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REPORTABLE

IN THE SUPREME COURT OF INDIA CIVIL APPELLATE JURISDICTION

CIVIL APPEAL NO.   6054   OF 2015 (Arising out of S.L.P.(C) NO.32319 of 2013)

Chief Controlling Revenue Authority …..Appellant(s)

Versus

Costal Gujarat Power Ltd. and others ..Respondent(s)

JUDGMENT M. Y. EQBAL, J.  

Leave granted.

2. The  Full  Bench  of  the  Gujarat  High  Court  on  reference

made  by  the  Chief  Controlling  Revenue  Authority,  State  of

Gujarat under Section 54(1A) of the Gujarat Stamp Act, 1958 (in

short,  “the  Act”),  passed  the  impugned  judgment  and  order

dated 3.12.2012 in Stamp Reference No.1/2011 answering the

reference in favour of the respondent and against the Revenue

holding that the respondent was not required to pay the dues of

deficit stamp duty of Rs. 50,41,600/-.

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3. The questions referred to the High Court for its opinion and

decision arise as under:-

(A) The deed of “indenture the deed of mortgage for  delayed  after  assets”  which  was  registered  on 6.10.2009  vide  Regn.  No.3375  registered  at  office  of Sub-Registrar,  Mundra  (District  Kachchh)  by  the applicant  has  paid  Rs.4,21,000/-  whether  as  per provision of Sections 5, 3(a), 3(B) and the Schedule-1’s Articles  6  and  36(b)  the  applicant  is  required  to  pay deficit stamp duty of Rs.50,41,600/- or not.”

(B) The deed of “indenture the deed of mortgage for  delayed  after  assets”  which  was  registered  on 6.10.2009  vide  Regn.no.3375,  at  the  office  of  the Sub-Registrar,  Mundra  (District  Kachchh)  by  the applicant is required to be considered as per Schedule 1’s  Articles  6  and  36  as  per  simple  mortgage  and whether the applicant is required to pay Rs. 4,21,600 or not?”

4. The facts of the case lie in a narrow compass. 5.  The  respondent  is  a  Company  named  Coastal  Gujarat

Power Ltd and it needed financial assistance for setting up an

Ultra Mega Power Project in the area of Kutch-Bhuj and for that

purpose it secured assistance from few lenders.  The lenders i.e.

financial institutions, which were thirteen in number, formed a

consortium as a trust and executed a security trustee agreement

(STA) inter se appointing one banker, viz. the State Bank of India

as the lead trustee, called the security trustee.  The duties of the

security trustee are carved out in the said agreement of security

trustees.   

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6.    The  respondent  executed  an  “Indenture  of  Mortgage  for

Delayed After Assets Deed’ with the State Bank of India, the said

security trustee, mortgaging its assets as mentioned in the deed

itself.  The said document was presented for registration before

the  Sub-Registrar,  Mudra,  by  paying  stamp  duty  of  Rs.

4,21,000/- and the deed was registered.

7. According to  the  appellant,  the  respondent was liable  to

pay Rs. 54,62,000/- on the said deed and, hence, demanded the

balance  amount  of  Rs.  50,41,000/-  from the   respondent  by

issuing  show  cause  notice  dated  5.11.2009.  The  issue  was

forwarded for consideration of the Deputy Collector, Stamp Duty

Valuation Organisation, Bhuj-Kutch under Section 33 of the Act.

8. The respondent was given an opportunity of hearing and

vide order dated April, 3, 2010, the Deputy Collector held that

the respondent was liable to pay the deficit stamp duty with the

amount of penalty of Rs.250/-.  

9.   The  revision  application  filed  by  the  respondent  under

Section 53[1] of the Act was dismissed vide order dated March,

28, 2011. The respondent thereafter made an application under

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Section 54[1-A] of the Act thereby giving rise to the Reference

Proceedings.

10. By way of the Reference, the opinion of the High Court was

sought on the questions referred hereinabove.

