Ballyfabs International Limited ... vs The State Of West Bengal And Others
2022 Latest Caselaw 3073 Cal

                        In the High Court at Calcutta
                       Constitutional Writ Jurisdiction
                                Appellate Side

The Hon'ble Justice Sabyasachi Bhattacharyya

                             W.P.A. No. 7006 of 2020
                Ballyfabs International Limited and another
                                     Vs.
                    The State of West Bengal and others

For the petitioners      :      Mr. Rupak Ghosh
                                Mr. Pradip Kr. Sarawagi

For respondent no.4      :      Mr. Surajit Auddy,

Ms. Swapnalekha Auddy

For the State : Mr. Ayan Banerjee

Hearing concluded on : 17.05.2022

Judgment on : 07.06.2022

Sabyasachi Bhattacharyya, J:-

1. The brief, undisputed facts of the case are as follows:

2. The petitioners purchased the property in a public e-auction conducted

by the IDBI Bank under the provisions of the Securitization and

Reconstruction of Financial Assets and Enforcement of Security Interest

Act, 2002 (hereinafter referred to as "SARFAESI Act") for a consideration

of Rs.14,01,00,000/-.

3. In view of the Bank not being willing to execute a conveyance in the

format suggested by the petitioners, petitioner no.1 filed a suit bearing

CS No. 64 of 2018 for declaration and mandatory injunction to approve

of the draft conveyance forwarded by the petitioners. In the suit, the

Bank agreed to execute the conveyance and the learned Single Judge

taking up the suit and connected application directed execution of the

conveyance by the Registrar of Assurances.

4. Subsequently, the Registrar claimed that he was entitled to re-evaluate

the property. Upon hearing the Registrar, the Trial Judge declined to give

any further directions in the suit, since the Registrar was not a party

thereto.

5. The petitioners preferred an appeal from the said order. The matter was

ultimately referred on a question of law to a Division Bench of this court

on August 14, 2020, which observed that the primary question raised

regarding the stamp duty payable for such sale was not gone into and

the petitioners were left free to avail other remedies.

6. The writ petition was filed for a direction on the Registrar of Assurances

to accept the value mentioned in the sale certificate issued by the IDBI

Bank Limited (respondent no.4), that is, Rs. 14,01,00,000/- and to

assess the stamp duty and registration fee accordingly without initiating

a fresh enquiry for re-evaluation.

7. The writ petition was taken up for hearing and, vide judgment and order

dated February 19, 2021, was referred to a Larger Bench, to be

constituted by the Hon'ble the Chief Justice, on the following question of

law:

Whether a sale conducted by an Authorized Officer under the

SARFAESI Act, 2002 is an open market sale and is thus excluded

from the scrutiny contemplated in Section 47A of the Indian Stamp

Act, 1899 (as amended in West Bengal).

8. Final judgment in the writ petition was, however, reserved till the

decision of the Larger bench.

9. Subsequently, the Division Bench which was constituted accordingly,

answered the reference, vide judgment and order dated April 22, 2022, in

the following manner:

1. "The sale conducted by the authorized officer in exercise of

the powers conferred under Rule 8 of the Security Interest

(Enforcement) Rule, 2002 by public auction or by inviting

tenders from the public would be regarded as the sale in the

open market and the price so accepted shall be the price

which it would fetch if sold in the open market under Section

47A of the Stamp Act. The sale must be conducted by

making a wide publication at least in one newspaper widely

circulated in the particular city/town/district where the

property is situated.

2. The authorized officer shall not have any relation or

connection with the intending purchaser.

3. Let the writ petition be placed before the Single Bench having

determination for disposing of the writ petition in the light of

the answers given to the reference."

10. The sole question which arose for consideration in the writ petition was

whether the e-auction sale, in which the petitioners purchased the

property-in-question, was an open market sale within the purview of

Section 16B of the Indian Stamp Act, 1899 (as amended in West Bengal),

thus, exempting the instrument of such sale from assessment by the

registering officer under the Registration Act, 1908, under Section 47A of

the Indian Stamp Act (as amended in West Bengal).

11. In view of the Larger Bench having already answered the reference in the

manner as indicated above, the writ petition has to be decided in

consonance with and in the light of the said answer, since the question is

no longer res integra.

12. In order to avoid unnecessary repetition, the detailed rationes decidendi

of the judgments of the Division Bench and of this Court, are not being

reproduced.

13. Accordingly, W.P.A. No. 7006 of 2020 is disposed of with the following

directions:

A.) Respondent nos.2 and 3 are directed to accept the value

mentioned in the Sale Certificate issued by the respondent

no.4-Bank (being Annexure P-5 to the writ petition), that is,

Rs. 14,01,00,000/- (Rupees Fourteen Crore One Lakh only) to

be the "market value of the property" in respect of the

immovable property, as indicated in Annexure P-5, for the

purpose of assessing the Stamp Duty and Registration fee

thereon, without undertaking any further enquiry under Section

47A of the Indian Stamp Act (as amended in West Bengal);

B.) The e-Assessment slips, being Annexures P-11 and P-13 to the

writ petition, respectively for the amounts of Rs. 24,74,96,541/-

and Rs. 37,45,05,089/-, are hereby quashed, along with all

other consequential action;

C.) In terms of the Division Bench order dated April 22, 2022,

passed in the connected reference, the sale conducted by the

authorized officer in exercise of the powers conferred under

Rule 8 of the Security Interest (Enforcement) Rule, 2002 by

public auction or by inviting tenders from the public would be

regarded as the sale in the open market and the price so

accepted shall be the price which it would fetch if sold in the

open market under Section 47A of the Stamp Act. The sale

must be conducted by publication at least in one newspaper

widely circulated in the particular city/town/district where the

property is situated and the authorized officer shall not have

any relation or connection with the intending purchaser.

14. There will be no order as to costs.

15. Urgent certified copies of this order shall be supplied to the parties

applying for the same, upon due compliance of all requisite formalities.

( Sabyasachi Bhattacharyya, J. )