Digjam Limited vs The Collector And Additional ...
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Gujarat High Court

Digjam Limited vs The Collector And Additional ... on 17 April, 2026

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                             C/SCA/2327/2021                               JUDGMENT DATED: 17/04/2026

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                                     IN THE HIGH COURT OF GUJARAT AT AHMEDABAD

                                       R/SPECIAL CIVIL APPLICATION NO. 2327 of 2021


                       FOR APPROVAL AND SIGNATURE:


                       HONOURABLE MR. JUSTICE HEMANT M. PRACHCHHAK
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                                    Approved for Reporting                Yes           No

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                                                DIGJAM LIMITED
                                                     Versus
                            THE COLLECTOR AND ADDITIONAL SUPERINTENDENT OF STAMPS
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                       Appearance:
                       MR VIVEK B GUPTA FOR MR SANJAY R GUPTA(341) for the Petitioner(s)
                       No. 1
                       MS NIRALI SARDA AGP for the Respondent(s) No. 1
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                         CORAM:HONOURABLE MR. JUSTICE HEMANT M.
                               PRACHCHHAK

                                                      Date : 17/04/2026

                                                        JUDGMENT

1. RULE returnable forthwith. Ms. Nirali Sarda, learned AGP for the respondent waives service of notice of rule on behalf of the respondent. With the consent of the learned counsel for the respective parties, the present petition is taken up for final hearing today.

2. The present petition is filed by the petitioner under Article 226 of the Constitution of India read with the provisions of the Gujarat Stamp Act, 1958 challenging the impugned order dated 30.12.2016 passed by the respondent concerning levy of the

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stamp duty of Rs.1,36,46,243/- and later on affirmed by the Chief Controlling Revenue Authority, Gandhinagar vide order dated 10.08.2020 in Stamp Appeal No. 17 of 2017.

3. Brief facts giving rise to the present petition are that, as per the order dated 17.02.2016 passed by the Co-ordinate Bench of this Court, the scheme of amalgamation in respect of Digjam Limited with Digjam Textiles Limited, now known as Digjam Limited has sanctioned the scheme of amalgamation being conveyance so far as it relates to reconstruction or amalgamation of companies by virtue of section 394 of Companies Act, 1956 under Article 20(d) of Schedule-I to the Gujarat Stamp Act, 1958 (hereinafter referred to as 'Act'). That, the Office of the Superintendent of Stamps, Gandhinagar had issued an order of deficit stamp duty on 30.12.2016 wherein it is stated that Section 2(g) of the Act pertains to the transfer of ownership and in view of the order passed by this Court in the company petition, the case falls under the clause relating to transfer of ownership which is required to be stamped and according to the provision, they have issued the recovery notice and initiated proceedings against the present petitioner and by virtue of the order passed by this Court in the company petition, the company is transferred to the new company. Therefore, by virtue of this conveyance deed the necessary stamp duty is leviable along with the necessary cess and Rs.1,36,46,243/- is to be paid within 90 days and 25% of the said amount is to be deposited within 90 days failing which 15% interest along with

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the amount of penalty is to be borne by the present petitioner. That, the petitioner has already deposited an amount of Rs.34,11,561/- being 25% of the amount ordered by the respondent. Aggrieved by the said order, the petitioner preferred an appeal before the appellate authority under section 53(1) of the Act wherein the petitioner has stated and explained that the petitioner is not required to pay the amount of deficit stamp duty however, without considering the settled legal principles as enunciated by the Hon'ble Apex Court, the impugned order dated 10.08.2020 was passed by the Chief Controlling Revenue Authority, Gandhinagar.

4. Being aggrieved and dissatisfied with the impugned orders dated 30.12.2016 and 10.08.2020 passed by the respondent and the Chief Controlling Revenue Authority, Gandhinagar respectively, the petitioner has preferred the present petition.

5. Heard Mr. Vivek B. Gupta, learned counsel appearing on behalf of Mr. Sanjay Gupta, learned counsel for the petitioner and Ms. Nirali Sarda, learned AGP for the respondent.