11. The  High Court  opined  that  the  State  of  Gujarat  is  not

entitled  to  recover  any additional  stamp duty  based upon its

perception of the legislative intendment behind Section 5 of the

Act.  The Court noted that stamp duty is payable on instruments

and  not  on  transactions.   Therefore,  merely  because  the

intended effect was achieved by executing one single document

as  against  different  sets  of  documents,  such  fact  would  not

enable the State authorities to justify the conclusion that the

one single document falls under the purview of Section 5 of the

Act.   It  was  SBI  alone  which  had  the  power  to  enforce  the

document  against  the  respondent.  The  High  Court  further

opined that there being only one instrument creating a mortgage

by  a  borrower  in  favour  of  a  security  trustee,  such  relation

between the borrower and security trustee is independent of the

relationship between the borrower and the lending banks.  The

relationship between the borrower and the security  trustee is

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that  of  a  mortgagor  and  mortgagee.  By  taking  aid  of  the

provision of the Indian Trust Act and after creation of a different

valid trust deed and making payment of stamp-duty thereon in

accordance  with  law,  the  State  Bank  of  India  became  the

security trustee of the lending Banks and held the mortgage for

and  on  behalf  of  those  beneficiaries.   Therefore,  by  the

instrument  in  question,  either  fictionally  or  otherwise,  no

separate or distinct matters or transactions are created. Thus,

the applicant is the mortgagor and the S.B.I., in the capacity of a

trustee,  is  the  mortgagee.   The  instrument  does  not  involve

either  “distinct  matters”  or  “distinct  transactions”  so  as  to

attract Section 5 of the Act. The Court found from the document

in question that the State Bank of India is the only mortgagee

under the instrument and no rights in the mortgaged property

had  been  created  in  favour  of  secured  parties  or  any  other

persons.

12.  The High Court further opined that the principles laid down

in The Member, Board of Revenue vs. Arthur Paul Benthall,

1955 SCR 84, can be of no assistance to the State in this case.

Indisputably, nobody disputed that the instrument in question

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is a mortgage deed and that according to the provisions of the

Act,  the  same  should  be  charged  in  accordance  with  the

schedule  1.   Thus,  by  no  stretch  of  imagination,  the  said

mortgage deed is treated as a combination of thirteen lenders by

taking aid of the above principles.  Finally, the Full Bench held

that  on  consideration  of  the  entire  materials  on  record,  the

reference was answered as  Point [A] No and Point [B] yes.

13. Hence, the present appeal by special leave.

14. Mr.  Preetesh  Kapur,  learned  counsel  appearing  for  the

appellant, Revenue Authority, assailed the impugned judgment

passed by the Full Bench of the Gujarat High Court as being

erroneous and contrary to the provisions of the Stamp Act in the

matter of Payment of Stamp Duty.  Learned counsel submitted

that  the  High  Court  has  failed  to  appreciate  that  the

respondents had formed the consortium and had executed the

present  mortgage  instead  of  several  distinct  instruments  of

mortgage with the sole purpose of evading Stamp Duty.  Learned

counsel submitted that admittedly the respondents had availed

financial  assistance  from  13  lenders  for  its  project  and

consequently, the respondent was required to execute mortgage

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deed in favour of  the 13 lenders.  However, in order to avoid

payment of Stamp Duty on each mortgage deed, the respondent

got the lenders to form a consortium and appointed State Bank

of India as security trustee.  Thus, in substance, the mortgage

deed between the SBI on behalf of the lenders and respondent is

a combination of 13 mortgages dealing with the respondents and

such lenders, hence, the respondent cannot be allowed to evade

payment of stamp duty by forming a consortium.

15. Learned counsel further submitted that the instrument in

question  relates  to  several  distinct  matters  or  distinct

transactions  inasmuch  as  the  respondent  borrower  availed

distinct loan from 13 different lenders, hence, the instrument

falls under Section 5 of the Gujarat Stamp Act.  Learned counsel

also referred to the Government Circular  dated 2.4.2007 and

submitted  that  clause  (ii)  of  the  Circular  specified  that  an

instrument like the present one would fall within the purview  of

Section 5 of the Act.

