Educational Empowerment And Welfare ... vs The District Registrar

Kerala High Court

Educational Empowerment And Welfare ... vs The District Registrar on 20 May, 2024

Author: Murali Purushothaman

Bench: Murali Purushothaman

                 IN THE HIGH COURT OF KERALA AT ERNAKULAM
                                     PRESENT
            THE HONOURABLE MR.JUSTICE MURALI PURUSHOTHAMAN
          MONDAY, THE 20TH DAY OF MAY 2024 / 30TH VAISAKHA, 1946
                            WP(C) NO. 23227 OF 2015
PETITIONER:

                EDUCATIONAL EMPOWERMENT AND WELFARE CO-OPERATIVE
                SOCIETY, VICHITHRA COMPLEX, KALTEX, KANNUR-2,
                REPRESENTED BY ITS SECRETARY.

                BY ADVS.
                     SRI.SURESH KUMAR KODOTH
                     SRI.K.P.ANTONY BINU


RESPONDENTS:

     1          THE DISTRICT REGISTRAR
                KANNUR, KANNUR DISTRICT.
                PIN - 670 001.

     2          SUB REGISTRAR
                KANNUR, KANNUR.P.O.
                PIN - 670 001.

     3          STATE OF KERALA
                REPRESENTEDBY ITS SECRETARY, DEPARTMENT OF
                REGISTRATION, THIRUVANANTHAPURAM.
                PIN - 695 001.

     4          REGISTRAR OF CO-OPERATIVE SOCIETIES
                THIRUVANANTHAPURAM.
                PIN - 695 001.


         THIS   WRIT   PETITION   (CIVIL)   HAVING   BEEN   FINALLY   HEARD   ON
12.04.2024, THE COURT ON 20.05.2024 DELIVERED THE FOLLOWING:
 WP(C) NO. 23227 OF 2015

                                : 2 :




                           JUDGMENT

The petitioner is a Co-operative Society registered under the Kerala Co-operative Societies Act, 1969 (for short 'the Act'). One of the members of the Society, Smt. Kizhakkedath Krishnakumari, agreed to sell 4.54 Ares of land in RS No.54 in Kannur amsham desam in favour of the Society for a total consideration of Rs.9,00,000/-. It is stated that the said rate is lesser than the then prevailing market value. The Joint Registrar of Co- operative Societies, by Ext.P2, granted permission to the Society to purchase the property for the said consideration. Accordingly, Ext.P3 sale deed was executed and the same was presented for registration WP(C) NO. 23227 OF 2015 : 3 : before the 2nd respondent, Sub Registrar, Kannur. However, the 2nd respondent insisted for payment of Stamp Duty for instrument and referred the matter to the 1st respondent for consideration on the question of exemption of stamp duty. The petitioner claimed the benefit of remission of stamp duty in terms of Ext.P4 Government Order and by virtue of Section 40 of the Act, before the 1st respondent. The same was rejected by the 1st respondent as per Ext.P5 order stating that in Ext.P3 Sale Deed, it is not stated that the sale was conducted for the purpose of the business of the petitioner Society. Referring to Section 40 of the Act, it is stated that the benefit of exemption of Stamp Duty is available only if the instrument is signed by the officer or member of the Society on behalf of the Society and WP(C) NO. 23227 OF 2015 : 4 : also in relation to the business of the Society. Ext.P3 document is executed by the vendor in her personal capacity. Accordingly, the 1st respondent held that Ext.P3 instrument impounded is not eligible for exemption as per Ext.P4 Government Order and directed that the deficit Stamp Duty of Rs.5,29,200/- shall be paid. Challenging Ext.P5 order, the petitioner has filed this writ petition.

2. According to the petitioner Society, Ext.P5 is contrary to the provisions under Section 40 (1)(a) of the Act and Ext.P4 Government Order. It is contended that the transfer of the property was made by the vendor as a member of the Society and for and on behalf of the Society and therefore the petitioner is entitled for remission of Stamp Duty.

