhs, the Registrar held that stamp duty was payable on Rs.2.25 crore, being the auction value of the immovable properties, and directed deposit of stamp duty before issuance of the sale certificate. The respondent challenged these directions by filing a writ petition under Article 226 of the Constitution, contending that they were contrary to Section 17(2)(xii) of the Registration Act, 1908 read with Order XXI Rule 94 CPC.