16. Per  contra,  Mr.  C.A.  Sundaram,  learned  senior  counsel

appearing  for  the  respondent,  drew our  attention  to  different

clauses of mortgage deed and submitted that security created by

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the said mortgage in favour of the security trustee shall become

enforceable   only  by  security  trustee  upon the  occurrence  of

event of default.  According to the learned senior counsel since

no independent right has been created in favour of the lenders

under the mortgage deed it cannot be held to be a separate and

distinct transaction.  According to Mr. Sundaram, Section 5 of

the Act shall not have any application.  Learned senior counsel

further referred to the relevant paragraph of the judgment of this

Court  in  The  Member,  Board  of  Revenue  vs.  Arthur  Paul

Benthall, 1955 SCR 842 and submitted that the ratio decided

in the said Judgment fully applied in the present case.

17. It was further contended what has to be looked into for the

purpose  of  stamp  duty  is  the  instrument,  i.e.,  the  Mortgage

Deed,  to  see  whether  it  dealt  with  distinct  matters.   The

Mortgage  Deed  dealt  with  only  one  single  matter,  i.e.,  the

mortgage  of  a  single  property  with  one  mortgagee.   Merely

because there was beneficial interest for all the individual banks

forming  the  consortium,  this  would  not  amount  to  distinct

matters as per the ratio of the Benthall Case, since there were

no  distinct  mortgages  regarding  distinct  properties,  but  one

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common mortgage for one property.  Hence, even assuming that

the banks were seen to have an individual interest, there was in

fact a commonality of such interest with all the other “secured

lenders” and, therefore, the instrument did not deal with distinct

matters.

18. According to the learned counsel, to decide as to whether

and how such instrument is to be stamped it is that instrument

alone that is to be looked at and not other documents executed

between the parties or inter se the banks themselves or between

the banks and a party to the instrument, since those are not the

instruments being stamped.  In fact, following such a course of

action would amount to indirectly stamping the loan agreements

and  STA  twice,  which  is  impermissible  in  law,  since  those

instruments  had  already  been  separately  and  individually

stamped.

19. Lastly, it was contended that in any event, in the instant

case, even if a doubt arises with regard to the interpretation of

the  Mortgage  Deed,  and  as  to  whether  it  comprises  distinct

matters or not, the benefit of such doubt must be given to the

assessee, i.e. the Respondent No.1, since it is a settled principle

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of interpretation of fiscal statutes that in case of ambiguity, the

interpretation favourable to the assessee must be adopted.

20. In light of the aforesaid, it is submitted that the impugned

judgment, which has rightly decided  the matter in favour of the

Respondent (assessee) and against the Appellant (revenue), does

not  suffer  from any  infirmity.   Therefore,  the  present  appeal

ought  to  be  dismissed  by  this  Court.  As  a  sequitor  to  the

dismissal of the appeal, the appellant should also be directed to

refund the excess stamp duty amount of Rs. 50,41,600/- that

was deposited, under protest, by Respondent No.1.  

21.  Before deciding the question first of all we shall deal with

the relevant document to ascertain the nature of loan.   1. Security Trustee Agreement dated 15.9.2008.  The  persons  set  out  in  Schedule  II  have  been  collectively

referred  to  as  the  “Senior  Lenders”  which  includes  their

successors,  transferee  and  assigns.   These  senior  dealers

entered into  an agreement  with  the  respondent   M/s.  Costal

Gujarat  Power  Limited,  a  company  registered  under  the

Companies Act and referred to as borrower.   

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22. From  the  body  of  this  agreement,  it  reveals  that  the

borrower  had  requested  the  senior  lenders  i.e.  thirteen

banks/financial institutions to make available to the borrower

loan  details  of  which  is  more  fully  set  out  in  Schedule  II.

Pursuant to the loan agreement entered into by the borrower

and the senior lenders, each of senior lenders inter alia  agreed

to provide to the borrower credit and loan facilities to finance

part of the project, costs of the project, more specifically set out

in Schedule II.  At this stage, we would like to extract herein

Schedule II of the said Security Trustee Agreement:-

SCHEDULE II PART A

LIST OF ECB FACILITY LENDERS

Sr. No.

