Payment of Stamp Duty is primarily governed by the Indian Stamp Act, 1899. That being in place, stamp duty is a State subject. Most States have their own Stamp duty legislation. Some States adopt the Indian Stamp Act with their own State amendments.  This is to ensure increased revenue for State governments.

Stamp Duty - It is a Government tax levied on all legal property transactions. It is admissible in Court of Law as evidence of purchase or sale of property between two parties.

Levy of Stamp Duty

Stamp duty is levied on a host of transactions / documents – (i) Sale deed / purchase deed (ii) Transfer deed  (iv) Mortgage deed (v) partition deed (vi) Power of Attorney(s) (vii) Lease / Rental agreement (viii) License Agreement to mention a few. Such documents are normally referred to as “instruments”.

Most important of them being the stamp duty levied on sale or purchase of property. This is because it is necessary to have legal evidence of ownership or of transfer of property. The municipal authorities will accordingly register the name of the property in the name of the owner. Usually stamp duty is borne by the buyer, but in many cases both the seller and buyer bear the stamp duty charges in instances of transfer of property.

Stamp duty on “Instrument or “Conveyance”?

Normally, stamp duty is levied on “Instruments”. Now, "Instrument" includes every document by which any right or liability is, or purports to be, created, transferred, limited, extended, extinguished or recorded. The phrase is also covered under the term “Conveyance” of the Indian Stamp Act, 1899. "Conveyance" includes a conveyance on sale and every instrument by which property, whether moveable or immoveable is transferred inter vivos and which is not otherwise specifically provided for by Schedule in the Act. Both these phrases have been consistently interchanged and used. This has given rise to ambiguity in several occasions.


While the Stamp Act clearly defines the terms “instruments” and “Conveyance” there was ambiguity on whether an order passed by the High Court sanctioning a scheme of merger and or amalgamation would fall under the term “instrument”.

There were many judicial pronouncements1 that held that a scheme of amalgamation would come under the purview of the term “instrument” and hence stamp duty becomes payable. However, there were equal number of judicial pronouncements2 that held that since there was no express inclusion of High Court order sanctioning a merger or amalgamation to fall under the purview of the term “instrument”, it would not constitute an “instrument’ and hence no stamp duty was payable on such transaction.

However the ambiguity stood clarified in November, 2018 when the Tamil Nadu government issued a notification clarifying that a scheme of amalgamation or reconstruction involves transfer of property and would hence be classified as “Conveyance” under Article 23 of the Indian Stamp Act, 1899. While the notification mentioned the applicability of Stamp duty, it did not expressly mention the rate of stamp duty and mode of calculation. Several representations were made to the government which finally gave clarity on the same in the 2019-20 State Budget.

Rate of stamp duty on mergers / amalgamations – thread bare

In an order issued by Commercial Taxes and Registration Department which became effective from 1st March, 2019, the Tamil Nadu State government has expressly pegged the rate of stamp duty for transfer of property in the course of amalgamation or reconstruction of companies to be the following:

  1. 2 % of the market value of the immovable property; OR - 0.6% of the aggregate of the market value of the shares, whichever is higher
  2. The registration fees payable on such transactions will be fixed at a maximum of INR 30,000

There are few other issues which to legal experts are of the view that can be interpreted within the parameters of existing laws:

  1. The rate of stamp duty and registration fee payable on schemes approved before 1st March, 2019. A “wait and watch” policy has to be adopted until the State government brings clarity to the same.
  2. What will constitute immovable property in a court ordered scheme? Now this will depend upon each scheme as may be approved by the Competent Authority and shall be construed accordingly.
  3. Whether a subsidiary company having no immovable property merged into its holding company will have to pay stamp duty? Government shall bring clarity on the same.
  4. What will be the rate of stamp duty if a company has assets in different States? If a company has assets in different Stares, stamp duty and registration fee as applicable and prevalent in the respective States will apply.

Despite the above, the GO issued by the Tamil Nadu government is a welcome relief especially in cases of amalgamation / merger of companies situated in the State of Tamil Nadu.  This has definitely aided the NCLTs in disposing off the cases faster.

A Uniform code for stamp duty?

Despite the existence of the parent legislation - The Indian Stamp Act, 1899, stamp duty is a State Act. While some States like Maharashtra, Karnataka and Tamil Nadu are governed by their own Stamp legislation, few other States such as Andhra Pradesh are governed by the parent Stamp Act. There is lack of uniformity in payment of Stamp duty especially in situations of corporate restructuring. The State governments and Central governments should devise a mechanism of uniform levy of stamp duty to mitigate ambiguity in their interpretation and applicability.