6. Mr. Vivek B. Gupta, learned counsel for the petitioner has referred and relied upon the decision of the Hon'ble Apex Court in the case of Ghanashyam Mishra and Sons Private Limited Vs. Edelweiss Asset Reconstruction Company Limited and Ors. reported in 2021 (9) SCC 657 and has contended that once the resolution plan is approved by the

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Adjudicating Authority, after it is satisfied, that the resolution plan as approved by the CoC meets the requirements as referred to in sub-section (2) of section 30, it shall be binding on the corporate debtor and its employees, members, creditors, guarantors and other stakeholders. He has submitted that such a provision is necessitated since one of the dominant purposes of IBC is, revival of the corporate debtor and to make it a running concern and, therefore, the impugned action taken by the respondent is against the settled principles as enunciated by the Hon'ble Apex Court. Over and above the contentions raised in the memo of petition, the learned counsel has urged that the petition deserves to be allowed.

7. As against that, Ms. Sarda, learned AGP has opposed the present petition and submitted that there is no any infirmity or any illegality in the impugned orders passed by the concerned Authorities. She has submitted that section 3 of the Act specifies the instruments mentioned in Schedule I which are chargeable with duty and Article 20(d) of the Schedule I provides for conveyance relating to amalgamation of companies. Article 20(d) of Schedule I is reproduced below:

20 [(d) CONVEYANCE, [so [Subject to maximum twenty-five far as it relates to crores rupees] -

reconstruction or (i) an amount equal to [One per amalgamation of cent) of the aggregate amount companies by an order of comprising of the market value of the High Court under share issued or allotted in section 394 of the exchange of or otherwise, or the Companies Act, 1956. face value of such shares,

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whichever is higher and the amount of consideration, if any, paid for such amalgamation, or

(ii) an amount equal to [one percent] of the true market value of the immovable property situated in the State of Gujarat of the transferor company.

whichever is higher.

[Explanation 1- For the purpose of this Article, an agreements to sell an immovable property or an irrevocable power of attorney shall, in case of transfer of the possession of such property before, at the time of, or after the execution of such agreement or power of attorney, be deemed to be a conveyance and the stamp duty thereon shall be chargeable accordingly:

Provided that the provisions of section 32-A shall apply mutatis mutandis to such agreement or power of attorney as are applicable to a conveyance:

Provided further that where subsequently a conveyance is executed in pursuance of such agreement of sale, or an irrevocable power of Attorney, the stamp duty, if any, already paid and recovered on the agreement of sale or an irrevocable power of Attorney which is deemed to be a conveyance, shall be adjusted towards the total duty leviable on the conveyance.]

[Explanation II - For the purposes of this Article, the expression

premises means any land or building or part of a building including any flat, apartment, tenement, shop or warehouse therein and includes:-

(i) gardens, grounds and out houses, if any, appertaining to such building or part of a building, and

(ii) any fittings affixed to such building or part of a building for the more beneficial enjoyment thereof.]

[Explanation III-for the purpose of clause (d), the market value

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of share-

(a) in relation of the transferee company whose shares are listed and quoted for trading on a stock exchange, means the market value of share as on the appointed date mentioned in the scheme of amalgamation or when appointed date is not so fixed, the date of Order of the High Court,

(b) In relation to the transferee company, whose shares are not listed or listed but not quoted for trading on a stock exchange means the market value of the share issued or allotted with reference to the market value of share of the transferor company.

(c) Where the transferee company and transferor company, whose shares are not listed but not quoted for trading on stock exchange means the face value of the share issued or allotted with reference to the face value of share of the transferee company.]

She has submitted that the amount to 1% of aggregate amount comprising of market value of shares issued or allotted or face value, whichever is higher and amount of consideration; or amount equal to 1% of true market value of immovable property of transferor company, whichever is higher, would be applicable.

