Allahabad High Court Judgement

Allahabad High Court Judgement

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JUDGEMENT HEADLINE : The Question Whether The Scheme Of Arrangement Should Be Stamped Or Not - Referred To Third Judge.
JUDGEMENT TITLE : M/S Hero Motors Limited, New Delhi Thru Its President Vs. State Of U.P. Thru' Adm (Finance & Revenue) And Others On 06/04/2007 By Allahabad High Court
CASE NO : WRIT - C NO. 41811 OF 2006
CORAM : Hon'ble Yatindra Singh,J. And Hon'ble Ran Vijai Singh,J.

HIGH COURT OF JUDICATURE AT ALLAHABAD


Reserved
1. Civil Misc. Writ Petition No. 41811 Of 2006
M/s Hero Motors Limited Vs. The State Of UP And Others

2. Civil Misc. Writ Petition No. 71022 Of 2006
Dhampur Sugar Mills Limited Vs. Apar Zila Adhikari Kanpur And Another

3. Civil Misc. Writ Petition No.2888 Of 2007
M/s Amar Ujala Publications Ltd. Vs. State Of UP And Others

4. Civil Misc. Writ Petition No. 8114 Of 2007
M/s Telesia Trading & Finance Ltd. Vs. State Of UP And Others.

5. Civil Misc. Writ Petition No. 8119 Of 2007
M/s Prudential Merchants & Traders Ltd. Vs. State Of UP And Others.

6. Civil Misc. Writ Petition No. 8139 Of 2007
M/s Padamshree Projects Ltd. Vs. State Of UP And Others.

Hon'ble Yatindra Singh, J.
Hon'ble Ran Vijai Singh, J.
(Delivered By Hon'ble Yatindra Singh, J)
1. The Main Question Involved In These Writ Petitions Is, 'whether Any Stamp Duty Can Be Charged Under, Article 23 Of Schedule 1-B Of The Indian Stamp Act (see Appendix-1) As Applicable In Our State (the UP Stamp Act) On The Scheme Of Arrangement Sanctioned By The Court, Which May Be De-merger Of A Going Concern With Another Company Or Amalgamation/merger Of One Company With Another Company.

2. The Indian Stamp Act Has Been Amended By The Different States. In Order To Distinguish The Acts As Applicable In Different States, I Am Prefixing The Name Of That State While Referring To The Act As Applicable In The State,

THE FACTS
WP 41811 Of 2006 (Hero Motors Case)
3. M/s Majestic Auto Limited (transferor Company) Is A Public Limited Company, It Has Two Units: One At Ghaziabad And Another At Ludhiana. The Unit At Ludhiana Is Manufacturing Moped Up To 72 Cc. The Unit At Ghaziabad Is Manufacturing Moped Beyond 72 Cc. M/s Hero Motors Limited (the Transferee Company) Is Another Public Limited Company Manufacturing Mopeds And Scooters. The Board Of Directors Of These Two Companies Proposed A Scheme Of Arrangement By Which Ghaziabad Unit Of The Transferror Company Was To Be De-merged And Merged With The Transferee Company. This Proposed Scheme Was Sanctioned By The Punjab And Haryana High Court On 29.5.2004. It Was Also Sanctioned By The Delhi High Court On 22.7.2004. It Appears That There Was Some Mistake In The Order Of The Delhi High Court And It Was Corrected On 30.7.2004.

4. In Substance The Scheme Of Arrangement Provides That The Assets Of Ghaziabad Unit Alongwith Its Liabilities And Employees Stood De-merged With The Transferor Company And Merged With The Transferee Company. Under The Scheme Of Arrangement, The Share Holders Of The Transferor Company Got Shares Of The Transferee Company In The Ratio Of 100 Is To 10.39 Shares Of The Face Value Of Rs. 10/-.

5. The Immoveable Property Is Situate In This State. The Transferee Company Filed An Application Before The Tehsildar For Recording Its Name Over The Same Under The Land Revenues Act. Thereafter A Notice Dated 5.4.2005 Was Issued To The Petitioner To Show Cause As To Why Deficiency In The Stamp Duty And Penalty Be Not Imposed On It. The Transferee Company Filed Their Reply On 18.4.2005 Against The Same. Thereafter The Order Was Passed On 8.6.2006 Imposing The Deficiency Of Stamp Duty Of Rs. 9,44,47,000/- Under Article 23(a) Of Schedule (I-B) Of The UP Stamp Act And Penalty Of Rs.5,00,00,000/-. Hence The Writ Petition No. 41811 Of 2006.

WP 71022 Of 2006 (Dhampur Sugar Case)
6. The Mansurpur Sugar Mills Limited (the Transferor Company) Is A Public Limited Company And Is A Subsidiary Of Dhampur Sugar Mills Ltd. (the Transferee Company). A Scheme Of Arrangement For Amalgamating The Transferor Company Alongwith (assets Liabilities And The Employees With The Transferor Company) Was Sanctioned By The Allahabad High Court On 14.2.2006.

7. Under The Scheme, The Shareholders Of The Transferor Company Got Shares Of The Transferee Company In The Ratio Of 10 Is To 1 Share Of Face Value Of Rs. 10. A Notice Was Issued To The Transferee Company On 25.11.2006 To Show Cause As To Why The Deficiency In Stamp Duty Alongwith Penalty Be Not Imposed Upon It. Hence The Writ Petition No. 71022 Of 2006.

WP 2888 Of 2007 (the Amar Ujala Case)
8. Amar Ujala Prakashan Bareilly (the Transferor Company) And M/s Amar Ujala Publication Ltd. Agra (the Transferee Company) Are Public Limited Companies. They Framed A Scheme Of Arrangement By Which The Transferor Company (alongwith Assets, Liability, And Employees Was Amalgamated/merged With The Transferee Company. This Scheme Was Sanctioned By The Allahabad High Court On 9.7.2004.

9. Under The Scheme, The Shareholders Of The Trransferor Company Got Share Of The Transferee Company In The Ratio Of 3 Is To 1 Share Of The Face Value Of Rs. 10/-The Respondents Issued A Notice Dated 25.11.2006 To Show Cause As To Why The Deficiency In The Stamp Duty And Penalty Be Not Imposed On Them. Hence The Present Writ Petition.

WP 8114 Of 2007 (The Telesia Case)
10. There Are Three Companies Namely Gobind Vanijya Ltd, Kanpur, Ujala Mercantiles Ltd, Kanpur And M/s Telesia Trading & Finance Ltd., Kanpur. The Entire Assets Of The Transferor Companies Consist Of Investments In Equity Shares Of Other Companies Only. A Scheme Of Arrangement Was Drawn Up By Which The First Two Companies Namely Gobind Vanijya Ltd, Kanpur And, Ujala Mercantile Ltd, Kanpur (the Transferor Companies) (alongwith Their Asset, Liabilities And Employees Were Amalgamated With M/s Telesia Trading & Finance Ltd., Kanpur (the Transferee Company). This Scheme Was Sanctioned By The Allahabad High Court On 4.8.2003.

11. Under The Scheme, The Share Holders Of The Transferor Company Got Shares Of The Transferee Company In The Ratio Of 2 Is To 1 Of Face Values Of Rs. 10. A Show Cause Notice Was Issued To The Transferee Company On 25.11.2006 To Show Cause Is To Why Deficiency In The Stamp Duty And Penalty Be Not Imposed Upon It. Hence The Writ Petition No. 8114 Of 2007.

WP 8119 Of 2007. (Pre Dental Merchant Case)
12. Ved Mercantiles Ltd, Kanpur And Parag Mercantiles Ltd. Kanpur Are The Transferor Companies And Prudential Merchants And Traders Ltd Is The Transferee Company. A Scheme Of Amalgamation Was Drawn Up By Which The First Two Companies Alongwith Assets, Liabilities, And Employees Merged With The Third Company. This Scheme Was Approved On 22.4.2003. The Entire Assets Of The Transferor Companies Consist Of Investment In Equity Shares Of Other Companies Only.

13. Under The Schemes, The Share Holders Of The Ved Mercantiles Ltd, Kanpur And Prudential Merchants And Traders Ltd Are Allotted Shares Of The Transferee Company In The Ratio 1 Is To 1 And 5 Is To 1 Share Respectively Of Face Value Of Rs. 10. A Show Cause Notice Has Been Issued To The Transferee Company On 25.11.2006 To Show Cause As To Why The Deficiency In The Stamp Duty And Penalty Be Not Imposed Upon It. Hence The Writ Petition No. 8119 Of 2007.
WP 8139 Of 2007 (Padmshree Projects Case)
14. There Are Three Companies Namely Elvis Commercials Enterprises Ltd , Silver Reed Commercials Ltd, Kanpur (the Transferor Companies) And M/s Padamshree Projects Ltd, Kanpur (the Transferee Company). In This Case Also, The Entire Assets Of The Transferor Companies Consist Of Investments In Equity Shares Of Other Companies Only. By The Scheme Of Arrangement, The First Two Companies (alongwith Assets, Liabilities And Employees) Amalgamated With The Transferee Company. This Scheme Was Sanctioned By The Allahabad High Court On 22.4.2003.

15. Under The Scheme, The Share Holders Of Silver Reed Commercial Ltd, Kanpur And Elvis Commercials Enterprises Ltd. Got Shares Of Transferee Company In The Ratio Of 1 Is To 1 And 4 Is To 3 Shares Respectively Of Face Value Of Rs. 10. A Show Cause Notice Has Been Issued To The Transferee Company On 25.11.2006 To Show Cause As To Why The Deficiency In The Stamp Duty And Penalty Be Not Imposed Upon The Same. Hence, The Writ Petition No. 8139 Of 2007.

POINTS FOR DETERMINATION
16. We Have Heard Sri Navin Sinha, Sri Rakesh Dwivedi, Senior Advocates, Sri Achintya Dwivedi;, Sri Kevin Gulathi, Sri Manish Goyal, Sri Nishat Mehrotra, Sri Rakesh Ranjan Agrawal, Sri SD Singh, Sri Suyash Agrawal Advocates For The Petitioners And Sri Sanjay Goswami, Standing Counsel For The Respondents. The Following Points Arise For Determination In This Case.
(i)Whether The Writ Petitions Are Liable To Be Dismissed On The Ground Of Alternative Remedy?
(ii)Whether The Scheme Of Arrangement, Sanctioned By The Court, (which Includes A Scheme Of De-merger And Merger Of The Going Concern With Another Company And A Scheme For Amalgamation/merger Of A Company With Another Company) Is An Instrument And A Conveyance Within The Meaning Of The UP Stamp Act?
(iii)In Case Answer To The Aforesaid Point Is In The Affirmative Then, Whether Such Scheme Is Covered By Article 23 Of Schedule 1-B Of The UP Stamp Act?

POINT-1: NO DISMISSAL- ON ALTERNATIVE REMEDY
WP 4811 Of 2006 - Order Dated 8.6.2006- No Reasonable Opportunity
17. In Pursuance Of The Show Cause Notice Dated 5.2.2005 The Petitioner Had Filed Its Reply On 18.4.2005. Thereafter No Evidence Was Produced And The Arguments Were Heard On 13.5.2005 And 6.6.2005. However, Before Any Decision Could Be Taken, The Presiding Officer Was Transferred And A New Officer Took Over. Thereafter Some Dates Were Fixed But The Case Could Not Be Taken For One Reason Or The Other.

18. The Case Was Adjourned On 21.9.2005 As The Staff Was On Strike On That Date. It Was Listed On 28.9.2005 And 4.10.2005 But Was Adjourned As The Advocates Were On Strike. Thereafter Some Dates Were Fixed In Which It Was Mentioned That The Counsel For The Hero Motors Was Not Present. It Was Again Listed On 12.5.2006. It Is Mentioned In The Order-sheet That:
The Case Is Taken Up Today;
The Respondent Is Not Present;
Written Arguments Have Been Received; And
The Case Be Put Up On 8.6.2006 For Order.

19. The Original File Of This Case Was Produced Before Us. In The Original File, There Are No Written Arguments. The Only Thing On The Record Is The Reply Given By The Petitioner On 18.4.2005. The Order Sheet Indicates That The Petitioner Was Not Present Yet, Surprisingly The Judgement Records That The Counsel For The Petitioner Was Heard.

20. The Petitioner Has Alleged In Paragraph-26 Of The WP That Case Could Not Be Taken Up Due To Strike And No Information Of The Date Was Given. There Is No Specific Denial Of The Same. The Order Sheet Also Indicates That The Case Was Adjourned Due To Strike Of The Employees And The Advocates. There Is Nothing On The Record To Show That Any Notice Of The Date After The Strike Was Given To The Petitioner. The Order-sheet Is Also Not Signed By The Counsel For The Petitioner From 21.7.2005 The First Day The Case Could Not Be Taken Up Due To Strike. In View Of This, It Can Not Be Said That Petitioner Was Given Reasonable Opportunity Before The Impugned Order Was Passed. In These Circumstances, Alternative Remedy Is Not An Absolute Bar. Apart From It, As Clarified In The Succeeding Paragraphs No Factual Questions Are Involved: The Facts Are Admitted And Only The Questions Of Law Are Being Argued.

Other WPs
21. All Other WPs (except WP 41811 Of 2006) Are Against Notice. In These WPs Stamp Duty Is Being Demanded Under Article 23 Of Schedule 1-B Of The UP Stamp Act On The Scheme Of Arrangement. A Common Question Of Law Is Being Raised That The No Stamp Duty Can Be Charged On The Scheme Of Arrangement Under That Article. It Is In View Of This, We See No Justification In Dismissing The Writ Petition On The Ground Of Alternative Remedy.

POINT 2: SCHEME OF ARRANGEMENT IS A CONVEYANCE
22. The Counsel For The Petitioners Submitted That The Scheme Of Arrangement (demerger And Merger Of A Going Concern Or The Amalgamation/merger With Any Company) Sanctioned By The Court Is Neither An Instrument Nor A Conveyance Under The UP Stamp Act And Stamp Duty Can Not Be Charged Upon The Same. The Counsel For The Petitioners Have Elaborated Their Submissions As Follows:
(i)The Scheme Of Arrangement Is An Order Of The Court And Can Neither Be An Instrument Nor A Conveyance.
(ii)Under Section 394 (2) Of The Companies Act, The Transfer Takes Place By Virtue Of The Order Of The Court And No Other Document Is Necessary.
(iii)In Any Other Case, The Transfer Can Be Completed By An Agreement Between The Parties Without Intervention Of The Court And The Fact That The Court Has Approved, It Does Not Change Its Nature. However, Here The Transfer Can Not Take Place Merely By The Agreement Of The Parties; It Can Take Place Only If It Is Sanctioned By The Court. The Order Regarding Scheme Of Arrangement Is Different Than The Order/ Decree In Any Other Case. In Other Cases, The Transfer Can Take Place Without Intervention Of The Court, Here It Is Not So.
(iv)Before Any Document Can Be Treated As An Instrument Or A Conveyance, It Has To Be Executed. The Word 'execution' Is Defined Under The Stamp Act. The Scheme Is Not Signed By Any Of The Parties And It Can Not Be Said That It Is Executed.
(v)Hindustan Lever And Another Vs. State Of Maharastra ; 2004 (9) SCC 438 (the HindustanLever Case) Arose From State Of Maharastra Where The Definition Of Word 'conveyance' Has Been Amended. It Specifically Includes Such Schemes Of Arrangement. The Observation Made In The Hindustan Lever Case Should Be Seen In That Light Only.
(vi) The Supreme Court Decision In Ruby Sales Services Pvt Ltd. Vs. State Of Maharastra And Others; 1994 (1) SCC 531 (The RubySales Case) Is Distinguishable On Facts As In That Case The Transfer Could Take Place Without Intervention Of The Court And The Compromise Itself Indicated That It Is A Conveyance.
(vii) The Case Is Covered By Division Bench Decision Of The Calcutta High Court Reported In Madhu Intra Ltd. Vs. Registrar Companies (2005) (58) SCL 160 = 2006 (180) Companies Cases 510 (the MadhuIntra Case). The Definition Of The Word 'conveyance' In The WB Stamp Act Was Similar To As Is Contained In The UP Stamp Act. In The MadhuIntra Case, Calcutta High Court After Rightly Distinguishing The RubeySales Case Held That The Scheme Of Arrangement Is Not A Conveyance Within The Meaning Of The Stamp Act.
(viii) Generally In A Conveyance, The Property Passes From One Hand To Another Hand. In These Cases, Even Though The Property Is Passing From One Company To Another Neverthless, The Shareholders Of The Transferor Company Become The Shareholders Of The Transferee Company. In Fact, The Property Remains In Control Of The Same Shareholders Except Some Others Shareholders Are Added.
(ix)The Demerger And Merger Of A Going Concern Can Neither Be An Instrument Nor A Conveyance (see Endnote-2 For Rulings And Dictionary Cited By The Counsel For The Petitioners To Explain The Meaning Of The Word 'going Concern').
I Am Afraid: I Can Not Accept These Submissions.

23. The Supreme Court In The RubySales Case Held,
'There Is No Particular Pleasure In Merely Going By The Label But What Is Decisive Is Term Of Document .....
The Consent Decree Falls Under The Definition Of Conveyance As Well As Instrument' (Paragraph 11 And 12).

24. In The HindustanLever Case The Supreme Court Held,
'The Foundation Or The Basis For Passing An Order Of Amalgamation Is Agreement Between Two Or More Companies. Under The Scheme Of Amalgamation, The Whole Or Any Part Of The Undertaking, Properties Or Liability Of Any Company Concerned In The Scheme Is To Be Transferred To The Other Company. (Paragraph 9)
...
Two Broad Principles Underlying A Scheme Of Amalgamation Which Have Been Brought Out In This Judgment [ Miheer H. Mafatlal Vs. Mafatlal Industries Ltd. : (1997) 1 SCC 579] Are:
(i) The Order Passed By The Court Amalgamating The Company Is Based On A Compromise Or Arrangement Arrived At Between The Parties And;
(ii) The Jurisdiction Of The Company Court While Sanctioning The Scheme Is Supervisory Only I.e. To Observe That The Procedure Set Out In The Act Is Met And Complied With And That Proposed Scheme Of Compromise Or Arrangement Is Not Violative Of Any Provision Of Law, Unconscionable Or Contrary To Public Policy. (Paragraph 12)
...
Thus The Amalgamation Scheme Sanctioned By The Court Would Be An "instrument" Within The Meaning Of Section 2(l). By The Said "instrument" The Properties Are Transferred From The Transferor Company To The Transferee Company, The Basis Of Which Is The Compromise Or Arrangement Arrived At Between The Two Companies.' (Paragraph 15).

25. The Question Whether The Amendments In The Definitions Of The Conveyance In The Maharastra Stamp Act Are Merely Clarificatory And Out Of Abundant Caution Or Not Has Been Answered In The RubeySales Case As Well As By The Division Bench Decision Of The Bombay High Court In Li Taka Pharmaceuticals Ltd. Vs. State Of Maharashtra AIR 1997 Bombay 7 (the LiTaka Case). The Supreme Court In The RubySales Case Held,
'As We Have Noticed Earlier The Definitions Of "conveyance" And "instrument" Start With The Expression "includes" Which Shows That The Definitions Are Very Wide. It Appears To Us That The Amendment Was Made Out Of Abundant Caution And It Does Not Mean That The Consent Decree Was Not Otherwise Covered By The Definitions Given In Section 2(g) Of 2(l) Of The Act. Having A Stamp Of Court Affixed Will Not Change The Nature Of The Document.' (Paragraph 15).

26. The Bombay High Court In The LiTaka Case Held,
'By Act No.17 Of 1993, The Legislature Has Also Added S. 2(g) (iv) To Include Every Order Passed By The High Court Under S. 394 Of The Companies Act In Respect Of Amalgamation Of Companies. In Our View, Applying The Ratio Of The Decision In The Case Of Ruby Sales Services Prima Facie, It Appears To Be Clalrificatory. As ..., The Amalgamation Order Passed Under S. 394 Of The Companies Act Is Based Upon The Agreement Between The Two Companies.' (Paragraph 15)

27. In View Of Above, I Hold That The Scheme Of Arrangement (be That May Be Demerger And Merger Of A Going Concern With Another Company Or Amalgamation/ Merger With Another Company) Sanctioned By The Court Is An Instrument And A Conveyance Within The Meaning Of Section 2(10) Of The UP Stamp Act.

POINT III: DUTY NOT CHARGABLE UNDER ARTICLE 23 SCHDULE 1-B
28. The Counsel For The Petitioners Submitted That Even If The Scheme Of Arrangement Is An Instrument And A Conveyance Within The Meaning Of The UP Stamp Act:
No Stamp Duty Is Payable Unless That Conveyance Can Be Chargeable Under Section 3 Read With The Schedules Of The UP Stamp Act;
The Notices In These Cases Are For Payment Of Duty Under Article 23 Of Schedule 1-B Of The UP Stamp Act.
The Scheme Of Arrangement Is Not Covered By The Aforesaid Article.

29. The Standing Counsel Submitted That:
Every Scheme Of Arrangement Can Be Split Up Into Transfer Of Assets And Liabilities;
Assets Can Also Be Split Into Immovable Or Moveable; In Case They Are Not Immoveable Then They Will Be Movable {section 3 (26) And 3(36) Of The General Cluses Act};
Article 23(a) And 23(b) Of The Schedule 1-B Of The UP
Stamp Act Cover The Transfers Of Immovable And Moveable Property Respectively And The Transfer Of Assets Can Be Categorised In One Of Them;
The State Is Charging Stamp Duty On Transfer Of Assets Only And It Is Not Charging Any Duty On Transfer Of Liability. This Can Always Be Done.
The Fact That Our State Has Not Separately Provided For Scheme Of Arrangement As Has Been Done By Some Other States Does Not Mean That Scheme Of Arrangement Is Not Covered By Article 23 Of Schedule 1-B;
The Transfer Of Assets Of Immovable Property Can Be Charged Under Article 23(a) And Of Movable Property Under Article 23(b) Of Schedule 1-B.
The Question Is Whether Scheme Of Arrangement Can Be So Split.

