Bombay High Court

Dalmia Bharat Sugar And ... vs The State Of Maharashtra Through ... on 17 March, 2017

Bench: A.S. Oka

 sng                                        1                wp-9956.16withcas




               IN THE HIGH COURT OF JUDICATURE AT BOMBAY
                       CIVIL APPELLATE JURISDICTION
                      WRIT PETITION NO.9956 OF 2016
                                   WITH 
                     CIVIL APPLICATION NO.628 OF 2017
                                ALONG WITH
                     CIVIL APPLICATION NO.629 OF 2017
                                    IN
                      WRIT PETITION NO.9956 OF 2016



 WP NO.9956 OF 2016

 Dalmia Bharat Sugar & Industries Ltd.               ..       Petitioner
       Vs.
 The State of Maharashtra and Others.                ..       Respondents
       -

C.A. NO.628 OF 2017

Sangli District Central Co-operative Bank Ltd. .. Applicant/ Intervenor In the matter between

Dalmia Bharat Sugar & Industries Ltd. .. Petitioner Vs.

The State of Maharashtra and Others. .. Respondents

C.A.NO.629 OF 2017

Ninaidevi Sahakari Sakhar Karkhana Ltd. .. Applicant/ Intervenor In the matter between

Dalmiya Bharat Sugar & Industries Ltd. .. Petitioner Vs.

The State of Maharashtra and Others. .. Respondents

sng 2 wp-9956.16withcas

Shri G.S.Godbole i/b Shri Shriniwas S. Patwardhan for the Petitioner. Shri Umesh R. Mankapure and Shri R.A. Naik for the Applicants in CA No.628 of 2017.

Shri Ashutosh M. Kulkarni along with Sarthak Diwan for the Applicants in CA No.629 of 2017.

Shri Manish Pabale, AGP for the Respondents.

CORAM : A.S. OKA & SMT.ANUJA PRABHUDESSAI, JJ

DATED : 17TH MARCH 2017

ORAL JUDGMENT ( PER A.S. OKA, J)

1. The parties were put to notice that the Petition will be

disposed of finally at the stage of admission. It may be noted here that

we have also heard the submissions of the Applicants in Civil

Application No.628 of 2017 and Civil Application No.629 of 2017.

2. The controversy involved in this Petition is very narrow.

With a view to appreciate the controversy, a brief reference to the facts

is necessary.

3. The Petition concerns a Co-operative Sugar Factory

established under the Maharashtra Co-operative Societies Act, 1960. It

appears that the said Sugar Factory had availed of certain financial

facilities from the Maharashtra State Co-operative Bank Limited. The

sng 3 wp-9956.16withcas

proceedings were initiated by the said Bank under the provisions of the

Securitization and Reconstruction of Financial Assets and Enforcement

of Security Interest Act, 2002 (for short "the said Act of 2002"). The

certificate of sale dated 1st September 2014 was issued in favour of the

Petitioner in exercise of powers under the Security Interest

(Enforcement) Rules, 2002 ( for short "the said Rules of 2002"). A copy

of the certificate of sale is annexed at Exhibit-A to the Petition.

4. The grievance in this Petition under Article 226 of the

Constitution of India is as regards the communication/order dated 30 th

December 2015 issued by the Sub-Registrar of Assurances, Class-II,

Shirala, District- Sangli by which the said Officer refused to register the

aforesaid sale certificate in accordance with the provisions of the Indian

Registration Act, 1908 (for short "the Registration Act"). The first

ground set out therein is that the document was not lodged for

registration within the time stipulated under the Registration Act. A

decision of the Division Bench of this Court in the case of M/s. Nestor

Builders & Developers Pvt. Ltd and Another v. State of Maharashtra

and others1 is referred which holds that on conjoint reading of Sections

23, 23A and 25 of the Registration Act, if document is not presented

within a period of four months for registration, the same can be

accepted provided delay is bonafide and not intentional. In the facts of

the case before the Division Bench of this Court, it was held that there 1 2015(6)Bom.C.R. 190

sng 4 wp-9956.16withcas

was a delay in disposal of the Application made for adjudication before

the Collector. The Sub-Registrar observed that the decision of this Court

is confined to the facts of the case. The second reason given is that he

has received objections to the sale certificate from Sangli District Co-

operative Central Co-operative Bank Limited (the Applicant in Civil

Application No.628 of 2017) as well as Ninaidevi Sahakari Sakhar

Karkhana Ltd.(the Applicant in Civil Application No.629 of 2017) as

well as others. He observed that there is an entry of encumbrance in

7/12 extract.

