Sale Certificate Issued After Court Auction Not Compulsorily Registrable; No Stamp Duty Required for Issuance: Supreme Court
The Supreme Court in State of Punjab & Anr. v. M/s Ferrous Alloy Forgings Pvt. Ltd. & Ors. clarified that a successful auction purchaser is not required to pay stamp duty for the issuance of a sale certificate in court-conducted auctions. Stamp duty becomes applicable only when the certificate is used for purposes other than retaining it as is. The Court also held that sale certificates issued by public authorities are not compulsorily registrable under Section 17(1) of the Registration Act, as they merely serve as evidence of title, with title transfer occurring upon confirmation of the sale.
The case arose from the liquidation of M/s Punjab United Forge Ltd., where the respondent, M/s Ferrous Alloy Forgings Pvt. Ltd., won an auction. When the Registrar demanded stamp duty at a higher valuation for the sale certificate, the respondent challenged this through a writ petition. The High Court ruled that no stamp duty is required at issuance.
The State appealed to the Supreme Court, which upheld the High Court’s decision, emphasizing that sale certificates, as evidence of title, neither transfer title nor require stamp duty at issuance. Citing precedents such as Municipal Corporation of Delhi v. Pramod Kumar Gupta (1991) and M/s Esjaypee Impex Pvt. Ltd. v. Canara Bank (2021), the Court reaffirmed that filing the certificate under Section 89(4) suffices for registration. The appeal was dismissed.