30. Section 3 Of The UP Stamp Act Is The Charging Section. It Provides That All Instrument Shall Be Charged With Duty Of The Amount As Indicated In The Schedules In These Cases Notices Have Been Issued Or Order Has Been Passed Treating The Case To Be Covered By Article 23 Of Schedule-1(B). This Article Conceives Of Two Kinds Of Conveyances
Conveyances Relating To Immovable Property {sub Article (a)};and
Conveyances Relating To Movable Property {sub Article (b)}.
The Question Is Whether The Scheme Of Arrangement Is Covered By It, What Is The Nature Of Scheme Of Arrangement? But Before That, Some Words About The Company, Shareholders, And Debenture Holders.

Company And Shareholders
31. In The Company Limited By Shares, The Persons Holding Equity Shares In Share Capital Of Company Are Members Of The Company And Their Names Are Entered In The Register Of The Members. This May Be By Issue And Allotment Of Shares By The Company Or By Purchase From Other Shareholders. The Only Other Way Is To Be A Subscriber Of The Memorandum--membership Is Then Attained On The Registration Of The Company. The Importance Of Being A Member Is That The Company Is Regarded As Belonging To The Members - They Literally Own A Share Of The Company By Having Contributed To The Share Capital. This Is Not To Say That The Company Is The Same As The Members. The Company Is A Distinct Legal Entity Which Incurs Its Own Debts And Makes Its Own Contracts. The Principle Of Limited Liability Depends Upon This Separation.

32. The Members Have Rights Under The Articles, And Express Themselves As A Whole By Virtue Of Passing Resolutions At The General Meetings Of The Company. Every Company Is Under A Statutory Obligation To Hold An Annual General Meeting. Certain Things Can Only Be Done By A Resolution Of Members In A General Meeting Of The Company. Other Things May Be Done By The Directors But This Is Derived From The Expressed Delegation Or From The Articles. Members Have A Right To Participate And To Vote In The General Meeting Where Decision Is Taken By Majority. However, The Majority Vote Cannot Be So Exercised So As To Oppress The Minority Group.There Has To Be A Balance Between Majority Control And Minority Protection And This Is Overseen By The Company Board Under The Companies Act.

Debenture Holders
33. The Debentures Holders Are Creditors Of A Company. Debentures Are Traded Like Shares, But Debenture Holders Are Not Members Of The Company: They Have Not Invested In Its Share Capital; They Have Merely Given Loan To The Company. In Case Of Convertible Debentures, They Also Have The Right To Exchange Them For Shares.

34. Debenture Holders Have No Say In The Affairs Of The Company, Unless Their Debts Are Threatened. In Such A Situation, They Have Considerable Power And Influence - Often To Take Control Of The Company Into Their Own Hands By The Appointment Of A Receiver, Or To Finish The Company Off By Petitioning For A Winding Up. In The Scheme Of Arrangement, They Have A Role To Play. They Do Participate In The Meeting Convened By The Court To Consider Such Schemes.

Nature Of The Scheme Of Arrangement
35. There Are Two Kinds Of Schemes. In One, Transferor Company Amalgamates/ Merges Completely With The Transferee Company. In This Case All Assets, Liabilities Become That Of The Transferee Companies. In The Second Case, Transferor Company Demerges A Part Of The Business (including Assets, Liabilities And Employees Relating To That Business) And Merges It With The Transferee Company. In Lieu Of These Transactions, Normally Shareholders Of The Transferor Company Are Allotted Shares Of The Transferee Company And Become Its Members/ Shareholders. In All Cases Before Us It Has So Happened.

36. Irrespective Of Kind Of Scheme, It Is Re-arrangement Of Business For Both The Companies. It Is Not Only Immovable Property Or The Movable Property (as It Normally Understood) That Is Transferred But Also The Intangible Rights, Privileges Alongwith The Liabilities Are Also Transferred. There Is No Way By Which The Assets And Liabilities Can Be Separately Judged. The Transfer Of Assets And Liabilities Are To Be Seen As One Transaction. The Consideration Of This Transaction Is, Allotment Of Shares Of The Transferee Company. The Ratio Of Allotment Of Shares Is Arrived At After Considering Net Assets Transferred (assets Minus The Liabilities) As Well As Future Market Potentialities. This Ratio Of Allotment Is What The Companies Regard As Best And Most Equitable Bargain For Them As The Share Holders Of The Transferor Company Generally Become The Shareholders Of The Transferee Company.

37. In The LiTaka Case, The Bombay High Court Describes Such Schemes As Follows:
'By Amalgamation Scheme, What Is Transferred Is A Going Concern And Not Assets And Liabilities Separately. As A Going Concern, What Is The Value Of The Property Is To Be Taken Into Consideration. Normally, That Would Be Reflected In An Amalgamation Scheme By The Shares Allotted To The Share Holders Of The Transferor Company. It Can Not Be Said That The Assets Are Separately Transferred And Liabilities Are Separately Transferred By The Amalgamation Scheme. ... For This Purpose, What Is To Be Kept In Mind Is That By Sanctioning The Amalgamation Scheme, The Court Is Sanctioning Not Transfer Of The Assets Or Liabilities Separately But The Going Concern Is Transferred Which Is Valued At A Particular Amount And That Valuation Would Be On The Basis Of Share Exchange Ratio.' (Paragraph 32)
...
By The Amalgamation Scheme, The Assets And Liabilities Are Not Separately Transferred But The Interest In A Going Concern Is Transferred. In This View Of The Mater, We Hold That Normally In A Case Of Amalgamation Of A Scheme Sanctioned By The High Court, Its Consideration Under Art. 25(1) Should Be Based On Its Valuation Arrived At On The Basis Of Shares Allotted By The Transferee Company To The Transferor Company.'

38. The Company Is A Different Identity Than The Shareholders But It Is The Shareholders Who Are Members Of The Company And Control It. Under Scheme Of Arrangement, The Shareholders Of The Transferor Company Generally Become Shareholders Of The Transferee Company. This Has Been Done In All Cases Before Us. By The Scheme Of Arrangement, The Equity Share Capital Of The Transferee Company Is Increased And The Equity Share Capital Of The Transferor Company Is Decreased And In The Case Of Amalgamation/ Merger, It Is Reduced To Zero. In The Layman Eyes, It Is In Substance, Allotment Of Shares Of Transferee Company To The Shareholders Of The Transferor Company In Lieu Of The Transaction.

39. In My Opinion, The Scheme Of Arrangement Can Not Be Split Up As Suggested By The Standing Counsel: The Cases Involving Scheme Of Arrangement Are Different Than The Cases Where Only Movable And Immovable Property, Simplicitor Is Transferred. These Transactions Can Not Be Split Up And Treated Merely As The Conveyance Of Transfer Of Immovable Or Movable Property. They Are A Class Apart. These Cases Do Not Fall Under Article 23 Of Schedule 1-B Of The UP Stamp Act.

40. The Scheme Of Arrangement Was Never Stamped In This State Yet No Notice Requiring Affixing Of Stamp On Scheme Of Arrangement Was Ever Issued Prior To The HindustanLever Case. We Had Requested The Standing Counsel To Find Out The Following Information:
(i)Whether The Schemes Of Arrangement Were Ever Stamped In This State Or Not; And
(ii)Whether Any Notice For Charging Stamp Duty Was Ever Issued Prior To The HindustanLever Case.
The Standing Counsel After Obtaining Instruction Had Made The Statement In The Negative. This Shows The Stand Of The State; It Never Treated Scheme Of Arrangement To Be Covered By The UP Stamp Act; It Never Doubted The Proposition That The Scheme Of Arrangement Are Beyond The UP Stamp Act. It Appears That The State Always Assumed That The Scheme Of Arrangement Can Not Be Charged Under The Stamp Act.

41. The HindustanLever Case Was Decided As The Law In Maharastra Is Different. The Notices In These Cases Have Been Issued Only After The HindustanLever Case. It Is Possible That After The HindustanLever Case A Doubt Has Arisen. However, The Stamp Act Is A Fiscal Act. { Kindly See District Registrar And Collector Vs. Canara Bank 2005 (1) SCC 496 (10.13), Jagish Narain Vs. CCRR AIR 1994 Allahabad 371 (8). LIC Vs. Dinanath Mahadeo AIR 1976 Bombay 295}. A Strict Construction Applies To Such Statutes. In My Opinion, A Doubt In The Fiscal Statute Should Preferably Be Removed By The Legislature And Not By The Court.

42. The Stamp Act Is A Central Act. However, It Can Be Amended By The States On The Matters Falling Under Entry 63 List II And Entry 4 List III Of The Seventh Schedule Of The Constitution. Six States Namely Gujrat, Karnataka, Madhya Pradesh, Mahatrastra, Rajasthan, And West Bengal Have Amended The Schedule To Include Scheme Of Arrangement And Other States Have Not So Amended The Stamp Act. There Is No Bar In Similarly Amending The Stamp Act. In View Of This, We Hold That Scheme Of Arrangement Under Section 391-394 Of The Companies Act Is Not Covered By Article 23 Of The Schedule-1B Of The UP Stamp Act.

43. Except In The Hero Motor Case, In All Other Cases, The Notice Has Been Given For Charging Duty Under Article 23 Of The Schedule1-B And The Determination Is Yet To Take Place. In The HeroMotor Case, The Total Value Of Assets As Mentioned In The Scheme Is Rs. 1,00,44,63,000/-. Out Of This, The Fixed Assets Are Valued At Rs. 94,44,63,000/- Total Value Of The Liabilities Is Rs. 89,98,81,484; The Losses Are Rs.9,66,98,475. The Net Value Of The Assets Transferred Is Worth Rs.78,83,041 Only. The Stamp Duty Has Been Calculated On The Fixed Assets, Under Article 23(a) Of The Schedule 1-B Of The UP Stamp Act, To The Tune Of Rs. 9,44,47,000/-. It Is More Than Ten Times Of The Net Assets Transferred.

44. It Is Correct That The Stamp Act Is A Fiscal Statute And There Is No Equity About The Same. In Case, The Act So Provides Then The Court Is Bound To Give Effect To It. I Am Not Guided By The The Value Of The Net Assets Transferred Or By The Stamp Duty Charged Thereupon But Have Merely Indicated To Show Whether This Could Ever Be The Intention Of The Legislature. If This Is To Be The Intention Of The Legislature Then, It Should Come By Means Of Clear And Unambiguous Language As Has Been Done By The Six Other States. It Is Relevant To Point Out That Even In Those Six States The Method Of Calculating Rate Of Stamp Duty For Scheme Of Arrangement Is Different Than The Rate For Calculating Stamp Duty On The Transfer Of Immoveable Or Moveable Property Under The UP Stamp Act: Stamp Duty In Such Cases Is Much Less.

CLARIFICATION
45. I Wish To Clarify Here That I Have Only Gone Into Question Whether Scheme Of Arrangement Is Covered Under Article 23 Of Schedule 1-B Of The UP Stamp Act Or Not. I Have Not Decided Whether Scheme Of Arrangement Can Fall Under Any Other Article Or Not. In Case It Is So Covered Then Stamp Duty Can Always Be Charged. A Notice Cannot Be Invalidated Merely For Mentioning Wrong Article. This Question May Be Considered After Giving Reasonable Opportunity To The Petitioner.

CONCLUSIONS
46. My Conclusions Are As Follows:
(a)It Is Not A Fit Case To Dismiss The Writ Petition On The Ground Of Alternative Remedy.
(b)The Order Dated 8.6.2006 In WP 41811 Of 2006 Was Passed Without Affording Reasonable Opportunity To The Petitioner And Is Illegal.
(c)The Scheme Of Arrangement (sanctioned By The Court) Is An Instrument And Conveyance Within The Meaning Of Section 2(10) Of The UP Stamp Act.
(d)The Scheme Of Arrangement Can Not Be Split Up As Transfer Of Assets And Liabilities So As To Make It Separately Chargeable For The Assets Only Under Article 23 Of The Schedule-1B.
(e)The Scheme Of Arrangement Is Not Covered By Article 23 Schedule 1-B Of The UP Stamp Act .

47. In View Of My Conclusions,
The Order Dated 8.6.2006 In WP 41811 Of 2006 Is Quashed. The Money Deposited By The Petitioner Before Respondent In Pursuance Of Interim Order Of The Court May Be Returned To It Within Three Months From Presentation Of Certified Copy Of This Order;
The Petitioners In All The Writ Petitions Shall Appear Before The Authority That Had Issued Notices To Them On 14.5.2007. Thereafter The Question Whether The Scheme Of Arrangement Is Covered Under Any Article Other Than Article 23 Schedule1-B Of The UP Stamp Act May Be Considered. This May Be Done After Affording Opportunity To The Petitioners.
With These Observations, The Writ Petitions Are Allowed.
Date: 6.4.2007
BBL

Endnote-1: We Are Thankful To The Counsel For The Parties For Looking Into Part Of The Judgement And Appendix For Mistakes.
Endnote-2: The Counsel For The Petitioners Cited The Following Books And Rulings For Interpreting The Word 'going Concern'.
(i)Advanced Law Lexicon (P Ramanathan Aiyar's).
(ii)Commissioner Of Income Tax Vs. KH Chambers: AIR 1965 SC 970 (paragraph 4).
(iii)RC Cooper Vs. Union Of India: 1970 (1) SCC 248 (paragraphs 38, 39, 197).
(iv)Doyapack Systems Pvt. Ltd. Vs. Union Of India: 1988 (2) SCC 299 (paragraph 51).
(v)State Of Karnataka Vs. Shreyas Papers (P) Ltd.: 2006 (1) SCC 615.
(vi)SKG Sugar Ltd. Vs. State Of Bihar: 2003(4) SCC 378 (paragraph 14)
(vii)HLL Vs. State Of Maharashtra: (2004) 9 SCC 438 (paragraphs 27, 28 And 38).
(viii) Commissioner Of Wealth Tax, Calcutta Vs. Tungabadra Industries Limited, Calcutta: 1969 (2) SCC 528.
(ix) Commissioner Of Gift Tax Vs. Smt. Kusumben D Mahadevia: 1980 (2) SCC 238 (paragraph 4).

Appendix-1
Indian Stamp Act, 1899 (as Applicable In UP)
2. Definitions.-
....
(10) 'Conveyance'- 'Conveyance' Includes A Conveyance On Sale And Every Instrument By Which Property, Whether Movable Or Immovable, Is Transferred Inter Vivos, And Which Is Not Otherwise Specifically Provided For By Schedule I, Schedule I-A Or Schedule I-B, As The Case May Be.
Explanation.- An Instrument Whereby A Co-owner Of A Property Having Defined Share Therein, Transfers Such Share Or Part Thereof To Another Co-owner Of The Property, Is, For The Purposes Of This Clause An Instrument By Which Property Is Transferred.
3. Instruments Chargeable With Duty.- Subject To The Provisions Of This Act And The Exemptions Contained In Schedule I, The Following Instruments Shall Be Chargeable With Duty Of The Amount Indicated In That Schedule As The Proper Duty Therefor, Respectively, That Is To Say-
...
Schedule 1-B Article 23
Description Of Instrument
Proper Stamp Duty
23. Conveyance - As Defined By Section 2(10) Not Being A Transfer Charged Or Exempted Under No. 62 -

(a) If Relating To Immovable Property Where The Amount Or Value Of The Consideration Of Such Conveyance, As Set Forth Therein, Or The Market Value Of The Immovable Property, Which Is The Subject Of Such Conveyance Whichever Is Greater, Does Not Exceed Rs. 500.
...





Sixty Rupees
...
(b) If Relating To Moveable Property -
where The Amount Or Value Of The Consideration Of Such Conveyance, As Set Forth Therein, Does Not Exceed Rs. 1000
...



Twenty Rupees
...


Hon'ble Ran Vijai Singh, J.
I Have Had The Advantage Of Perusing The Opinion Of My Esteemed Brother Hon'ble Yatindra Singh, J. I Am In Respectful Agreement With The Conclusions (a), (b) And (c) In Answering The Questions (points For Determination) (i) And (ii) But So Far As Conclusions (d) And (e) In Response To Point For Determination (iii) Is Concerned, I Have To Say Few Words On The Conclusions (d) And (e).
Before Coming To The Point Directly Few Definitions Under Section 2 And Some Other Sections Of The Stamp Act And The Relevant Recitals From The Scheme Of Amalgamation/merger/de-merger And Court's Orders Are Required To Be Examined Which Are As Follows:
Conveyance
Conveyance Is Defined Under Section 2 (10) Of The Stamp Act Which Is Reproduced Below:
"'Conveyance'.-'Conveyance' Includes A Conveyance On Sale And Every Instrument By Which Property, Whether Movable Or Immovable, Is Transferred Inter Vivos, And Which Is Not Otherwise Specifically Provided For By Schedule I, Schedule I-A Or Schedule I-B, As The Case May Be."

The Definition Covers Three Types Of Instrument:
a) Conveyance On Sale, I.e. Transfer Of Property As A Result Of Sale;
b) Any Other Instrument By Which Property Moveable Or Immoveable Is Transferred In Favour Of Another, And Which Is Not Provided For Elsewhere In The Act (such As Gifts, Settlements Etc.)
c) An Instrument Whereby A Co-owner Transfers The Property In Favour Of Another Co-owner.
Conveyance, According To This Definition, Can Be Either Of Immovable Or Of Movable Property. Immovable Property May Be Either 'tangible' Or 'intangible'. 'Tangible' Means Property Which Can Be Perceived By The Sense Of Touch. 'Intangible' Means Property Which Cannot Be Perceived By The Sense Of Touch, But Still Constitutes Right Or Interest In Some Property.

The Word 'inter Vivos' Used In The Definition Means Between Living Persons. The Word Living Persons Has Been Explained In Section 5 Of The Transfer Of Property Act.

"5. "Transfer Of Property" Defined.- In The Following Sections "transfer Of Property" Means An Act By Which A Living Person Conveys Property, In Present Or In Future, To One Or More Other Living Persons, Or To Himself, [or To Himself] And One Or More Other Living Persons; And "to Transfer Property" Is To Perform Such Act.
[In This Section "living Person" Includes A Company Or Association Or Body Of Individuals, Whether Incorporated Or Not, But Nothing Herein Contained Shall Affect Any Law For The Time Being In Force Relating To Transfer Of Property To Or By Companies, Associations Or Bodies Of Individuals.]"

From The Bare Perusal Of The Section It Is Apparent That Company Is Living Person Within The Meaning Of Section 5 Of Transfer Of Property Act.

Instrument
Instrument Has Been Defined Under Section 2(14) Of The Stamp Act Which Is Quoted Below:
'Instrument'.- 'Instrument' Includes Every Document And Record Created Or Maintained In Or By An Electronic Storage And Retrieval Device Or Media By Which Any Right Or Liability Is, Or Purports To Be Created, Transferred, Limited, Extended, Extinguished Or Recorded.


Chargeable
The Word Chargeable Has Been Defined Under Section 2 (6) Of The Stamp Act Which Is Reproduced Below:
"Chargeable.-'Chargeable' Means, As Applied To An Instrument Executed, Or First Executed, After The Commencement Of This Act, Chargeable Under This Act, And, As Applied To Any Other Instrument, Chargeable Under The Law In Force In India, When Such Instrument Was Executed, Or Where Several Persons Executed The Instrument, At Different Times, First Executed.

Instruments Chargeable With Duty Has Been Defined In Section 3 Of The Stamp Act Which Is Reproduced Below:
"Instruments Chargeable With Duty.- Subject To Provisions Of This Act And The Exemptions Contained In Schedule I, The Following Instruments Shall Be Chargeable With Duty Of The Amount Indicated In That Schedule As Proper Duty Therefore, Respectively, That Is To Say-"

(a) Every Instrument Mentioned In That Schedule Which, Not Having Been Previously Executed By Any Person, Is Executed In India On Or After The First Day Of July 1899;
(b) Every Bill Of Exchange Payable Otherwise Than On Demand, Or Promissory Note Drawn, Or Made Out Of India, On, Or After That Day, And Accepted Or Paid Or Presented For Acceptance Or Payment, Or Endorsed, Transferred, Or Otherwise Negotiated In India; And
(c) Every Instrument (other Than A Bill Of Exchange, Or Promissory Note) Mentioned In That Schedule, Which, Not Having Been Previously Executed By Any Person, Is Executed Out Of India Or To Any Matter Or Thing Done Or To Be Done, In India And Is Received In India.

Section 3 Of The Stamp Act, Deals With The Chargeability Of An Instrument To Duty, Is Reproduced Below:
3. Instruments Chargeable With Duty.-Subject To Provisions Of This Act And The Exemptions Contained In Schedule I, The Following Instruments Shall Be Chargeable With Duty Of The Amount Indicated In That Schedule As The Proper Duty Therefor, Respectively, That Is To Say-
(a) Every Instrument Mentioned In That Schedule Which, Not Having Been Previously Executed By Any Person, Is Executed In India On Or After The First Day Of July 1899;
(b) Every Bill Of Exchange Payable Otherwise That On Demand, Or Promissory Note Drawn, Or Made Out Of India, On, Or After That Day, And Accepted Or Paid Or Presented For Acceptance Or Payment, Or Endorsed, Transferred, Or Otherwise Negotiated In India; And
(c)every Instrument (other Than A Bill Of Exchange, Or Promissory Note) Mentioned In That Schedule, Which, Not Having Been Previously Executed By Any Person, Is Executed Out Of India On Or After That Day, Relates To Any Property Situate, Or To Any Matter Or Thing Done Or To Be Done, In India And Is Received In India:
Provided That, Except As Otherwise Expressly Provided In This Act, And Notwithstanding Anything Contained In Clauses (a), (b) And (c)of This Section, Or In Schedule I Or I-A The Following Instruments Shall, Subject To The Exemptions Contained In Schedule I-A Or I-B, Be Chargeable With Duty Of The Amount Indicated In Schedule I-A Or I-B Or As The Proper Duty Therefore, Respectively, That Is To Say-
(aa) Every Instrument Mentioned In Schedule I-A Or I- B, Which Not Having Been Previously Executed By Any Person, Was Executed In Uttar Pradesh:
(i) In The Case Of Instruments Mentioned In Schedule I-A, On Or After The Date On Which The U.P. Stamp (Amendment) Act, 1984 Came Into Force, And
(ii) In The Case Of Instruments Mentioned In Schedule I-B, On Or After The Date On Which The U.P. Stamp (Amendment) Act, 1952 Comes Into Force;
(bb) Every Instrument Mentioned In Schedule I-A Or I-B, Which, Not Having Been Previously Executed By Any Person, Was Executed Out Of Uttar Pradesh:
(i) In The Case Of Instruments Mentioned In Schedule I-A On Or After The Date On Which The U.P. Stamp (Amendment) Act, 1948 Came Into Force, And
(ii) In The Case Of Instruments Mentioned In Schedule I-B, On Or After The Date On Which The U.P. Stamp (Amendment) Act, 1952 Comes Into Force And Relates To Any Property Situated, Or Any Matter Or Thing Done Or To Be Done In Uttar Pradesh, And Is Received In Uttar Pradesh:
Provided Also That No Duty Shall Be Chargeable In Respect Of:
(i)any Instrument Executed By Or On Behalf Of, Or In Favour Of The Government, In Cases Where, But For This Exemption, The Government Would Be Liable To Pay The Duty Chargeable In Respect Of Such Instrument;
(ii)any Instrument For The Sale, Transfer Or Other Disposition, Either Absolutely, Or By Way Of Mortgage Or Otherwise, Of Any Ship Or Vessel, Or Any Part, Interest, Share Or Property Of, Or In Any Ship Or Vessel, Registered Under The Merchant Shipping Act, 1984, Or Under Act XIX Of 1838, Or The Indian Registration Of Ships Act, 1841 (X Of 1841), As Amended By Subsequent Acts.