ECB Facility Commitment (in  Dollars millions)

Lending Office

1 Asian Development Bank

450 Asian Development Bank, 6  AD3 Avenue, Mandaluyong City 1550, Metro Manila, Philippines Facsimile: +63-2-636-2348

2 International Finance Corporation

450 International Finance  Corporation, 2121 Pennsylvania     Avenue, NW, Washington, D.C. 20433,  United States of America  

3 BNP Paribas, as a KEIC Covered Facility Lender

326.65 Structured Finance - Asset Finance -  Export Finance, 37,  Place du Marche  Saint-Honore ACI CHDESAI 75031 Paris Cedex 01  France Attention: Commercial

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Support and Loan Implementation Facsimile: +33(0)1 43 1681 83, With reference to: MUNDRA

4 The  Export- Import  Bank  of Korea

500 Head Office in Seoul,  Korea  The Export-Import  Bank of Kora 16-1, Yeouido-dong Yeongdeungpo-gu  Seoul, 150-996 Republic of Korea Facsimile: +82-2-3779-6747

PART B

LIST OF RUPEE FACILITY LENDERS

Sr. No.

Details of Rupee Facility Lender and Lending Office Rupee  Commitment (In Rupee  Crores)

1 INDIA INFRASTRUCTURE FINANCE COMPANY LIMITED,  having its Head Office at 1201-1207, Naurang House  Kasturba Gandhi Marg, New Delhi - 110 001 Telephone No: 011-23736354 Fax No. 011-23736355

1800

2 ORIENTAL BANK OF COMMERCE, having its Head office at Harsha Bhavan,  E-Block, Connaught Place, New Delhi 110 001,  and having its Large Corporate Branch at 181-A, Maker Tower ‘E’, 18th Floor, Cuffe Parade,  Mumbai 400 005 Telephone No: 022-221542.437 22 153836 Fax No. 022-22153533

550

3 STATE BANK OF BIKANER AND JAIPUR,  having its Head Office at 5-A, Tilak Marg, Scheme, Jaipur  – 302 016 and having its Commercial Network Branch at  239, P.D.Mello Road, Fort. Mumbai – 400 001. Telephone No: 022-226557777 2262 1854  Fax No. 022-22651324

200

4. State Bank of Hyderabad,  having its Head Office At Gunfoundry, Hyderabad and  having its Overseas Branch at Ashok Mahal, 1204, Tulloch Marg, Colaba, Mumbai-400 039. Telephone No.022-22042586/22820177 Fax No.022-22851321

100

5. State Bank of India with its Corporate Centre 2000

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At State Bank Bhavan, Madame Cama road, Mumbai  400 021 and having its Project Finance SBU at 3rd Floor State Bank Bhavan, Madam Cama Road,  Mumbai-400 021. Telephone No.022-22884150/22852538  Fax.022-22883021

6. State Bank of Indore, having its head Office at 5,  Y.N.Road, Indore-452 003 and having its Commercial  Branch at Mittal Court ‘B’ Wing, Nariman Point,  Mumbai-400 021. Telephone No.022-228121557/22821558 Fax No.022-22835735

100

7 State Bank of Travancore, having its Head Office At  Poojappura, Thiruvananthapuram-695012 and having Its Corporate Finance Branch at 12-115, Tulsiani  Chambers,Nariman Point, Mumbai-400 021.  Telephone No.022-30287007 Fax No.022-30287017.

100

8 The Housing and Urban Development Corporation  Ltd.Having its Head Office at HUDCO Bhawan, Core-7A,  India Habitat Centre Lodhi road, New Delhi-110003, And having its Mumbai Regional Office at Shreyas  Chambers, 2nd Floor, 175 Dr. D.N. Road, Fort,  Mumbai-400 001. Telephone No.022-690080-84 Fax No.022-22690086

500

9. Vijay bank, having its Head Office At  41/2 Head Office Building Trinity Circle, Mahatma Gandhi Road Bangalore G.P.O. Bangalore-560001 and having its Industrial Finance Branch at New Excelsior Building, 2nd  Floor, Fort Mubai-400 001. Telephone No.022-22079776 Fax No.022-22075994.

