1 HIGH COURT OF MADHYA PRADESH BENCH AT INDORE (SB: HON. SHRI JUSTICE PRAKASH SHRIVASTAVA) W.P. No.1589/2004 State of M.P. .... Petitioner Vs. Hemant @ Hemkant Dave and Another .... Respondents ------------------------------------------------------------------------------------ W.P. No.1591/2004 State of M.P. .... Petitioner Vs. Kailashchandra Malpani and Another .... Respondents ------------------------------------------------------------------------------------ Mrs. Jyoti Tiwari, learned G.A. for the petitioner. Shri M.K. Jain, learned counsel for respondent no.1. ------------------------------------------------------------------------------------ Whether approved for reporting : ORDER (Passed on 14.9.2011) 1/ This order will govern the disposal of W.P. No.1589/2004 and W.P. No.1591/2004, which have been filed against the common order dated 22.2.2004 passed by the Board of Revenue in Revision Case No.792-1/2001 and 793-1/2001. 2/ In W.P. No.1591/2004 the respondent no.2-Bank had extended the facility of cash credit limit to the respondent no.1 and for this purpose the respondent no.1 had executed the 2 deed (Ex.P/2) titled “mortgage deed of guaranteers property by way of security”. When the said deed was produced before the Sub Registrar for registration, the same was impounded. The Sub-Registrar referred the matter to Collector Stamps, vide Annexure P/3, on the ground that the document was not sufficiently stamped and the stamp duty was payable in terms of Article 40 of the Stamp Act, 1899 (for short “the Act”), as the document comes under the definition of mortgage deed under Section 2(17) of the Act. The Collector Stamps issued notice to the respondents and the respondents took the stand that the deed in question is a simple mortgage executed for due payment of the cash credit facility and the stamp duty is payable under Article 57(b) of the Act. The Collector Stamps passed the order dated 29.6.1999 holding that the deed in question is a mortgage deed covered under Section 2(17) of the Act, therefore, stamp duty as per Article 40 is payable. The Collector Stamps, therefore, held the respondents liable for payment of the additional duty with penalty. The respondents filed Revision Petition before the Board of Revenue and the Board of Revenue by order dated 22.1.2004 has allowed the revision petition. 3/ In W.P. No.1589/2004 also the similar document was executed by the respondent no.1 in favour of the respondent no.2. The Registrar had impounded the document and referred the matter to the Collector Stamps on the same ground and the Collector Stamps had passed the similar order on the same date on 29.6.1999, and the Revision against that order has been allowed by the Board of Revenue by common 3 order dated 22.1.2004. 4/ Learned counsel appearing for the petitioner submitted that the Board of Revenue has committed an error in allowing the Revision Petition without properly appreciating the position on facts and in law, as enumerated in detail by the order of Collector Stamps. She submits that the order of the Board of Revenue is a cryptic order and that the stamp duty is payable as per Article 40 of the Stamp Act looking to the nature of the deed. 5/ Learned counsel appearing for the respondents have supported the impugned order passed by the Board of Revenue and submitted that no error has been committed by the Board of Revenue in holding that the stamp duty is payable under Article 57 of the Act. 6/ I have heard the learned counsel for the parties and perused the record. 7/ Section 2(17) of the Act defines mortgage deed as under :- “Mortgage-deed”.-”Mortgage-deed” includes every instrument whereby, for the purpose of securing advanced or to be advanced, by way of loan, or an existing or future debt, or the performance of an engagement, one person transfers, or creates to, or in favour of, another, a right over or in respect of specified property.” 8/ Article 40 of the Act relates to the payment of duty of mortgage deeds and the relevant part of Article 40 is extracted below :- Description of Instrument Proper Stamp-duty Art. 40. MORTGAGE-DEED, not being an Agreement relating to Deposit of title-deeds, 4 Pawn or Pledge (No.6), Bottomry Bond (NO.16), Mortgage for a Crop (No.41), Respondentia Bond (No.56), or Security Bond (No.57),- (a) When possession of the property or any part of the property comprised in such deed is given by mortgagor or agreed to be given; The same duty as a Conveyance (No.23) for a consideration equal to the amount secured by such deed. (b) When [* * * *] possession is not given or agreed to be given as aforesaid; The same duty as a Bond (No.15) for the amount secured by such deed. Explanation.-A mortgagor who gives to the mortgagee a power-of-attorney to collect rents or a lease of the property mortgaged or part thereof, is deemed to give possession within the meaning of this Article. (c) when a collateral or auxiliary or additional or substituted security, or by way of further assurance for the above-mentioned purpose where the principal or primary security is duty stamped- for every sum secured not exceeding Rs.1,000; Eight annas. 9/ Article 57 relates to the payment of duty on security bond or mortgage deed and reads as under :- Description of Instrument Proper Stamp-duty Art. 57. SECURITY BOND OR MORTGAGE DEED, executed by way of security for the due execution of an office, or to account for money or other property received by virtue thereof or executed by a surety to secure the due performance of a contract- (a) when the amount secured does not exceed Rs.1,000; The same duty as a Bond (No.15) for the amount secured. (b) in any other case. Five rupees. 5 10/ In the present case, the Registrar while making a reference to the Collector, has relied a number of judgments of different courts. The Collector Stamps while passing the order dated 29.6.1999 has examined the nature of document which was executed by respondent no.1 in favour of respondent no.2 and after referring to the judgments of Madras High Court reported in AIR 1979 Madras 282, AIR 1947 Awadh 37 and AIR 1931 Patna 705 took the view that the stamp duty is payable as per Article 40 of the Act. This order has been reversed by Board of Revenue. 11/ I have minutely examined the impugned order passed by the Board of Revenue. The Board of Revenue after taking note of Article 57 of the Act has allowed the Revision Petition by placing reliance upon some judgment of Allahabad High Court of the year 1971, even without mentioning the details of the said judgment. The Board of Revenue has not appreciated and examined the reasoning and the judgments which find place in the order of the Collector Stamps. The Board of Revenue has also not properly examined the nature of the document, which was executed by the respondent no.1 in favour of the respondent no.2. The provisions as contained in Section 2(17) and Article 40 of the Act have also not been considered by the Board of Revenue. I find substance in the argument of the learned counsel for the petitioner that the order of the Board of Revenue is cryptic inasmuch as the Board of Revenue has failed to examine the relevant aspects of the matter and has not assigned adequate reasons for reversing the order of the Collector Stamps. 6 12/ In view of the aforesaid analysis, the order of the Board of Revenue dated 22.1.2004 can not be sustained and is hereby set aside. The matter is remanded back to the Board of Revenue for fresh adjudication in accordance with law, keeping in view the observations made above. 13/ The writ petitions are accordingly allowed to the extent indicated above. 14/ The original order be kept in W.P. No.1589/2004 and a copy whereof be placed in the record of W.P. No.1591/2004. No costs. (PRAKASH SHRIVASTAVA) J u d g e Trilok.