[Cites 19, Cited by 0]
Bombay High Court
Schaeffler India Ltd vs Chief Controlling Revenue Authority ... on 18 February, 2026
2026:BHC-AS:8547-DB
WP-7496-2023.doc
IN THE HIGH COURT OF JUDICATURE AT BOMBAY
CIVIL APPELLATE JURISDICTION
WRIT PETITION NO. 7496 OF 2023
Schaeffler India Ltd. ]
(Formerly FAG Bearings India Ltd. ) ]
A company incorporated under the ]
Companies Act, 1956, having its Registered ]
office at 15th Floor, ASTP Amar Sadanand ]
Tech Park Plot No.3, Baner, Pune-411045. ] ...Petitioner
Versus
1) Chief Controlling Revenue Authority, ]
Pune, Maharashtra, having his office at ]
the office of the Inspector General of ]
Registration & Controller of Stamps, ]
Pune, New Administration Building, ]
Ground Floor, Opp. Council Hall, Pune- ]
411 001 ]
2) Collector of Stamps (Enforcement-I) ]
Mumbai, having his office at General ]
Stamp Office, Ground floor, Old Custom ]
House, Shahid Bhagat Singh Road, Fort, ]
Mumbai 400 001 ]
3) State of Maharashtra ]
through the ]
Additional Government Pleader (A.S.) ]
High Court, Bombay, having office at ]
PWD Building, Ground floor, ]
Dr. Kane Marg, Mumbai 400 032 ] ...Respondents
Mr. Nikhil Sakhardande a/w Mr. Dhaval Shethia, Ms. Nafisa
Khandeparkar, Ms. Mrudula Dixit i/b AZB & Partners, for the Petitioner.
Mr. O. A. Chandurkar, Addl GP a/w Ms. Tanu Bhatia, AGP, for the State.
CORAM : SHARMILA U. DESHMUKH
RESERVED ON : JANUARY 30th,2026
PRONOUNCED ON : FEBRUARY 18th, 2026
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Arya Chavan 1/17
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JUDGMENT:
1. Rule. With consent, Rule made returnable forthwith and taken up
for final disposal.
2. Vide judgment dated 20th January, 2026, this Court had allowed
the Petition setting aside the impugned order dated 25 th March, 2019
and 12th September, 2022. Subsequently, an Interim Application was
moved seeking expunging of paragraphs 7, 13, 20, and 21 of the
judgment dated 20th January, 2026. The paragraphs sought to be
expunged recorded the submissions of Mr. Sakhardande, learned senior
advocate for the Petitioner that the National Company Law Tribunal,
Chennai (for short 'NLCT, Chennai') order was lodged for adjudication in
Chennai and stamp duty has been accordingly paid in Chennai and the
findings of this Court on the said submissions.
3. This Court in earlier round of litigation had supported its findings
by taking into consideration that the adjudicating authorities in
Maharashtra cannot assess the stamp duty leviable on the NCLT,
Chennai order as necessary stamp duty on the sanctioned order of NCLT
Chennai Bench had already been paid. Though Mr. Sakhardande would
submit that the said paragraphs are severable from the rest of the
judgment, after hearing Mr. Sakhardande and learned AGP, this Court
thought it fit to recall the order of 20 th January, 2026 and hear the
matter afresh. Accordingly, the order of 20 th January, 2026 was recalled
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and matter was heard afresh.
FACTUAL MATRIX:
4. Briefly stated the facts of the case are that by the impugned
orders dated 12th September, 2022 and 25th March, 2019, the
Respondent Nos 1 and 2 had assessed the stamp duty of Rs. 50,00,000/-
on the instrument lodged for adjudication, which was the order of
National Company Law Tribunal, Mumbai Bench (for short "NCLT,
Mumbai") dated 8th October, 2018 sanctioning a composite scheme of
amalgamation of INA Bearings India Private Limited (for short "INA
Bearing") and LuK India Private Limited (for short "LuK India") with the
Petitioner Company under the provisions of Section 230 to 232 of the
Companies Act, 2013.