500

Total = 5850

23. It  further  appears  from  the  Security  Trustee  Agreement

that the entire financing of the project by Senior Lenders agreed

to  be  secured  by  first  ranking  mortgage  and  pari  passu

charge/issuing of  all  the moveable properties of the borrower.

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Further a first ranking  pari passu charge of all  the borrowers

account and each of the other accounts required to be created

by borrower under any transaction document.

24. For  the  aforesaid  purpose,  the  Senior  Lenders  and  the

issuing bank (SBI) desired that the borrowers settle a trust for

the  beneficial  interest  of  the  Senior  Lenders  and  the  issuing

bank (SBI) had to empower the security trustee to accept the

lien created pursuant to the security document.  At the request

of the borrower, the Senior Lenders and the issuing bank agreed

to act as security trustee for the secured parties on the terms

and conditions contained in the agreement and in the financing

document.   By  the  said  agreement,  the  State  Bank  of  India

(project  finance  SBI  Bombay)  was  appointed  as  a  security

trustee to act on behalf of the secured parties, pursuant to the

trust created by the said agreement.

25. On  6th October,  2009,  an  indenture  on  mortgage  was

executed  by  and  between  the  borrower,  M/s.  Costal  Gujarat

Power Limited and State  Bank of  India as in the capacity  as

security trustee for the Senior Lenders as set out in the schedule

of this mortgage deed.  In the said deed it is mentioned inter alia

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that  pursuant  to  the  Senior  Loan  Agreement  entered  into

between  the  borrower  and  senior  lenders,  each  of  the  senior

lenders have agreed to extend to the borrower the loan to the

maximum  extent  set  out  in  schedule-I.   By  this  indenture,

English Mortgage in respect of immovable property was created.

The relevant clauses of Mortgage deed are set out herein below:- (Emphasis given)

“2.  Benefit of Indenture.  The Security Trustee, acting for the benefit  of  the secured parties shall  hold the Security created by the borrower in its  favour this  indenture over the mortgaged properties including convents and mortgages given by the borrowers pursuant hereto, upon trust for the benefit  of  the  secured  parties  subject  to  the  powers  and provisions  contained  herein  and  in  the  Security  Trustee Agreement, for the due payment of the mortgage Debt and performance  of  all  obligations  under  the  financing Documents.

4.   Grant  and  Transfers:-For  the  consideration  aforesaid and as continuing security for the payment and discharge of the mortgage Debt and performance of all obligations under the Financing Documents by the Borrower hereby secured or intended to  be  hereby  secured,  the  Borrower  both hereby grant,  assign, convey assure, charge and transfer into the Security Trustee for the benefit of the secured Parties by was of a first mortgage and charge) all  the rights title, interest and benefit in all and singular the beneficial  right title and interest of the Borrower in respect of the immovable property situated  in  situated  in  district  Mundra  in  the  State  of Gujarat  more  particularly  described  in  Schedule  2 hereinunder  written  (the  “delayed  After  Acquired  Assets”) together  with  all  buildings  erections  and  constructions  of every description which are standing erected or attached or shall  at  any time hereafter  during the continuance of  the Security hereby lands and premises or any part thereof and all rights to use common areas and facilities and incidentals attached  hereto,  together  with   all  trees,  fences,  hedges,

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ditches, ways sewers, drains, waters, watercourses, liberties, privileges, easements and appurtenances whatsoever to the said lands, hereditaments or premises or any part thereof whether presently in existence or in the future belonging to or in anyway appurtenant thereto and all the estate, right title, interest property claim and demand whatsoever of the Borrower into and upon the same which description shall include  all  properties  of  the  above  description  whether presently  in existence constructed or acquired hereafter (the “Mortgaged  Properties”).   To  have  and  to  hold  all  and singular the Mortgaged Properties into unto and to the use of the security Trustee Upon Trust and subject to the powers and  provisions  herein  contained  and  subject  also  to  the proviso for redemption hereinafter mentioned.