Section 17 Of The Stamp Act Speaks About The Stamping Of Instruments Before Or At The Time Of Execution Which Is Reproduced Below:

17. "Instruments Executed In India.- All Instruments Chargeable With Duty And Executed By Any Person In India, Shall Be Stamped Before Or At The Time Of Execution.

Recitals From The Scheme Of Amalgamation/arrangement/ De-merger And Merger/re-construction Of Companies In The Respective Writ Petitions And Court's Orders:

(1) Writ Petition No. 8119 Of 2007 M/s. Prudential Merchants & Traders Ltd. Vs. State Of U.P. Through Collector, Kanpur Nagar And Others (scheme Of Amalgamation):
1.With Effect From 1st November, 2002, (hereinafter Called The "Appointed Date), The Entire Undertaking Of VED MERCHANTIES LIMITED And PARAG MERCHANTIES LIMITED (hereinafter Called The "Transferor Companies") Including All Its Properties, Movable And Immovables, And Assets Of Whatsoever Nature Such As Licences/registrations And Quota Rights, Lease And Tenancy Rights Or Power Of Whatever Kind, Nature Or Description (all Undertakings Properties, Assets, Rights And Powers Are Hereinafter Collectively Referred To As The "said Undertaking"), Shall Without Any Further Act Or Deed Be And The Same Shall Stand Transferred To And Vested As A Going Concern In PRUDENTIAL MERCHANTIES & TRADERS LIMITED (hereinafter Called The Transferee Company) Pursuant To The Provisions Of Section 394 Of The Companies Act, 1956, (hereinafter Referred To As The "said Act") Subject To The Charges, If Any Then Affecting The Undertaking Of The Transferor Companies Transferred To And Vested In The Transferee Company As Aforesaid, Without Such Charges In Any Way Extending To Other Undertakings Of Transferee Company.
2.................

This Court Doth Order
(1) That All The Property, Rights And Powers Of The Above-named Two Transferor Companies Specified In The First, Second And Third Parts Of The Schedule Hereto And All Other Property, Rights And Powers Of The Above Named Two Transferor Companies Be Transferred Without...........or Deed To The Transferee Company And Accordingly The Same Shall Pursuant To Section 394 (2) Of The Companies Act, 1956, Be Transferred To And Vest In The Transferee Company For All Estate And Interest Of The Transferor Companies Therein But Subject Nevertheless To All Charge Now Affecting The Same.

ANNEXURE
Sanctioned Scheme Of Amalgamation
SCHEDULE
(Part - I)
Description Of Free Hold Properties Of The Transferor Companies-None
SCHEDULE
(Part - II)
Description Of Lease Hold Properties Of The Transferor Companies-None
SCHEDULE
(Part - III)
Short Description Of All Stocks, Shares, Debentures And Other Chose-in-action Of The Transferor Companies-Annexed

(2) Writ Petition No. 8139 Of 2007 M/s. Padamshree Projects Limited Vs. State Of U.P. Through Collector, Kanpur Nagar And Others (scheme Of Amalgamation):

1.With Effect From 1st November, 2002, (hereinafter Called The "Appointed Date"), The Entire Undertaking Of ELVIS COMMERCIAL ENTERPRISES LIMITED And SILVER REED COMMERCIALS LIMITED (hereinafter Called The 'Transferor Companies") Including All Its Properties, Movable And Immovables, And Assets Of Whatsoeve Nature Such A Licences/registrations And Quota Rights, Lease And Tenancy Rights Or Power Of Whatever Kind Nature Or Description (all Undertakings Properties, Assets, Rights And Powers Are Hereinafter Collectively Referred To As The "said Undertaking"), Shall Without Any Further Act Or Deed Be And The Same Shall Stand Transferred To And Vested As A Going Concern In PADAMSHREE PROJECTS LIMITED (hereinafter Called The Transferee Company) Pursuant To The Provisions Of Section 394 Of The Companies Act, 1956, (hereinafter Referred To As The "said Act") Subject To The Charges, If Any Then Affecting The Undertaking Of The Transferor Companies Transferred To And Vested In The Transferee Company As Aforesaid, Without Such Charges In Any Way Extending To Other Undertakings Of The Transferee Company.
2.......................

This Court Doth Order
(1) That All The Property, Rights And Powers Of The Above Named Two Transferor Companies Specified In The First, Second And Third Parts Of The Schedule Hereto And All Other Property, Rights And Powers Of The Above Named Two Transferor Companies Be Transferred Without Further Act Or Deed To The Transferee Company And Accordingly The Same Shall Pursuant To Section 394 (2) Of The Companies Act, 1956, Be Transferred To And Vest In The Transferee Company For All The Estate And Interest Of The Transferor Companies, Therein But Subject Nevertheless To All Charges Now Affecting The Same.

ANNEXURE
Sanctioned Scheme Of Amalgamation
SCHEDULE
(Part - I)
Description Of Free Hold Properties Of The Transferor - None
SCHEDULE
(Part - II)
Description Of Lease Hold Properties Of The Transferor Companies-None
SCHEDULE
(Part - III)
Short Description Of All Stocks, Shares, Debentures And Other Chose-in-action Of The Transferor Companies-Annexed

(3) Writ Petition No. 8114 Of 2007 M/s. Telesia Trading & Finance Limited Vs. State Of U.P. Through Collector, Kanpur Nagar And Others (scheme Of Amalgamation):

1.With Effect From 1st February, 2003, (hereinafter Called The "Appointed Date), The Entire Undertaking Of GOBIND VANIJYA LIMITED And UJALA MERCHANTIES LIMITED (hereinafter Called The "Transferor Companies") Including All Its Properties, Movable And Immovable, And Assets Of Whatsoever Nature Such As Licences Registrations And Quota Rights, Lease And Tenancy Rights Or Power Of Whatever Kind Nature Or Description (All Undertakings Properties, Assets, Rights And Powers Are Hereinafter Collectively Referred To As The "said Undertaking"), Shall Without Any Further Act Or Deed Be And The Same Shall Stand Transferred To And Vested As A Going Concern In TELESIA TRADING AND FINANCE LIMITED (hereinafter Called The Transferee Company) Pursuant To The Provisions Of Section 394 Of The Companies Act, 1956 (hereinafter Referred To As The "said Act") Subject To The Charges, If Any, Then Affecting The Undertaking Of The Transferor Companies Transferred To And Vested In The Transferee Company As Aforesaid Without Such Charges In Any Way Extending To Other Undertakings Of The Transferee Company.
2.................

This Court Doth Order
1.That All The Property, Rights And Powers Of The Above-named Two Transferor Companies Specified In The First, Second And Third Parts Of The Scheme Hereto And All Other Property, Rights And Powers Of The Above Named Two Transferor Companies Be Transferred Without Any Further Act Or Deed To The Transferee Company And Accordingly The Same Shall Pursuant To Section 394 (2) Of The Companies Act, 1956, Be Transferred To And Vest In The Transferee Company For All Estate And Interest Of The Transferor Companies Therein But Subject Nevertheless To All Charges Now Affecting The Same.
2.........................

ANNEXURE
Sanctioned Scheme Of Amalgamation
SCHEDULE
(Part - I)
Description Of Free Hold Properties Of The Transferor Companies- None
SCHEDULE
(Part - II)
Description Of Lease Hold Properties Of The Transferor Companies-None
SCHEDULE
(Part - III)
Short Description Of All Stocks, Shares, Debentures And Other Chose-in-action Of The Transferor Companies.

(4) Writ Petition No. 2888 Of 2007 M/s. Amar Ujala Publications Ltd. Vs. State Of U.P. And Others (scheme Of Amalgamation):
1.With Effect From The Commencement Of Business On1st April, 2003, I.e. The Appointed Date, Subject To The Provisions Of The Scheme In Relation To The Modalities Of Transfer And Vesting, The Undertaking And Entire Business And All Immovable Properties Were So Ever Situated And Incapable Of Passing By Physical Delivery As Also All Other Assets, Capital Work-in-progress, Current Assets, Investments, Powers, Authorities, Allotments, Approvals And Consents, Licenses, Registration, Contracts, Engagements, Arrangement, Rights Intellectual Property Rights, Titles, Interests, Benefits And Advantages Of Whatsoever Nature Belonging To Or In The Ownership, Power Possession, Control Of Or Vested In Or Granted In Favour Of Or Enjoyed By The Transferor Company, Including But Without Being Limited To, All Licenses, Liabilities, Easements, Advantages, Benefits, Privileges, Lease, Tenancy Rights, Ownership, Trade Marks Brand Copy Rights, Quota Rights, Subsidies, Concessions, Exemptions, Sales Tax Exemptions, Concessions/obligations, Approvals, Clearances, Environmental Clearances, Authorizations, Certification, Quality, Certification, Utilities Electricity Connections, Electronics And Computer Link Ups, Services Of All Types Reserves, Provisions, Funds Benefits Of All Agreements And All Other Interests Arising To The Transferor Company (herein Collectively Referred To As "the Said Assets") Shall, Without Any Further Act Or Deed Or Without Payment Of Any Duty Or Other Charges, Be Transferred To And Vested In The Transferee Company Pursuant To The Provisions Of Section 394 Of The Act, For All The Estate, Right, Title And Interest Of The Transferor Company Therein So As To Become The Property Of The Transferee Company But, Subject To Mortgages, Charges And Encumbrances, If Any, Then Affecting The Undertaking Of The Transferor Company Without Such Charges In Any Way Extending To The Undertaking Of The Transferee Company.
2....................

This Court Doth Further Order
(1) That All The Property, Rights And Powers Of The Transferor Company Specified In The First, Second And Third Part's Of The Schedule Hereto And All Other The Property, Rights And Powers Of The Transferor Company Be Transferred Without Further Act Or Deed To The Transferee Company And Accordingly The Same Shall Pursuant To Section 394 (2) Of The Companies Act, 1956, Be Transferred To And Vest In The Transferee Company For All The Estate And Interest Of The Transferor Company Therein But Subject Nevertheless To All Charge Now Affecting The Same.

ANNEXURE
Sanctioned Scheme Of Amalgamation
SCHEDULE
(Part - I)
(A Short Description Of The Free Hold Property Of The Transferor Company)
As Mentioned In The Scheme Of Amalgamation.
SCHEDULE
(Part - II)
(A Short Description Of Lease Hold Property Of The Transferor Company)
As Mentioned In The Scheme Of Amalgamation.

SCHEDULE
(Part - III)
(A Short Description Of All Stocks, Shares, Debentures And Other Choses Inaction Of The Transferor Company)
As Mentioned In The Scheme Of Amalgamation.

(5) Writ Petition No. 71022 Of 2006 Dhampur Sugar Mills Ltd. Vs. Appar Zila Adhikari (Vitta And Rajasva), Kanpur Nagar And Another The Scheme Of Amalgamation Is Reproduced Below:

1. With Effect From The Appointed Date And Subject To The Provisions Of This Scheme In Relation To The Mode Of Transfer And Vesting, The Whole Undertaking And The Entire Business Including All Movable And Immovable Properties, Assets, Capital Work In Progress, Current Assets, Investments, Powers, Authorities, Allotments, Approvals And Consents, Licenses, Registrations, Contracts, Engagements, Arrangements, Claims, Rights Interests, Benefits, And Advantages Of Whatsoever Nature And Wheresoever Situated, Belonging To Or In The Ownership, Power Or Possession And In The Control Of Or Vested In Or Granted In Favour Of Or Enjoyed By MSML, Including But Without Being Limited To All Patents, Trademarks, Trade Names And Other Industrial Rights Of Any Nature Whatsoever And Licenses In Respect Thereof Privileges, Liberties, Easements, Advantages, Benefits, Leases, Tenancy Rights, Ownership Rights, Quota Rights, Permits, Approvals, Reauthorizations And Availment Of Telephones, Telexes, Facsimiles, Connections And Installations, Utilities, Electricity And Other Services, Reserves Provisions, Funds, Benefits And All Arrangements And All Other Interest Arising To The Transferor Company Including The Equities (rights And Also The Obligations) In Respect Of Its Existing Or Proposed Joint Ventures (hereinafter Collectively Referred To As The Said Undertaking) Shall, Without Any Further Act Or Deal, Be Transferred To And Vested In And/or Deemed To Be Transferred And Vested In The Transferee Company I.e. DSML Pursuant To The Provisions Of Sections 391 To 394 Of The Act For All The Estate, Rights, Titles, And Interest Of The Transferor Company I.e. MSML Therein.
2. ....................

This Court Doth Order
The Confirmation Petition Is Accordingly Allowed. The Scheme Of Amalgamation Is Approved Without Any Modification With 01.04.2005 As Appointed Date And The Date Of This Order As Effective Date. The Transferor Company Shall Stand Dissolved Without Any Order Of Winding Up To Be Made By The Court.
(1) That All The Property, Rights And Powers Of The Above Named Transferor Company Specified In The First, Second And Third Parts Of The Schedule Hereto And All Other Property, Rights And Powers Of The Above Named Transferor Company Be Transferred Without Any Further Act Or Deed To The Transferee Company And Accordingly The Same Shall Pursuant To Section 394 (2) Of The Companies Act, 1956, Be Transferred To And Vest In The Transferee Company For All The Estate And Interest Of The Transferor Company Therein But Subject Nevertheless To All Charges Now Affecting The Same; And
(2) That All The Liabilities And Duties Of The Above Named Transferor Company Be Transferred Without Further Act Or Deed To The Transferee Company And Accordingly The Same Shall, Pursuant To Section 394 (2) Of The Companies Act, 1956, Be Transferred To And Become The Liabilities And Duties Of The Transferee Company.

ANNEXURE
Sanctioned Scheme Of Amalgamation
SCHEDULE
(Part - I)
Description Of The Free Hold Properties Of The Company As Given In The Scheme Of Amalgamation.
SCHEDULE
(Part - II)
Description Of Lease Hold Properties Of The Transferor Company As Given In The Scheme Of Amalgamation.

SCHEDULE
(Part - III)
Short Description Of All Stocks, Debentures And Other Chose-in-action Of The Transferor Company Given In The Scheme Of Amalgamation.

(6) The Facts Of Writ Petition No. 41811 Of 2006 (Hero Motors Case) Are:

1.M/s Majestic Auto Ltd. (transferor Company) Is A Public Limited Company, It Has Two Units: One At Ghaziabad And Another At Ludhiana. The Unit At Ludhiana Is Manufacturing Moped Up To 72 Cc. The Unit At Ghaziabad Is Manufacturing Moped Beyond 72 Cc. M/s Hero Motors Limited (the Transferee Company) Is Another Public Limited Company Manufacturing Mopeds And Scooters. The Board Of Directors Of These Two Companies Proposed A Scheme Of Arrangement By Which Ghaziabad Unit Of The Transferor Company Was To Be De-merged And Merged With The Transferee Company. This Proposed Scheme Was Sanctioned By The Punjab And Haryana High Court On 29.5.2004. It Was Also Sanctioned By The Delhi High Court On 22.7.2004. It Appears That There Was Some Mistake In The Order Of The Delhi High Court And It Was Corrected On 30.7.2004.
2.In Substance The Scheme Of Arrangement Provides That The Assets Of Ghaziabad Unit Along With Its Liabilities And Employees Stood De-merged With The Transferor Company And Merged With The Transferee Company. Under The Scheme Of Arrangement, The Share Holders Of The Transferor Company Got Shares Of The Transferee Company In The Ratio Of 100 Is To 10.39 Shares Of The Face Value Of Rs. 10/-.
3.The Immoveable Property Is Situate In Our State. The Transferee Company Filed An Application Before The Tehsildar For Recording Its Name Over The Same Under The Land Revenues Act. Thereafter A Notice Dated 5.4.2005 Was Issued To The Petitioner To Show Cause As To Why Deficiency In The Stamp Duty And Penalty Be Not Imposed On It. The Transferee Company Filed Their Reply On 18.4.2005 Against The Same. Thereafter The Order Was Passed On 8.6.2006 Imposing The Deficiency Of Stamp Duty Of Rs. 9,44,47,000/- Under Article 23 (a) Of Schedule I-B Of The U.P. Stamp Act And Penalty Of Rs. 5,00,00,000/-. Hence The Writ Petition No. 41811 Of 2006.

From The Bare Reading Of The Scheme Of Arrangement/amalgamation/merger, De-merger/reconstruction Of Company, Almost In All The Writ Petitions The Word Transferor Companies And Transferee Companies Have Been Used And The Transferor Companies Including All Its Properties Movable, Immoveable And Assets Of Whatever Nature Such As Licences, Registrations, Quota Rights, Lease And Tenancy Rights And All Undertakings Properties Assets And Rights Have Been Transferred To The Transferee Company.
In The Court's Orders, Property Rights And Powers Of Transferor Companies Contained In The Ist, IInd And IIIrd Parts Of The Schedules, Have Been Transferred Without Any Registered Deed Of Transfer To The Transferee Company In View Of Section 394 (2) Of The Companies Act And The Same Has Vested In The Transferee Companies. It Is Also Noticeable That In Most Of The Cases Schedule I And II Containing The Description Of Free Hold Properties And Lease Properties Have Not Been Annexed, Only IIIrd Schedule Has Been Annexed In Few Writ Petitions.
In View Of Entry 63 Of The State List Of 7th Schedule Of The Constitution, The Power To Determine Rate Of The Stamp Duty In Respect Of The Documents Which Are Not Specified In List-I (Union List) Of The 7th Schedule Of The Constitution) Are Under The Domain Of State Government Therefore, The Power Of State Legislature To Frame Law With Regard To The Rates Of Charging Stamp Duty Cannot Be Disputed.
It Is Well Settled That While Dealing With The Chargeability Clause, The Material Thing Is To Be Seen Is The Intention Of The Parties Which Is To Be Gathered From A Fair And Reasonable Reading Of The Entire Instrument, Which Ought To Be The Basis To Find Out If An Instrument Is Chargeable, The Use Of Expressions Does Not Generally Serve As A Guide For Interpretation Of Deed. It Is The Real Meaning Of Transaction Which Is To Be Gathered.
The Court Is Not To Be Guided By The Apparent Tenor Of The Document. It Is The Real Nature Of The Transaction, Which Will Determine The Duty But The Recital Of The Instrument Should Not Be Lost Sight Of, Merely Because The Parties Gave A Particular Description Of Its Nature. In The Case Of K.V. Subba Rao Vs. District Registrar Of Assurances, Guntur AIR 1986 AP 42, A Special Bench Of Andhra Pradesh High Court Consisting Up Three Hon'ble Judges Has Made The Following Observation In This Regard:
"It Is Now Well Settled That In Order To Determine The Nature Of An Instrument, Neither The Nomenclature Nor The Language Which The Parties May Choose To Employ In Framing The Document Is Decisive. What Is Decisive Is The Actual Nature And The Character Of The Transaction Intended By The Executant."