5. The scheme of amalgamation proposed the transfer of entire
business of LuK India and INA Bearings to the Petitioner as a 'going
concern", in consideration whereof the Petitioner was to issue equity
shares to the shareholders of INA Bearings and LuK India priced at INR
5,853 per share. As LuK India was based in Hosur, Tamil Nadu, Company
Petition came to be filed before NCLT, Chennai Bench, which had the
jurisdiction to sanction the scheme qua LuK India. NCLT, Chennai Bench
sanctioned the scheme vide order dated 13 th June, 2018. The Petitioner
and INA Bearings being located in Maharashtra filed similar Company
Petition before NCLT, Mumbai Bench, which sanctioned the scheme vide
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order dated 8th October, 2018. The order of 8 th October, 2018 of the
NCLT, Mumbai bench directed lodging of the certified copy of the order
alongwith the copy of the Scheme for adjudication.
6. In pursuance thereof, the Petitioner lodged the order of sanction
dated 8th October, 2018 for adjudication on 27 th November, 2018
accompanied by an affidavit of the Company Secretary of the Petitioner
setting out the necessary details of the sanctioned scheme, including
the shares allotted and the share price along with all supporting
documents. An interim order was passed on 19 th January, 2019 for
payment of stamp duty of Rs. 50,00,000/- and the final order was passed
on 25th March, 2019 holding that the scheme consists of two different
transactions and stamp duty was to be paid separately. The order relied
upon the stamp duty notification dated 6 th May, 2002, which capped the
maximum duty payable at Rs. 25,00,00,000/- and accordingly, the stamp
duty was adjudicated at Rs. 50,00,00,000/ considering the instrument to
comprise of two different transactions. Being aggrieved by the order,
the Petitioner filed an appeal before the Respondent No. 1 under
Section 53 (1A) of the Maharashtra Stamp Act, 1958 (for short "Stamp
Act, 1958") and the impugned order dated 25 th March, 2022 confirmed
the Respondent No. 2's order dated 25 th March, 2019. Hence, the
present petition.
SUBMISSIONS:
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7. Mr. Sakhardande would submit that Section 3 of the Stamp Act,
1958 contemplates payment of stamp duty on instrument and not the
underlying transaction, which instrument in the present case is the
order of NCLT Mumbai and not the scheme of amalgamation. He
submits that the order of NCLT, Mumbai sanctioned one composite
scheme of amalgamation and while doing so observed about the
consideration payable to the share holders of both the transferor
companies. He submits that the assessment of stamp duty on two
underlying transactions of amalgamation would amount to the scheme
of amalgamation being charged with stamp duty and not the
instrument.
8. He submits that the issue is no longer res integra and stands
decided in Chief Controlling Revenue Authority, Pune And Another
vs Reliance Industries Limited, Mumbai And Another 1. He submits
that the decision holds that the scheme of Stamp Act, 1958 is based on
chargeability of instrument and not on transactions and it is immaterial
whether it is pertaining to one and same transaction. He submits that
applying the principle of law laid down in the said decision to the
present case, it is immaterial whether the order of NCLT, Mumbai
pertains to one transaction or different transactions, even accepting
without prejudice, the contention that NCLT, Mumbai while passing the
order has considered the consideration payable to the second
1 2016 SCC Onl Bom 1428
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transferor company LuK India Private Limited (for short "LuK India"). He
submits that the decision of the Gujarat High Court in the case of
Ambuja Cement Limited vs Chief Controlling Revenue Authority 2
covers the issue in hand and even if the same is not binding has
persuasive value. He submits that the Gujarat High Court in a detailed
decision has held that treating the transaction as a distinct transaction
and demanding separate stamp duty is in conflict with the true import
and meaning of Section 5 of Stamp Act, 1958. He submits that in the
present case, it is a precise application of Section 5 of the Stamp Act,
1958 which has led to the stamp duty being levied on the underlying
transactions as two distinct transactions ignoring settled principle of
law that it is the instrument which is chargeable.