5.   Pari  Passu Ranking:-   The mortgage and first  charge created  pursuant  to  security  4  hereto   in  favour  of  the Security Trustee for the benefit of the Secured parties shall rank  pari  passu inter-se  and  without  and  preference  or priority over each other. The mortgage and first charge to be created in favour of the Security  Trustee  for  the  benefit  of  the  Working  Capital lenders  and  if  approved  in  accordance  with  the  Hedging Plan, the Hedge provides shall rank pari passu inter-se and with  the  Secured  Parties  and  without  any  preference  or priority over each other and the secured parties once such mortgage and charge in relation to the Mortgaged properties is created in their favour.”

26. Clauses 18.1 and 18.3 are also relevant and reproduced

herein under:- “18.1   Section 67A of the Transfer of Property Act, 1882:- The provisions of Section 67-A of the Transfer of Property ct, 1882, shall  not  apply  to these presents.   Notwithstanding that the Security Trustee may hold two of more mortgages executed by the Borrower including these presents in respect of which the Security trustee has the right to obtain the kind of decrees under section 67 of the Transfer of Property Act, 1882,  the  Security  Trustee  shall  be  entitled  to  sue  and obtain such decree on any of such mortgages without being bound to sue on all such mortgages in respect of which the mortgage money shall have become due.”

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27. Clause 23.1, deals with the manner of  payment of  stamp

duty.  The said clause reads as under:- “23.1.Stamp  Duty  and  Other  Fees  on  Execution, Registration, etc.:-  The Borrower shall pay all stamp duty, other duties, taxes, fees, penalties or other charges payable on  or  in  connection  with  the  execution,  issue,  delivery, registration  of  this  Indenture,  the  Security  Trustee Agreement  and  any  document,  act  and  registration performed pursuant hereto, if and when the Borrower may be  required  to  pay  the  same  according  to  any  of  the Financing Documents or according to the Applicable Law for the time being or at any time in orce in the State in which its properties  are  situated.   If  the  Borrower  fails  to  pay  the stamp  duty,  other  duties,  Taxes,  fees,  penalties  or  other charges payable hereinabove, then the Security Trustee may (but is not obligated to) pay such amounts, on behalf of the Borrower.   Any  money  paid  by  the  Security  Trustee  as aforesaid, shall constitute a part of the Mortgage Debt.”

28. From the facts discussed and narrated hereinabove, it  is

manifest that the instrument of mortgage came into existence

only  after   separate  loan  agreements  were  executed  by  the

borrower with the lenders with regard to separate loan advanced

by  those  lenders  to  the  respondent  borrower.   The  mortgage

deed  which  recites  at  length  as  to  how  and  under  what

circumstances property was mortgaged with the security trustee

for and on behalf of lender bank.

29. When  several  matters  are  contained  in  one  instrument,

what stamp is payable thereon in England has been dealt with

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and Halsbury’s Law of England 4th Edition volume 44 paragraph

613 at page 399 is quoted herein below:- “613.  Instrument  relating  to  several  matters.   Except where  there  is  statutory  provision  to  the  contrary,  an instrument containing or relating to several distinct matters is  to  be  separately  charged,  as  if  it  were  a  separate instrument,  with  stamp  duty  in  respect  of  each  of  the matters, and an instrument made for any consideration in respect of which it is chargeable with ad valorem duty, and also  for  any  further  or  other  valuable  consideration,  is separately chargeable, as if it were a separate instrument, in respect of each of the consideration.”