5. The learned counsel appearing for the Petitioner heavily

relied upon the decision of the Division Bench of this Court in the case

of M/s. Nestor Builders & Developers Pvt. Ltd and Another and

submitted that the law laid down therein ought to have been applied by

the Sub-Registrar which holds that if there is a bonafide delay in

presentation of the document, the delay can be condoned. He invited

our attention to the various factual aspects by pointing out that an

Application for adjudication of the stamp duty payable on the sale

certificate dated 1st September 2014 was made on 29th September 2014

under Section 31 of the Maharashtra Stamp Act, 1958 (for short "the

Stamp Act"). On 18th April 2015, an order was made by the third

Respondent declining to make adjudication on the grounds stated

therein. The said order was challenged by the Petitioner by preferring

sng 5 wp-9956.16withcas

an Appeal on 5th May 2015 which was allowed by the second

Respondent by an order dated 30th June 2015. On the basis of the order

of the Appellate Authority, on 5 th August 2015, the adjudication was

made as regards the stamp duty payable on the sale certificate.

According to the case of the Petitioner, after making payment of the

stamp duty adjudicated upon, an attempt was made by the Petitioner to

make online registration of the sale certificate. However, the said

Application could not be processed. On 1st September 2015, an

Application was made by the Petitioner requesting for exclusion of the

time required for processing the adjudication of sale certificate. An

Application was made on 8th October 2015 by the Petitioner to the fifth

Respondent (Inspector General of Registration and Controller of

Stamps) seeking directions to the Sub-Registrar of Assurances for

registration of the sale certificate. Reliance is placed on the letter dated

16th October 2015 issued by the fourth Respondent - Sub-Registrar to

the Joint District Registrar seeking his guidance. The Petitioner is also

placing reliance on the direction issued by the fifth Respondent on 21 st

November 2015 and by the third Respondent on 3 rd December 2016

under which, according to the Petitioner, a direction was issued to

6. There is a reply filed by Mrs. Anuja Anand Narinrekar, In-

charge Collector of Stamps, Sangli. In the affidavit, it is stated that the

sng 6 wp-9956.16withcas

order of adjudication was passed on 5 th August 2015 and the

adjudicated amount of stamp duty was deposited by the Petitioner vide

challan dated 14th August 2015. On the basis of the said deposit, an

endorsement as contemplated by Sub-section (2) of Section 30 of the

Stamp Act has been made on the document. Reliance is placed on the

letter dated 30th December 2015 issued by the Sub-Registrar by which

attention of the Petitioner was invited to Rule 44 of the Maharashtra

Registration Rules, 1961 governing the transfer of Government land

allotted to a Sugar Factory. Reliance is also placed on the Circular dated

23rd August 2006.

7. The learned counsel appearing for the Petitioner in support

of the Petition relied upon a decision of the Division Bench of this Court

in the case of M/s. Nestor Builders & Developers Pvt. Ltd and

Another. His submission is that the Applicants in both the Civil

Applications have no locus. He pointed out that the Applicant in Civil

Application No.628 of 2017 has made incorrect statements. He pointed

out that at no stage, any objection was raised by the said Applicant

before the impugned order/communication was issued. He pointed out

that the first letter of objection is addressed by the Applicant in the said

Civil Application No.628 of 2017 on 18 th October 2016 to the Tahsildar.

He pointed out that even the Applicant in another Civil Application

No.629 of 2017 has no locus.

sng 7 wp-9956.16withcas

8. Relying upon several decisions of the Apex Court and this

Court, he would urge that the Authorities under the Registration Act

cannot make adjudication on any issue regarding title. The learned

AGP supported the impugned communication/order.

9. The learned counsel appearing for the Applicant in Civil

Application No.628 of 2017 invited our attention to the annexures to

the Civil Applications and the orders passed by the Debt Recovery

Tribunal, Pune. The learned counsel appearing for the Applicant in

Civil Application No.628 of 2017 accepted that when the relevant sale

certificate was issued, there was no restraint order from any Competent

Court or Competent Authority. He submitted that considering the

Circulars which are annexed to the affidavit-in-reply of the State

Government, there is every justification for the Registering Authorities

to have refused the registration of the document. His submission is that

the rights of the Applicant will be affected. More or less similar

submissions are made by the learned counsel appearing for the

Applicant in support of the Civil Application No.629 of 2017.