9. Per contra, learned AGP has drawn attention of this Court to
Section 5 of the Stamp Act, 1958 as well as order of NCLT, Mumbai to
contend that NCLT, Mumbai had considered the composite scheme
which included the amalgamation of INA Bearing with the Petitioner
company as well as the amalgamation of LuK India with the Petitioner
company, and therefore, the same constituted two different
transactions. He submits that having accepted that the order of NCLT,
Chennai was not lodged for adjudication at Chennai, and no stamp duty
has been paid in Chennai, the impugned order rightly holds that there is
no payment of stamp duty on the merging of second transferor
2 C/SR/1/2020 decided on 10/02/2023 by Gujarat High Court
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company. He has taken this Court through the provisions of Section 2(g)
(iv) of the Stamp Act, 1958 to contend that by reason of order of NCLT
Mumbai, the order of NCLT, Chennai has been brought in Maharashtra
State and order of sanction by NCLT, Mumbai is based on order of NCLT,
Chennai.
10. Upon query by this Court as to whether in such event, if the stamp
duty would have been paid on the order of NCLT, Chennai, the Petitioner
herein would be entitled to rebate under Section 19 of Stamp Act, 1958,
learned AGP submits that Section 19 would apply and the Petitioners
would be entitled for rebate. He submits that the Petitioner's registered
office is in Maharashtra and as the implementation of the scheme is in
Maharashtra, it would give jurisdiction to the Maharashtra stmap
authorities to levy stamp duty on NCLT, Chennai order.
11. In rejoinder, Mr. Sakhardande would submit that Section 232 of the
Companies Act, 2013 permits amalgamation of multiple companies and
Mumbai authorities would not have jurisdiction to assess stamp duty on
NCLT, Chennai order.
REASONS AND ANALYSIS:
12. The core issue which arises for consideration is as regards
applicability of Section 5 of the Stamp Act, 1958 to the order of NCLT
sanctioning the scheme of amalgamation under the statutory provisions
of Section 230 to 232 of the Companies Act, 2013. Section 232 of the
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Companies Act, 2013 governs the merger and amalgamation of
company and permits compromise or arrangement which would involve
merger or amalgamation of any two or more companies.
13. Section 2(g)(iv) of Stamp Act, 1958 provides that the order of NCLT
passed under Section 230 to 234 of the Companies Act, 2013 is
conveyance by which property is transferred. Section 3 of the Stamp
Act,1958 specifies the instruments chargeable with the amount of duty
indicated in Schedule I. Section 2(l) defines instrument to include every
document by which any right or liability is or purports to be created,
transferred, limited, extended, extinguished or recorded. Article 25 (da)
of Schedule I of the Stamp Act, 1958 governs the stamp duty payable on
the order of National Company Law Tribunal passed under Section 230
to 234 of the Companies Act, 2013 in respect of the amalgamation,
merger, demerger, arrangement or reconstruction of companies. Article
25(da) makes a mention of order of NCLT in respect of amalgamation,
mergers etc. Conjoint reading of Section 2(g)(iv) with Article 25(da)
gives a clear indication that the statutory provisions of Stamp Act, 1958
recognizes that it is the order of NCLT, which is chargeable with duty.
14. The Respondent No. 1 has observed that the assessment has been
done by the Respondent No 2 by considering that in present case, two
different transferor companies had filed petition before NCLT, Mumbai,
however the Tribunal in both the Petitions has passed common order
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and as there is amalgamation of the Petitioner with two transferor
companies, the same constitutes separate and distinct transactions
under Section 5 of Stamp Act, 1958, which was correct application. It
holds that even if the order of NCLT, Mumbai is one order, by the
scheme of amalgamation, two different companies are amalgamated
with the Petitioner Company and even if for technical reasons or to
restrict the arguments one order is passed, the assessment is required
to be done by applying Section 5 of the Stamp Act, 1958.
