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Suresh Chandra Shukla v. State of U.P. - WRIT - C No. 8939 of 2003  RD-AH 2437 (6 September 2005)
Civil Misc. Writ Petition No. 8938 of 2003
M/s Suresh Chand Shukla and another vs. State of U.P. and others.
Hon'ble R.K.Agrawal, J.
Hon'ble Mrs. M.Chaudhary, J.
In this case the only issue involved is if a party has to deposit the security for the purpose of a contract and agreement is to be registered, as to whether the stamp duty of security is to be fixed as per the provision of Article 57 Schedule I-B of the Stamp Act as amended from time to time or is to be affixed in view of the provisions of Article 40 of the Stamp Act.
We have heard Sri Rajiv Gupta, learned counsel for the petitioners, learned standing counsel for respondent nos.1 and 2 and Sri Shashi Kant, learned counsel appearing for respondent nos. 3 and 4.
The issue has elaborately been dealt with by the Division Bench of this Court in Tajveer Singh and others vs. State of U.P. and others (1997) 2 AWC 1029, wherein it has been held that in such a case, Stamp Duty on security is to be fixed as per the provisions of Article 57 Schedule 1-B of the Stamp Act and not as required under Article 40 of the Act. This judgment in Tajveer Singh's case (supra), has been consistently been followed by this Court in large number of cases. While deciding the said reliance has been placed upon the earlier judgment of this Court by the Special Bench in M/s Hindustan Sugar Mills, Ltd. vs. State of U.P. and others (AIR 1972 Alld 8) and the judgment of the Delhi High Court in Chief Controlling Authority vs. Marshal produce Brokers Pvt. Ltd., (AIR 1980 Delhi 249) and a Division Bench of this Court in Writ Petition No. 30837 of 1995, Shri Pal Goel vs. Deputy Director of Construction, decided on 18th March, 1996 and also the judgment of the Hon'ble Supreme Court in Board of Revenue vs. A.M.Ansari (AIR 1996 SC 1813), wherein it has been held that the sum which is offered as security, is not a mortgage and, therefore, is not liable to stamp duty under Article 35 of the Stamp Act. The Court had also considered the full Bench decision of this Court in Rishi Deo Sondhi vs. Dhampur Sugar Mills (AIR 1947 Alld. 190) wherein it was held that an instrument in which specific amount is offered as security is not a mortgage deed and, therefore, it does not require the stamp as per the provisions of Article 14 of the Stamp Act.
On the contrary, the learned standing counsel has placed reliance upon the full Bench decision of this Court in M/s Ram Chand and sons Sugar Mills vs. State of U.P. (AIR 1978 Alld.443) wherein a suit had been filed by a Company and the Court had directed the Company to furnish security either in cash or of the properties. In compliance, the Director of the Company executed a bond and thereby pledged the Company's property for the payment of the amount that might be found ultimately due by the Court against the Company. While dealing with the issue, Hon'ble Apex Court held that in this specific property, it would amount to mortgage deed as defined under Section 2(17) of the Stamp Act and as the possession has not been handed over to the other party, the stamp was liable to be paid under Article 40 of Schedule 1-B.
The facts in M/s Ram Chand (supra) are quite distinguishable. That was a case of mortgage of the immovable property without possession. In the instant case, the security is being deposited in cash/bank guarantee/bank draft etc. and by no means, it can be held to be a mortgage. Therefore, we are of the considered opinion that the ratio of such judgment is not attracted at all. The case is squarely covered by the judgment in Tajveer Singh's case (supra) and thus, in view of the above, the writ petition deserves to be allowed.
Accordingly, the writ petition stands allowed and the impugned order dated 19.6.2001 (Annexure II to the writ petition) passed by respondent no.1; order dated 4.9.2001 (Annexure III to the writ petition) passed by respondent no.2 and the order dated 17.1.2002 (Annexure IV to the writ petition) passed by respondent no.4 are hereby quashed. The respondents are directed to ask for the stamp duty as per the requirement under Article 57 Schedule 1-B of the Stamp Act.
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