Madhya Pradesh High Court
Encore Asset Reconstruction Company ... vs The State Of Madhya Pradesh on 17 June, 2025
Author: Vivek Rusia
Bench: Vivek Rusia
NEUTRAL CITATION NO. 2025:MPHC-IND:14383
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IN THE HIGH COURT OF MADHYA PRADESH
AT INDORE
BEFORE
HON'BLE SHRI JUSTICE VIVEK RUSIA
&
HON'BLE SHRI JUSTICE BINOD KUMAR DWIVEDI
ON THE 17th OF JUNE, 2025
WRIT PETITION No. 10355 of 2019
ENCORE ASSET RECONSTRUCTION COMPANY PVT. LTD. THR.
SHRI TARUN KUMAR
Versus
THE STATE OF MADHYA PRADESH AND OTHERS
Appearance:
Shri Sumeet Samvatsar - Advocate for the petitioner.
Shri Bhuwan Gautam - Government Advocate for the
respondent/State.
ORDER
Per: Justice Vivek Rusia
Petitioner has filed this present petition seeking direction to the
respondent to refund the Stamp Duty and excess Registration Fee paid in
respect of registration of the Assignment Agreement dated 27.12.2018
executed by the Allahabad Bank.
2. Facts of the case in brief:
2.1 Petitioner is a company incorporated and registered under the
Companies Act, 1956. It is also registered as an asset reconstruction
company under Section 3 of the Securitisation and Reconstruction of
Financial Assets and Enforcement of Security Interest Act, 2002 (hereinafter
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referred to as the 'SARFAESI Act') with the Reserve Bank of India (RBI).
The Allahabad Bank assigned certain financial assets in favour of the
petitioner in its capacity as the trustee of EARC - BANK - 011 - Trust by
way of Assignment Agreement dated 27.12.2018 executed under the
provisions of Section 5 of the SARFAESI Act. The said agreement was
present before the Sub Registrar Office 3 - Indore for registration. According
to the petitioner, as per Section 5 of the SARFAESI Act the petitioner
company is not liable to pay the Stamp Duty as there is only an acquisition
of right or interest in the financial asset of the bank. The petitioner was
entitled to the benefit of Section 5(1A) of the SARFAESI Act but was
compelled to pay Stamp Duty to the tune of Rs. 36,89,325/- and Registration
Fee of Rs. 6,90,400/-. Hence, this petition has been filed seeking direction
for refund of the Stamp Duty and Registration Fee.
2.2 After notice, the respondents have filed their reply raising an
objection about the maintainability of the petition due to availability of
alternate remedy of filing an application for refund under Section 31 the
Indian Stamp Act, 1899 (hereinafter referred to as the 'Act of 1899') before
the competent authority. The petitioner has voluntarily paid the Stamp Duty
without raising any protest or objection therefore, it has acquiescence to the
payment of Stamp Duty and has waived off his right to challenge the same or
seek refund of the Stamp Duty. The petitioner has no right to claim the
refund of duty paid for the purpose of municipal duty, Upkar, Panchayat
duty etc. which are levied and utilised for specific purposes provided under
the relevant Acts.
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3. Shri Samvatsar, learned counsel for the petitioner submits that this
petition has been admitted for final hearing and during the pendency of this
petition, the limitation for filing an application under Section 31 of the Act
of 1899 (i.e. one month) has expired. Therefore, the petitioner be not
relegated to the alternate remedy to claim the refund. Pure question of law is
involved in this case regard applicability of Section 5(1A) of the SARFAESI
Act under which the petitioner is not required to pay the Stamp Duty and
Registration fees. In support of this contentions, Shri Samvatsar, learned
counsel has placed on the judgment passed by the Division Bench of this
Court in case of M/s Satyam Cineplexes Ltd. vs. State of Madhya Pradesh &
Ors. reported in 2021 SCC OnLine MP 2228. The relevant paragraph 15 is
reproduced hereunder for ready reference :
''15. Before dealing with rival contentions on merits, it is
apposite to decide the question of availability of alternative
remedy. Indisputably, an alternative remedy is available to the
petitioner against the impugned order. However, it is noteworthy
that this petition despite availability of that remedy was
entertained by this Court way back on 28.07.2014. The question
involved in the present matter is legal in nature and no factual
inquiry is required. In our opinion, after almost six years from the
date present petition was entertained, it will not be proper to
relegate the petitioner to avail the alternative remedy. We find
support in our view from the judgment of this Court reported in
1995 MPLJ 969 (Chambal Ghati Shiksha Prasar Samiti vs. State
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of M.P.) . After considering the judgment of Supreme Court
reported in 1970 (2) SCC 355 (Hriday Narain vs. ITO Bareilly) ,
this Court came to hold as under:
"There is no dispute with the proposition that when an
alternate remedy is available then normally aggrieved
party should be relegated to his ordinary remedy
provided under the statute. But there is another well
known principle of law enunciated by the Supreme
Court. In Hirday Narain v. Income Tax Officer,
Bareilly, (1970) 2 SCC 355 : AIR 1971 SC 33, the
Supreme Court has held in categoric terms that if a
petition is entertained and during the pendency of the
petition the remedy for seeking alternate remedy
expires then the petitioner should be heard on merits
and the parties should not be relegated to remedies
under the statute."