Learned Counsel For The Petitioners Have Made Following Submissions:
a) Scheme Of Arrangement/amalgamation/merger, De-merger/reconstruction Of Companies Of A Going Concern Is Not Conveyance Relating To Immoveable Property Or Movable Property. For The Purposes Of Payment Of Stamp Duty As Required Under Articles 23 (1) A And 23 (1) B Of Schedule I-B Of The Act.
b) Since There Is No Method Of Computation Of Stamp Duty Prescribed Under The Rules Framed Under Stamp Act In Respect To Such Scheme Of Arrangements, Therefore, No Stamp Duty Can Be Charged.
C) While Transferring The Assets, Liabilities Have Also Been Transferred And That Has Not Been Taken Into Consideration While Issuing The Impugned Notice.
d) Almost In Six States There Are Amendment Under The Stamp Act With Regard To The Chargeability Of Stamp Duty In Respect To The Scheme Of Amalgamation Of Companies/reconstruction Of Companies. Since In The State Of U.P. There Is No Such Amendment, Therefore, The Stamp Duty Cannot Be Charged.
e) The Another Reason For Not Charging Stamp Duty Is That Before The Hindustan Lever Ltd. Case The State Of U.P. Has Not Been Charging Stamp Duty On Such Type Of Scheme Of Arrangement/amalgamation/merger, De-merger/reconstruction Of Companies. Therefore, It Cannot Be Charged Now Unless The Relevant Provisions Of The Stamp Act Are Amended.
The Learned Standing Counsel Has Submitted That The Reason For Not Charging The Stamp Duty Earlier On Such Type Of Scheme Of Arrangement/amalgamation/merger, De-merger/reconstruction Of Companies By The Stamp Officers Of State Government Was Non Availability Of These Kinds Of Instruments Before The Public Offices. As These Type Of Instruments Were Only Available Either With The Office Of Company Courts Or With The Officers Of Registrar Of Companies Or With Offices Of The Companies Itself. It Had Never Been Brought To Light Before The Officers Who Are Entrusted To Discharged Such Type Of Duties Under The Stamp Act And When Such Type Of Scheme Was Brought In Light For The Purposes Of Mutation In The Case Of Hero Motors Then The Tehsildar Has Referred The Matter Before The Stamp Authorities For Determination Of The Stamp Duty.
It Has Also Been Submitted That Merely Because Earlier Stamp Duty Was Not Charged On Such Type Of Schemes Of Arrangement/amalgamation/merger, De-merger/ Reconstruction Of Companies Will Not Preclude The State Authorities To Charge It Now If The Scheme Falls Under The Definition Of Instruments Or Instrument Of Conveyance. It Has Also Been Submitted That So Far The Approval Of Company Court Approving Such Scheme Is Concerned The Company Court Was Exercising Its Power Under The Companies Act And Approval Was Granted Within The Four Corners Of The Provisions Of The Companies Act And It Was Not Seen With The Angle Of The Payment Of Stamp Duty Under The Stamp Act. It Has Also Been Submitted That The Petitioners Are Well Armed With The Legal Experts And Their Intention To Not Pay Stamp Duty Can Also Be Judged From This Angle That They Had Never Brought These Kinds Of Schemes Before The Collector Under Section 31 Of The Stamp Act For Adjudication Of Proper Stamp Duty.
It Is Only In One Writ Petition 4750 Of 2007 Hindalco Industries Ltd. Vs. State Of U.P. And Others. The Instrument Was Brought In The Light Before The Collector Under Section 31 Of The Stamp Act And It Was Adjudicated By The Collector But That Writ Petition Was Not Pressed In View Of The Subsequent Development As The Authority Itself Has Decided To Not Proceed With The Matter As The Notice Was Time Barred And Started Without Permission Of The State Government.
Considering The Submissions Of The Learned Counsel For The Parties, The Material Thing Which Is Required To Be Looked Into Is The Requirement Of Law Under The Various Provisions Of The Stamp Act With Regard To The Chargeability Of Stamp Duty On Such Type Of Scheme Of Arrangements/merger/de-merger Or Reconstruction Of Company.
Since It Has Already Been Held That Such Type Of Scheme Of Amalgamation/merger, De-merger/reconstruction Of Companies Falls Under The Definition Of Conveyance, Therefore, Only Questions Requires To Be Examined Is The Applicability Of Articles 23-(1) A, 23-(1) B Of The Schedule I-B Of The Stamp Act. From The Perusal Of Entire Scheme, The Definition Of Instruments/conveyance/chargeability And Relevant Chargeable Articles Of The Schedule I-B Of The Stamp Act, It Is Apparent That Different Kind Of Stamp Duty Is Chargeable On Different Kind Of Transfer Of Property.
For Example Some Instruments Relating To The Transfer Of Property Enumerated In The Indian Stamp Act 1899 And Its Schedule Are Instrument Of Conveyance, Gift, Instrument Of Partition, Lease, Mortgage Deed, Settlement Trust, Transfer Of Lease, Transfer (Article 62 Schedule I-B) Release, Re-conveyance Of Mortgage Of Property, Exchange Of Property, Instrument Of Counter Part, Certificate Of Sale, Award (Article 12 Of Schedule I-B). Certain Types Of Agreement To Sale With Possession Of Property Etc., Separate Rates Of Stamp Duties Are Prescribed For All These Instruments In The Schedule And Chargeable Sections.
This May Be With A View To Give Certain Kind Of Relaxations To A Particular Class Of Instruments. The Power Of Exemption Has Also Been Provided Under The Stamp Act Which Is Within The Domain Of The State Government.
The Question Which Involves In This Case Is Whether This Type Of Conveyance Is Chargeable With Stamp Duty Under The Provisions Of Stamp Act Applicable In U.P. Or Not. It Is True That In State Of U.P. There Is No Separate Amendments With Regard To The Chargeability Of Stamp Duty On A Scheme Of Amalgamation/re-construction Of The Companies Etc. But Here In State Of U.P. Only Two Kinds Of Properties Have Been Mentioned Movable And Immoveable, Therefore, It Has To Be Ascertained Whether The Particular Type Of Instrument Of Conveyance Broadly Falls Under These Two Categories Or Not. There Is No Exclusion Clause In The Definition Of The Instrument. It Is Also Not Res Integra That The Share Is Also Property.
In Respective Writ Petitions These Schemes Have Been Brought On Record And If The Language Of These Schemes Are Looked Into Then By No Strech Of Imagination, It Can Be Said That A Right, Liability Has Neither Been Created Nor Transferred. On The Contrary It Contains That The Movable, Immoveable Properties Along With The Liabilities Have Been Merged Or Amalgamated Of A Going Concern And That Is Why It Has Been Held That This Kind Of Document Falls Under The Definition Of Conveyance As Defined Under The Stamp Act. It Is Well Within The Domain Of State Government To Classify The Instrument In Different Categories With A View To Charge Stamp Duty Separately. This May Be For The Reason To Give Certain Kind Of Relief With Respect To The Execution Of Certain Kind Of Instrument. Since In Other States A Different Kind Of Stamp Duty Has Been Prescribed By Way Of Amendment For Such Type Of Scheme Framed And Approved Under Section 394 Of The Companies Act Will Not Mean That In State Of U.P. Such Type Of Instrument Cannot Be Charged Unless So Included In The Definition Of The Conveyance And Thereafter Unchargeable Articles Are Amended Under The Stamp Act. In Those States Where Amendment Have Been Made, It May Have Been Made With A View To Give Certain Kind Of Relaxations With Respect To Such Type Of Schemes But It Appears That The State Legislature Of U.P. Has Not Intended So And It Has Broadly Divided The Properties In Two Classes Movable And Immoveable With A View To Charge Stamp Duty Under The Stamp Act. It Cannot Be Said That This Kind Of Transaction Neither Falls Under The Category Of Movable Nor Immoveable Property.
The Counsel For The Petitioners Have Invited Attention Of The Court Towards The Strict Construction Of The Taxing Statutes And Submitted That Unless Language Is Clear With Respect To Chargeability On Such Type Of Arrangement No Stamp Duty Can Be Charged. The Ruling Relied Upon By The Counsel For The Petitioners With Regard To The Interpretation Of Fiscal Statute As Understood By Me Are Fully Applicable In Reverse In The Case Of Petitioners Looking Into The Nature Of The Instrument And Chargeable Section And Charging Articles. There Is No Place Of Equity In Interpreting The Fiscal Statutes Since In State Of U.P., The Properties Chargeable Under The Articles On Such Type Of Conveyance Is Divided Only In Two Classes Movable And Immovable, Therefore, There Is No Scope For The Court To Understand Other Than That And Further There Is No Scope For The Petitioner To Classify The Movable Property In Different Variety How Soever The Hard Consequences It May Face. This Observation Has Come Because Of The Fact That The Counsel For The Petitioners While Making Their Submissions Have Also Invited The Attention Of The Court Towards The Fact That In The Process Of Merger And De-merger Not Only Assets But Liabilities Have Also Gone And That Has Not Been Taken Into Consideration While Issuing Show Cause Notice. There Is No Such Provision Under The Stamp Act To Deduct The Liability And Then Proceed To Charge Stamp Duty Under The Act On An Instrument Of Conveyance. The Place Of Equity In Interpreting The Other Statutes Than The Fiscal Statutes Has Also Been Considered In Different Type Of Cases. The Hon'ble Apex Court In The Case Of Life Insurance Corporation Of India Vs. Asha Ram Chandra Ambedkar (Mrs) And Another Reported In 1994 Volume 2 SCC 718 Has Held:
"Justice According To Law Is A Principal As Old As The Hills. The Courts Are To Administer The Law As They Find It, However, Inconvenient It May Be..........."
The Courts Should Endeavour To Find Out Whether A Particular Case Which Sympathetic Considerations Are To Be Weighed Falls Within The Scope Of Law. Disregardful Of Law, However, Hard The Case May Be, It Should Never Be Done.
In The Case Of Raghunath Rai Bareja Vs. Punjab National Bank Reported In 2007 V 1 AWC 507 The Apex Court Has Observed...............
It Is Well Settled That When There Is A Conflict Between The Law And Equity, It Is The Law Who Is To Prevail In Accordance With Latin Maxim Dura Lex Sed Which Means The Law Is Hard But It Is The Law, Equity Can Only Supplement The Law But It Cannot Supplement Or Override It.
"...............What Is Administered In The Court Of Justice According To Law And Considerations Of Fair Play And Equity, However, Or They May Be Most Err To Clear And Express Provision Of Law.
The Above Proposition Has Only Been Cited Because The Learned Counsel For The Petitioners Have Argued That Along With The Assets Liabilities Have Also Been Tranferred And If The Liabilities Are Not Taken Into The Consideration Then Survival, Of The Concern Where The Going Concern Has Gone Will Be Difficult.
It Is True From Perusal Of Record That There Is Heavy Liability Along With The Assets Has Also Gone Of The Going Concern Merged In The Other Concern But Looking Into The Fiscal Nature Of The Statute, I Am Of The View That The Liability Of Payment Of Stamp Duty Cannot Be Relaxed. The Court Finds Itself Helpless To Help The Petitioner.
So Far As Splitting Of The Scheme Of Arrangement/merger, De-merger/reconstruction Of Company With A View To Charge Stamp Duty Is Concerned, I Beg To Defer In This Regard For The Simple Reason That The Stamp Duty Is Demanded Only With Regard To The Transfer Of Assets Not On Liability And Under The Provisions Of Stamp Act To My Little Knowledge There Is No Provision To Charge The Stamp Duty After Excluding The Liabilities. Learned Counsel For The Petitioners Have Also Not Shown Any Provision Under The Provision Of The Stamp Act In This Regard. Since Stamp Act Is A Fiscal Statute, Therefore, The Stamp Duty Has To Be Charged Under The Chargeable Articles Over An Instrument. Therefore, The Stamp Duty In My Opinion Can Be Charged Even Without Splitting The Liability As No Duty Is Demanded On The Liability. So Far As The Different Kind Of Instrument In One Deed Is Concerned, Section 5 Of The Stamp Act Takes Care Of It Which Is Reproduced Below:
"5. Instrument Relating To Several Distinct Matters.-Any Instrument Comprising Or Relating To Several Distinct Matters Shall Be Chargeable With The Aggregate Amount Of Duties With Which Separate Instruments, Each Comprising Or Relating To One Of Such Matters, Would Be Chargeable Under This Act."

It Will Be Open To The Petitioners To Take Such Plea Before The Stamp Authorities By Whom Notices Have Been Issued. So Far As The Arguments Of The Counsel For The Petitioners With Regard To The Absence Of Computation Of Stamp Duty On The Scheme Of Amalgamation/merger/de-merger/arrangement/reconstruction Of Companies Is Concerned, Suffice To Say That The Stamp Duty Has Been Demanded, As Apparent From The Notices, Only On The Valuation Given By The Petitioners And Approved By The Company Court. The Stamp Authorities Have Not Demanded Stamp Duty On Their Own Valuation. Therefore, This Argument Is Not Available To The Petitioners. However, While Considering The Demand Of Tax Under The Fiscal Statute It Is The Duty Of The Court To Get It Ensure Whether The Tax Payer Is Discharging His Duty Fairly Or Adopting Colourable Device To Not Pay The Proper Tax.
A Constitution Bench Of Hon'ble Apex Court In The Case Of M/s McDowell & Co. Ltd. Vs. Commercial Tax Officer AIR 1986 SC 649 Has Observed:
"We Think That Time Has Come For Us To Depart From The Westminster Principle As Emphatically As The British Courts Have Done And To Dissociate Ourselves From The Observations Of Shah, J. And Similar Observations Made Elsewhere. The Evil Consequences Of Tax Avoidance Are Manifold. First There Is Substantial Loss Of Much Needed Public Revenue, Particularly In A Welfare State Like Ours. Next There Is The Serious Disturbance Caused To The Economy Of The Country By The Piling Up Of Mountains Of Black Money, Directly Causing Inflation. Then There Is "the Large Hidden Loss" To The Community (as Pointed Out By Master Sheatcroft In 18 Modern Law Review 209) By Some Of The Best Brains In The Country Being Involved In The Perpetual War Waged Between The Tax-avoider And His Expert Team Of Advisers, Lawyers And Accountants On One Side And The Tax-gatherer And His Perhaps Not So Skillful Advisers On The Other Side. Then Again There Is The 'sense Of Injustice And Inequality Which Tax Avoidance Arouses In The Breasts Of Those Who Are Unwilling Or Unable To Profit By It'. Last But Not The Least Is The Ethics (to Be Precise, The Lack Of It) Of Transferring The Burden Of Tax Liability To The Shoulders Of The Guidelines Good Citizens From Those Of The 'artful Dodgers'. It May, Indeed, Be Difficult For Lesser Mortals To Attain The State Of Mind Of Mr. Justice Holmes, Who Said, "Taxes Are What We Pay For Civilized Society. I Like To Pay Taxes. With Them I Buy Civilization." But, Surely, It Is Hight Time For The Judiciary In India Too To Part Its Ways From The Principle Of Westminster And The Alluring Logic Of Tax Avoidance, We Now Live In A Welfare State Whose Financial Needs, If Backed By The Law, Have To Be Respected And Met. We Must Recognise That There Is Behind Taxation Laws As Much Moral Sanction As Behind Any Other Welfare Legislation And It Is A Pretence To Say That Avoidance Of Taxation Is Not Unethical And That It Stands On No Less Moral Plane Than Honest Payment Of Taxation. In Our View, The Proper Way To Construe A Taxing Statute, While Considering A Device To Avoid Tax, Is To Ask Whether The Provisions Should Be Construed Literally Or Liberally, Nor Whether The Transaction Is Not Unreal And Not Prohibited By The Statute, But Whether The Transaction Is A Device To Avoid Tax, And Whether The Transaction Is Such That The Judicial Process May Accord Its Approval To It. A Hint Of This Approach Is To Be Found In The Judgemnt Of Desai, J. In Wood Polymer Ltd. And Bengal Hotels Limited, (1977) 47 Com Cas 597 (Guj) Where The Learned Judge Refused To Accord Sanction To The Amalgamation Of Companies As It Would Lead To Avoidance Of Tax." (Para 17)

"It Is Neither Fair Not Desirable To Expect The Legislature To Intervene And Take Care Of Every Device And Scheme To Avoid Taxation. It Is Up To The Court To Take Stock To Determine The Nature Of The New And Sophisticated Legal Devices To Avoid Tax And Consider Whether The Situation Created By The Devices Could Be Related To The Existing Legislation With The Aid Of 'emerging' Techniques Of Interpretation Was Done In Ramsay (1982 AC 300), Burma Oil (1982 STC 30) And Dawson (1984-I All ER 530), To Expose The Devices For What They Really Are And To Refuse To Give Judicial Benediction." (Para 18)

"Tax Planning May Be Legitimate Provided It Is Within The Framework Of Law. Colourable Devices Cannot Be Part Of Tax Planning And It Is Wrong To Encourage Or Entertain The Belief That It Is Honourable To Avoid Payment Of Tax By Resorting To Dubious Methods. It Is The Obligation Of Every Citizen To Pay The Taxes Honestly Without Resorting To Subterfuges." (Para 45)

This View Has Been Reiterated By Hon'ble Apex Court Reported In Union Of India Vs. M/s Playworld Electronics Pvt. Ltd. AIR 1990 SC 202, In Paragraph 11 It Has Been Held That:
"It Is True That Tax Planning May Be Legitimate Provided It Is Within The Framework Of The Law. Colourable Devices Cannot Be Part Of Tax Planning And It Is Wrong To Encourage Or Entertain The Belief That It Is Honourable To Avoid The Payment Of Tax By Dubious Methods. It Is The Obligation Of Every Citizen To Pay The Taxes Honestly Without Resorting To Subterfuges. It Is Also True That In Order To Create The Atmosphere Of Tax Compliance, Taxes Must Be Reasonably Collected And When Collected, Should Be Utilised In Proper Expenditure And Not Wasted."(Para 11)

It Is Noticeable That The Companies Act And The Indian Stamp Acts Operate In Different Fields. Both Have Got Their Independent Status. The Things Done Under The Provisions Of Companies Act Or Not Done, Keeping In View The Provisions Of Indian Stamp Acts Otherwise Also, While Framing Such Scheme And Getting Approval Of The Court Under The Companies Act, The Court Dealing With Approval Of Scheme Under The Provisions Of Companies Act Is Not Supposed To Look Into The Correctness Of The Statements With Regard To The Valuation Of Properties And The Liabilities. Whereas The Stamp Acts Is Only Concerned With The Nature Of The Instruments And Its Chargeability Under The Various Sections And Schedules Of The Indian Stamp Act. Therefore, To My Mind The Court's Order Approving The Scheme Of Amalgamation/merger, De-merger/reconstruction Of Companies Can Be Looked Into By The Authorities Under The Stamp Act With A View To Charge The Stamp Duty.
Except In The Case Of Hero Motors All The Writ Petitions Have Been Filed Challenging The Show Cause Notice. However, In The Case Of Hero Motors The Notices Have Been Issued Only After The Report Of Tehsildar. When Such Scheme Of Amalgamation Was Brought Before The Tehsildar For The Purpose Of Mutation Of The Name Of The Company Then It Transpired That The Aforesaid Scheme Has Neither Been Registered Nor Duly Stamped At The Time Of Execution. The Correctness Of The Tehsildar's Order In Referring The Matter To The Stamp Authority Finds Support From Section 17 And 49 Of The Stamp Act Which Are Reproduced Below:

"17 Documents Of Which Registration Is Compulsory.-(1) The Following Documents Shall Be Registered, If The Property To Which They Relate Is Situate In A District In Which, And If They Have Been Executed On Or After The Date On Which, Act No. XVI Of 1864, Or The Indian Registration Act, 1866, Or The Indian Registration Act, 1871, Or The Indian Registration Act, 1877, Or This Act Came Or Comes Into Force, Namely:
(a) Instruments Of Gift Of Immovable Property;
(b) Other Non-testamentary Instruments Which Purport Or Operate To Create, Declare, Assign, Limit Or Extinguish, Whether In Present Or In Future, Any Right, Title Or Interest Whether Vested Or Contigent, To Or In Immovable Property:
(c) Non-testamentary Instruments Which Acknowledge The Receipt Or Payment Of Any Consideration On Account Of The Creation, Declaration, Assignment, Limitation Or Extinction Of Any Such Right, Title Or Interest; And
(d) Leases Of Immovable Property From Year To Year Or For Any Term Exceeding One Year, Or Reserving A Yearly Rent;
[(e) Non-testamentary Instruments Transferring Or Assigning Any Decree Or Order Of A Court Or Any Award When Such Decree Or Order Or Award Purports Or Operates To Create, Declare, Assign, Limit Or Extinguish Whether In Present Or In Future Any Right, Title Or Interest Whether Vested Or Contigent, To Or In Immoveable Property;
(f) Any Other Instrument Required By Any Law For The Time Being In Force, To Be Registered.]


The Effect Of Non Registration Is Provided Under Section 49 Of The Registration Act Which Is Reproduced Below:

"49. Effect Of Non-registration Of Documents Required To Be Registered.-No Document Required By Section 17 [or By Any Provision Of The Transfer Of Property Act, 1882 (Act No. 4 Of 1882)] [or Of Any Other Law For The Time Being In Force] To Be Registered Shall-
(a) Affect Any Immovable Property Comprised Therein, Or
[(b) Confer Any Power Or Create Any Right Or Relationship, Or]
(c ) Be Received As Evidence Of Any Transaction Affecting Such Property Or Conferring Such Power [or Creating Such Right Or Relationship] Unless It Has Been Registered:
[Provided That An Unregistered Document Affecting Immovable Property And Required By This Act, Or The Transfer Of Property Act, 1882, To Be Registered May Be Received Or As Evidence Of Any Collateral Transaction Not Required To Be Effected By Registered Instrument.]

From The Bare Perusal Of Section 17 And 49 It Is Apparent That Such Type Of Scheme Of Arrangement/amalgamation/merger, De-merger/reconstruction Of Companies Are Required To Be Registered Before The Registering Authority And At The Time Of Execution It Has To Be Stamped With Proper Stamp Duties. Since The Entire Schedules As Contained In The Scheme Of Arrangement/amalgamation/merger, De-merger/reconstruction Of Companies Has Not Been Brought On Record, Therefore, Broadly It Can Be Inferred That It Is Chargeable Only Under Articles 23 (1) A And 23 (1) B Of Schedule I-B Of The Stamp Acts As The Properties Are Either Immovable Or Movable Have Been Transferred But From The Language Used In The Scheme It Appears That Different Type Of Instruments Are Clubed Together In One Deed And Apart From The Movable And Immovable Properties, Leasehold Rights, Work In Progress, Current Assets, Investments, Powers, Authorities Allotments, Approvals, Licences, Registrations, Contracts, Engagements, Arrangements, Claims, Rights, Interests, Benefits And Advantages, Have Also Been Transferred.
It Will Be Open To The Petitioners To File Their Reply Before The Respective Authorities Of Stamps Raising All Such Pleas Which Are Legally Available To Them. So Far As The Case Of Hero Motors Is Concerned, Since In This Case The Order Passed By The Stamp Authority Has Been Quashed On The Ground Of Breach Of Principles Of Natural Justice, Therefore, The Petitioners In That Case Also Stands On The Same Footing At The Stage Of Show Cause Notice. It Will Also Be Open To The Petitioner In That Case To Take Such Plea As Available.
Since In The Case Of Hero Motors Case At The Time Of Grant Of Interim Order It Was Directed To Deposit Certain Amounts That Amount May Be Refunded To The Petitioner.
Date: 6.4.2007
SK



Hon'ble Yatindra Singh, J
Hon'ble Ran Vijai Singh, J

The Points Of Determination Have Been Mentioned In The Order Of Hon'ble Yatindra Singh, J. We Agree On Point No. One And Two. There Is Difference Of Opinion Amongst Us So For As Question Number Three Is Concerned. One Of Us (Honble Yatindra Singh, J) Has Held That Scheme Of Arrangement Sanctioned By The Court Is Not Covered By Article 23 Of Schedule 1-B Of The Indian Stamp Act Whereas Other One (Hon'ble Ran Vijai Singh,J) Has Held That It Is Covered By Article 23 Schedule 1B Of The Indian Stamp Act. The Papers Of These Writ Petitions May Be Placed Before Hon'ble The Chief Justice For Nominating The Third Judge. In View Of The Fact That There Is Difference Of Opinion Amongst Us And The Matter Is To Be Placed Before The Third Judge, It Will Not Be Necessary For The Petitioners To Appear Before The Authority On 14.5.2007.
The Interim Order Is Extended Till Further Order Of The Court.
Date: 6.4.2007
BBL
Reserved
1. Civil Misc. Writ Petition No. 41811 Of 2006
M/s Hero Motors Limited Vs. The State Of UP And Others

2. Civil Misc. Writ Petition No. 71022 Of 2006
Dhampur Sugar Mills Limited Vs. Apar Zila Adhikari Kanpur And Another

3. Civil Misc. Writ Petition No.2888 Of 2007
M/s Amar Ujala Publications Ltd. Vs. State Of UP And Others

4. Civil Misc. Writ Petition No. 8114 Of 2007
M/s Telesia Trading & Finance Ltd. Vs. State Of UP And Others.

5. Civil Misc. Writ Petition No. 8119 Of 2007
M/s Prudential Merchants & Traders Ltd. Vs. State Of UP And Others.

6. Civil Misc. Writ Petition No. 8139 Of 2007
M/s Padamshree Projects Ltd. Vs. State Of UP And Others.

Hon'ble Yatindra Singh, J.
Hon'ble Ran Vijai Singh, J.
(Delivered By Hon'ble Yatindra Singh, J)
1. The Main Question Involved In These Writ Petitions Is, 'whether Any Stamp Duty Can Be Charged Under, Article 23 Of Schedule 1-B Of The Indian Stamp Act (see Appendix-1) As Applicable In Our State (the UP Stamp Act) On The Scheme Of Arrangement Sanctioned By The Court, Which May Be De-merger Of A Going Concern With Another Company Or Amalgamation/merger Of One Company With Another Company.