While the GO issued by the Tamil Nadu government is intended to promote ease of doing business, it is desirable that other states follow suit to enable optimal revenue generation for States while at the same time not burdening corporates with heavy stamp duty(s).


  1. Hindustan Lever & Anr Vs State of Maharashtra & Anr: (2004) 9 SCC 438
  2. Madhu Intra Ltd v. Registrar of Companies: 2006 130 CompCas 510 Cal



In July, 2017 the Tamil Nadu State Government introduced a bill to promulgate the Tamil Nadu Regulation of Rights and Responsibilities of Landlords and Tenants Act, 2017.

Less than 2 years later, from February, 2019 the bill has become a reality as it became an Act. The new tenancy act is aimed at balancing the rights, duties and interest of the tenant and owners / landlords. This Act will replace the Tamil Nadu Buildings (Lease and Rent control) Act, 1960 commonly known as the “Rent Control Act”.

Under this Act, the government proposes to constitute a RERA like legislation with respect to rent accommodations. It proposes to create a rental authority, Courts and a Tribunal to deal with rent and its related issues. It aims to balance rights of the owners and tenants.

A look at the salient features of the latest tenancy Act:

  1. This Act will become applicable to renting out of properties in all urban areas of the State. However, the Act will not govern accommodation provided by the government and or institutions that lease properties as part of its service contract, notified religious and charitable trusts, Wakf property and registered Trusts.
  2. After the commencement of this Act, no person can take on rent a property / accommodation except by entering into a written agreement and registering the agreement within the stipulated time limit with the rent control authority. Such registration shall be done jointly by the tenant and the landlord.
  3. Definitions have been made more inclusive – for instance, the definition of “Landlord” includes not just the person whose name is in the tenancy agreement, but also a person entitled to receive on behalf of the landlord including such others – Trustees, Guardians, Receivers and Successors in interest. The definition of “Tenant” is also expansive and includes sub tenants and includes every person occupying or in possession of the property.
  4. The Act contains an open ended provision enabling the parties to mutually determine and fix the security deposit. However, if the agreement is silent on the same, then not more than 3 months’ rent can be collected as security deposit.
  5. There is an express provision on subletting that states that a tenant cannot sublet premises without the prior consent of the landlord. There is also an express provision that the tenant cannot charge rent to the sub lessee an amount higher than the rent paid by the tenant to the landlord. However, there seems to be no express provision restricting the landlord from doing the same.
  6. In the event of the death of the tenant, his / her heirs: parents, spouse, children – son, unmarried daughter and daughter–in-law (being the widow of an already deceased son) shall continue to live in the premises as long as the tenancy agreement continues.
  7. The Act introduces the concept of a Property Manager – an individual / a company to act as an agent on behalf of the landlord. Such property managers can collect rent from the tenant, carry out essential repairs and inspect the premises from time to time. The landlord shall inform the tenant about the property manager by providing relevant details. Also the property manager has to suitably inform the tenant of inspection of premises at least 24 hours prior to such inspection. The property manager can also act as an intermediary between the landlord and tenant in the event of dispute resolution.
  8. A three tier hierarchy is proposed to be put in place – (i) Rent authority (ii) Rent Court and (iii) Rent Tribunal.
  9. The Rent authorities in every district would be created / constituted. Such quasi-judicial authorities will be headed by a Deputy Collector rank officer to resolve disputes between tenants and landlords. (ii) Rent Court will be headed by a member of the State Judicial services. The Rent Tribunal is a multi-member body to be headed by the retired High Court Judge and will have the appellate authority over matters arising on appeal from the Rent Court.
  10. The civil court has no jurisdiction over suits or proceedings under this Act. Similarly the jurisdiction of the Rent courts are limited to the tenancy agreement under this Act. Questions such as title and the ownership of the premises shall not be decided by the Rent courts.
  11. The State government has launched an exclusive portal to register the agreements and obtain a tenancy registration number.  This when jointly registered by the tenant and landlord will be sufficient evidence to establish a relationship between both parties.
  12. The Act clearly lays down responsibilities of both the tenants and landlords – such as
    Landlord: structural repairs (except those caused by damages by tenant), plumbing, internal wiring and whitewashing.
  13. Any disputes between the tenant and the landlord shall be heard and decided by the Rent Courts which shall be created / constitutes in each District. The decision by such Court shall be considered final.