WP(C) NO. 23227 OF 2015 : 5 :

3. Heard the learned Counsel for the petitioner and the learned Government Pleader for respondents.

4. The question as to whether a member of the Society executing a document in his own capacity is entitled for the benefit of remission of stamp duty was set at rest by the Hon'ble Supreme Court in Kerala Land Reforms & Development Co-operative Society Limited v. District Registrar (General) and Another [2022 KHC 7093]. The Apex Court held that, Sale Deed executed by members in favour of the society or by the society in favour of respective member in their own capacity or in the capacity of a guardian of a minor shall not be entitled to the benefit of remission of stamp duty as it is available only in respect of instruments executed by or on behalf of the society. Paragraphs 8 and 9 of the said WP(C) NO. 23227 OF 2015 : 6 : judgment read as follows:-

"8. From the aforesaid, it is apparent that the instruments executed by a member in his own capacity or/and in the capacity of a Guardian of a minor, which was in clause 1(a) of SRO 75/60 is missing insofar as S.40 of the Kerala Act, 1969 is concerned. S.40 of the Kerala Act, 1969 further provides that only in cases where, but for such remission the society, officer or member, as the case may be, would be liable to pay such stamp duty. As per S.40 (1)(a), the stamp duty chargeable under the Kerala Act, 1959 in respect of any instrument executed by or on behalf of a society or by an officer or member thereof and relating to the business of such society and in cases where, but for such remission the society, officer or member, as the case may be, would be liable to pay such stamp duty, there shall be remission of stamp duty. Thus, as clause 1(a) of SRO 75/60 is inconsistent with the relevant provisions of WP(C) NO. 23227 OF 2015 : 7 : the Kerala Act, 1969, more particularly S.40 thereof, the said order is not saved and cannot be said to be deemed to have been issued under the Kerala Act, 1969 (S.110(2) of the Kerala Act, 1969) as has been contended on behalf of the appellants. Therefore, considering the express provision contained in S.40(1)(a) of the Kerala Act, 1969, a member of the society executing the document in his own capacity or in the capacity of a Guardian or a minor shall not be entitled to the benefit of remission of stamp duty.

9. In view of the above and for the reasons stated above, the appellants herein shall not be entitled to the benefit of remission of stamp duty on the instruments /sale deeds in question. Such instruments/sale deed in question cannot be said to be executed by or on behalf of a society or by an officer or member thereof relating to the business of the society. We are in complete agreement with the view taken by the Full Bench of WP(C) NO. 23227 OF 2015 : 8 : the High Court."

5. The Sale Deed is executed by the member of the Society in her own capacity. The instrument cannot be said to be executed by or on behalf of the Society relating to the business of the Society. In the said circumstances, the petitioner is not entitled to seek exemption or remission from the payment of stamp duty in view of the law laid down by the Apex Court in the decision cited (supra).

6. This Court, on 31.07.2015, passed an interim order directing respondents 1 and 2 to register and release Ext.P3 Sale Deed in favour of the petitioner Society, provided it pays the necessary Stamp Duty without penalty, notwithstanding Ext.P5 and that such payment shall be subject to the outcome of the decision WP(C) NO. 23227 OF 2015 : 9 : of the Hon'ble Supreme Court in the pending proceedings.

In the light of the judgment in Kerala Land Reforms & Development Co-operative Society Limited (supra) and my findings as above, petitioner Society is liable to pay the stamp duty in respect of Ext.P3 Sale Deed.

There is no merit in the writ petition and the same is dismissed.

Sd/-

MURALI PURUSHOTHAMAN JUDGE SRJ WP(C) NO. 23227 OF 2015 : 10 : APPENDIX OF WP(C) 23227/2015 PETITIONER'S EXHIBITS EXHIBIT P1 TRUE COPY OF THE REGISTERED BYE LAW IN RESPECT OF THE PETITIONER SOCIETY ALONG WITH ENGLISH TRANSLATION.

EXHIBIT P2 TRUE COPY OF THE ORDER DATED 30-3-2015 PASSED BY JOINT REGISTRAR OF CO-OPERATIVE SOCIETIES, ALONG WITH ENGLISH TRANSLATION.

EXHIBIT P3 TRUE COPY OF THE SALE DEED EXECUTED ON 4-4- 2015, ALONG WITH ENGLISH TRANSLATION. EXHIBIT P4 TRUE COPY OF THE NOTIFICATION GO(MS) 795/60/AGRI DATED 8-10-1960.

EXHIBIT P5 TRUE COPY OF THE ORDER DATED 20-5-2015 PASSED BY 1ST RESPONDENT ALONG WITH ENGLISH TRANSLATION.