2. The Indian Stamp Act Has Been Amended By The Different States. In Order To Distinguish The Acts As Applicable In Different States, I Am Prefixing The Name Of That State While Referring To The Act As Applicable In The State,

THE FACTS
WP 41811 Of 2006 (Hero Motors Case)
3. M/s Majestic Auto Limited (transferor Company) Is A Public Limited Company, It Has Two Units: One At Ghaziabad And Another At Ludhiana. The Unit At Ludhiana Is Manufacturing Moped Up To 72 Cc. The Unit At Ghaziabad Is Manufacturing Moped Beyond 72 Cc. M/s Hero Motors Limited (the Transferee Company) Is Another Public Limited Company Manufacturing Mopeds And Scooters. The Board Of Directors Of These Two Companies Proposed A Scheme Of Arrangement By Which Ghaziabad Unit Of The Transferror Company Was To Be De-merged And Merged With The Transferee Company. This Proposed Scheme Was Sanctioned By The Punjab And Haryana High Court On 29.5.2004. It Was Also Sanctioned By The Delhi High Court On 22.7.2004. It Appears That There Was Some Mistake In The Order Of The Delhi High Court And It Was Corrected On 30.7.2004.

4. In Substance The Scheme Of Arrangement Provides That The Assets Of Ghaziabad Unit Alongwith Its Liabilities And Employees Stood De-merged With The Transferor Company And Merged With The Transferee Company. Under The Scheme Of Arrangement, The Share Holders Of The Transferor Company Got Shares Of The Transferee Company In The Ratio Of 100 Is To 10.39 Shares Of The Face Value Of Rs. 10/-.

5. The Immoveable Property Is Situate In This State. The Transferee Company Filed An Application Before The Tehsildar For Recording Its Name Over The Same Under The Land Revenues Act. Thereafter A Notice Dated 5.4.2005 Was Issued To The Petitioner To Show Cause As To Why Deficiency In The Stamp Duty And Penalty Be Not Imposed On It. The Transferee Company Filed Their Reply On 18.4.2005 Against The Same. Thereafter The Order Was Passed On 8.6.2006 Imposing The Deficiency Of Stamp Duty Of Rs. 9,44,47,000/- Under Article 23(a) Of Schedule (I-B) Of The UP Stamp Act And Penalty Of Rs.5,00,00,000/-. Hence The Writ Petition No. 41811 Of 2006.

WP 71022 Of 2006 (Dhampur Sugar Case)
6. The Mansurpur Sugar Mills Limited (the Transferor Company) Is A Public Limited Company And Is A Subsidiary Of Dhampur Sugar Mills Ltd. (the Transferee Company). A Scheme Of Arrangement For Amalgamating The Transferor Company Alongwith (assets Liabilities And The Employees With The Transferor Company) Was Sanctioned By The Allahabad High Court On 14.2.2006.

7. Under The Scheme, The Shareholders Of The Transferor Company Got Shares Of The Transferee Company In The Ratio Of 10 Is To 1 Share Of Face Value Of Rs. 10. A Notice Was Issued To The Transferee Company On 25.11.2006 To Show Cause As To Why The Deficiency In Stamp Duty Alongwith Penalty Be Not Imposed Upon It. Hence The Writ Petition No. 71022 Of 2006.

WP 2888 Of 2007 (the Amar Ujala Case)
8. Amar Ujala Prakashan Bareilly (the Transferor Company) And M/s Amar Ujala Publication Ltd. Agra (the Transferee Company) Are Public Limited Companies. They Framed A Scheme Of Arrangement By Which The Transferor Company (alongwith Assets, Liability, And Employees Was Amalgamated/merged With The Transferee Company. This Scheme Was Sanctioned By The Allahabad High Court On 9.7.2004.

9. Under The Scheme, The Shareholders Of The Trransferor Company Got Share Of The Transferee Company In The Ratio Of 3 Is To 1 Share Of The Face Value Of Rs. 10/-The Respondents Issued A Notice Dated 25.11.2006 To Show Cause As To Why The Deficiency In The Stamp Duty And Penalty Be Not Imposed On Them. Hence The Present Writ Petition.

WP 8114 Of 2007 (The Telesia Case)
10. There Are Three Companies Namely Gobind Vanijya Ltd, Kanpur, Ujala Mercantiles Ltd, Kanpur And M/s Telesia Trading & Finance Ltd., Kanpur. The Entire Assets Of The Transferor Companies Consist Of Investments In Equity Shares Of Other Companies Only. A Scheme Of Arrangement Was Drawn Up By Which The First Two Companies Namely Gobind Vanijya Ltd, Kanpur And, Ujala Mercantile Ltd, Kanpur (the Transferor Companies) (alongwith Their Asset, Liabilities And Employees Were Amalgamated With M/s Telesia Trading & Finance Ltd., Kanpur (the Transferee Company). This Scheme Was Sanctioned By The Allahabad High Court On 4.8.2003.

11. Under The Scheme, The Share Holders Of The Transferor Company Got Shares Of The Transferee Company In The Ratio Of 2 Is To 1 Of Face Values Of Rs. 10. A Show Cause Notice Was Issued To The Transferee Company On 25.11.2006 To Show Cause Is To Why Deficiency In The Stamp Duty And Penalty Be Not Imposed Upon It. Hence The Writ Petition No. 8114 Of 2007.

WP 8119 Of 2007. (Pre Dental Merchant Case)
12. Ved Mercantiles Ltd, Kanpur And Parag Mercantiles Ltd. Kanpur Are The Transferor Companies And Prudential Merchants And Traders Ltd Is The Transferee Company. A Scheme Of Amalgamation Was Drawn Up By Which The First Two Companies Alongwith Assets, Liabilities, And Employees Merged With The Third Company. This Scheme Was Approved On 22.4.2003. The Entire Assets Of The Transferor Companies Consist Of Investment In Equity Shares Of Other Companies Only.

13. Under The Schemes, The Share Holders Of The Ved Mercantiles Ltd, Kanpur And Prudential Merchants And Traders Ltd Are Allotted Shares Of The Transferee Company In The Ratio 1 Is To 1 And 5 Is To 1 Share Respectively Of Face Value Of Rs. 10. A Show Cause Notice Has Been Issued To The Transferee Company On 25.11.2006 To Show Cause As To Why The Deficiency In The Stamp Duty And Penalty Be Not Imposed Upon It. Hence The Writ Petition No. 8119 Of 2007.
WP 8139 Of 2007 (Padmshree Projects Case)
14. There Are Three Companies Namely Elvis Commercials Enterprises Ltd , Silver Reed Commercials Ltd, Kanpur (the Transferor Companies) And M/s Padamshree Projects Ltd, Kanpur (the Transferee Company). In This Case Also, The Entire Assets Of The Transferor Companies Consist Of Investments In Equity Shares Of Other Companies Only. By The Scheme Of Arrangement, The First Two Companies (alongwith Assets, Liabilities And Employees) Amalgamated With The Transferee Company. This Scheme Was Sanctioned By The Allahabad High Court On 22.4.2003.

15. Under The Scheme, The Share Holders Of Silver Reed Commercial Ltd, Kanpur And Elvis Commercials Enterprises Ltd. Got Shares Of Transferee Company In The Ratio Of 1 Is To 1 And 4 Is To 3 Shares Respectively Of Face Value Of Rs. 10. A Show Cause Notice Has Been Issued To The Transferee Company On 25.11.2006 To Show Cause As To Why The Deficiency In The Stamp Duty And Penalty Be Not Imposed Upon The Same. Hence, The Writ Petition No. 8139 Of 2007.

POINTS FOR DETERMINATION
16. We Have Heard Sri Navin Sinha, Sri Rakesh Dwivedi, Senior Advocates, Sri Achintya Dwivedi;, Sri Kevin Gulathi, Sri Manish Goyal, Sri Nishat Mehrotra, Sri Rakesh Ranjan Agrawal, Sri SD Singh, Sri Suyash Agrawal Advocates For The Petitioners And Sri Sanjay Goswami, Standing Counsel For The Respondents. The Following Points Arise For Determination In This Case.
(i)Whether The Writ Petitions Are Liable To Be Dismissed On The Ground Of Alternative Remedy?
(ii)Whether The Scheme Of Arrangement, Sanctioned By The Court, (which Includes A Scheme Of De-merger And Merger Of The Going Concern With Another Company And A Scheme For Amalgamation/merger Of A Company With Another Company) Is An Instrument And A Conveyance Within The Meaning Of The UP Stamp Act?
(iii)In Case Answer To The Aforesaid Point Is In The Affirmative Then, Whether Such Scheme Is Covered By Article 23 Of Schedule 1-B Of The UP Stamp Act?

POINT-1: NO DISMISSAL- ON ALTERNATIVE REMEDY
WP 4811 Of 2006 - Order Dated 8.6.2006- No Reasonable Opportunity
17. In Pursuance Of The Show Cause Notice Dated 5.2.2005 The Petitioner Had Filed Its Reply On 18.4.2005. Thereafter No Evidence Was Produced And The Arguments Were Heard On 13.5.2005 And 6.6.2005. However, Before Any Decision Could Be Taken, The Presiding Officer Was Transferred And A New Officer Took Over. Thereafter Some Dates Were Fixed But The Case Could Not Be Taken For One Reason Or The Other.

18. The Case Was Adjourned On 21.9.2005 As The Staff Was On Strike On That Date. It Was Listed On 28.9.2005 And 4.10.2005 But Was Adjourned As The Advocates Were On Strike. Thereafter Some Dates Were Fixed In Which It Was Mentioned That The Counsel For The Hero Motors Was Not Present. It Was Again Listed On 12.5.2006. It Is Mentioned In The Order-sheet That:
The Case Is Taken Up Today;
The Respondent Is Not Present;
Written Arguments Have Been Received; And
The Case Be Put Up On 8.6.2006 For Order.

19. The Original File Of This Case Was Produced Before Us. In The Original File, There Are No Written Arguments. The Only Thing On The Record Is The Reply Given By The Petitioner On 18.4.2005. The Order Sheet Indicates That The Petitioner Was Not Present Yet, Surprisingly The Judgement Records That The Counsel For The Petitioner Was Heard.

20. The Petitioner Has Alleged In Paragraph-26 Of The WP That Case Could Not Be Taken Up Due To Strike And No Information Of The Date Was Given. There Is No Specific Denial Of The Same. The Order Sheet Also Indicates That The Case Was Adjourned Due To Strike Of The Employees And The Advocates. There Is Nothing On The Record To Show That Any Notice Of The Date After The Strike Was Given To The Petitioner. The Order-sheet Is Also Not Signed By The Counsel For The Petitioner From 21.7.2005 The First Day The Case Could Not Be Taken Up Due To Strike. In View Of This, It Can Not Be Said That Petitioner Was Given Reasonable Opportunity Before The Impugned Order Was Passed. In These Circumstances, Alternative Remedy Is Not An Absolute Bar. Apart From It, As Clarified In The Succeeding Paragraphs No Factual Questions Are Involved: The Facts Are Admitted And Only The Questions Of Law Are Being Argued.

Other WPs
21. All Other WPs (except WP 41811 Of 2006) Are Against Notice. In These WPs Stamp Duty Is Being Demanded Under Article 23 Of Schedule 1-B Of The UP Stamp Act On The Scheme Of Arrangement. A Common Question Of Law Is Being Raised That The No Stamp Duty Can Be Charged On The Scheme Of Arrangement Under That Article. It Is In View Of This, We See No Justification In Dismissing The Writ Petition On The Ground Of Alternative Remedy.

POINT 2: SCHEME OF ARRANGEMENT IS A CONVEYANCE
22. The Counsel For The Petitioners Submitted That The Scheme Of Arrangement (demerger And Merger Of A Going Concern Or The Amalgamation/merger With Any Company) Sanctioned By The Court Is Neither An Instrument Nor A Conveyance Under The UP Stamp Act And Stamp Duty Can Not Be Charged Upon The Same. The Counsel For The Petitioners Have Elaborated Their Submissions As Follows:
(i)The Scheme Of Arrangement Is An Order Of The Court And Can Neither Be An Instrument Nor A Conveyance.
(ii)Under Section 394 (2) Of The Companies Act, The Transfer Takes Place By Virtue Of The Order Of The Court And No Other Document Is Necessary.
(iii)In Any Other Case, The Transfer Can Be Completed By An Agreement Between The Parties Without Intervention Of The Court And The Fact That The Court Has Approved, It Does Not Change Its Nature. However, Here The Transfer Can Not Take Place Merely By The Agreement Of The Parties; It Can Take Place Only If It Is Sanctioned By The Court. The Order Regarding Scheme Of Arrangement Is Different Than The Order/ Decree In Any Other Case. In Other Cases, The Transfer Can Take Place Without Intervention Of The Court, Here It Is Not So.
(iv)Before Any Document Can Be Treated As An Instrument Or A Conveyance, It Has To Be Executed. The Word 'execution' Is Defined Under The Stamp Act. The Scheme Is Not Signed By Any Of The Parties And It Can Not Be Said That It Is Executed.
(v)Hindustan Lever And Another Vs. State Of Maharastra ; 2004 (9) SCC 438 (the HindustanLever Case) Arose From State Of Maharastra Where The Definition Of Word 'conveyance' Has Been Amended. It Specifically Includes Such Schemes Of Arrangement. The Observation Made In The Hindustan Lever Case Should Be Seen In That Light Only.
(vi) The Supreme Court Decision In Ruby Sales Services Pvt Ltd. Vs. State Of Maharastra And Others; 1994 (1) SCC 531 (The RubySales Case) Is Distinguishable On Facts As In That Case The Transfer Could Take Place Without Intervention Of The Court And The Compromise Itself Indicated That It Is A Conveyance.
(vii) The Case Is Covered By Division Bench Decision Of The Calcutta High Court Reported In Madhu Intra Ltd. Vs. Registrar Companies (2005) (58) SCL 160 = 2006 (180) Companies Cases 510 (the MadhuIntra Case). The Definition Of The Word 'conveyance' In The WB Stamp Act Was Similar To As Is Contained In The UP Stamp Act. In The MadhuIntra Case, Calcutta High Court After Rightly Distinguishing The RubeySales Case Held That The Scheme Of Arrangement Is Not A Conveyance Within The Meaning Of The Stamp Act.
(viii) Generally In A Conveyance, The Property Passes From One Hand To Another Hand. In These Cases, Even Though The Property Is Passing From One Company To Another Neverthless, The Shareholders Of The Transferor Company Become The Shareholders Of The Transferee Company. In Fact, The Property Remains In Control Of The Same Shareholders Except Some Others Shareholders Are Added.
(ix)The Demerger And Merger Of A Going Concern Can Neither Be An Instrument Nor A Conveyance (see Endnote-2 For Rulings And Dictionary Cited By The Counsel For The Petitioners To Explain The Meaning Of The Word 'going Concern').
I Am Afraid: I Can Not Accept These Submissions.

23. The Supreme Court In The RubySales Case Held,
'There Is No Particular Pleasure In Merely Going By The Label But What Is Decisive Is Term Of Document .....
The Consent Decree Falls Under The Definition Of Conveyance As Well As Instrument' (Paragraph 11 And 12).

24. In The HindustanLever Case The Supreme Court Held,
'The Foundation Or The Basis For Passing An Order Of Amalgamation Is Agreement Between Two Or More Companies. Under The Scheme Of Amalgamation, The Whole Or Any Part Of The Undertaking, Properties Or Liability Of Any Company Concerned In The Scheme Is To Be Transferred To The Other Company. (Paragraph 9)
...
Two Broad Principles Underlying A Scheme Of Amalgamation Which Have Been Brought Out In This Judgment [ Miheer H. Mafatlal Vs. Mafatlal Industries Ltd. : (1997) 1 SCC 579] Are:
(i) The Order Passed By The Court Amalgamating The Company Is Based On A Compromise Or Arrangement Arrived At Between The Parties And;
(ii) The Jurisdiction Of The Company Court While Sanctioning The Scheme Is Supervisory Only I.e. To Observe That The Procedure Set Out In The Act Is Met And Complied With And That Proposed Scheme Of Compromise Or Arrangement Is Not Violative Of Any Provision Of Law, Unconscionable Or Contrary To Public Policy. (Paragraph 12)
...
Thus The Amalgamation Scheme Sanctioned By The Court Would Be An "instrument" Within The Meaning Of Section 2(l). By The Said "instrument" The Properties Are Transferred From The Transferor Company To The Transferee Company, The Basis Of Which Is The Compromise Or Arrangement Arrived At Between The Two Companies.' (Paragraph 15).

25. The Question Whether The Amendments In The Definitions Of The Conveyance In The Maharastra Stamp Act Are Merely Clarificatory And Out Of Abundant Caution Or Not Has Been Answered In The RubeySales Case As Well As By The Division Bench Decision Of The Bombay High Court In Li Taka Pharmaceuticals Ltd. Vs. State Of Maharashtra AIR 1997 Bombay 7 (the LiTaka Case). The Supreme Court In The RubySales Case Held,
'As We Have Noticed Earlier The Definitions Of "conveyance" And "instrument" Start With The Expression "includes" Which Shows That The Definitions Are Very Wide. It Appears To Us That The Amendment Was Made Out Of Abundant Caution And It Does Not Mean That The Consent Decree Was Not Otherwise Covered By The Definitions Given In Section 2(g) Of 2(l) Of The Act. Having A Stamp Of Court Affixed Will Not Change The Nature Of The Document.' (Paragraph 15).

26. The Bombay High Court In The LiTaka Case Held,
'By Act No.17 Of 1993, The Legislature Has Also Added S. 2(g) (iv) To Include Every Order Passed By The High Court Under S. 394 Of The Companies Act In Respect Of Amalgamation Of Companies. In Our View, Applying The Ratio Of The Decision In The Case Of Ruby Sales Services Prima Facie, It Appears To Be Clalrificatory. As ..., The Amalgamation Order Passed Under S. 394 Of The Companies Act Is Based Upon The Agreement Between The Two Companies.' (Paragraph 15)

27. In View Of Above, I Hold That The Scheme Of Arrangement (be That May Be Demerger And Merger Of A Going Concern With Another Company Or Amalgamation/ Merger With Another Company) Sanctioned By The Court Is An Instrument And A Conveyance Within The Meaning Of Section 2(10) Of The UP Stamp Act.

POINT III: DUTY NOT CHARGABLE UNDER ARTICLE 23 SCHDULE 1-B
28. The Counsel For The Petitioners Submitted That Even If The Scheme Of Arrangement Is An Instrument And A Conveyance Within The Meaning Of The UP Stamp Act:
No Stamp Duty Is Payable Unless That Conveyance Can Be Chargeable Under Section 3 Read With The Schedules Of The UP Stamp Act;
The Notices In These Cases Are For Payment Of Duty Under Article 23 Of Schedule 1-B Of The UP Stamp Act.
The Scheme Of Arrangement Is Not Covered By The Aforesaid Article.

29. The Standing Counsel Submitted That:
Every Scheme Of Arrangement Can Be Split Up Into Transfer Of Assets And Liabilities;
Assets Can Also Be Split Into Immovable Or Moveable; In Case They Are Not Immoveable Then They Will Be Movable {section 3 (26) And 3(36) Of The General Cluses Act};
Article 23(a) And 23(b) Of The Schedule 1-B Of The UP
Stamp Act Cover The Transfers Of Immovable And Moveable Property Respectively And The Transfer Of Assets Can Be Categorised In One Of Them;
The State Is Charging Stamp Duty On Transfer Of Assets Only And It Is Not Charging Any Duty On Transfer Of Liability. This Can Always Be Done.
The Fact That Our State Has Not Separately Provided For Scheme Of Arrangement As Has Been Done By Some Other States Does Not Mean That Scheme Of Arrangement Is Not Covered By Article 23 Of Schedule 1-B;
The Transfer Of Assets Of Immovable Property Can Be Charged Under Article 23(a) And Of Movable Property Under Article 23(b) Of Schedule 1-B.
The Question Is Whether Scheme Of Arrangement Can Be So Split.

30. Section 3 Of The UP Stamp Act Is The Charging Section. It Provides That All Instrument Shall Be Charged With Duty Of The Amount As Indicated In The Schedules In These Cases Notices Have Been Issued Or Order Has Been Passed Treating The Case To Be Covered By Article 23 Of Schedule-1(B). This Article Conceives Of Two Kinds Of Conveyances
Conveyances Relating To Immovable Property {sub Article (a)};and
Conveyances Relating To Movable Property {sub Article (b)}.
The Question Is Whether The Scheme Of Arrangement Is Covered By It, What Is The Nature Of Scheme Of Arrangement? But Before That, Some Words About The Company, Shareholders, And Debenture Holders.