10. We have given careful consideration to the submissions.

The first ground on which the fourth Respondent has declined to

sng 8 wp-9956.16withcas

registration within the stipulated period. This issue is no longer res

integra in view of the decision in the case of M/s. Nestor Builders &

Developers Pvt. Ltd and Another. After considering the entire scheme

of Stamp Act and after considering the Sections 23, 23A and 25 thereof,

the Division Bench in the case of M/s. Nestor Builders & Developers

Pvt. Ltd and Another, held thus:

"11. Having examined the relevant provisions of the Registration Act and applying the above principles of law as laid down by the Supreme Court, we are of the considered opinion that the time taken by the Collector of Stamps for adjudication is required to be excluded by the respondents in accepting the said document for registration. It would thus be appropriate that in the facts of the present case the respondents are directed not to take into consideration the period from 11 May 2012 to 18 February 2013 which was spent in the adjudication of the said document and excluding the said period, register the petitioners' deed of conveyance."

(Underline supplied)

11. The fourth Respondent was bound by the said law laid

down by a Division Bench of this Court. In the present case, the date of

sale certificate is 1st September 2014. The order of the Appellate

Authority at Exhibit-C shows that the Application for adjudication under

Section 31 of the Stamp Act was made on 29 th September 2014. As

disclosed in the Petition, by an order dated 18 th April 2015, the said

Application was not entertained and that is the reason why a Statutory

sng 9 wp-9956.16withcas

Appeal under Sub-section (3) of section 32 of the Stamp Act was

preferred on 5th May 2015. The said Appeal was allowed by an order

dated 30th June 2015, a copy of which is annexed at Exhibit-C to the

Petition. On the basis of the direction issued by the Appellate Authority,

an order was made by the third Respondent on 5 th August 2015 making

adjudication of stamp duty payable on the sale certificate. As noted

earlier, in the affidavit-in-reply, these facts are not disputed. In fact, the

affidavit-in-reply states that on 14th August 2015, stamp duty was paid

and necessary endorsement was made on the sale certificate. The said

endorsement was made on 26th August 2015. Thus, from the date of the

Sale Certificate till 26th August 2015, there is a valid explanation for not

tendering the document for registration as is clear from the admitted

facts. Immediately on 1st September 2015, the Petitioner made an

Application to the Sub-Registrar requesting him to register the Sale

Certificate. By the letter dated 16th October 2015, the Sub-Registrar

informed the Petitioner that guidance was sought from the higher

officer and action will be taken after obtaining the guidance from the

higher officer. Thereafter, the communication dated 30 th December

2015 which is impugned in this Petition was issued.

12. Thus, there was a complete explanation for the delay in

lodging the Sale Certificate for registration and even on the basis of the

admitted facts, as reflected from the affidavit-in-reply, the said delay

sng 10 wp-9956.16withcas

can be said to be bonafide. Therefore, the first ground mentioned in

the letter dated 16th October 2015 does not survive.

13. In the impugned communication, it is observed that there

are encumbrances recorded on 7/12 extract in respect of the land

subject matter of sale certificate and there are objections raised by the

aforesaid Applicants in the Civil Applications and others. We may note

here that there was a Maharashtra amendment made in the form of

Section 22A of the Registration Act vide Act No.24 of 1938 read with 35

of 1958. Section 22A reads thus:

"22A. Documents registration of which is opposed to public policy.-- (1) The State Government may, by notification in the Official Gazette, declare that the registration of any document or class of document is opposed to public policy.

(2) Notwithstanding anything contained in this Act, the registering officer shall refuse to register any document to which a notification issued under sub- section (1) is applicable."

14. We may note here that a similar Rajasthan Amendment

incorporated was challenged before the Rajasthan High Court. The said

amendment was held to be unconstitutional and was struck down. The

said decision was affirmed by the Apex Court in the case of State of

Rajasthan and Others v. Basant Nahata2.

 2     (2005)12 SCC 77





  sng                                                  11               wp-9956.16withcas

15. As far as Section 22A introduced by the Maharashtra Act

No.24 of 1938 is concerned, by the Maharashtra Act No.10 of 2012

which came into force on 25 th May 2012, Section 22A has been deleted.

In clause (h) of Sub-Rule (1) of Rule 44 of the Maharashtra Registration

Rules, 1961, there was a provision made for giving effect to Section

22A. For the sake of completion, we may note here that by the

Notification dated 27th June 2006, Clause (e) was added to Sub-Rule

(1) of Rule 44 covering a transaction which is prohibited by any existing

Act of Central or State Government.

16. Though a submission was sought to be canvassed by the

learned counsel appearing for the Applicant in Civil Application No.628

of 2017 that the registration of document will be opposed to the public

policy, the said argument deserves to be discarded as Section 22A is no

longer on the Statute Book. Moreover, Sub-section (1) of Section 22A

clearly provides that only if a Notification published in the official

gazette declaring that registration of any document or class of

document is opposed to any public policy, the question of refusal of

registration of document will arise.

17. In short, the submissions canvassed by the learned counsel

appearing for the Applicants in the Civil Applications are based on the

sng 12 wp-9956.16withcas

issues regarding title to the property subject matter of sale certificate.