She has submitted that in present facts of the case, the value of shares and amount of consideration is amounting to Rs. 136,46,24,315/- whereas the true market value of the immovable property of the transferor company is amounting to Rs. 119,48,64,178/- and therefore, the total amount of shares and consideration, being higher, shall be considered for the purpose of levying stamp duty under Article 20(d).

7.1 She has submitted that the applicant had submitted

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details before this Court under the Companies Act, 1956 and filled up form no.1 with respect to details of immovable properties. She has submitted that as per the valuation report, the market value of immovable property of transferor company is Rs.105,30,47,400/- and the market value of the plant and machinery of the transferor company is Rs.14,18,16,778/-. Thus, the total market value of the immovable properties of transferor company is Rs.119,48,64,178/-.

7.2 She has submitted that as per the sanctioned scheme of amalgamation, the transferor company has 8,76,41,621 equity shares issued at value of Rs.10/-per share and Rs.5/- as premium per share thereby total value of equity shares is Rs.15/- issued at the ratio of 1:1. She has submitted that the transferor company is a listed company and on the appointed date i.e. on 30.6.2015, the price of share in National Stock Exchange was Rs.7.10/- whereas price of share in Bombay Stock Exchange was Rs.7.09/- and thus, for the purpose of computation, price of share before National Stock Exchange, being higher, as on appointed date but the Total value of share is Rs.15/- thus, the value of equity shares 8,76,41,621/-, issued at market price of Rs.15/- per share would be total Rs.131,46,24,315/-.

7.3 She has submitted that as per the sanctioned scheme of amalgamation, the shareholders of transferor company are issued convertible redeemable preferences shares 500000 8% at value of Rs.100/-at the ratio of 1:1 (against 1 share, 1 share 8%

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non convertible preference share). Hence the total value of 500000 8% non convertible redeemable preference share at Rs.100/- each would be total Rs.5,00,00,000/-. Thus the total value of equity shares and convertible redeemable preference shares is:

Rs.131,46,24,315/- + Rs.5,00,00,000/- = i.e. Rs.136,46,24,315/-

That, since the value of shares is higher than that of immovable property, as per Article 20(d), the stamp duty would be levied on the value of shares i.e. 1% of Rs.136,46,24,315/-which is Rs.1,36,46,243/-.

7.4 She has submitted that while computing the amount of share under Article 20(d), the face value along with amount of consideration shall be considered and in present case, the amount of premium on the share would be treated as amount of consideration. She has submitted that the selling price of share would include par value and premium and hence, for the purpose of computation, the total value of share be computed and not at face/par value. That, the premium shall be considered as part of consideration and hence, the stamp duty would be levied over the total value of share and consideration.

7.5 She has submitted that the petitioner has placed reliance upon the procedure initiated before National Company Law Tribunal. She has submitted that the petitioner company has been amalgamated by virtue of the sanctioned scheme of

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amalgamation by this Court on 17.02.2016 and therefore, the existing petitioner company stands merged with amalgamating company therefore, the proceedings initiated before the National Company Law Tribunal would not be applicable to present facts of case.

7.6 She has submitted that, in similar facts, this Court had passed judgment in Special Civil Application No. 14597 of 2019 dated 20.12.2019 holding that for the purpose of levy of stamp duty, share premium is required to be considered as part of consideration paid for the purpose of amalgamation and thus, the amount of premium is the amount of consideration for the purpose of computation. She has further submitted that the aforesaid decision of the Co-ordinate Bench of this Court was challenged before the Division Bench of this Court by way of Letters Patent Appeal No. 125 of 2020 whereby the findings of the learned Single Judge was reversed and thereafter, the order passed by the Division Bench of this Court was challenged by the State Authority before the Hon'ble Supreme Court by filing Special Leave Petition which is pending before the Hon'ble Supreme Court. Therefore, in view of the above, she has urged that appropriate orders may be passed.