Company And Shareholders
31. In The Company Limited By Shares, The Persons Holding Equity Shares In Share Capital Of Company Are Members Of The Company And Their Names Are Entered In The Register Of The Members. This May Be By Issue And Allotment Of Shares By The Company Or By Purchase From Other Shareholders. The Only Other Way Is To Be A Subscriber Of The Memorandum--membership Is Then Attained On The Registration Of The Company. The Importance Of Being A Member Is That The Company Is Regarded As Belonging To The Members - They Literally Own A Share Of The Company By Having Contributed To The Share Capital. This Is Not To Say That The Company Is The Same As The Members. The Company Is A Distinct Legal Entity Which Incurs Its Own Debts And Makes Its Own Contracts. The Principle Of Limited Liability Depends Upon This Separation.

32. The Members Have Rights Under The Articles, And Express Themselves As A Whole By Virtue Of Passing Resolutions At The General Meetings Of The Company. Every Company Is Under A Statutory Obligation To Hold An Annual General Meeting. Certain Things Can Only Be Done By A Resolution Of Members In A General Meeting Of The Company. Other Things May Be Done By The Directors But This Is Derived From The Expressed Delegation Or From The Articles. Members Have A Right To Participate And To Vote In The General Meeting Where Decision Is Taken By Majority. However, The Majority Vote Cannot Be So Exercised So As To Oppress The Minority Group.There Has To Be A Balance Between Majority Control And Minority Protection And This Is Overseen By The Company Board Under The Companies Act.

Debenture Holders
33. The Debentures Holders Are Creditors Of A Company. Debentures Are Traded Like Shares, But Debenture Holders Are Not Members Of The Company: They Have Not Invested In Its Share Capital; They Have Merely Given Loan To The Company. In Case Of Convertible Debentures, They Also Have The Right To Exchange Them For Shares.

34. Debenture Holders Have No Say In The Affairs Of The Company, Unless Their Debts Are Threatened. In Such A Situation, They Have Considerable Power And Influence - Often To Take Control Of The Company Into Their Own Hands By The Appointment Of A Receiver, Or To Finish The Company Off By Petitioning For A Winding Up. In The Scheme Of Arrangement, They Have A Role To Play. They Do Participate In The Meeting Convened By The Court To Consider Such Schemes.

Nature Of The Scheme Of Arrangement
35. There Are Two Kinds Of Schemes. In One, Transferor Company Amalgamates/ Merges Completely With The Transferee Company. In This Case All Assets, Liabilities Become That Of The Transferee Companies. In The Second Case, Transferor Company Demerges A Part Of The Business (including Assets, Liabilities And Employees Relating To That Business) And Merges It With The Transferee Company. In Lieu Of These Transactions, Normally Shareholders Of The Transferor Company Are Allotted Shares Of The Transferee Company And Become Its Members/ Shareholders. In All Cases Before Us It Has So Happened.

36. Irrespective Of Kind Of Scheme, It Is Re-arrangement Of Business For Both The Companies. It Is Not Only Immovable Property Or The Movable Property (as It Normally Understood) That Is Transferred But Also The Intangible Rights, Privileges Alongwith The Liabilities Are Also Transferred. There Is No Way By Which The Assets And Liabilities Can Be Separately Judged. The Transfer Of Assets And Liabilities Are To Be Seen As One Transaction. The Consideration Of This Transaction Is, Allotment Of Shares Of The Transferee Company. The Ratio Of Allotment Of Shares Is Arrived At After Considering Net Assets Transferred (assets Minus The Liabilities) As Well As Future Market Potentialities. This Ratio Of Allotment Is What The Companies Regard As Best And Most Equitable Bargain For Them As The Share Holders Of The Transferor Company Generally Become The Shareholders Of The Transferee Company.

37. In The LiTaka Case, The Bombay High Court Describes Such Schemes As Follows:
'By Amalgamation Scheme, What Is Transferred Is A Going Concern And Not Assets And Liabilities Separately. As A Going Concern, What Is The Value Of The Property Is To Be Taken Into Consideration. Normally, That Would Be Reflected In An Amalgamation Scheme By The Shares Allotted To The Share Holders Of The Transferor Company. It Can Not Be Said That The Assets Are Separately Transferred And Liabilities Are Separately Transferred By The Amalgamation Scheme. ... For This Purpose, What Is To Be Kept In Mind Is That By Sanctioning The Amalgamation Scheme, The Court Is Sanctioning Not Transfer Of The Assets Or Liabilities Separately But The Going Concern Is Transferred Which Is Valued At A Particular Amount And That Valuation Would Be On The Basis Of Share Exchange Ratio.' (Paragraph 32)
...
By The Amalgamation Scheme, The Assets And Liabilities Are Not Separately Transferred But The Interest In A Going Concern Is Transferred. In This View Of The Mater, We Hold That Normally In A Case Of Amalgamation Of A Scheme Sanctioned By The High Court, Its Consideration Under Art. 25(1) Should Be Based On Its Valuation Arrived At On The Basis Of Shares Allotted By The Transferee Company To The Transferor Company.'

38. The Company Is A Different Identity Than The Shareholders But It Is The Shareholders Who Are Members Of The Company And Control It. Under Scheme Of Arrangement, The Shareholders Of The Transferor Company Generally Become Shareholders Of The Transferee Company. This Has Been Done In All Cases Before Us. By The Scheme Of Arrangement, The Equity Share Capital Of The Transferee Company Is Increased And The Equity Share Capital Of The Transferor Company Is Decreased And In The Case Of Amalgamation/ Merger, It Is Reduced To Zero. In The Layman Eyes, It Is In Substance, Allotment Of Shares Of Transferee Company To The Shareholders Of The Transferor Company In Lieu Of The Transaction.

39. In My Opinion, The Scheme Of Arrangement Can Not Be Split Up As Suggested By The Standing Counsel: The Cases Involving Scheme Of Arrangement Are Different Than The Cases Where Only Movable And Immovable Property, Simplicitor Is Transferred. These Transactions Can Not Be Split Up And Treated Merely As The Conveyance Of Transfer Of Immovable Or Movable Property. They Are A Class Apart. These Cases Do Not Fall Under Article 23 Of Schedule 1-B Of The UP Stamp Act.

40. The Scheme Of Arrangement Was Never Stamped In This State Yet No Notice Requiring Affixing Of Stamp On Scheme Of Arrangement Was Ever Issued Prior To The HindustanLever Case. We Had Requested The Standing Counsel To Find Out The Following Information:
(i)Whether The Schemes Of Arrangement Were Ever Stamped In This State Or Not; And
(ii)Whether Any Notice For Charging Stamp Duty Was Ever Issued Prior To The HindustanLever Case.
The Standing Counsel After Obtaining Instruction Had Made The Statement In The Negative. This Shows The Stand Of The State; It Never Treated Scheme Of Arrangement To Be Covered By The UP Stamp Act; It Never Doubted The Proposition That The Scheme Of Arrangement Are Beyond The UP Stamp Act. It Appears That The State Always Assumed That The Scheme Of Arrangement Can Not Be Charged Under The Stamp Act.

41. The HindustanLever Case Was Decided As The Law In Maharastra Is Different. The Notices In These Cases Have Been Issued Only After The HindustanLever Case. It Is Possible That After The HindustanLever Case A Doubt Has Arisen. However, The Stamp Act Is A Fiscal Act. { Kindly See District Registrar And Collector Vs. Canara Bank 2005 (1) SCC 496 (10.13), Jagish Narain Vs. CCRR AIR 1994 Allahabad 371 (8). LIC Vs. Dinanath Mahadeo AIR 1976 Bombay 295}. A Strict Construction Applies To Such Statutes. In My Opinion, A Doubt In The Fiscal Statute Should Preferably Be Removed By The Legislature And Not By The Court.

42. The Stamp Act Is A Central Act. However, It Can Be Amended By The States On The Matters Falling Under Entry 63 List II And Entry 4 List III Of The Seventh Schedule Of The Constitution. Six States Namely Gujrat, Karnataka, Madhya Pradesh, Mahatrastra, Rajasthan, And West Bengal Have Amended The Schedule To Include Scheme Of Arrangement And Other States Have Not So Amended The Stamp Act. There Is No Bar In Similarly Amending The Stamp Act. In View Of This, We Hold That Scheme Of Arrangement Under Section 391-394 Of The Companies Act Is Not Covered By Article 23 Of The Schedule-1B Of The UP Stamp Act.

43. Except In The Hero Motor Case, In All Other Cases, The Notice Has Been Given For Charging Duty Under Article 23 Of The Schedule1-B And The Determination Is Yet To Take Place. In The HeroMotor Case, The Total Value Of Assets As Mentioned In The Scheme Is Rs. 1,00,44,63,000/-. Out Of This, The Fixed Assets Are Valued At Rs. 94,44,63,000/- Total Value Of The Liabilities Is Rs. 89,98,81,484; The Losses Are Rs.9,66,98,475. The Net Value Of The Assets Transferred Is Worth Rs.78,83,041 Only. The Stamp Duty Has Been Calculated On The Fixed Assets, Under Article 23(a) Of The Schedule 1-B Of The UP Stamp Act, To The Tune Of Rs. 9,44,47,000/-. It Is More Than Ten Times Of The Net Assets Transferred.

44. It Is Correct That The Stamp Act Is A Fiscal Statute And There Is No Equity About The Same. In Case, The Act So Provides Then The Court Is Bound To Give Effect To It. I Am Not Guided By The The Value Of The Net Assets Transferred Or By The Stamp Duty Charged Thereupon But Have Merely Indicated To Show Whether This Could Ever Be The Intention Of The Legislature. If This Is To Be The Intention Of The Legislature Then, It Should Come By Means Of Clear And Unambiguous Language As Has Been Done By The Six Other States. It Is Relevant To Point Out That Even In Those Six States The Method Of Calculating Rate Of Stamp Duty For Scheme Of Arrangement Is Different Than The Rate For Calculating Stamp Duty On The Transfer Of Immoveable Or Moveable Property Under The UP Stamp Act: Stamp Duty In Such Cases Is Much Less.

CLARIFICATION
45. I Wish To Clarify Here That I Have Only Gone Into Question Whether Scheme Of Arrangement Is Covered Under Article 23 Of Schedule 1-B Of The UP Stamp Act Or Not. I Have Not Decided Whether Scheme Of Arrangement Can Fall Under Any Other Article Or Not. In Case It Is So Covered Then Stamp Duty Can Always Be Charged. A Notice Cannot Be Invalidated Merely For Mentioning Wrong Article. This Question May Be Considered After Giving Reasonable Opportunity To The Petitioner.

CONCLUSIONS
46. My Conclusions Are As Follows:
(a)It Is Not A Fit Case To Dismiss The Writ Petition On The Ground Of Alternative Remedy.
(b)The Order Dated 8.6.2006 In WP 41811 Of 2006 Was Passed Without Affording Reasonable Opportunity To The Petitioner And Is Illegal.
(c)The Scheme Of Arrangement (sanctioned By The Court) Is An Instrument And Conveyance Within The Meaning Of Section 2(10) Of The UP Stamp Act.
(d)The Scheme Of Arrangement Can Not Be Split Up As Transfer Of Assets And Liabilities So As To Make It Separately Chargeable For The Assets Only Under Article 23 Of The Schedule-1B.
(e)The Scheme Of Arrangement Is Not Covered By Article 23 Schedule 1-B Of The UP Stamp Act .

47. In View Of My Conclusions,
The Order Dated 8.6.2006 In WP 41811 Of 2006 Is Quashed. The Money Deposited By The Petitioner Before Respondent In Pursuance Of Interim Order Of The Court May Be Returned To It Within Three Months From Presentation Of Certified Copy Of This Order;
The Petitioners In All The Writ Petitions Shall Appear Before The Authority That Had Issued Notices To Them On 14.5.2007. Thereafter The Question Whether The Scheme Of Arrangement Is Covered Under Any Article Other Than Article 23 Schedule1-B Of The UP Stamp Act May Be Considered. This May Be Done After Affording Opportunity To The Petitioners.
With These Observations, The Writ Petitions Are Allowed.
Date: 6.4.2007
BBL

Endnote-1: We Are Thankful To The Counsel For The Parties For Looking Into Part Of The Judgement And Appendix For Mistakes.
Endnote-2: The Counsel For The Petitioners Cited The Following Books And Rulings For Interpreting The Word 'going Concern'.
(i)Advanced Law Lexicon (P Ramanathan Aiyar's).
(ii)Commissioner Of Income Tax Vs. KH Chambers: AIR 1965 SC 970 (paragraph 4).
(iii)RC Cooper Vs. Union Of India: 1970 (1) SCC 248 (paragraphs 38, 39, 197).
(iv)Doyapack Systems Pvt. Ltd. Vs. Union Of India: 1988 (2) SCC 299 (paragraph 51).
(v)State Of Karnataka Vs. Shreyas Papers (P) Ltd.: 2006 (1) SCC 615.
(vi)SKG Sugar Ltd. Vs. State Of Bihar: 2003(4) SCC 378 (paragraph 14)
(vii)HLL Vs. State Of Maharashtra: (2004) 9 SCC 438 (paragraphs 27, 28 And 38).
(viii) Commissioner Of Wealth Tax, Calcutta Vs. Tungabadra Industries Limited, Calcutta: 1969 (2) SCC 528.
(ix) Commissioner Of Gift Tax Vs. Smt. Kusumben D Mahadevia: 1980 (2) SCC 238 (paragraph 4).

Appendix-1
Indian Stamp Act, 1899 (as Applicable In UP)
2. Definitions.-
....
(10) 'Conveyance'- 'Conveyance' Includes A Conveyance On Sale And Every Instrument By Which Property, Whether Movable Or Immovable, Is Transferred Inter Vivos, And Which Is Not Otherwise Specifically Provided For By Schedule I, Schedule I-A Or Schedule I-B, As The Case May Be.
Explanation.- An Instrument Whereby A Co-owner Of A Property Having Defined Share Therein, Transfers Such Share Or Part Thereof To Another Co-owner Of The Property, Is, For The Purposes Of This Clause An Instrument By Which Property Is Transferred.
3. Instruments Chargeable With Duty.- Subject To The Provisions Of This Act And The Exemptions Contained In Schedule I, The Following Instruments Shall Be Chargeable With Duty Of The Amount Indicated In That Schedule As The Proper Duty Therefor, Respectively, That Is To Say-
...
Schedule 1-B Article 23
Description Of Instrument
Proper Stamp Duty
23. Conveyance - As Defined By Section 2(10) Not Being A Transfer Charged Or Exempted Under No. 62 -

(a) If Relating To Immovable Property Where The Amount Or Value Of The Consideration Of Such Conveyance, As Set Forth Therein, Or The Market Value Of The Immovable Property, Which Is The Subject Of Such Conveyance Whichever Is Greater, Does Not Exceed Rs. 500.
...





Sixty Rupees
...
(b) If Relating To Moveable Property -
where The Amount Or Value Of The Consideration Of Such Conveyance, As Set Forth Therein, Does Not Exceed Rs. 1000
...



Twenty Rupees
...


Hon'ble Ran Vijai Singh, J.
I Have Had The Advantage Of Perusing The Opinion Of My Esteemed Brother Hon'ble Yatindra Singh, J. I Am In Respectful Agreement With The Conclusions (a), (b) And (c) In Answering The Questions (points For Determination) (i) And (ii) But So Far As Conclusions (d) And (e) In Response To Point For Determination (iii) Is Concerned, I Have To Say Few Words On The Conclusions (d) And (e).
Before Coming To The Point Directly Few Definitions Under Section 2 And Some Other Sections Of The Stamp Act And The Relevant Recitals From The Scheme Of Amalgamation/merger/de-merger And Court's Orders Are Required To Be Examined Which Are As Follows:
Conveyance
Conveyance Is Defined Under Section 2 (10) Of The Stamp Act Which Is Reproduced Below:
"'Conveyance'.-'Conveyance' Includes A Conveyance On Sale And Every Instrument By Which Property, Whether Movable Or Immovable, Is Transferred Inter Vivos, And Which Is Not Otherwise Specifically Provided For By Schedule I, Schedule I-A Or Schedule I-B, As The Case May Be."

The Definition Covers Three Types Of Instrument:
a) Conveyance On Sale, I.e. Transfer Of Property As A Result Of Sale;
b) Any Other Instrument By Which Property Moveable Or Immoveable Is Transferred In Favour Of Another, And Which Is Not Provided For Elsewhere In The Act (such As Gifts, Settlements Etc.)
c) An Instrument Whereby A Co-owner Transfers The Property In Favour Of Another Co-owner.
Conveyance, According To This Definition, Can Be Either Of Immovable Or Of Movable Property. Immovable Property May Be Either 'tangible' Or 'intangible'. 'Tangible' Means Property Which Can Be Perceived By The Sense Of Touch. 'Intangible' Means Property Which Cannot Be Perceived By The Sense Of Touch, But Still Constitutes Right Or Interest In Some Property.

The Word 'inter Vivos' Used In The Definition Means Between Living Persons. The Word Living Persons Has Been Explained In Section 5 Of The Transfer Of Property Act.

"5. "Transfer Of Property" Defined.- In The Following Sections "transfer Of Property" Means An Act By Which A Living Person Conveys Property, In Present Or In Future, To One Or More Other Living Persons, Or To Himself, [or To Himself] And One Or More Other Living Persons; And "to Transfer Property" Is To Perform Such Act.
[In This Section "living Person" Includes A Company Or Association Or Body Of Individuals, Whether Incorporated Or Not, But Nothing Herein Contained Shall Affect Any Law For The Time Being In Force Relating To Transfer Of Property To Or By Companies, Associations Or Bodies Of Individuals.]"

From The Bare Perusal Of The Section It Is Apparent That Company Is Living Person Within The Meaning Of Section 5 Of Transfer Of Property Act.

Instrument
Instrument Has Been Defined Under Section 2(14) Of The Stamp Act Which Is Quoted Below:
'Instrument'.- 'Instrument' Includes Every Document And Record Created Or Maintained In Or By An Electronic Storage And Retrieval Device Or Media By Which Any Right Or Liability Is, Or Purports To Be Created, Transferred, Limited, Extended, Extinguished Or Recorded.


Chargeable
The Word Chargeable Has Been Defined Under Section 2 (6) Of The Stamp Act Which Is Reproduced Below:
"Chargeable.-'Chargeable' Means, As Applied To An Instrument Executed, Or First Executed, After The Commencement Of This Act, Chargeable Under This Act, And, As Applied To Any Other Instrument, Chargeable Under The Law In Force In India, When Such Instrument Was Executed, Or Where Several Persons Executed The Instrument, At Different Times, First Executed.

Instruments Chargeable With Duty Has Been Defined In Section 3 Of The Stamp Act Which Is Reproduced Below:
"Instruments Chargeable With Duty.- Subject To Provisions Of This Act And The Exemptions Contained In Schedule I, The Following Instruments Shall Be Chargeable With Duty Of The Amount Indicated In That Schedule As Proper Duty Therefore, Respectively, That Is To Say-"

(a) Every Instrument Mentioned In That Schedule Which, Not Having Been Previously Executed By Any Person, Is Executed In India On Or After The First Day Of July 1899;
(b) Every Bill Of Exchange Payable Otherwise Than On Demand, Or Promissory Note Drawn, Or Made Out Of India, On, Or After That Day, And Accepted Or Paid Or Presented For Acceptance Or Payment, Or Endorsed, Transferred, Or Otherwise Negotiated In India; And
(c) Every Instrument (other Than A Bill Of Exchange, Or Promissory Note) Mentioned In That Schedule, Which, Not Having Been Previously Executed By Any Person, Is Executed Out Of India Or To Any Matter Or Thing Done Or To Be Done, In India And Is Received In India.

Section 3 Of The Stamp Act, Deals With The Chargeability Of An Instrument To Duty, Is Reproduced Below:
3. Instruments Chargeable With Duty.-Subject To Provisions Of This Act And The Exemptions Contained In Schedule I, The Following Instruments Shall Be Chargeable With Duty Of The Amount Indicated In That Schedule As The Proper Duty Therefor, Respectively, That Is To Say-
(a) Every Instrument Mentioned In That Schedule Which, Not Having Been Previously Executed By Any Person, Is Executed In India On Or After The First Day Of July 1899;
(b) Every Bill Of Exchange Payable Otherwise That On Demand, Or Promissory Note Drawn, Or Made Out Of India, On, Or After That Day, And Accepted Or Paid Or Presented For Acceptance Or Payment, Or Endorsed, Transferred, Or Otherwise Negotiated In India; And
(c)every Instrument (other Than A Bill Of Exchange, Or Promissory Note) Mentioned In That Schedule, Which, Not Having Been Previously Executed By Any Person, Is Executed Out Of India On Or After That Day, Relates To Any Property Situate, Or To Any Matter Or Thing Done Or To Be Done, In India And Is Received In India:
Provided That, Except As Otherwise Expressly Provided In This Act, And Notwithstanding Anything Contained In Clauses (a), (b) And (c)of This Section, Or In Schedule I Or I-A The Following Instruments Shall, Subject To The Exemptions Contained In Schedule I-A Or I-B, Be Chargeable With Duty Of The Amount Indicated In Schedule I-A Or I-B Or As The Proper Duty Therefore, Respectively, That Is To Say-
(aa) Every Instrument Mentioned In Schedule I-A Or I- B, Which Not Having Been Previously Executed By Any Person, Was Executed In Uttar Pradesh:
(i) In The Case Of Instruments Mentioned In Schedule I-A, On Or After The Date On Which The U.P. Stamp (Amendment) Act, 1984 Came Into Force, And
(ii) In The Case Of Instruments Mentioned In Schedule I-B, On Or After The Date On Which The U.P. Stamp (Amendment) Act, 1952 Comes Into Force;
(bb) Every Instrument Mentioned In Schedule I-A Or I-B, Which, Not Having Been Previously Executed By Any Person, Was Executed Out Of Uttar Pradesh:
(i) In The Case Of Instruments Mentioned In Schedule I-A On Or After The Date On Which The U.P. Stamp (Amendment) Act, 1948 Came Into Force, And
(ii) In The Case Of Instruments Mentioned In Schedule I-B, On Or After The Date On Which The U.P. Stamp (Amendment) Act, 1952 Comes Into Force And Relates To Any Property Situated, Or Any Matter Or Thing Done Or To Be Done In Uttar Pradesh, And Is Received In Uttar Pradesh:
Provided Also That No Duty Shall Be Chargeable In Respect Of:
(i)any Instrument Executed By Or On Behalf Of, Or In Favour Of The Government, In Cases Where, But For This Exemption, The Government Would Be Liable To Pay The Duty Chargeable In Respect Of Such Instrument;
(ii)any Instrument For The Sale, Transfer Or Other Disposition, Either Absolutely, Or By Way Of Mortgage Or Otherwise, Of Any Ship Or Vessel, Or Any Part, Interest, Share Or Property Of, Or In Any Ship Or Vessel, Registered Under The Merchant Shipping Act, 1984, Or Under Act XIX Of 1838, Or The Indian Registration Of Ships Act, 1841 (X Of 1841), As Amended By Subsequent Acts.

