CIVIL WRIT PETITION NO.12329 of 2010 -1- IN THE HIGH COURT OF PUNJAB AND HARYANA AT CHANDIGARH CIVIL WRIT PETITION NO. 12329 of 2010 DATE OF DECISION: APRIL 19, 2011 The Shahabad Cooperative Sugar Mills Ltd. .....Petitioner VERSUS State of Haryana and another ....Respondents CORAM:- HON'BLE MR.JUSTICE RANJIT SINGH PRESENT: Mr. S.K. Mukhi, Advocate, for the petitioner. Ms. Shruti Jain, AAG, Haryana, for the State. **** RANJIT SINGH, J. The petitioner is a Co-operative Sugar Mill engaged in the business of processing of sugarcane at Shahabad, District Kurukshetra. The Sugar Mill has been set up on the land using the urgency provision of Land Acquisition Act. The award for the land was passed on 8.8.1983. The compensation was paid to the concerned owner of the land and the land was duly mutated in the name of the petitioner-Sugar Mill. The entry in this regard is also contained in the revenue record for running the sugar mill. The petitioner-Sugar Mill is now wanting to set up a 24 MW Bagasse based Co-generation of Power Plant, which is in public interest. To set up this co-generation plant, the petitioner has proposed to raise term loan of ` 41.50 crores from HARCO Bank and another loan of ` 34.84 crores from Sugar Development Fund (SDF), which is CIVIL WRIT PETITION NO.12329 of 2010 -2- Government of India undertaking. To secure this loan, the petitioner intended to mortgage the land, which is worth ` 95,84,22,225/- and the petitioner went to mortgage the same in favour of HARCO Bank. The petitioner also intended to get the second charge in favour of National Cooperative Development Corporation (NCDC), a Government of India Undertaking from whom the impugned loan of ` 34.84 crores is being raised out of the Sugar Development Fund (SDF). The petitioner submitted a request to the Revenue Officer (Tehsildar) for registration of second charge in favour of Government of India/NCDC by way of equitable mortgage. HARCO as well as NCDC have also submitted letter in support of the petitioner to mortgage the land in order to secure the respective loan being advanced to it. The Tehsildar had required the petitioner to deposit a stamp duty of ` 8,52,034/- for creation of second charge in favour of SDF through NCDC. The petitioner has, thus, filed this writ petition to urge that the mortgage deed be registered without payment of any stamp duty. The primary submission in support of this submission is that the petitioner is involved in agriculture and as per the Haryana Agricultural Credit Operations and Miscellaneous Provisions (Banks) Act, 1973 (for short 'the Act'), agriculturist is not required to pay the stamp duty as per Section 4 of the Act. This Section provides that where an agriculturist creates a charge on land, or any other immovable property, which he owns or in which he has an interest in respect of financial assistance given to him by a bank, he may make a declaration on the lines of the form set out in the CIVIL WRIT PETITION NO.12329 of 2010 -3- Schedule hereto or as near thereto as circumstances permit, declaring that thereby he creates, in favour of the bank, a charge on such land or his interest therein or other immovable property, as the case may be, to secure the financial assistance given to him by the bank. If the sugar mill is covered by definition of agriculturist then it may be exempt from payment of the stamp duty. It is thus, to be seen whether the petitioner-sugar mill would be covered by the definition of “Agriculturist' or not. The term 'Agriculturist' is defined in the Act and counsel has placed reliance on the definition. This is as under:- “(a) “agriculture” and “agricultural purpose” shall include making land fit for cultivation, cultivation of land, improvement of land including development of sources of irrigation, raising, protecting and harvesting of crops, horticulture, forestry, planting and farming, cattle breeding, animal husbandry, dairy farming, seed farming, pisciculture, apiculture, sericulture, piggery, poultry farming and such other activities as are generally carried on by agriculturists, dairy farmers, cattle breeders, poultry farmers and other categories of persons engaged in similar activities including marketing of agricultural products, their storage and transport and the acquisition of implements and machinery in connection with any such activity.” Relying upon this definition, counsel for the petitioner submits that the activities carried on by the petitioner would be covered by the definition of “agriculture” and purpose would also be “agricultural purpose”. Counsel, accordingly, pleads that directions CIVIL WRIT PETITION NO.12329 of 2010 -4- issued to the petitioner to pay the stamp duty for registering the mortgage deed, are illegal and cannot be sustained. The State counsel, in response, however, has pointed out that the petitioner had earlier approached the Revenue Authority for securing the loan taken from HARCO on the basis of declaration, but his request was declined and then the petitioner had paid stamp duty on the mortgage deed in question. The petitioner now again has approached with simple declaration and when asked to pay stamp duty, he has approached this Court. The petitioner is running a sugar mill. It is basically an industry though may be dependent upon agriculture. The definition of “agriculture” and “agricultural purpose” is wide enough, but still in my view may not cover the activities carried on by the petitioner. Word “agriculture” and “agricultural purpose” includes making the land fit for cultivation, cultivation of land, improvement of land including development of sources of irrigation. None of these activities can be attributed to the petitioner, who is running a sugar mill. The petitioner is also not raising, protecting and harvesting crops. He is not engaged in a horticulture, forestry, planting and farming. The petitioner is not engaged in cattle breeding, animal husbandry, dairy farming, seed farming, pisciculture, apiculture, sericulture, piggery and poultry farming. Running of sugar mill cannot be termed as such other activities as are generally carried on by agriculturists. The petitioner is running an industry, which is based on agriculture produce and so is not engaged in agricultural activity. There is nothing common in the activities carried on by the petitioner CIVIL WRIT PETITION NO.12329 of 2010 -5- and the agriculture except that he is used agriculture produced by other. The agriculturists like dairy farmers, cattle breeders, poultry farmers and other categories of persons engaged in similar activities including marketing of agricultural products, would also not cover the petitioner to be an “agriculture” or for “agricultural purpose”. The petitioner or his activities cannot be termed as agriculture or his activities as agriculturist. The loan, which the petitioner is securing, is for setting up a power generation plant, which again is not for the purpose of agriculture, but for either running his own industry or for commercial purpose. A decision of the Division Bench relied upon by the counsel for the petitioner in Narvir Singh and another Versus State of Haryana and others, (CWP No.3533 of 2007) decided on 30.8.2007 may not help his cause. That was a case where issue was to determine if mutation can be entered into revenue record in respect of an equitable mortgage by deposit of title deed without deed of mortgage. Question involved in the said case was validity of the equitable mortgage deed. It was viewed that memorandum merely confirmed an equitable mortgage but did not create a mortgage as it was merely a record of transaction. This was not held to be registrable. Here the petitioner want his mortgage deed to be registered. That was a case of registration of charge in the revenue record and not for registration of mortgage. Reference to Budhewal Co-op. Sugar Mills Limited Versus Commissioner of Income-Tax, (2009) 315 ITR 351, is also misplaced. This was a case where issue was to see if special deduction to a co-operative society engaged in CIVIL WRIT PETITION NO.12329 of 2010 -6- manufacture and sale of sugar was entitled under the Income Tax Act, 1961. There the members were found to be growers of sugarcane as well and hence, were held entitled to deduction. Here, the issue is of payment of stamp duty to secure the mortgage deeds. I am, thus, not inclined to interfere in the writ jurisdiction. The writ petition is, accordingly, dismissed. April 19, 2011 ( RANJIT SINGH ) monika JUDGE