8. I have heard the learned counsel for the respective parties and perused the materials placed on record. I have also considered the impugned orders passed by the concerned authorities. Considering the fact that the decision of the Hon'ble

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Apex Court in the case of Ghanashyam Mishra and Sons Private Limited (supra) was reaffirmed by the Hon'ble Apex Court in the recent case of Ujaas Energy Ltd. Vs. West Bengal Power Development Corporation Ltd. reported in 2026 AIR (SC)-0-1541 wherein paragraph 12 of the judgment reads as under:

"102.1. That once a resolution plan is duly approved by the adjudicating authority Under Sub-section (1) of Section 31, the claims as provided in the resolution plan shall stand frozen and will be binding on the corporate debtor and its employees, members, creditors, including the Central Government, any State Government or any local authority, guarantors and other stakeholders. On the date of approval of the resolution plan by the adjudicating authority, all such claims, which are not a part of resolution plan, shall stand extinguished and no person will be entitled to initiate or continue any proceedings in respect to a claim, which is not part of the resolution plan."

Under such circumstances, the recovery proceedings initiated by the respondent authority for the deficit stamp duty as considered by the respondent is affirmed by the said judgment and therefore, the contention of the present petitioner that the petitioner being the transferee company and after the order of amalgamation was passed by this Court in company petition, the petitioner was required to allot equity shares of Rs.10 each at a premium of Rs.5 per shares and 5,00,000 non-convertible redeemable preference shares of Rs.100 each at par in the ratio of 1:1 to the shareholders of erstwhile Digjam Limited the transferor company in terms of paragraph eight of the said scheme of amalgamation. Therefore, it is required to be asserted

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that the respondent authority has considered the value of immovable property much lower than the value of the allotted equity and preference shares and without considering and properly appreciating the said facts and assigning any cogent reasons, the respondent authority passed the impugned order on 30.12.2016 by determining the market value of the immovable properties determined at Rs.119,48,64,178/- which was transferred in pursuance to the scheme and the equity shares of Rs.10 and 8% non convertible redeemable preference shares of Rs.100 determined at Rs.136,46,24,315/-. Subsequently, the respondent authority ordered to recover the amount of Rs.1,36,46,243/- which is absolutely erroneous and against the settled principles of law as enunciated by the Hon'ble Apex Court.

8.1 It appears that the respondent authorities have not raised any claim before this Court as per the provisions of The Insolvency and Bankruptcy Code, 2016. The levy of the stamp duty passed by the respondent is not even valid in the eye of law and therefore, the contention raised by the petitioner is required to be considered in light of the decision of the Hon'ble Apex Court and the respondent authorities have not raised any claim with regard to the deficit stamp duty at the time of the order passed by this Court in proceedings of amalgamation. Therefore, under such circumstances, the contention raised by Ms.Sarda, learned AGP that whether the petitioner is liable to pay deficit stamp duty as defined under Section 2(1) of the Gujarat Stamp

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Act, considered to be an instrument, even the contention with regard to paragraph 14 of the affidavit in reply that the amount of shares under article 20(d), the face value along with the amount of consideration shall be considered and in the present case, the amount of premium over the share would be treated as an amount of consideration and therefore, the recovery of the deficit stamp duty is justifiable and is not even illegal is hereby denied and is not tenable in view of the decision of the Hon'ble Apex Court in the case of Ghanashyam Mishra and Sons Private Limited (supra) which was further reiterated and reaffirmed in the recent decision of the Hon'ble Apex Court in the case of Ujaas Energy Ltd(supra).

9. Considering the facts and circumstances of the case and the submissions made by learned counsel for the respective parties and the aforesaid decisions of the Hon'ble Supreme Court, the petition deserves to be allowed and the impugned orders deserve to be quashed and set aside.

10. In the result, the petition is hereby allowed. The impugned orders dated 30.12.2016 and 10.08.2020 passed by the respondent and the Chief Controlling Revenue Authority, Gandhinagar respectively are hereby quashed and set aside. Rule is made absolute.

(HEMANT M. PRACHCHHAK,J) ANUSRI