30. Coming to the provisions contained in the Stamp Act, we

have to see as to whether the provision of Section 5 is ancillary

to Section 4 or a separate and distinct provision.   For better

appreciation Sections 4, 5 and 6 of  the Gujarat Stamp Act is

reproduced herein below:-  “Section  4-  Several  instruments  used  in  single transaction of sale, mortgage or settlement.  (1) Where, in the case of any sale, mortgage or settlement, several  instruments  are  employed  for  completing  the transaction,  the  principle  instrument  only  shall  be chargeable with the duty prescribed in Schedule I  for  the conveyance, mortgage or settlement, and each of the other instruments  shall  be  chargeable  with  a  duty  of  1  [one hundred rupees] instead of the duty (if any) prescribed for it in that Schedule.  (2) The parties may determine for themselves which of the instruments  so  employed  shall,  for  the  purposes  of sub-section (1), be deemed to be the principal instrument.  Provided  that  the  duty  chargeable  on  the  instrument  so determined  shall  be  the  highest  duty  which  would  be chargeable  in  respect  of  any  of  the  said  instruments employed.

Section  5  -  Instrument  relating  to  several  distinct matters  or  distinct  transactions.  Any  instrument

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comprising or  relating to  several  distinct  matters shall  be chargeable  with  the  aggregate  amount  of  the  duties  with which separate instrument, each comprising or relating to one  of  such  matters  or  distinct  transactions,  would  be chargeable under this Act.

6.  Instruments  coming  within  several  descriptions  in Schedule I.-Subject to the provisions of the last preceding section, an instrument so framed as to come within two or more  of  the  descriptions  in  Schedule  I,  shall,  where  the duties  chargeable  thereunder  are  different,  be  chargeable only with the highest of such duties: Provided that nothing in  this  Act  contained  shall  render  chargeable  with  duty exceeding  one  rupee  a  counterpart  or  duplicate  of  any instrument chargeable with duty and in respect of which the proper duty has-been paid.”

31. From  bare  reading  of  these  provisions,  it  is  clear  that

Section  4  deals  with  single  transaction  completed  in  several

instruments, whereas Section 5 deals only with the instrument

which comprises more than one transaction and it is immaterial

for  the  purpose  whether  those  transactions  are  of  the  same

category or of different categories.

32. It  appears from the trustee document that  altogether 13

banks lent money to the mortgagor, details of which have been

described in the schedule and for the repayment of money, the

borrower  entered  into  separate  loan  agreements  with  13

financial institutions.  Had this borrower entered into a separate

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mortgage  deed  with  these  financial  institutions  in  order  to

secure the loan there would have been a separate document for

distinct transactions.  On proper construction of this indenture

of mortgage it can safely be regarded as 13 distinct transactions

which falls under Section 5 of the Act.

33. Both the learned counsel put reliance on the five Judges

Constitution Bench Judgment of this Court in the Case of  The

Member, Board of Revenue vs. Arthur Paul Benthall (supra).

The  said  case  originated  from a  reference  made  to  the  High

Court of Calcutta by the Revenue Authorities seeking  opinion

with regard to the stamp duty payable in the instrument. The

respondent in that case was at the material time the Managing

Director of M/s. Bird and Co. Ltd.  and Messrs F.W. Heilgers

and Com. Ltd which were acting  Managing Agents of  several

Companies  Act  under  the  Indian  Companies  Act.   The

respondents were also Director of a number of other Companies,

and had on occasions acted  as  liquidator of some Companies,

as executor  or administrator of estates of deceased persons and

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as trustee of various estates.  He proposed to execute power of

attorney empowering the M/s. Douglas Chisholm Fairbairn and

John James Brims Southerland jointly and severally to act for

him  in  his  individual  capacity  and  also  as  executor

administrator,  trustee,  Managing  Agents,  liquidator,  and  all

other  capacities.   The  Collector  referred  the  matter  under

Section  56(2)  of  the  Act  to  the  decision  of  Chief  Controller,

Revenue Authority, who eventually referred it to the High Court

of Calcutta stating his own opinion that stamp duty was payable

on the power “for as many respective capacities as the principal

executes the power”.  The majority view of the Bench held that

the different capacities of the executants would not constitute

the distinct matter for the purpose of Section 5 of the Act and

that the proper duty and instrument was payable under Article

48(d) of Schedule 1(a) of the Stamp Act.