Section 17 Of The Stamp Act Speaks About The Stamping Of Instruments Before Or At The Time Of Execution Which Is Reproduced Below:

17. "Instruments Executed In India.- All Instruments Chargeable With Duty And Executed By Any Person In India, Shall Be Stamped Before Or At The Time Of Execution.

Recitals From The Scheme Of Amalgamation/arrangement/ De-merger And Merger/re-construction Of Companies In The Respective Writ Petitions And Court's Orders:

(1) Writ Petition No. 8119 Of 2007 M/s. Prudential Merchants & Traders Ltd. Vs. State Of U.P. Through Collector, Kanpur Nagar And Others (scheme Of Amalgamation):
1.With Effect From 1st November, 2002, (hereinafter Called The "Appointed Date), The Entire Undertaking Of VED MERCHANTIES LIMITED And PARAG MERCHANTIES LIMITED (hereinafter Called The "Transferor Companies") Including All Its Properties, Movable And Immovables, And Assets Of Whatsoever Nature Such As Licences/registrations And Quota Rights, Lease And Tenancy Rights Or Power Of Whatever Kind, Nature Or Description (all Undertakings Properties, Assets, Rights And Powers Are Hereinafter Collectively Referred To As The "said Undertaking"), Shall Without Any Further Act Or Deed Be And The Same Shall Stand Transferred To And Vested As A Going Concern In PRUDENTIAL MERCHANTIES & TRADERS LIMITED (hereinafter Called The Transferee Company) Pursuant To The Provisions Of Section 394 Of The Companies Act, 1956, (hereinafter Referred To As The "said Act") Subject To The Charges, If Any Then Affecting The Undertaking Of The Transferor Companies Transferred To And Vested In The Transferee Company As Aforesaid, Without Such Charges In Any Way Extending To Other Undertakings Of Transferee Company.
2.................

This Court Doth Order
(1) That All The Property, Rights And Powers Of The Above-named Two Transferor Companies Specified In The First, Second And Third Parts Of The Schedule Hereto And All Other Property, Rights And Powers Of The Above Named Two Transferor Companies Be Transferred Without...........or Deed To The Transferee Company And Accordingly The Same Shall Pursuant To Section 394 (2) Of The Companies Act, 1956, Be Transferred To And Vest In The Transferee Company For All Estate And Interest Of The Transferor Companies Therein But Subject Nevertheless To All Charge Now Affecting The Same.

ANNEXURE
Sanctioned Scheme Of Amalgamation
SCHEDULE
(Part - I)
Description Of Free Hold Properties Of The Transferor Companies-None
SCHEDULE
(Part - II)
Description Of Lease Hold Properties Of The Transferor Companies-None
SCHEDULE
(Part - III)
Short Description Of All Stocks, Shares, Debentures And Other Chose-in-action Of The Transferor Companies-Annexed

(2) Writ Petition No. 8139 Of 2007 M/s. Padamshree Projects Limited Vs. State Of U.P. Through Collector, Kanpur Nagar And Others (scheme Of Amalgamation):

1.With Effect From 1st November, 2002, (hereinafter Called The "Appointed Date"), The Entire Undertaking Of ELVIS COMMERCIAL ENTERPRISES LIMITED And SILVER REED COMMERCIALS LIMITED (hereinafter Called The 'Transferor Companies") Including All Its Properties, Movable And Immovables, And Assets Of Whatsoeve Nature Such A Licences/registrations And Quota Rights, Lease And Tenancy Rights Or Power Of Whatever Kind Nature Or Description (all Undertakings Properties, Assets, Rights And Powers Are Hereinafter Collectively Referred To As The "said Undertaking"), Shall Without Any Further Act Or Deed Be And The Same Shall Stand Transferred To And Vested As A Going Concern In PADAMSHREE PROJECTS LIMITED (hereinafter Called The Transferee Company) Pursuant To The Provisions Of Section 394 Of The Companies Act, 1956, (hereinafter Referred To As The "said Act") Subject To The Charges, If Any Then Affecting The Undertaking Of The Transferor Companies Transferred To And Vested In The Transferee Company As Aforesaid, Without Such Charges In Any Way Extending To Other Undertakings Of The Transferee Company.
2.......................

This Court Doth Order
(1) That All The Property, Rights And Powers Of The Above Named Two Transferor Companies Specified In The First, Second And Third Parts Of The Schedule Hereto And All Other Property, Rights And Powers Of The Above Named Two Transferor Companies Be Transferred Without Further Act Or Deed To The Transferee Company And Accordingly The Same Shall Pursuant To Section 394 (2) Of The Companies Act, 1956, Be Transferred To And Vest In The Transferee Company For All The Estate And Interest Of The Transferor Companies, Therein But Subject Nevertheless To All Charges Now Affecting The Same.

ANNEXURE
Sanctioned Scheme Of Amalgamation
SCHEDULE
(Part - I)
Description Of Free Hold Properties Of The Transferor - None
SCHEDULE
(Part - II)
Description Of Lease Hold Properties Of The Transferor Companies-None
SCHEDULE
(Part - III)
Short Description Of All Stocks, Shares, Debentures And Other Chose-in-action Of The Transferor Companies-Annexed

(3) Writ Petition No. 8114 Of 2007 M/s. Telesia Trading & Finance Limited Vs. State Of U.P. Through Collector, Kanpur Nagar And Others (scheme Of Amalgamation):

1.With Effect From 1st February, 2003, (hereinafter Called The "Appointed Date), The Entire Undertaking Of GOBIND VANIJYA LIMITED And UJALA MERCHANTIES LIMITED (hereinafter Called The "Transferor Companies") Including All Its Properties, Movable And Immovable, And Assets Of Whatsoever Nature Such As Licences Registrations And Quota Rights, Lease And Tenancy Rights Or Power Of Whatever Kind Nature Or Description (All Undertakings Properties, Assets, Rights And Powers Are Hereinafter Collectively Referred To As The "said Undertaking"), Shall Without Any Further Act Or Deed Be And The Same Shall Stand Transferred To And Vested As A Going Concern In TELESIA TRADING AND FINANCE LIMITED (hereinafter Called The Transferee Company) Pursuant To The Provisions Of Section 394 Of The Companies Act, 1956 (hereinafter Referred To As The "said Act") Subject To The Charges, If Any, Then Affecting The Undertaking Of The Transferor Companies Transferred To And Vested In The Transferee Company As Aforesaid Without Such Charges In Any Way Extending To Other Undertakings Of The Transferee Company.
2.................

This Court Doth Order
1.That All The Property, Rights And Powers Of The Above-named Two Transferor Companies Specified In The First, Second And Third Parts Of The Scheme Hereto And All Other Property, Rights And Powers Of The Above Named Two Transferor Companies Be Transferred Without Any Further Act Or Deed To The Transferee Company And Accordingly The Same Shall Pursuant To Section 394 (2) Of The Companies Act, 1956, Be Transferred To And Vest In The Transferee Company For All Estate And Interest Of The Transferor Companies Therein But Subject Nevertheless To All Charges Now Affecting The Same.
2.........................

ANNEXURE
Sanctioned Scheme Of Amalgamation
SCHEDULE
(Part - I)
Description Of Free Hold Properties Of The Transferor Companies- None
SCHEDULE
(Part - II)
Description Of Lease Hold Properties Of The Transferor Companies-None
SCHEDULE
(Part - III)
Short Description Of All Stocks, Shares, Debentures And Other Chose-in-action Of The Transferor Companies.

(4) Writ Petition No. 2888 Of 2007 M/s. Amar Ujala Publications Ltd. Vs. State Of U.P. And Others (scheme Of Amalgamation):
1.With Effect From The Commencement Of Business On1st April, 2003, I.e. The Appointed Date, Subject To The Provisions Of The Scheme In Relation To The Modalities Of Transfer And Vesting, The Undertaking And Entire Business And All Immovable Properties Were So Ever Situated And Incapable Of Passing By Physical Delivery As Also All Other Assets, Capital Work-in-progress, Current Assets, Investments, Powers, Authorities, Allotments, Approvals And Consents, Licenses, Registration, Contracts, Engagements, Arrangement, Rights Intellectual Property Rights, Titles, Interests, Benefits And Advantages Of Whatsoever Nature Belonging To Or In The Ownership, Power Possession, Control Of Or Vested In Or Granted In Favour Of Or Enjoyed By The Transferor Company, Including But Without Being Limited To, All Licenses, Liabilities, Easements, Advantages, Benefits, Privileges, Lease, Tenancy Rights, Ownership, Trade Marks Brand Copy Rights, Quota Rights, Subsidies, Concessions, Exemptions, Sales Tax Exemptions, Concessions/obligations, Approvals, Clearances, Environmental Clearances, Authorizations, Certification, Quality, Certification, Utilities Electricity Connections, Electronics And Computer Link Ups, Services Of All Types Reserves, Provisions, Funds Benefits Of All Agreements And All Other Interests Arising To The Transferor Company (herein Collectively Referred To As "the Said Assets") Shall, Without Any Further Act Or Deed Or Without Payment Of Any Duty Or Other Charges, Be Transferred To And Vested In The Transferee Company Pursuant To The Provisions Of Section 394 Of The Act, For All The Estate, Right, Title And Interest Of The Transferor Company Therein So As To Become The Property Of The Transferee Company But, Subject To Mortgages, Charges And Encumbrances, If Any, Then Affecting The Undertaking Of The Transferor Company Without Such Charges In Any Way Extending To The Undertaking Of The Transferee Company.
2....................

This Court Doth Further Order
(1) That All The Property, Rights And Powers Of The Transferor Company Specified In The First, Second And Third Part's Of The Schedule Hereto And All Other The Property, Rights And Powers Of The Transferor Company Be Transferred Without Further Act Or Deed To The Transferee Company And Accordingly The Same Shall Pursuant To Section 394 (2) Of The Companies Act, 1956, Be Transferred To And Vest In The Transferee Company For All The Estate And Interest Of The Transferor Company Therein But Subject Nevertheless To All Charge Now Affecting The Same.

ANNEXURE
Sanctioned Scheme Of Amalgamation
SCHEDULE
(Part - I)
(A Short Description Of The Free Hold Property Of The Transferor Company)
As Mentioned In The Scheme Of Amalgamation.
SCHEDULE
(Part - II)
(A Short Description Of Lease Hold Property Of The Transferor Company)
As Mentioned In The Scheme Of Amalgamation.

SCHEDULE
(Part - III)
(A Short Description Of All Stocks, Shares, Debentures And Other Choses Inaction Of The Transferor Company)
As Mentioned In The Scheme Of Amalgamation.

(5) Writ Petition No. 71022 Of 2006 Dhampur Sugar Mills Ltd. Vs. Appar Zila Adhikari (Vitta And Rajasva), Kanpur Nagar And Another The Scheme Of Amalgamation Is Reproduced Below:

1. With Effect From The Appointed Date And Subject To The Provisions Of This Scheme In Relation To The Mode Of Transfer And Vesting, The Whole Undertaking And The Entire Business Including All Movable And Immovable Properties, Assets, Capital Work In Progress, Current Assets, Investments, Powers, Authorities, Allotments, Approvals And Consents, Licenses, Registrations, Contracts, Engagements, Arrangements, Claims, Rights Interests, Benefits, And Advantages Of Whatsoever Nature And Wheresoever Situated, Belonging To Or In The Ownership, Power Or Possession And In The Control Of Or Vested In Or Granted In Favour Of Or Enjoyed By MSML, Including But Without Being Limited To All Patents, Trademarks, Trade Names And Other Industrial Rights Of Any Nature Whatsoever And Licenses In Respect Thereof Privileges, Liberties, Easements, Advantages, Benefits, Leases, Tenancy Rights, Ownership Rights, Quota Rights, Permits, Approvals, Reauthorizations And Availment Of Telephones, Telexes, Facsimiles, Connections And Installations, Utilities, Electricity And Other Services, Reserves Provisions, Funds, Benefits And All Arrangements And All Other Interest Arising To The Transferor Company Including The Equities (rights And Also The Obligations) In Respect Of Its Existing Or Proposed Joint Ventures (hereinafter Collectively Referred To As The Said Undertaking) Shall, Without Any Further Act Or Deal, Be Transferred To And Vested In And/or Deemed To Be Transferred And Vested In The Transferee Company I.e. DSML Pursuant To The Provisions Of Sections 391 To 394 Of The Act For All The Estate, Rights, Titles, And Interest Of The Transferor Company I.e. MSML Therein.
2. ....................

This Court Doth Order
The Confirmation Petition Is Accordingly Allowed. The Scheme Of Amalgamation Is Approved Without Any Modification With 01.04.2005 As Appointed Date And The Date Of This Order As Effective Date. The Transferor Company Shall Stand Dissolved Without Any Order Of Winding Up To Be Made By The Court.
(1) That All The Property, Rights And Powers Of The Above Named Transferor Company Specified In The First, Second And Third Parts Of The Schedule Hereto And All Other Property, Rights And Powers Of The Above Named Transferor Company Be Transferred Without Any Further Act Or Deed To The Transferee Company And Accordingly The Same Shall Pursuant To Section 394 (2) Of The Companies Act, 1956, Be Transferred To And Vest In The Transferee Company For All The Estate And Interest Of The Transferor Company Therein But Subject Nevertheless To All Charges Now Affecting The Same; And
(2) That All The Liabilities And Duties Of The Above Named Transferor Company Be Transferred Without Further Act Or Deed To The Transferee Company And Accordingly The Same Shall, Pursuant To Section 394 (2) Of The Companies Act, 1956, Be Transferred To And Become The Liabilities And Duties Of The Transferee Company.

ANNEXURE
Sanctioned Scheme Of Amalgamation
SCHEDULE
(Part - I)
Description Of The Free Hold Properties Of The Company As Given In The Scheme Of Amalgamation.
SCHEDULE
(Part - II)
Description Of Lease Hold Properties Of The Transferor Company As Given In The Scheme Of Amalgamation.

SCHEDULE
(Part - III)
Short Description Of All Stocks, Debentures And Other Chose-in-action Of The Transferor Company Given In The Scheme Of Amalgamation.

(6) The Facts Of Writ Petition No. 41811 Of 2006 (Hero Motors Case) Are:

1.M/s Majestic Auto Ltd. (transferor Company) Is A Public Limited Company, It Has Two Units: One At Ghaziabad And Another At Ludhiana. The Unit At Ludhiana Is Manufacturing Moped Up To 72 Cc. The Unit At Ghaziabad Is Manufacturing Moped Beyond 72 Cc. M/s Hero Motors Limited (the Transferee Company) Is Another Public Limited Company Manufacturing Mopeds And Scooters. The Board Of Directors Of These Two Companies Proposed A Scheme Of Arrangement By Which Ghaziabad Unit Of The Transferor Company Was To Be De-merged And Merged With The Transferee Company. This Proposed Scheme Was Sanctioned By The Punjab And Haryana High Court On 29.5.2004. It Was Also Sanctioned By The Delhi High Court On 22.7.2004. It Appears That There Was Some Mistake In The Order Of The Delhi High Court And It Was Corrected On 30.7.2004.
2.In Substance The Scheme Of Arrangement Provides That The Assets Of Ghaziabad Unit Along With Its Liabilities And Employees Stood De-merged With The Transferor Company And Merged With The Transferee Company. Under The Scheme Of Arrangement, The Share Holders Of The Transferor Company Got Shares Of The Transferee Company In The Ratio Of 100 Is To 10.39 Shares Of The Face Value Of Rs. 10/-.
3.The Immoveable Property Is Situate In Our State. The Transferee Company Filed An Application Before The Tehsildar For Recording Its Name Over The Same Under The Land Revenues Act. Thereafter A Notice Dated 5.4.2005 Was Issued To The Petitioner To Show Cause As To Why Deficiency In The Stamp Duty And Penalty Be Not Imposed On It. The Transferee Company Filed Their Reply On 18.4.2005 Against The Same. Thereafter The Order Was Passed On 8.6.2006 Imposing The Deficiency Of Stamp Duty Of Rs. 9,44,47,000/- Under Article 23 (a) Of Schedule I-B Of The U.P. Stamp Act And Penalty Of Rs. 5,00,00,000/-. Hence The Writ Petition No. 41811 Of 2006.

From The Bare Reading Of The Scheme Of Arrangement/amalgamation/merger, De-merger/reconstruction Of Company, Almost In All The Writ Petitions The Word Transferor Companies And Transferee Companies Have Been Used And The Transferor Companies Including All Its Properties Movable, Immoveable And Assets Of Whatever Nature Such As Licences, Registrations, Quota Rights, Lease And Tenancy Rights And All Undertakings Properties Assets And Rights Have Been Transferred To The Transferee Company.
In The Court's Orders, Property Rights And Powers Of Transferor Companies Contained In The Ist, IInd And IIIrd Parts Of The Schedules, Have Been Transferred Without Any Registered Deed Of Transfer To The Transferee Company In View Of Section 394 (2) Of The Companies Act And The Same Has Vested In The Transferee Companies. It Is Also Noticeable That In Most Of The Cases Schedule I And II Containing The Description Of Free Hold Properties And Lease Properties Have Not Been Annexed, Only IIIrd Schedule Has Been Annexed In Few Writ Petitions.
In View Of Entry 63 Of The State List Of 7th Schedule Of The Constitution, The Power To Determine Rate Of The Stamp Duty In Respect Of The Documents Which Are Not Specified In List-I (Union List) Of The 7th Schedule Of The Constitution) Are Under The Domain Of State Government Therefore, The Power Of State Legislature To Frame Law With Regard To The Rates Of Charging Stamp Duty Cannot Be Disputed.
It Is Well Settled That While Dealing With The Chargeability Clause, The Material Thing Is To Be Seen Is The Intention Of The Parties Which Is To Be Gathered From A Fair And Reasonable Reading Of The Entire Instrument, Which Ought To Be The Basis To Find Out If An Instrument Is Chargeable, The Use Of Expressions Does Not Generally Serve As A Guide For Interpretation Of Deed. It Is The Real Meaning Of Transaction Which Is To Be Gathered.
The Court Is Not To Be Guided By The Apparent Tenor Of The Document. It Is The Real Nature Of The Transaction, Which Will Determine The Duty But The Recital Of The Instrument Should Not Be Lost Sight Of, Merely Because The Parties Gave A Particular Description Of Its Nature. In The Case Of K.V. Subba Rao Vs. District Registrar Of Assurances, Guntur AIR 1986 AP 42, A Special Bench Of Andhra Pradesh High Court Consisting Up Three Hon'ble Judges Has Made The Following Observation In This Regard:
"It Is Now Well Settled That In Order To Determine The Nature Of An Instrument, Neither The Nomenclature Nor The Language Which The Parties May Choose To Employ In Framing The Document Is Decisive. What Is Decisive Is The Actual Nature And The Character Of The Transaction Intended By The Executant."

