IN THE HIGH COURT OF HIMACHAL PRADESH, SHIMLA CMPMO No. 131 of 2002 Date of decision: 07.12.2010. Keshwa Ram . …Petitioner. Versus State of H.P. and another …Respondents. Coram The Hon’ble Mr.Justice Deepak Gupta, J. Whether approved for reporting?1 No. For the petitioner: Mr. R.K.Gautam, Sr. Advocate with Mr. Vikrant Chandel, Advocate. For the respondents: Mr. Vivek Thakur, Addl. A.G. Deepak Gupta, J. (Oral) 1. Interpretation of two exemption notifications issued under Section 9(1)(a) of the Indian Stamp Act and Article 1 of the Indian Registration Act is the subject matter of the present petition. 2. The notification issued under Section 9(1)(a) of the Indian Stamp Act reads as follows:- “In exercise of the powers conferred by clause (a) of sub-section(1) of section 9 of the Indian Stamp Act, 1809 (Act No.2 of 1899) as applicable to Himachal Pradesh, the Governor, Himachal Pradesh is pleased to remit the stamp duty chargeable on the instruments executed by or on behalf of Co-operative Society or by any 1 Whether the reporters of local papers may be allowed to see the Judgment? Yes. 2 officer or member thereof and relating to the business of such society or any class of such instruments or in respect of any award or order made under the H.P.Cooperative Societies Act, 1968 (Act No. 3 of 1969) with immediate effect in the whole of Himachal Pradesh.” 3. Notification issued under the Indian Registration Act reads as follows:- “16. Provided further that no registration fee shall be chargeable on the instrument executed by or on behalf of Co-operative Society or by any officer or member thereof and relating to the business of the such society or any class or such instruments or in respect of any award or order made under the H.P.Co-operative Societies Act, 1968 (Act No. 3 of 1969.” 4. The undisputed facts are that the petitioner is a member of the Cooperative Society known as Jogindra Central Cooperative Bank. He obtained a loan for purchase of a truck. He mortgaged his property to secure the repayment of the loan. He claimed exemption from payment of stamp duty and registration fee in terms of the aforesaid two notifications. It appears that the respondent No.2 initiated proceedings for recovery of stamp duty and 3 registration fee from the petitioner. The plaintiff thereafter filed civil suit in the Court of the Sub Judge, 1st Class, Kandaghat claiming benefit of the aforesaid two notifications and he prayed that a decree for declaration be passed that he is entitled to the benefit thereof and the respondents be restrained by a decree of prohibitory injunction from recovering the amount of stamp duty and registration fee as arrears of rent. This suit was decreed by the learned trial Court. However, the learned lower Appellate Court has set-aside the decree. According to the learned lower Appellate Court it is only the documents which directly relate to the Cooperative Society or its business which can legally be exempted or remitted from such levy. The Appellate Court held that merely because the petitioner was a member of the Bank, he is not entitled to the exemption under the two notifications. 5. The value of the suit is admittedly less than Rs.20,000/- and therefore, no second appeal is maintainable and hence this petition under 4 Article 227 of the Constitution of India. Since, only a legal question is involved, petition has been admitted for hearing. 6. The most important word of the notifications are as follows: executed by or on behalf of Cooperative Society or by any officer or member thereof and relating to the business of the such society or any class or such instruments Identical words are used in both the notifications. A perusal of the aforesaid first phrase shows that any document executed by or on behalf of the Cooperative Society relating to the business of the society is perse exempted from stamp duty and registration fee. The second part of the aforesaid phrase deals with instruments executed by any officer or member of the cooperative society relating to the business of the society. The learned lower Appellate Court held that the loan was taken by the petitioner for his personal use and therefore, it cannot be said to be business of the society. This interpretation, in my view, is not correct. As pointed out above, the first half 5 of the phrase totally exempts any documents executed by or on behalf of the Cooperative Society relating to its business. These can be signed by any person but must be executed by or on behalf of the Cooperative Society. The second part of the phrase relates to documents/instruments executed by officers or members of the society and they should relate to the business of the society. 7. The Jogindra Central Cooperative Bank is a society and is engaged in banking business. One of the essential parts of a banking business is to extend loans. When a mortgage deed is executed to repay the loan it has a direct link and nexus with the business of the society. Obviously, only those instruments will be exempted which are executed by the members of the society or by office bearers of the society. Therefore, when a loan is taken by a member or office bearer of the society and such member or office bearer executes any instrument and such instrument is subject to payment of stamp duty/registration fee then in 6 terms of the aforesaid notifications the payment of stamp duty charges and registration fee is remitted and exempted. 8. In view of the above discussion, the petition is allowed. The judgement and decree of the learned lower Appellate Court is set-aside and the judgement and decree of the learned trial Court is affirmed. No costs. 7th December, 2010 (Deepak Gupta) ™ Judge