At this stage, we may make a useful reference to the decision of the

Apex Court in the case of Satya Pal Anand v. State of Madhya

Pradesh and others3, and in particular, what is held in Paragraph 41,

which reads thus:

"41. Section 35 of the Act does not confer a quasi- judicial power on the Registering Authority. The Registering Officer is expected to reassure that the document to be registered is accompanied by supporting documents. He is not expected to evaluate the title or irregularity in the document as such. The examination to be done by him is incidental, to ascertain that there is no violation of provisions of the 1908 Act. In Park View Enterprises, it has been observed that the function of the Registering Officer is purely administrative and not quasi-judicial. He cannot decide as to whether a document presented for registration is executed by person having title, as mentioned in the instrument. We agree with that exposition."

18. Coming back to the impugned communication, reliance

was placed on Clause (e) of Sub-Rule (1) of Rule 44 of the Maharashtra

Registration Rules, 2005. The Notification dated 27 th July 2006

published in the official gazette on 22 nd July 2006 incorporates Clause

(e) (which is in Marathi) and Clause (i) (which is in English). Clause

(i) reads thus:

"44(1) Before accepting any document for registration, a registering officer may not concern himself with its validity, but shall ascertain -

 3     (2016)10 SCC 767





  sng                                                  13                wp-9956.16withcas

                   (a)     .......
                   (b)     .......
                            (i) that,   if   the   transaction   which   is

intended by the document, is prohibited by any existing act of Central or State Government, then the true copy of requisite permission or No Objection Certificate from the Competent Authority under the said act, has been attached along with the document, and that, the document is not written in contradiction with any vital term or condition mentioned in that permission or No Objection Certificate."

19. On plain reading of Clause (i), we fail to understand how

the Sub-Registrar of Assurances could have invoked the said clause (i).

Sub-Rule (1) of Rule 44 of the said Rules of 1961 provides that before

accepting any document for registration, a Registering Officer may not

concern with himself with its validity but should ascertain various

factors which are set out in Clauses (a) to (i). Clause (i) will apply

when transaction covered by the document is prohibited by a Central or

State Statute. If it is prohibited, the Registering Officer will have to

ascertain whether requisite permission from the Competent Authority

under the relevant enactment has been obtained and has been attached

to the document. The Registering Officer will have to also ascertain

whether the document is contrary to any of the terms and conditions

mentioned in the No Objection Certificate granted by the Competent

Authority. In the present case, neither the State Government nor the

Applicants in the Civil Applications have shown any such statutory

prohibition.

sng 14 wp-9956.16withcas

20. The learned counsel appearing for the Applicants submitted

that a direction may be issued to the Sub-Registrar of Assurances to

take into consideration the objections raised by the Applicants.

21. As held by the Apex Court, the Registering Officer under

the Registration Act has no power to adjudicate upon the issue of title

to the property. As held by the Apex Court in the case of Satya Pal

Anand, the function of the Registering Officer is purely administrative

and not quasi judicial and he has no right to decide whether document

presented for registration is executed by a person having title as

mentioned in the instrument. Therefore, no such direction as sought by

the Applicants can be issued.

22. Therefore, the Petition must succeed. However, we must

note here that we have not made any adjudication on the issue of title

to the property subject matter of sale certificate or the legality of the

sale.

23. Hence, we pass the following order:

ORDER :

(a) The impugned order/communication dated 30th

December 2015 is hereby quashed and set

aside;

  sng                                                        15               wp-9956.16withcas




                  (b)          We accept the statement made by the learned

counsel appearing for the Petitioner that the

original sale certificate dated 1st September

2014 has been submitted in the office of the

fourth Respondent along with the letter dated

1st September 2015 and the said certificate is

not taken by the Petitioner;

(c) At this stage, the learned counsel appearing for

the Petitioner states that the original certificate

was returned to the Petitioner. We direct the

representative of the Petitioner to remain

present in the office of the fourth Respondent

on 10th April 2017 and produce original

certificate for registration.

(d) We direct the fourth Respondent to accept the

sale certificate produced by the Petitioner and

to register the same in accordance with the

Indian Registration Act, 1908 provided all other

requirements of law are satisfied by the

Petitioner;

  sng                                                     16               wp-9956.16withcas




                  (e)          We   reiterate   that   registration   of   the   said

document shall not be refused on the basis of

the grounds set out in the impugned

communication dated 30th December 2015

(Exhibit-J to the Petition);

(f) We make it clear that we have not made any

adjudication on the issue of title to the property

subject matter of sale certificate and, therefore,

all contentions raised by the Applicants in the

Civil Applications are kept open;