15. The impugned order is flawed as there is factual error in as much
as it proceeds on the basis that there were two company petitions filed
by NCLT, Mumbai and common order was passed in separate company
petitions for technical reason and for restricting arguments. It
erroneously holds that as per the scheme of amalgamation there are
two different transferor companies amalgamating with the Petitioner
company and constitutes two different transactions. The impugned
order is also legally unsustainable as it assesses the stamp duty payable
on the underlying transaction and not the order of NCLT, Mumbai which
is the instrument to be assessed for purpose of stamp duty.
16. The proposed scheme was a composite scheme of amalgamation
of two companies i.e. INA Bearings and LuK India with the Petitioner
company. As NCLT, Mumbai had no jurisdiction over LuK India which was
situated within the jurisdiction of NCLT, Chennai Bench, there were two
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petitions filed seeking sanction: one with NCLT, Mumbai which had
jurisdiction over INA Bearings and the Petitioner Company and the other
application was filed with NCLT, Chennai having jurisdiction over LuK
India. The sanction was sought from NCLT, Mumbai and Chennai Bench
to the same composite scheme. NCLT, Mumbai noted that similar
application was filed with NCLT, Chennai in respect of LuK India which
has been sanctioned on 13 th June, 2018. NCLT, Mumbai Bench
considered the arrangement proposed by the scheme and opined that
the scheme of merger by absorption appears to be fair and reasonable.
In clause (a) of paragraph 9 of order dated 8 th October, 2018, NCLT,
Mumbai directed that all assets and liabilities of the 1 st Transferor
Company i.e. INA Bearing shall be transferred to and become the
liabilities and duties of the transferee company. In clause (c) of
paragraph 9, NCLT, Mumbai ordered issuance of shares in the transferee
company to the share holders of INA Bearings and LuK India. The order
of NCLT, Chennai Bench dated 13 th June, 2018 notes that under the
proposed scheme, the Petitioner Company is to issue and allot the
shares to shareholders of LuK India, which was also noted in the order
of NCLT, Mumbai Bench.
17. Learned AGP would support the impugned order by contending
that the NCLT, Chennai order has been brought in Mumbai by reason of
the observations in NCLT, Mumbai order as regards the consideration
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and transfer of shares to shareholders of LuK India. The impugned
order does not record any such finding which proceeds on an erroneous
basis that two petitions were filed in NCLT, Mumbai and common order
was passed. What is lodged for adjudication is the NCLT, Mumbai order
and it is the order of sanction of NCLT, Mumbai which constitutes the
instrument for purpose of assessment of stamp duty. It is the NCLT,
Mumbai order which originated in Mumbai and was lodged for
adjudication.
18. In Chief Controlling Revenue Authority, Pune And Another vs
Reliance Industries Limited, Mumbai And Another (supra), the
Hon'ble Full Bench was considering a similar situation where by order of
Gujarat High Court and Bombay High Court, the same scheme of
amalgamation came to be sanctioned. The order from both the High
Courts as one of the companies was situated within the jurisdiction of
Gujarat State, stamp duty was paid in the State of Gujarat on the order
passed by the High Court of Gujarat and the order of Bombay High
Court was lodged for adjudication. Considering that the sum of Rs.
10,00,00,000/- was already paid in the State of Gujarat on the order
passed by Gujarat High Court, the Company sought
remission/deduction/set off in the payment of stamp duty to the extent
of Rs. 10,00,00,000/- which came to be rejected. Before the Hon'ble full
bench one of the issues which was referred was as under :
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"(4) Whether for the purpose of section 19 of the Act the
scheme/compromise/arrangement between the two
Companies must be constructed as document executed
outside the state on which the stamp duty is legally
levied, demanded and paid in another State ?"
19. The Hon'ble full bench held in paragraph 21 and 31 as
under :
"21. Although the two orders of two different high Courts are
pertaining to same scheme they are independently different
instruments and can not be said to be same document especially
when the two orders of different high Courts are upon two
different petitions by two different companies. When the
scheme of the said Act is based on chargeability on instrument
and not on transactions, it is immaterial whether it is pertaining
to one and the same transaction. The duty is attracted on the
instrument and not on transaction.