Land is a State subject as per the second list of the seventh schedule of the Constitution of India. Hence legislations are governed by the respective States. The erstwhile “Rent Control Act” was perceived to contain provisions favouring the tenants. The latest tenancy Act, modelled on the Centre’s Tenancy Act is aimed at maintaining a balance in protecting interests of the tenants and the landlords. With ever increasing demand for rental accommodations / property, the enactment of the new legislation is timely and the need of the hour.



Supreme court order quashing the RBI circular on debt recovery proceedings under IBC

Transferred case (civil) no.66 of 2018 in transfer petition (civil) no.1399 of 2018


On 2nd April, 2019 the Supreme Court passed an order quashing an circular issued by the Reserve Bank of India (RBI) on 12th February, 2018. This created an almost face-off between the Central agency and the central government.

“February 12 Circular”

The RBI had issued almost 192 circulars last year. However the circular dated on 12th February, 2018 created a storm. A look at the highlights of the circular:

  1. Lenders has to classify a loan account as a “stressed” account or Special mention account (SMA) even if there was delay / default by a single day.
  2. If Lenders with loan exposure of Rs. 20 billion (INR 2,000 crores) have failed to resolve the issue within 180 days, then they have to mandatorily refer the same to the NCLT. They have to file an insolvency application under the IBC, 2016 within 15 days after the expiry of the 180 day timeline.
  3. Immediate effect withdrawal of loan resolution mechanisms such as Corporate debt restructuring (CDR) scheme, Strategic Debt restructuring (SDR) Scheme, Scheme for Sustainable Structuring of Stressed Assets (S4A). Also Institutional mechanism such as the Joint Lenders Forum (JLF) stood discontinued.

The impact

The circular came at a time when Banks were preparing to announce their performance / results. Implementing the circular meant recording higher Nonperforming assets (NPA) by the Banks. Besides banks, other infrastructure companies – power, telecom, thermal plants, iron & steel, sugar and textile companies were also in the red. Out of them, the power sector accounted for maximum stressed assets to the Banks. India Inc. was up in arms. Major associations representing the power sector went to courts against the central agency.

In August, 2018 the Supreme Court directed that all cases challenging the circular be transferred to the apex court. In the apex court, the petitioners submitted that the every sector industry / sector were beset with its own difficulties, challenges and dynamics which were exclusive to that sector only. For instance, the power sector was already severely regulated by the Electricity Act. The procurement, tariffs, mode of power disbursal are expressly laid down. They are dependent on change in government policies, delayed regulatory responses, default in payment of dues by distribution companies in India. These are beyond the control of the power companies. Similarly the textile industry is dependent on good crop, rainfall and availability of labour. These are extraneous factors. Therefore, it is best for the RBI to issue industry specific regulations and timelines as against the “One size fits all” approach. The 180-day limit to all sectors of the economy without going into the special problems faced by each sector would treat unequals equally and would be arbitrary and discriminatory, and therefore, violative of Article 14 of the Constitution of India. Also the RBI was not empowered under section 35Aof the Banking Regulation Act to issue circulars pertaining to insolvency code which was not in existence at that time. The RBI is empowered to issue circulars under the Banking regulation Act and the RBI Act and not the other statutes such as the insolvency code.

But the RBI stood its ground calling this the need of the hour. The RBI defended and justified the circular was not arbitrary and ultra vires the Article 14 of the Constitution. It stated that the circular was in fact issued in public interest and in the interest of the national economy. It stated that bad loans were ever mounting and the loan resolution schemes were not at all effective in containing the bad loans. Further, it sought to curtail the comfort zone between the Bank and the borrowers where borrowers would resort to taking evergreen loans (where the principal amount need be repaid within certain time period and they would be like a line of credit). These huge amounts that are due and owing should come back into the economy for further productive use. Either they do it within the 180 day period or through the insolvency code. The RBI relied upon Section 7 of the RBI Act, under which the Central Government may, from time to time, give such directions to the RBI that it may consider necessary in public interest, after consultation with the Governor of the RBI.

After duly deliberating on the cases, the two Judge bench led by Justice Rohinton Nariman and Justice Vineet Saran ruled, inter-alia,  that under Section 35AA of the Banking Regulation Act (a) the RBI can only direct banking institutions to move under the Insolvency Code if two conditions precedents are specified, namely, (i) that there is a Central Government authorization to do so; and (ii) that it should be in respect of specific defaults;  (b) de hors the authorization of the Central Government, the RBI has no power to issue directions on its own; (c) any directions which are in respect of debtors generally, without due deliberation and care , would be ultra vires Section 35AA.  Further, they were of the view that RBI had not fully complied with Section 45L of the RBI Act, which gave it the power to call for information from financial institutions and give directions. They were of the view that the impugned circular nowhere said that the RBI had due regard to the conditions in which and the objects for which such institutions have been established, their statutory responsibilities, and the effect the business of such financial institutions is likely to have on trends in the money and capital markets. Further the circular applies to the both banking and non baking institutions alike which make it difficult to segregate them and make it applicable to only non-financial institutions. As a result the two judge bench declared as ultra vires the circular as a whole and non effect in law. As a result all cases in which debtors have been proceeded against by financial creditors under Section 7 of the Insolvency Code, only because of the operation of the impugned circular will be proceedings which, being faulted at the very inception, are declared to be non-est.

