Khush Housing Finance Pvt. Ltd. Vs State of Maharashtra (Bombay High Court)
The Bombay High Court considered the petition in continuation of its order dated 13.01.2026. The learned Additional Government Pleader did not dispute the legal position laid down by the Supreme Court in State of Punjab and Anr. Vs. Ferrous Alloy Forgings P. Ltd. And Ors., which interpreted Section 89(4) of the Indian Registration Act, 1908 in relation to sale certificates issued upon confirmation of auction sales. The Court also noted that the said Supreme Court decision had been relied upon by a Division Bench of the Bombay High Court in Vishal Laxman Arkal Vs. Inspector General of Registration and Ors., and the State requested the Court to pass an appropriate order.
After hearing the petitioner, the High Court observed that the Supreme Court had already determined the precise issue of whether a successful auction purchaser is required to deposit stamp duty before issuance of a sale certificate under the Stamp Act and the Registration Act. Referring to the Supreme Court’s observations, the High Court noted that a sale certificate issued upon confirmation of an auction sale is merely evidence of title, does not require registration under Section 17(1) of the Registration Act, and that title passes upon successful completion and confirmation of the auction sale. It further noted that mere filing of a copy of the sale certificate under Section 89(4) of the Registration Act is sufficient and that stamp duty under Articles 18 and 23 of the First Schedule to the Stamp Act arises only when the auction purchaser presents the original sale certificate for registration or uses it for another purpose.
In view of the settled legal position, the High Court made the petition absolute in terms of prayer clauses (B) and (C). It quashed and set aside the notice dated 16.03.2023 demanding stamp duty on 29 sale certificates issued under the SARFAESI Act, directed that the sale certificates be accepted in Book No. 1 maintained under Section 89(4) of the Registration Act, 1908, and granted the relief sought regarding recording of such sale certificates under Section 89(4).
Cases Discussed
- Vishal Laxman Arkal Vs. Inspector General of Registration and Ors. (Bombay HC), 2025 SCC OnLine Bom 4727
- State of Punjab and Anr. Vs. Ferrous Alloy Forgings P. Ltd. And Ors. (SC), 2024 SCC OnLine SC 3372
FULL TEXT OF THE JUDGMENT/ORDER OF BOMBAY HIGH COURT
1. In continuation of order dated 13.01.2026, the learned Additional G.P. Mr. More do not dispute the legal position emerging from the decision of the Apex Court in case of State of Punjab and Anr. Vs. Ferrous Alloy Forgings P. Ltd. And Ors.1 which has interpreted the provisions of Section 89(4) of the Indian Registration Act, 1908 vis a vis a certificate issued to a purchaser in pursuance of the confirmation of an auction sale.
The said decision having been relied upon by the Division Bench of this Court in the case of Vishal Laxman Arkal Vs. Inspector General of Registration and Ors.2, Mr. More specifically request the Court to pass appropriate order.
2. Having heard Dr. Chandrachud, learned counsel appearing for the petitioner in the backdrop of the aforesaid pronouncement of law, as the Apex Court in case of State of Punjab and Anr. Vs. Ferrous Alloy Forgings P. Ltd. And Ors. (Supra), has determined this very precise question as to whether, “it is mandatory for the successful auction purchaser to deposit the stamp duty for the sale certificate to be issued to it in view of the provisions of the Stamp Act and the Registration Act.” , and we find that in reference to the precedents, the Court has specifically observed thus:
“17. The position of law is thus settled that a sale certificate issued to the purchaser in pursuance of the confirmation of an auction sale is merely evidence of such title and does not require registration under Section 17(1) of the Registration Act. It is not the issuance of the sale certificate which transfers the title in favour of the auction purchaser. The title is transferred upon successful completion of the sale and its confirmation by the competent authority after all the objections against the sale have been disposed of.
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20. The position of law discussed above makes it clear that sale certificate issued by the authorised officer is not compulsorily registrable. Mere filing under Section 89(4) of the Registration Act itself is sufficient when a copy of the sale certificate is forwarded by the authorised officer to the registering authority. However, a perusal of Articles 18 and 23 respectively of the first schedule to the Stamp Act respectively makes it clear that when the auction purchaser presents the original sale certificate for registration, it would attract stamp duty in accordance with the said Articles. As long as the sale certificate remains as it is, it is not compulsorily registrable. It is only when the auction purchaser uses the certificate for some other purpose that the requirement of payment of stamp duty, etc. would arise.”
3. In the wake of the aforesaid, we deem it appropriate to make the petition absolute in terms of prayer Clauses (B) and (C), which read thus:
B) By issue of Writ of Certiorari and/or Writ of directions and/or Order in the nature of Writ by exercising its extra ordinary and inherent powers of this Hon’ble Court under Article 226 of the Constitution of India r/w. Section 89(4) of the Registration Act, 1908 to quashed and set aside the Notice/letter dated 16.03.2023 issued by the Respondent No.5 to the Petitioner for payment of Stamp duty on the 29 Sale Certificates being Ex. P-1 to P-29 issued under the provisions of SARFEASI Act in favour of successful bidder and accept the same on record in Book No.1 maintained by the Respondent No.5 as per section 89(4) of the Registration Act, 1908, upon verifying legality, validity correctness of the demand of the stamp duty made by the Respondent No.5 at the instruction of the Respondent Nos. 1 to 4, on such terms and conditions as this Hon’ble Court may deem fit and proper.
C) By an Order and/or Writ of this Hon’ble Court, upon verifying its legality, validity, propriety and correctness of the Policy/Guidelines of the Government of Maharashtra as well as the Guidelines laid down by the Hon’ble Supreme Court of India, be pleased to declare that the sale Certificates issued by secured creditor under SARFEASI Acts and Rules required to be recorded in Book No.1 maintained by the Respondent No.5 as per section 89(4) of the Registration Act, 1908 since such sale certificates are exempted from adjudication and payment of stamp duty as per sec.33 of Maharashtra Stamp Act, 1958, on such terms and conditions as this Hon’ble Court may deem fit and proper.
Notes:
1 2024 SCC OnLine SC 3372
2 2025 SCC OnLine Bom 4727