Learned Counsel For The Petitioners Have Made Following Submissions:
a) Scheme Of Arrangement/amalgamation/merger, De-merger/reconstruction Of Companies Of A Going Concern Is Not Conveyance Relating To Immoveable Property Or Movable Property. For The Purposes Of Payment Of Stamp Duty As Required Under Articles 23 (1) A And 23 (1) B Of Schedule I-B Of The Act.
b) Since There Is No Method Of Computation Of Stamp Duty Prescribed Under The Rules Framed Under Stamp Act In Respect To Such Scheme Of Arrangements, Therefore, No Stamp Duty Can Be Charged.
C) While Transferring The Assets, Liabilities Have Also Been Transferred And That Has Not Been Taken Into Consideration While Issuing The Impugned Notice.
d) Almost In Six States There Are Amendment Under The Stamp Act With Regard To The Chargeability Of Stamp Duty In Respect To The Scheme Of Amalgamation Of Companies/reconstruction Of Companies. Since In The State Of U.P. There Is No Such Amendment, Therefore, The Stamp Duty Cannot Be Charged.
e) The Another Reason For Not Charging Stamp Duty Is That Before The Hindustan Lever Ltd. Case The State Of U.P. Has Not Been Charging Stamp Duty On Such Type Of Scheme Of Arrangement/amalgamation/merger, De-merger/reconstruction Of Companies. Therefore, It Cannot Be Charged Now Unless The Relevant Provisions Of The Stamp Act Are Amended.
The Learned Standing Counsel Has Submitted That The Reason For Not Charging The Stamp Duty Earlier On Such Type Of Scheme Of Arrangement/amalgamation/merger, De-merger/reconstruction Of Companies By The Stamp Officers Of State Government Was Non Availability Of These Kinds Of Instruments Before The Public Offices. As These Type Of Instruments Were Only Available Either With The Office Of Company Courts Or With The Officers Of Registrar Of Companies Or With Offices Of The Companies Itself. It Had Never Been Brought To Light Before The Officers Who Are Entrusted To Discharged Such Type Of Duties Under The Stamp Act And When Such Type Of Scheme Was Brought In Light For The Purposes Of Mutation In The Case Of Hero Motors Then The Tehsildar Has Referred The Matter Before The Stamp Authorities For Determination Of The Stamp Duty.
It Has Also Been Submitted That Merely Because Earlier Stamp Duty Was Not Charged On Such Type Of Schemes Of Arrangement/amalgamation/merger, De-merger/ Reconstruction Of Companies Will Not Preclude The State Authorities To Charge It Now If The Scheme Falls Under The Definition Of Instruments Or Instrument Of Conveyance. It Has Also Been Submitted That So Far The Approval Of Company Court Approving Such Scheme Is Concerned The Company Court Was Exercising Its Power Under The Companies Act And Approval Was Granted Within The Four Corners Of The Provisions Of The Companies Act And It Was Not Seen With The Angle Of The Payment Of Stamp Duty Under The Stamp Act. It Has Also Been Submitted That The Petitioners Are Well Armed With The Legal Experts And Their Intention To Not Pay Stamp Duty Can Also Be Judged From This Angle That They Had Never Brought These Kinds Of Schemes Before The Collector Under Section 31 Of The Stamp Act For Adjudication Of Proper Stamp Duty.
It Is Only In One Writ Petition 4750 Of 2007 Hindalco Industries Ltd. Vs. State Of U.P. And Others. The Instrument Was Brought In The Light Before The Collector Under Section 31 Of The Stamp Act And It Was Adjudicated By The Collector But That Writ Petition Was Not Pressed In View Of The Subsequent Development As The Authority Itself Has Decided To Not Proceed With The Matter As The Notice Was Time Barred And Started Without Permission Of The State Government.
Considering The Submissions Of The Learned Counsel For The Parties, The Material Thing Which Is Required To Be Looked Into Is The Requirement Of Law Under The Various Provisions Of The Stamp Act With Regard To The Chargeability Of Stamp Duty On Such Type Of Scheme Of Arrangements/merger/de-merger Or Reconstruction Of Company.
Since It Has Already Been Held That Such Type Of Scheme Of Amalgamation/merger, De-merger/reconstruction Of Companies Falls Under The Definition Of Conveyance, Therefore, Only Questions Requires To Be Examined Is The Applicability Of Articles 23-(1) A, 23-(1) B Of The Schedule I-B Of The Stamp Act. From The Perusal Of Entire Scheme, The Definition Of Instruments/conveyance/chargeability And Relevant Chargeable Articles Of The Schedule I-B Of The Stamp Act, It Is Apparent That Different Kind Of Stamp Duty Is Chargeable On Different Kind Of Transfer Of Property.
For Example Some Instruments Relating To The Transfer Of Property Enumerated In The Indian Stamp Act 1899 And Its Schedule Are Instrument Of Conveyance, Gift, Instrument Of Partition, Lease, Mortgage Deed, Settlement Trust, Transfer Of Lease, Transfer (Article 62 Schedule I-B) Release, Re-conveyance Of Mortgage Of Property, Exchange Of Property, Instrument Of Counter Part, Certificate Of Sale, Award (Article 12 Of Schedule I-B). Certain Types Of Agreement To Sale With Possession Of Property Etc., Separate Rates Of Stamp Duties Are Prescribed For All These Instruments In The Schedule And Chargeable Sections.
This May Be With A View To Give Certain Kind Of Relaxations To A Particular Class Of Instruments. The Power Of Exemption Has Also Been Provided Under The Stamp Act Which Is Within The Domain Of The State Government.
The Question Which Involves In This Case Is Whether This Type Of Conveyance Is Chargeable With Stamp Duty Under The Provisions Of Stamp Act Applicable In U.P. Or Not. It Is True That In State Of U.P. There Is No Separate Amendments With Regard To The Chargeability Of Stamp Duty On A Scheme Of Amalgamation/re-construction Of The Companies Etc. But Here In State Of U.P. Only Two Kinds Of Properties Have Been Mentioned Movable And Immoveable, Therefore, It Has To Be Ascertained Whether The Particular Type Of Instrument Of Conveyance Broadly Falls Under These Two Categories Or Not. There Is No Exclusion Clause In The Definition Of The Instrument. It Is Also Not Res Integra That The Share Is Also Property.
In Respective Writ Petitions These Schemes Have Been Brought On Record And If The Language Of These Schemes Are Looked Into Then By No Strech Of Imagination, It Can Be Said That A Right, Liability Has Neither Been Created Nor Transferred. On The Contrary It Contains That The Movable, Immoveable Properties Along With The Liabilities Have Been Merged Or Amalgamated Of A Going Concern And That Is Why It Has Been Held That This Kind Of Document Falls Under The Definition Of Conveyance As Defined Under The Stamp Act. It Is Well Within The Domain Of State Government To Classify The Instrument In Different Categories With A View To Charge Stamp Duty Separately. This May Be For The Reason To Give Certain Kind Of Relief With Respect To The Execution Of Certain Kind Of Instrument. Since In Other States A Different Kind Of Stamp Duty Has Been Prescribed By Way Of Amendment For Such Type Of Scheme Framed And Approved Under Section 394 Of The Companies Act Will Not Mean That In State Of U.P. Such Type Of Instrument Cannot Be Charged Unless So Included In The Definition Of The Conveyance And Thereafter Unchargeable Articles Are Amended Under The Stamp Act. In Those States Where Amendment Have Been Made, It May Have Been Made With A View To Give Certain Kind Of Relaxations With Respect To Such Type Of Schemes But It Appears That The State Legislature Of U.P. Has Not Intended So And It Has Broadly Divided The Properties In Two Classes Movable And Immoveable With A View To Charge Stamp Duty Under The Stamp Act. It Cannot Be Said That This Kind Of Transaction Neither Falls Under The Category Of Movable Nor Immoveable Property.
The Counsel For The Petitioners Have Invited Attention Of The Court Towards The Strict Construction Of The Taxing Statutes And Submitted That Unless Language Is Clear With Respect To Chargeability On Such Type Of Arrangement No Stamp Duty Can Be Charged. The Ruling Relied Upon By The Counsel For The Petitioners With Regard To The Interpretation Of Fiscal Statute As Understood By Me Are Fully Applicable In Reverse In The Case Of Petitioners Looking Into The Nature Of The Instrument And Chargeable Section And Charging Articles. There Is No Place Of Equity In Interpreting The Fiscal Statutes Since In State Of U.P., The Properties Chargeable Under The Articles On Such Type Of Conveyance Is Divided Only In Two Classes Movable And Immovable, Therefore, There Is No Scope For The Court To Understand Other Than That And Further There Is No Scope For The Petitioner To Classify The Movable Property In Different Variety How Soever The Hard Consequences It May Face. This Observation Has Come Because Of The Fact That The Counsel For The Petitioners While Making Their Submissions Have Also Invited The Attention Of The Court Towards The Fact That In The Process Of Merger And De-merger Not Only Assets But Liabilities Have Also Gone And That Has Not Been Taken Into Consideration While Issuing Show Cause Notice. There Is No Such Provision Under The Stamp Act To Deduct The Liability And Then Proceed To Charge Stamp Duty Under The Act On An Instrument Of Conveyance. The Place Of Equity In Interpreting The Other Statutes Than The Fiscal Statutes Has Also Been Considered In Different Type Of Cases. The Hon'ble Apex Court In The Case Of Life Insurance Corporation Of India Vs. Asha Ram Chandra Ambedkar (Mrs) And Another Reported In 1994 Volume 2 SCC 718 Has Held:
"Justice According To Law Is A Principal As Old As The Hills. The Courts Are To Administer The Law As They Find It, However, Inconvenient It May Be..........."
The Courts Should Endeavour To Find Out Whether A Particular Case Which Sympathetic Considerations Are To Be Weighed Falls Within The Scope Of Law. Disregardful Of Law, However, Hard The Case May Be, It Should Never Be Done.
In The Case Of Raghunath Rai Bareja Vs. Punjab National Bank Reported In 2007 V 1 AWC 507 The Apex Court Has Observed...............
It Is Well Settled That When There Is A Conflict Between The Law And Equity, It Is The Law Who Is To Prevail In Accordance With Latin Maxim Dura Lex Sed Which Means The Law Is Hard But It Is The Law, Equity Can Only Supplement The Law But It Cannot Supplement Or Override It.
"...............What Is Administered In The Court Of Justice According To Law And Considerations Of Fair Play And Equity, However, Or They May Be Most Err To Clear And Express Provision Of Law.
The Above Proposition Has Only Been Cited Because The Learned Counsel For The Petitioners Have Argued That Along With The Assets Liabilities Have Also Been Tranferred And If The Liabilities Are Not Taken Into The Consideration Then Survival, Of The Concern Where The Going Concern Has Gone Will Be Difficult.
It Is True From Perusal Of Record That There Is Heavy Liability Along With The Assets Has Also Gone Of The Going Concern Merged In The Other Concern But Looking Into The Fiscal Nature Of The Statute, I Am Of The View That The Liability Of Payment Of Stamp Duty Cannot Be Relaxed. The Court Finds Itself Helpless To Help The Petitioner.
So Far As Splitting Of The Scheme Of Arrangement/merger, De-merger/reconstruction Of Company With A View To Charge Stamp Duty Is Concerned, I Beg To Defer In This Regard For The Simple Reason That The Stamp Duty Is Demanded Only With Regard To The Transfer Of Assets Not On Liability And Under The Provisions Of Stamp Act To My Little Knowledge There Is No Provision To Charge The Stamp Duty After Excluding The Liabilities. Learned Counsel For The Petitioners Have Also Not Shown Any Provision Under The Provision Of The Stamp Act In This Regard. Since Stamp Act Is A Fiscal Statute, Therefore, The Stamp Duty Has To Be Charged Under The Chargeable Articles Over An Instrument. Therefore, The Stamp Duty In My Opinion Can Be Charged Even Without Splitting The Liability As No Duty Is Demanded On The Liability. So Far As The Different Kind Of Instrument In One Deed Is Concerned, Section 5 Of The Stamp Act Takes Care Of It Which Is Reproduced Below:
"5. Instrument Relating To Several Distinct Matters.-Any Instrument Comprising Or Relating To Several Distinct Matters Shall Be Chargeable With The Aggregate Amount Of Duties With Which Separate Instruments, Each Comprising Or Relating To One Of Such Matters, Would Be Chargeable Under This Act."

It Will Be Open To The Petitioners To Take Such Plea Before The Stamp Authorities By Whom Notices Have Been Issued. So Far As The Arguments Of The Counsel For The Petitioners With Regard To The Absence Of Computation Of Stamp Duty On The Scheme Of Amalgamation/merger/de-merger/arrangement/reconstruction Of Companies Is Concerned, Suffice To Say That The Stamp Duty Has Been Demanded, As Apparent From The Notices, Only On The Valuation Given By The Petitioners And Approved By The Company Court. The Stamp Authorities Have Not Demanded Stamp Duty On Their Own Valuation. Therefore, This Argument Is Not Available To The Petitioners. However, While Considering The Demand Of Tax Under The Fiscal Statute It Is The Duty Of The Court To Get It Ensure Whether The Tax Payer Is Discharging His Duty Fairly Or Adopting Colourable Device To Not Pay The Proper Tax.
A Constitution Bench Of Hon'ble Apex Court In The Case Of M/s McDowell & Co. Ltd. Vs. Commercial Tax Officer AIR 1986 SC 649 Has Observed:
"We Think That Time Has Come For Us To Depart From The Westminster Principle As Emphatically As The British Courts Have Done And To Dissociate Ourselves From The Observations Of Shah, J. And Similar Observations Made Elsewhere. The Evil Consequences Of Tax Avoidance Are Manifold. First There Is Substantial Loss Of Much Needed Public Revenue, Particularly In A Welfare State Like Ours. Next There Is The Serious Disturbance Caused To The Economy Of The Country By The Piling Up Of Mountains Of Black Money, Directly Causing Inflation. Then There Is "the Large Hidden Loss" To The Community (as Pointed Out By Master Sheatcroft In 18 Modern Law Review 209) By Some Of The Best Brains In The Country Being Involved In The Perpetual War Waged Between The Tax-avoider And His Expert Team Of Advisers, Lawyers And Accountants On One Side And The Tax-gatherer And His Perhaps Not So Skillful Advisers On The Other Side. Then Again There Is The 'sense Of Injustice And Inequality Which Tax Avoidance Arouses In The Breasts Of Those Who Are Unwilling Or Unable To Profit By It'. Last But Not The Least Is The Ethics (to Be Precise, The Lack Of It) Of Transferring The Burden Of Tax Liability To The Shoulders Of The Guidelines Good Citizens From Those Of The 'artful Dodgers'. It May, Indeed, Be Difficult For Lesser Mortals To Attain The State Of Mind Of Mr. Justice Holmes, Who Said, "Taxes Are What We Pay For Civilized Society. I Like To Pay Taxes. With Them I Buy Civilization." But, Surely, It Is Hight Time For The Judiciary In India Too To Part Its Ways From The Principle Of Westminster And The Alluring Logic Of Tax Avoidance, We Now Live In A Welfare State Whose Financial Needs, If Backed By The Law, Have To Be Respected And Met. We Must Recognise That There Is Behind Taxation Laws As Much Moral Sanction As Behind Any Other Welfare Legislation And It Is A Pretence To Say That Avoidance Of Taxation Is Not Unethical And That It Stands On No Less Moral Plane Than Honest Payment Of Taxation. In Our View, The Proper Way To Construe A Taxing Statute, While Considering A Device To Avoid Tax, Is To Ask Whether The Provisions Should Be Construed Literally Or Liberally, Nor Whether The Transaction Is Not Unreal And Not Prohibited By The Statute, But Whether The Transaction Is A Device To Avoid Tax, And Whether The Transaction Is Such That The Judicial Process May Accord Its Approval To It. A Hint Of This Approach Is To Be Found In The Judgemnt Of Desai, J. In Wood Polymer Ltd. And Bengal Hotels Limited, (1977) 47 Com Cas 597 (Guj) Where The Learned Judge Refused To Accord Sanction To The Amalgamation Of Companies As It Would Lead To Avoidance Of Tax." (Para 17)

"It Is Neither Fair Not Desirable To Expect The Legislature To Intervene And Take Care Of Every Device And Scheme To Avoid Taxation. It Is Up To The Court To Take Stock To Determine The Nature Of The New And Sophisticated Legal Devices To Avoid Tax And Consider Whether The Situation Created By The Devices Could Be Related To The Existing Legislation With The Aid Of 'emerging' Techniques Of Interpretation Was Done In Ramsay (1982 AC 300), Burma Oil (1982 STC 30) And Dawson (1984-I All ER 530), To Expose The Devices For What They Really Are And To Refuse To Give Judicial Benediction." (Para 18)

"Tax Planning May Be Legitimate Provided It Is Within The Framework Of Law. Colourable Devices Cannot Be Part Of Tax Planning And It Is Wrong To Encourage Or Entertain The Belief That It Is Honourable To Avoid Payment Of Tax By Resorting To Dubious Methods. It Is The Obligation Of Every Citizen To Pay The Taxes Honestly Without Resorting To Subterfuges." (Para 45)

This View Has Been Reiterated By Hon'ble Apex Court Reported In Union Of India Vs. M/s Playworld Electronics Pvt. Ltd. AIR 1990 SC 202, In Paragraph 11 It Has Been Held That:
"It Is True That Tax Planning May Be Legitimate Provided It Is Within The Framework Of The Law. Colourable Devices Cannot Be Part Of Tax Planning And It Is Wrong To Encourage Or Entertain The Belief That It Is Honourable To Avoid The Payment Of Tax By Dubious Methods. It Is The Obligation Of Every Citizen To Pay The Taxes Honestly Without Resorting To Subterfuges. It Is Also True That In Order To Create The Atmosphere Of Tax Compliance, Taxes Must Be Reasonably Collected And When Collected, Should Be Utilised In Proper Expenditure And Not Wasted."(Para 11)

It Is Noticeable That The Companies Act And The Indian Stamp Acts Operate In Different Fields. Both Have Got Their Independent Status. The Things Done Under The Provisions Of Companies Act Or Not Done, Keeping In View The Provisions Of Indian Stamp Acts Otherwise Also, While Framing Such Scheme And Getting Approval Of The Court Under The Companies Act, The Court Dealing With Approval Of Scheme Under The Provisions Of Companies Act Is Not Supposed To Look Into The Correctness Of The Statements With Regard To The Valuation Of Properties And The Liabilities. Whereas The Stamp Acts Is Only Concerned With The Nature Of The Instruments And Its Chargeability Under The Various Sections And Schedules Of The Indian Stamp Act. Therefore, To My Mind The Court's Order Approving The Scheme Of Amalgamation/merger, De-merger/reconstruction Of Companies Can Be Looked Into By The Authorities Under The Stamp Act With A View To Charge The Stamp Duty.
Except In The Case Of Hero Motors All The Writ Petitions Have Been Filed Challenging The Show Cause Notice. However, In The Case Of Hero Motors The Notices Have Been Issued Only After The Report Of Tehsildar. When Such Scheme Of Amalgamation Was Brought Before The Tehsildar For The Purpose Of Mutation Of The Name Of The Company Then It Transpired That The Aforesaid Scheme Has Neither Been Registered Nor Duly Stamped At The Time Of Execution. The Correctness Of The Tehsildar's Order In Referring The Matter To The Stamp Authority Finds Support From Section 17 And 49 Of The Stamp Act Which Are Reproduced Below:

"17 Documents Of Which Registration Is Compulsory.-(1) The Following Documents Shall Be Registered, If The Property To Which They Relate Is Situate In A District In Which, And If They Have Been Executed On Or After The Date On Which, Act No. XVI Of 1864, Or The Indian Registration Act, 1866, Or The Indian Registration Act, 1871, Or The Indian Registration Act, 1877, Or This Act Came Or Comes Into Force, Namely:
(a) Instruments Of Gift Of Immovable Property;
(b) Other Non-testamentary Instruments Which Purport Or Operate To Create, Declare, Assign, Limit Or Extinguish, Whether In Present Or In Future, Any Right, Title Or Interest Whether Vested Or Contigent, To Or In Immovable Property:
(c) Non-testamentary Instruments Which Acknowledge The Receipt Or Payment Of Any Consideration On Account Of The Creation, Declaration, Assignment, Limitation Or Extinction Of Any Such Right, Title Or Interest; And
(d) Leases Of Immovable Property From Year To Year Or For Any Term Exceeding One Year, Or Reserving A Yearly Rent;
[(e) Non-testamentary Instruments Transferring Or Assigning Any Decree Or Order Of A Court Or Any Award When Such Decree Or Order Or Award Purports Or Operates To Create, Declare, Assign, Limit Or Extinguish Whether In Present Or In Future Any Right, Title Or Interest Whether Vested Or Contigent, To Or In Immoveable Property;
(f) Any Other Instrument Required By Any Law For The Time Being In Force, To Be Registered.]


The Effect Of Non Registration Is Provided Under Section 49 Of The Registration Act Which Is Reproduced Below:

"49. Effect Of Non-registration Of Documents Required To Be Registered.-No Document Required By Section 17 [or By Any Provision Of The Transfer Of Property Act, 1882 (Act No. 4 Of 1882)] [or Of Any Other Law For The Time Being In Force] To Be Registered Shall-
(a) Affect Any Immovable Property Comprised Therein, Or
[(b) Confer Any Power Or Create Any Right Or Relationship, Or]
(c ) Be Received As Evidence Of Any Transaction Affecting Such Property Or Conferring Such Power [or Creating Such Right Or Relationship] Unless It Has Been Registered:
[Provided That An Unregistered Document Affecting Immovable Property And Required By This Act, Or The Transfer Of Property Act, 1882, To Be Registered May Be Received Or As Evidence Of Any Collateral Transaction Not Required To Be Effected By Registered Instrument.]

From The Bare Perusal Of Section 17 And 49 It Is Apparent That Such Type Of Scheme Of Arrangement/amalgamation/merger, De-merger/reconstruction Of Companies Are Required To Be Registered Before The Registering Authority And At The Time Of Execution It Has To Be Stamped With Proper Stamp Duties. Since The Entire Schedules As Contained In The Scheme Of Arrangement/amalgamation/merger, De-merger/reconstruction Of Companies Has Not Been Brought On Record, Therefore, Broadly It Can Be Inferred That It Is Chargeable Only Under Articles 23 (1) A And 23 (1) B Of Schedule I-B Of The Stamp Acts As The Properties Are Either Immovable Or Movable Have Been Transferred But From The Language Used In The Scheme It Appears That Different Type Of Instruments Are Clubed Together In One Deed And Apart From The Movable And Immovable Properties, Leasehold Rights, Work In Progress, Current Assets, Investments, Powers, Authorities Allotments, Approvals, Licences, Registrations, Contracts, Engagements, Arrangements, Claims, Rights, Interests, Benefits And Advantages, Have Also Been Transferred.
It Will Be Open To The Petitioners To File Their Reply Before The Respective Authorities Of Stamps Raising All Such Pleas Which Are Legally Available To Them. So Far As The Case Of Hero Motors Is Concerned, Since In This Case The Order Passed By The Stamp Authority Has Been Quashed On The Ground Of Breach Of Principles Of Natural Justice, Therefore, The Petitioners In That Case Also Stands On The Same Footing At The Stage Of Show Cause Notice. It Will Also Be Open To The Petitioner In That Case To Take Such Plea As Available.
Since In The Case Of Hero Motors Case At The Time Of Grant Of Interim Order It Was Directed To Deposit Certain Amounts That Amount May Be Refunded To The Petitioner.
Date: 6.4.2007
SK



Hon'ble Yatindra Singh, J
Hon'ble Ran Vijai Singh, J

The Points Of Determination Have Been Mentioned In The Order Of Hon'ble Yatindra Singh, J. We Agree On Point No. One And Two. There Is Difference Of Opinion Amongst Us So For As Question Number Three Is Concerned. One Of Us (Honble Yatindra Singh, J) Has Held That Scheme Of Arrangement Sanctioned By The Court Is Not Covered By Article 23 Of Schedule 1-B Of The Indian Stamp Act Whereas Other One (Hon'ble Ran Vijai Singh,J) Has Held That It Is Covered By Article 23 Schedule 1B Of The Indian Stamp Act. The Papers Of These Writ Petitions May Be Placed Before Hon'ble The Chief Justice For Nominating The Third Judge. In View Of The Fact That There Is Difference Of Opinion Amongst Us And The Matter Is To Be Placed Before The Third Judge, It Will Not Be Necessary For The Petitioners To Appear Before The Authority On 14.5.2007.
The Interim Order Is Extended Till Further Order Of The Court.

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