Mixed response

While section of the India Inc has heaved a heavy sigh of relief on the SC order quashing the February, 12th 2018 circular issued by the RBI, there are sections of the society that are of the view that this will only slow down and complicate the debt resolution process. It is opined that the circular had left banks with no option but to streamline recovery of loans within the timelines. Borrowers also had to risk losing reputation being dragged into insolvency resolution. The RBI opined that it is this fear psychosis that led parties to be more credit disciplined and hence the circular was effective. There is strong sentiment for the circular to be continued to be implemented after addressing industry specific concerns. Such concerns ought to be sorted out with the RBI. The circular is too rigid in its approach and a reasonably flexible modification to the circular would have helped speed up the debt recovery and resolution process. Else another face off seems to be imminent.




Supreme Court



Complusion; especially constraint exercised by one person over another to do an illegal act, or to act contrary to his inclination.

Jurisdiction in rem

Power of court over a thing so that its judgement is valid as against the rights of every person in the thing,e.g a judgement or decree of registration of title to land.


In english law, idlers; vagabonds.

Laden in bulk

A term in maritime law, applied to a vessel which is freighted with a cargo which is neither in casks, boxes, bales nor cases, but lies loose in the hold, being defended from wet or moisture by a number of mats and a quantity of dunnage.


Shoe Skills



AMISTAD (1997) (Movie)

A historical, adapted from the novel: Mutiny on the Amistad: The Saga of a Slave Revolt and Its Impact on American Abolition, Law, and Diplomacy (1987) by historian Howard Jones. Directed and Co- produced by Steven Spielberg, The movie is a true story telling events on board the Spanish “La Amistad” a ship carrying African slaves from Cuba to the US in 1839. In the course of the journey, a section of the slaves headed by a Mende tribal man (one of the ethnic groups in Sierra Leone wherein people were sold in large scale as slaves) lead a mutiny and gain control of the ship. They spare the lives of two Spanish navigators to steer them back to their land. The sailors mislead and direct them towards the United States of America. Thus begins an international legal battle. While the Americans want to charge them with piracy and murder, the President (seeking a re-election) directs his lawyers to represent on behalf of the government and the Queen of Spain stating that the slaves are the property of Spain and hence covered under a treaty between Spain and the US. Two abolition lawyers decide to defend the African slaves. A federal district court ruled that transport of people as slaves in ships was against the principles against international slave trade. The court ruled that the African men only defended themselves and were hence ordered to be set free. Under severe international pressure, the case was appealed before the Supreme Court which only confirmed the lower court ruling to set the Africans free. They were temporarily provided shelter in the US and with their funding most of them returned to Africa. The movie is a historical legal drama that brilliantly depicted the events by building on evidence found on board the ship while showing the gut wrenching conditions in which the slaves lived in the ship. Legally, this case is considered a milestone in abolition of slavery. The movie also earned commercial success and critical response while being nominated for a host of awards.


A fictional character appearing in Marvel comics, She- Hulk a.k.a Jennifer Walters was the last character created by the legendary Stan Lee.

A lawyer by profession establishing her nascent practice, Jennifer suffers an injury when she gets blood transfusion from her cousin Bruce Banner a.k.a Hulk! As a result she acquires some of Hulk’s qualities. She becomes larger and stronger if she is provoked or enraged. She-Hulk has been a member of the Avengers, the Fantastic Four, Heroes for Hire, the Defenders, Fantastic Force, and S.H.I.E.L.D.  A lawyer in the day and a super hero by night. Also a lawyer to the super heroes! A must read for all age groups!

CIVIL WARS (1991-1993) (TV Series)

A Courtroom drama that aired on U.S television from 1991-1993, this television dealt with civil wars of the domestic kind – divorce. Two lawyers specializing in divorce become partners even as they barely know each other. How they tactfully deal with acrimonious divorce cases formed the crux of the 36 episodes.

An unjust law is itself a species of violence


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