Madras High Court

M/S.Om Sakthi Kalikambal ... vs The Inspector General Of ... on 12 August, 2022

                                                                                   W.A.No.246 of 2022

                                     IN THE HIGH COURT OF JUDICATURE AT MADRAS

                                                      DATED: 12.08.2022

                                                             CORAM :

                        THE HON'BLE MR.MUNISHWAR NATH BHANDARI, CHIEF JUSTICE
                                                              AND
                                            THE HON'BLE MRS.JUSTICE N.MALA
                                                      W.A.No.246 of 2022

                     M/s.Om Sakthi Kalikambal Multi-State Cooperative
                      Housing Society Ltd.
                     rep. By its President,
                     G.R.Ravichandran                             ... Appellant

                                  versus

                     1.The Inspector General of Registration,
                      Mylapore, Santhome,
                      Chennai 600 004

                     2.The Sub-Registrar Office,
                      Madhavaram,
                      Chennai 51                                       ... Respondents


                     Prayer: Appeal filed under Clause 15 of the Letters Patent Act against
                     the order dated 29.10.2021 in WP No.2169 of 2014.


                                  For the Appellant      :      Mr.V.Raghavachari

                                  For the Respondents    :      Mr.P.Muthukumar,
                                                                State Government Pleader,
                                                                assisted by Mr.K.M.D.Muhilan,
                                                                Government Advocate




                     Page 1 of 14
https://www.mhc.tn.gov.in/judis
                                                                                 W.A.No.246 of 2022

                                                         JUDGMENT

(Judgment of the Court was delivered by the Hon'ble Chief Justice)

The writ appeal has been filed to assail the order dated

29.10.2021 in WP No.2169 of 2014 whereby a batch of writ petitions

seeking exemption of the stamp duty in reference to the provisions of

the Tamil Nadu Registration of Cooperative Societies Act, 1983, was

dismissed.

2. The order of learned Single Judge is in reference to the fact

that appellant society is a Multi-State Cooperative Society, registered

under the Multi-State Cooperative Societies Act, 2002. The claim was

regarding exemption from payment of stamp duty for registration of

document by the Sub-Registrar, Madhavaram, Chennai. The learned

Single Judge framed the issue as to whether the appellant/Cooperative

Society would be entitled to seek exemption in regard to the payment

of stamp duty.

3. The issue was examined by learned Single Judge in reference

to the provisions of the Act of 2002 under which the appellant/

Cooperative Society was registered. A reference of Section 7 of the Act

of 2002 was given, which is regarding issuance of registration

https://www.mhc.tn.gov.in/judis W.A.No.246 of 2022

certificate under Section 8 of the Act of 2002. The Multi-State

Cooperative Society is a body corporate under Section 9 of the Act of

2002. After referring to the nature and affairs of a Multi-State

Cooperative Society, learned Single Judge further proceeded to refer

to the Tamil Nadu Cooperative Society Act, 1983, which is a State Act.

The Act of 1983 governs Cooperative Societies of the State registered

under the said Act. In view of the above, learned Single Judge made a

distinction between the Cooperative Societies registered under the

State Act of 1983 and the Multi-State Cooperative Societies registered

under the Central Act of 2002. After making distinction between the

two Acts with reference to the registration and operation of law,

learned Single Judge proceeded to discuss as to whether the appellant

Multi-State Cooperative Society is entitled to seek exemption from

payment of stamp duty under the State Act, as exemption was sought

with reference to the Act of 1983 and Government Order in

G.O.Ms.No.2179, Cooperation, dated 29.6.1966, granting exemption

to the Cooperative Societies from payment of stamp duty under

Section 9 of the Indian Stamp Act. The power exists with the State

Government under Section 51 of the Act of 1983 to exempt a

Cooperative Society from stamp duty and registration fee. It is with

further stipulation that a stamp duty not being the stamp duty referred

https://www.mhc.tn.gov.in/judis W.A.No.246 of 2022

in clause (a) of sub-Section 2 of Section 9 of the Indian Stamp Act can

be remitted by the Government. The appellant sought benefit under

the provisions of the Act of 1983 and Government Order issued

therein, where all the Cooperative Societies were given exemption

from payment of stamp duty.