31. Therefore the contentions of the respondents that the
Scheme of Amalgamation would be an instrument within the
meaning of Section 2(l) of ths aid Act id not legally sustainable.
The Scheme of Amalgamation by itself cannot and does not
result in transferring the property. It is the order of the Court
that sanctions such a Scheme of Amalgamation results in
transferring the property and it is therefore this Order alone
would be an 'instrument' as defined by the said Act on which
stamp duty is chargeable. Therefore the contentions of the
respondents that the parties were liable to pay stamp duty on
the sanctioned Scheme read with the two Orders is not correct
and cannot be accepted."
20. The Hon'ble Full Bench was considering an identical fact situation
as the rebate was sought on the ground that the order of Gujarat High
Court is to be construed as instrument brought in this State. The
Hon'ble High Court negated the contention and held that even if there
are two orders pertaining to the same scheme, in essence, the orders
are independent different instruments and cannot be said to be same
document when the two orders are based on two different petitions by
two different companies. It held that it is immaterial whether it is
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pertaining to one and same transaction as the duty is attracted on the
instrument and not the transaction. In effect, it was held that it is not
permissible to look into the underlying transaction for assessing the
stamp duty.
21. The issue no. 4 was answered as under:
"Basically a scheme/comprises/arrangement between two
companies is never a document chargeable to stamp duty
whether such document is executed in the state or outside
the state of Maharashtra. Moreover, in view of the
conclusions above Section 19 of the Stamp Act, 1958 in
any event, has no application whatsoever."
22. The said decision is sufficient answer to the contention raised by
learned AGP. The impugned order by applying Section 5 of Stamp Act,
1958 seeks to assess the underlying transaction which is impermissible
as it is the order of NCLT, Mumbai which constitutes the instrument.
Applying the enunciation of law by Hon'ble Full Bench, it is immaterial
whether the scheme of amalgamation pertains to amalgamation of one
company or of two companies in one company. It is the order of sanction
of scheme which constitutes conveyance. Further, the consequence of
accepting the contention that order of NCLT, Chennai is instrument
executed outside the State and brought within the State would result in
applying Section 19 of Stamp Act, 1958, a course specifically negated by
the Hon'ble Full Bench.
23. The provisions of Section 5 of the Stamp Act, 1958 applies, where
one instrument relates to several distinct matters of transactions which
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cannot be blended into one or cannot be conceived as merely parts of
one aggregate. It applies where the instrument comprises of several
distinct matters, though may be of same category and where Section 5
applies, each of the instruments dealing with each of the matter would
be chargeable under the Stamp Act, 1958 by the aggregate amount of
stamp duty in respect of all such instruments. The application of Section
5 requires going into the underlying transaction which cannot be done
in respect of order of sanction of scheme.
24. The composite scheme was considered by NCLT, Mumbai Bench for
ascertaining whether the same was fair and reasonable. In that context,
the consideration in respect of the share holders of the second
transferrer company i.e LuK India was noted. A similar exercise was
carried out by NCLT, Chennai which also noted the consideration of
issuance of shares to share holders of LuK India by the Petitioner
Company. The observations of NCLT, Mumbai as regards the
consideration in respect of amalgamation of LuK India does not
constitute a distinct transaction within the meaning of Section 5 of the
Stamp Act, 1958 or amounts to bringing the order of NCLT, Chennai in
this State.
25. In Ambuja Cements Limited vs Chief Controlling Revenue
Authority (supra), the Gujarat High Court was considering the stamp
references made by the Chief Controlling Revenue Authority of Gujarat
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State in respect of stamp duty payable on scheme of amalgamation.