(Emphasis Supplied)
In this view of the matter, we are not inclined to relegate the
petitioner to avail the alternative remedy.''
4. On the other hand, Shri Bhuwan Gautam, learned Government
Advocate for the respondent/State submits that the petitioner has given a
wrong declaration in paragraph No. 2 of the writ petition that no efficacious
alternative remedy is available to the petitioner except to approach this
Court. Whereas, under Section 31 of the Act of 1899, the petitioner was
required to approach the Collector of Stamp. As per Section 32(2) of the Act
of 1899, when in the opinion of the Collector the instrument is not
chargeable with duty, he shall certify in a manner that the instrument is not
chargeable. Thereafter, the petitioner may apply for refund under Section
45(2) of the Act of 1899.
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5. In rebuttal, Shri Samvatsar, learned counsel for the petitioner
submits that in view of the law laid down by Division Bench of this Court in
case of Satyam Cineplex Ltd. (supra) , the limitation for approaching the
Collector of Stamp under Section 31 of the Act of 1899, which is one month,
has expired and now the petitioner cannot file any application, therefore the
writ petition be entertained.
Heard learned counsel for the parties.
6. The petitioner has paid the assessed Stamp Duty and Registration
Fee on 25.04.2019 and within one month, this petition has been filed on
21.05.2019. This Court issued notice on 03.07.2019 and admitted the writ
petition on 23.08.2022. Therefore, when petition has been filed within one
month from the date of payment of Stamp Duty and Registration Fee, the
time consumed during pending of this writ petition is liable to be condoned
for filing the application before the Collector of Stamp under Section 31 of
the Act of 1899. Under the Act of 1899, the authority has been given to the
Collector of Stamp to examine whether the instrument is chargeable with
duty or not. Therefore, instead of examining the issue by this Court, it
would be appropriate to relegate the petitioner to approach the authority
provided under the Act to decide whether the instrument is chargeable with
duty or not. Section 31 and 45 of the Indian Stamp Act, 1899 provides as
under :
31. Adjudication as to proper stamp. --(1) When any instrument,
whether executed or not and whether previously stamped or not, is
brought to the Collector, and the person bringing it applies to have
the opinion of that officer as to the duty (if any) with which it is
chargeable, and pays a fee of such amount (not exceeding five
rupees and not less than fifty naye paise) as the Collector may in
each case direct, the Collector shall determine the duty (if any)
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with which, in his judgment, the instrument is chargeable.
(2) For this purpose the Collector may require to be furnished with
an abstract of the instrument, and also with such affidavit or other
evidence as he may deem necessary to prove that all the facts and
circumstances affecting the chargeability of the instrument with
duty, or the amount of the duty with which it is chargeable, are
fully and truly set forth therein, and may refuse to proceed upon
any such application until such abstract and evidence have been
furnished accordingly:
Provided that--
(a) no evidence furnished in pursuance of this section shall be
used against any person in any civil proceeding, except in an
inquiry as to the duty with which the instrument to which it relates
is chargeable; and
(b) every person by whom any such evidence is furnished, shall,
on payment of the full duty with which the instrument to which it
relates, is chargeable, be relieved from any penalty which he may
have incurred under this Act by reason of the omission to state
truly in such instrument any of the facts or circumstances
aforesaid.
45. Power to Revenue-authority to refund penalty or excess duty
in certain cases. -- (1) Where any penalty is paid under section 35
or section 40, the Chief Controlling Revenue-authority may, upon
application in writing made within one year from the date of the
payment, refund such penalty wholly or in part.
(2) Where, in the opinion of the Chief Controlling Revenue-
authority, stamp-duty in excess of that which is legally chargeable
has been charged and paid under section 35 or section 40, such
authority may, upon application in writing made within three
months of the order charging the same, refund the excess.
7. In view of the aforesaid provisions, the relief which the petitioner
is seeking by way of this writ petition can be granted by the Collector of
Stamp if he finds that the instrument submitted by the petitioner is not
chargeable with duty.
8. So far as the contention of Shri Samvatsar, learned counsel for the
petitioner that the period of limitation for approaching the authority has
already expired, the petitioner is entitled for the benefit of condonation of the
period consumed during the pendency of the writ petition as the petitioner
has approached this Court within one month from the date of payment of the
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Stamp Duty and Registration Fee. Therefore, the period from the date of
filing of the petition till today is hereby condoned for the petitioner to file an
application under Section 31 of the Act of 1899.
9. With the aforesaid liberty, the petition stands dismissed.
(VIVEK RUSIA) (BINOD KUMAR DWIVEDI)
JUDGE JUDGE
vidya