34.   Answering the Reference, the Constitution Bench of this

Court elaborately discussed the scope and object of Sections 4,5,

and 6 of the Stamp Act and finally allowed the appeal.  Their

Lordship held:-

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“We  are  unable  to  accept  the  contention  that  the  word "matter"  in  section 5 was  intended  to  convey  the  same meaning  as  the  word  "description"  in  section 6.  In  its popular  sense,  the  expression  "distinct  matters"  would connote something different from distinct "categories". Two transactions might be of same description, but all the same, they  might  be  distinct.  If  A  sells  Black-acre  to  X  and mortgages  White-acre  to  Y,  the  transactions  fall  under different categories, and they are also distinct matters. But if A mortgages Black-acre to X and White-acre to Y, the two transactions fall  under the same category, but they would certainly  be  distinct  matters.  If  the  intention  of  the legislature  was  that  the  expression  'distinct  matter'  in section5 should be understood not in its popular sense but narrowly  as  meaning  different  categories  in  the  Schedule, nothing would have been easier than to say so. When two words  of  different  import  are  used  in  a  statute  in  two consecutive provisions, it would be difficult to maintain that they are used in the same sense, and the conclusion must follow that the expression "distinct matters" in section 5 and "description" in section 6 have different connotations.”

35.   Their Lordships further held that:- “When a person possesses both a personal  capacity and a representative  capacity,  such  as  trustee,  and  there  is  a delegation  of  power  by  him  in  both  those  capacities,  the position in law is exactly the same as if different persons join in  executing  a  power  in  respect  of  matters  which  are unrelated. There being no community of interest between the personal  estate  belonging  to  the  executant  and  the  trust estate vested in him, they must be held to be distinct matters for purposes of section 5. The position is the same when a person is executor or administrator, because in that capacity he represents the estate of the deceased, whose persona is deemed to continue in him for purposes of administration.

36. We  have  also  gone  through  the  provisions  contained  in

Sections 33, 39, Article 6 and 6(b) of the Act as also Bombay

Stamp  (Gujarat  Second  Amendment)  Rules,  2007  and  the

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Circular dated 2.4.2007.  After giving out anxious consideration

to those provisions and also in the light of the ratio decided by

the  Constitution  Bench  of  this  Court  in  The  Benthall  case

(supra), we are of the definite opinion that the High Court has

committed serious error of law in interpreting the provisions of

Sections 5 and 6 of the Act.  Consequently, the answer given by

the High Court on the Reference cannot be sustained in Law.

37. As a result, this appeal is allowed, the impugned order is

set aside.  It is held that the respondent is liable to pay deficit

stamp duty together  with interest  as directed by the revenue

authorities.  However, there shall be no order as to costs.

…………………………….J. (M.Y. Eqbal)

…………………………….J. (Arun Mishra)

New Delhi August 11, 2015

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ITEM NO.1B               COURT NO.10               SECTION IX (For Judgment)                S U P R E M E  C O U R T  O F  I N D I A                        RECORD OF PROCEEDINGS Civil Appeal No. 6054 of 2015 @ Petition(s) for Special Leave to  Appeal (C)  No(s).  32319/2013 CHIEF CONTROLLING REVENUE AUTHORITY                Petitioner(s)                                 VERSUS COSTAL GUJARAT POWER LTD. & ORS.                   Respondent(s)

Date : 11/08/2015 This petition was called on for pronouncement of judgment today. For Petitioner(s)

Ms. Jesal, Adv.                       For Ms. Hemantika Wahi,Adv.                       For Respondent(s)                      Mr. Dheeraj Nair,Adv.                      Mr. K. R. Sasiprabhu,Adv.                      

Hon'ble Mr. Justice M.Y. Eqbal pronounced the judgment of the  Bench  comprising  His  Lordship  and  Hon'ble  Mr.  Justice  Arun Mishra.

Leave granted. The appeal is allowed in terms of the signed reportable

judgment.

  [INDU POKHRIYAL] [SUKHBIR PAUL KAUR]      COURT MASTER    A.R.-CUM-P.S.

(Signed reportable judgment is placed on the file)

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