4. Learned Single Judge analyzed the issue and found that the

writ appellant is not a society registered under the Act of 1983 but it is

a Multi-State Cooperative Society controlled by the Central Act. In view

of the above, a Cooperative Society registered under the Central Act of

2002 cannot seek exemption provided to a Cooperative Society

registered under the State Act of 1983. If the State Government has

invoked the power under Section 51 of the Act of 1983 to exempt the

Cooperative Society registered under the Act of 1983 from the

payment of stamp duty, it cannot apply to a Multi-State Cooperative

Society, which is registered under the Central Act of 2002. After giving

elaborate reasons, the exemption prayed by the appellant in making

payment of stamp duty for registration of document was not allowed

and accordingly, the writ petition was dismissed.

https://www.mhc.tn.gov.in/judis W.A.No.246 of 2022

5. Learned counsel for the writ appellant submits that when a

Cooperative Society registered under the Central Act of 2002 and

under the State Act of 1983, operates in the State of Tamil Nadu,

then, difference between the two cannot be made, and furthermore,

when exemption of stamp duty has been given to all the Cooperative

Societies, then, it cannot be with the exclusion of Multi-State

Cooperative Societies registered under the Central Act of 2002. For the

aforesaid purpose, a reference of the letter written by the Secretary to

Government of Tamil Nadu has been given, where a similar prayer to

extend the benefit to a Multi-State Cooperative Society was endorsed.

The notification dated 29.06.1966 was made operational even to a

Multi-State Cooperative Society. The appellant's case is squarely

covered by the aforesaid. It is more so when the said administrative

letter was issued after clarifying application of the exemptions granted

to the Cooperative Society registered under the Act of 1983. The

appellant's case is squarely covered by the aforesaid.

6. A further reference of the audit objection has been given,

where without having clarity on the issue and reference of the earlier

letter of the Secretary to Government, objection was raised regarding

non-payment of stamp duty. The audit objection was erroneous and

https://www.mhc.tn.gov.in/judis W.A.No.246 of 2022

thus, it should have been ignored by the respondents. The learned

Single Judge has committed an error in persuading himself and guided

by the Act of 2002 as the appellant society was registered as Multi-

State Cooperative Society under the Act of 2002 and not under the Act

of 1983, ignoring the letter of the Secretary to Government and the

area of operation of the Cooperative Society. It may be that Multi-

State Cooperative Societies can operate in different States but while it

is operating in a particular State, it should be entitled to the exemption

given to all the Cooperative Societies operating therein. The prayer is

accordingly to set aside the judgment.

7. At this stage, learned counsel for the writ appellant made a

reference to Section 59 of the Act of 2002 to show a provision for

exemption and accordingly, if the exemption is given for transfer of

shares or debentures, it should apply in regard to the sale deed also.

8. We have considered the submissions made by learned counsel

for the appellant and perused the records.

9. The legal issue involved in the present matter is as to

whether a Cooperative Society registered under the Central Act of

https://www.mhc.tn.gov.in/judis W.A.No.246 of 2022

2002 is entitled to the exemption granted under the State Act of

1983 when the provision postulate application of exemption only to

those Cooperative Societies registered under the Act of 1983. Power

for exemption has been given under Section 51 of the Act of 1983.