One of questions considered was as under:
"46. Assuming that an order of the High Court under
Section 232 of Companies Act, 1956 sanctioning a
single composite scheme of arrangement, albeit
between multiple companies, is an instrument
comprising or relating to several distinct matters or
distinct transactions, whether as per Article 20(d) of
Schedule I to the Stamp Duty Act, stamp duty
chargeable on such an order would not be calculated
on the aggregate of amount pertaining to each of such
distinct matters and is subjected to a maximum cap of
Rs 25 Crores?"
26. The Hon'ble Full Bench considered the various provisions including
Section 5 of the Stamp Act. It noted the decision of the Hon'ble Apex
Court in The Member, Board of Revenue vs Arthus Paul Benthall3,
where the Hon'ble Apex Court had held that if a number of persons join
in executing one instrument, and there is community of interest
between them in the subject matter comprised therein, it will be
chargeable with a single duty. It held in paragraph 112 as under:
"112. As such treating the said transaction as distinct
transaction and thereby demand separate stamp duty
appears to be in conflict with the true import and meaning of
Section 5 of the Stamp Act. A conjoint reading of the
principals enunciated in the afore-mentioned cases by the
Hon'ble Apex Court, we are of the opinion that neither the
scheme of amalgamation or reconstruction sanction by
Company Court in exercise of the powers vested under
Section 394 of the Companies Act, 1956 or Section 232 (2013
Act) can be brought within the sweep of Section 5. if such
interpretation were to be accepted, it would run counter to
the literal meaning of fiscal statute and as such reference will
have to be answered against the Revenue and in favour of the
Subject."
3 AIR 1956 SC 35
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27. This Court is in agreement with the decision of the Gujarat High
Court as regards the non applicability of Section 5 of the Stamp
Act,1958 to the order of sanction to the scheme of amalgamation.
28. Even accepting that the order of sanction of scheme of NCLT
Chennai bench has not been lodged for adjudication in Chennai and
there is no payment of stamp duty, the stamp authorities in Mumbai
would not have the jurisdiction to assess the stamp duty on the NCLT,
Chennai order as it is not an order which is originating in Maharashtra.
The provisions of Section 19 envisages an instrument executed outside
State in respect of the property in the State and subsequently received
in the State of Maharashtra. As the order of the NCLT, Chennai bench
has not been received in Maharashtra, the mere reference to the same
in the NCLT Mumbai order would not amount to that instrument of NCLT
Chennai being brought in the State of Maharashtra. Whether the duty
has been paid on the NCLT Chennai order is an issue to be considered by
the concerned authorities in Chennai and the same is immaterial for the
purpose of assessing the stamp duty on the order of NCLT, Mumbai
bench.
29. The impugned order assessing the stamp duty on the transactions
of merger with INA Bearings and LuK India by considering the two
transactions as separate and distinct transactions is clearly erroneous in
view of the settled legal position. The impugned order seeks to levy the
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stamp duty on the transaction by segregating the transactions into two
different transactions : one of amalgamation of INA Bearings with
Petitioner and other of LuK India with the Petitioner. As held by the
Hon'ble Gujarat High Court in Ambuja Cements Limited vs Chief
Controlling Revenue Authority (supra), such reconstruction cannot be
inter se segregated.
30. In light of the above, the impugned orders dated 25 th March, 2019
and 12th September, 2022 are hereby quashed and set aside. The
Petitioners are liable to pay stamp duty on the instrument being the
order of National Company Law Tribunal, Mumbai dated 8 th October,
2018 under the provisions of Article 25 (da) of the Stamp Act, 1958 with
the cap of Rs. 25,00,00,000/-. As the amount has already been paid
under protest by the Petitioner, the Respondent Nos. 1 and 2 to refund
the excess stamp duty of Rs. 25,00,00,000/- within a period of 8 weeks
from the date of uploading of this order on the website. In the event,
the amount is not refunded within the period of 8 weeks, the same to
carry interest at the rate of 6%p.a. till payment of realization.
31. The Petition is allowed in the above terms. Rule is made absolute.
32. In view of the same, nothing survives for consideration in the
Interim Application. The Interim Applications stands disposed of.
(SHARMILA U. DESHMUKH, J.) [
