M.M.KUMAR,J - (1.) THIS petition filed under Article 226 of the Constitution prays for quashing order dated 29.4.2005 (Annexure P-2) passed by the Additional Deputy Commissioner-cum-Collector, Moga in pursuance to the proceedings initiated under Section 3 of the Indian Stamp Act, 1899 (for brevity 'the Act'). The Collector has held that on the basis of instructions dated 11.9.1979 (R-1), any mortgage without delivery of possession and deposit of title deed to secure loan is assessable under Section 9(1)(a) of the Act. Accordingly, a deficiency of Rs. 1,39,800/- has been determined and direction for recovery of the same from the petitioner has ordered.
(2.) BRIEF facts of the case are that the petitioner is a firm which has dealing with the Oriental Bank of Commerce Branch, Dhalle Ke Tehsil District, Moga (for brevity 'the bank'). The firm entered into an agreement for availing the facility of loan to the extent of Rs. 80 lacs (30 lacs as cash credit + Rs. 50 lacs as term loan) subject to the condition that it was to return loan amount along with interest and other expenses and it was also to deposit title deeds of properties collateral security for the loan with the bank. The details of the title deed has been given in the agreement title dated 27.12.2000 registered vide Wasika No. 5394 by the office of the Sub- Registrar, Moga in favour of the petitioner firm for a total consideration of Rs. 2,25,000/-. Likewise, title deed dated 27.12.2000 registered vide Wasika No. 4924 by the office of Sub Registrar, Moga against a consideration of Rs. 1,55,000/-. There were other properties mentioned in the Schedule (Annexure P-1)as well. It is well known that an equitable mortgage is created by surrendering the title deeds for securing the bank loan. The aforementioned document was got registered in favour of the bank on 18.11.2003. The audit raised an objection vide their audit note pointing out deficiency of stamp duty to the tune of Rs. 1,39,800/-. Accordingly, Sub-Registrar, Moga-Respondent No. 2 sent his report to the Additional Deputy Commissioner-cum-Collector, Moga-respondent No. 4, who upheld the demand. It has been pointed out in his order dated 29.4.2005 (Annexure P-2) that the petitioner had affixed stamp duty valuing Rs. 20,200/- at the time of getting the document attested. He referred to notification dated 7.11.1979 issued by the Revenue Department to support the view that any mortgage without possession by deposit of title deed or any loan secured by a mortgage without possession was assessable to stamp duty as per the provisions of Section 9(1)(a) of the Act. Therefore, he upheld the demand of Rs. 1,39,800/- and ordered recovery of aforementioned amount from the petitioner. The order of the Collector was challenged in an appeal and the Commissioner, Ferozepur Division, Ferozepur upheld the view taken by the Collector. Para 5 of the order passed by the Commissioner reads as under :- "I have considered the arguments advanced by the learned counsel for the appellants as well as the State Representatives. A perusal of the report of the Sub Registrar, Moga, shows that the Stamp Auditor of the office of Financial Commissioner (Revenue) Punjab, Chandigarh in the Audit Note for the year 2005 had found deficiency of Stamp duty amounting to Rs. 1,39,800/- in respect of demulcent No. 5431 dated 18.11.2003 shows that the appellant has secured loan of Rs. 8,000,00/- from Oriental Bank of Commerce, Dhalle Ke, District Moga. The Collector in his impugned order has mentioned that as per Punjab Government notification No. CA. 11/99-S9/79/14885A dated 7.11.1979 the stamp duty is to be charged @ 2% and registration fee @ 1% on mortgage deed without possession, deposit of title deed, or mortgage without possession to secure loan or to secure loan from any commercial bank. The Collector, therefore, vide his order dated 29.4.2005, rightly directed the appellant to pay Rs. 1,39,800/- as deficiency of stamp duty as pointed by the Audit Party. I, therefore, see no force in this appeal and dismiss the same." The petitioner has attacked the orders passed by the Collector as well as by the Commissioner by asserting that there is no notification dated 7.11.1979 in existence which has been made the basis of the impugned order apart from the report of the audit. It has been pleaded that there is no legal provision for imposition of stamp duty on the petitioner who has merely deposited the original title deed without surrendering possession with the bank for securing loan nor any such provision has been relied upon in the impugned orders. Learned counsel has also submitted that once audit objection has been raised by pointing out deficiency of stamp duty amounting to Rs. 1,39,800/-, then the conclusion was foregone and the principles of natural justice have also been violated. A reference has been made to various inter locatory orders to substantiate the aforementioned contention. Learned counsel for the petitioner has referred to circular dated 11.9.1979 (R-1) by claiming that the circular in fact support the petitioner inasmuch as it remit the stamp duty chargeable under the Act on any deed of mortgage without possession by deposit of title deeds or on any agreement deed for securing loan from any commercial or banking institution.
(3.) MRS . Charu Tuli, learned State counsel has however, pointed out that notification dated 11.9.1979 is in operation and reference to notification dated 7.11.1979 has erroneously been made. According to the learned State counsel, once a document is offered for registration, then under the Registration Act, 1908, the stamp duty and registration fee is charged as per the provisions of the Act. She has banked upon Section 9(1) of the Act to submit that stamp duty and registration fee is normally leviable. According to the learned State counsel, the view taken by the Collector as well as by the Commissioner, Ferozepur Division, Ferozepur, deserves to be upheld and the petition is liable to be dismissed. She has emphasised that circular dated 11.9.1979 (R-1) is confined only to purchase of inputs like crop loan on fertilizers, insecticides, pesticides, weedicides and seeds.;