Section 51 is quoted hereunder for ready reference:

“51. Powers to exempt from stamp duty and registration fee.__ The Government, by notification, may, in the

case of any registered society or class of registered

societies, remit-

(a) the stamp duty not being the stamp duty

referred to in clause (a) of sub-section (2) of

section 9 of the Indian Stamp Act, 1899 (Central Act

II of 1899), with which, under any law for the time

being in force, instruments executed by or on

behalf of or in favour of a registered society or by

an officer or member and relating to the business

of such society or any class of such instruments or

decisions, awards or orders of the Registrar or

arbitrators under this Act are respectively

chargeable; and

https://www.mhc.tn.gov.in/judis W.A.No.246 of 2022

(b) any fee payable under the law of

registration for the time being in force.”

10. If any Government Order is issued by invoking the powers

given under Section 51 of the Act of 1983, it would apply only to

the Cooperative Society registered under the Act of 1983 and

cannot operate on a Multi-State Cooperative Society registered

under the Central Act of 2002. Any Cooperative Society registered

under the Central Act of 2002 can operate in more than one State

while a Cooperative Society registered under the State Act can

operate only in the State concerned. Merely for the reason that the

writ appellant Cooperative Society is operating even in the State of

Tamil Nadu only, it would not lose its character of a Multi-State

Cooperative Society registered under the Central Act of 2002. In

view of the above, we do not find any error in the judgment of the

learned Single Judge holding that the Cooperative Society

registered under the Central Act of 2002 not entitled to any

exemption granted to a Cooperative Society registered under the

State Act of 1983.

https://www.mhc.tn.gov.in/judis W.A.No.246 of 2022

11. The learned counsel for the writ appellant has given

reference of the letter of Secretary to Government of Tamil Nadu to

exempt a Multi-State Cooperatisve Society from the payment of

stamp duty, holding that the Cooperative Society registered under a

Central Act would also be entitled to exemption under the State Act.

We find aforesaid letter to be erroneous and going against the

provisions of law. The Secretary to the Government has no

authority to extend the benefit to any Multi-State Cooperative

Society going against the intent and provisions of the Act of 1983

and therefore, we are unable to persue ourselves to guide the

matter by the letter written by the Secretary to the Government of

Tamil Nadu in ignorance of the provisions of law and without

understanding the impact of the said letter. May be to extend undue

benefit to a particular Multi-State Cooperative Society, such a letter

has been written. The observation aforesaid is made in reference to

the further argument of the learned counsel for the writ appellant,

who has referred to Section 59 of the Act of 2002. Section 59 is

quoted hereunder for ready reference:

“59. Exemption from compulsory registration of instruments Nothing in clauses (b) and (c) of sub-section

https://www.mhc.tn.gov.in/judis W.A.No.246 of 2022

(1) of section 17 of the Registration Act, 1908 (16 of

1908) shall apply to --

(a) any instrument relating to shares in a

multi-state Cooperative Society notwithstanding

that the assets of the society consist in whole or in

part of immovable property; or

(b) any debenture issued by any such society

and not creating, declaring, assigning, limiting or

extinguishing any right, title or interest to or in

immovable property, except in so far as it entitles

the holder thereof to the security afforded by a

registered instrument whereby the society has

mortgaged, conveyed or otherwise transferred the

whole or part of its immovable property or any

interest therein to trustees upon trust for the

benefit of the holders of such debentures; or

(c) an endorsement upon transfer of any

debenture issued by any such society.”

12. The Act of 2002 provides exemptions, but such exemption

would be applicable to the instruments referred therein only and not

https://www.mhc.tn.gov.in/judis W.A.No.246 of 2022

in general. When a specific provision exists under the Act of 2002,

than beyond that can a Multi-State Corporation Society claim

benefit under the State Act by which it is not governed and

provisions of exemption is different. The learned counsel for the writ

appellant tried to persuade the Court that exemption under Section

59 of the Act of 2002 would be even in reference to a sale deed. We

are unable to persuade ourselves with the aforesaid argument. The

exemption has been given on the payment of stamp duty on the

transfer of shares and debentures and not on the sale deed. An

exemption of the stamp duty on the transfer of share cannot mean

exemption for transfer of properties on the execution of sale deed.