SARFAESI Sale Certificates Not Liable To Stamp Duty Upon Issuance: Kerala High Court

The Kerala High Court has recently held that a sale certificate issued pursuant to an auction sale under the SARFAESI Act is not liable to stamp duty merely upon its issuance. The Court also held that a Registering Officer cannot refuse to file a copy of such certificate on the ground that it is unstamped.

A Full Bench comprising Justices Sathish Ninan, T.R. Ravi and M.A. Abdul Hakhim answered a reference arising from conflicting Division Bench decisions on the issue.

“It has been held that the consistent view for more than 150 years is that, a certificate of sale is not liable to payment of stamp duty. It was held that the Registering Authority is bound under Section 89 of the Registration Act, to file in Book No.1, a copy of the duly validated sale certificate. It was also held that a certificate of sale is not compulsorily registrable.”,the court noted 

The reference arose after a Division Bench in Sub Registrar, Sub Registrar's Office, Ernakulam v. C.M. Nadirsha answered both questions in the affirmative. A later Division Bench in Revenue Divisional Officer v. Thomas Daniel answered both questions in the negative.

The questions referred to the Full Bench were whether a sale certificate issued pursuant to a sale under the SARFAESI Act is liable to stamp duty. The second question was whether a Registering Officer can decline to file a copy of such certificate because the original certificate is unstamped.

The State contended that the Kerala Stamp Act specifically prescribes stamp duty for sale certificates. It argued that such duty must be paid when the certificate is executed.

The State also argued that filing a copy of an unstamped sale certificate amounts to “acting upon” the document. It contended that a Registering Officer is therefore prohibited from doing so.

While examining the statutory provisions, the Full Bench observed that the arguments advanced by the State appeared to support the view taken in Nadirsha.

“The arguments as above seem to suggest that, a certificate of sale is liable to stamp duty, that it is payable at the time of its execution; and also that the Registering Officer can decline to file copy of an unstamped sale certificate, in Book No.1. The above supports the view adopted in Sub Registrar v. Nadirsha (supra).”

The Bench, however, observed that the Supreme Court had subsequently considered the issue in State of Punjab v. Ferrous Alloy Forgings (P) Ltd., The Inspector General of Registration v. G. Madhurambal, Shanti Devi L. Singh v. Tax Recovery Officer and Esjaypee Impex Pvt. Ltd. v. Assistant General Manager and Authorised Officer, Canara Bank.

The Court also referred to the Full Bench decision in Fathima v. Canara Bank. That decision held that sale certificates issued on behalf of secured creditors are not compulsorily registrable, that no stamp duty is leviable on such certificates and that the registering authority is required to enter them in its records.

Ultimately, the Full Bench held that the issue stood concluded by the law declared by the Supreme Court.

“That, a certificate of sale is not liable for payment of stamp duty, has been held by the Apex Court in Madhurambal and connected cases. That, the Registering Officer is not entitled to decline filing of an unstamped sale certificate in his Book No.1, has also been held by the Apex Court in Shanti Devi, Esjaypee Impex and Madhurambal. That, stamp duty need be paid on a sale certificate only when it is presented for registration or used for other purposes, has been held in Madhurambal and Ferrous Alloy Forgings. It is not for this Court to have a re-look into the issues settled by the Apex Court.”

The Court concluded,

“Thus, we find that the judgment in, The Revenue Divisional Officer and Others v. Thomas Daniel and Others (2025 (4) KLT 534), is in consonance with the law laid down by the Apex Court and is liable to be followed.”

The reference was answered accordingly.

For Appellants: Advocates Mohammed Rafiq, Spl G.P, Varghese Parambil, Albert Joseph, Boban Vargheese, T.K Kunjumon, Arun Paul (Kaprassery), M.R Jayaprasad, Bobby J Arakunnel

For Respondents: Advocates T.H Abdul Azeez, P.V Parvathy, Reena Thomas, Nigi George, Ananthu V Lal, Sherin Varghese, Brahma R.K, Antony Thomas Mohan, Fabi Abdul Latheef, Ajmal V.A, M Gopikrishnan Nambiar, K John Mathai, Joson Manavalan, Kuryan Thomas, Paulose C Abraham, Raja Kannan, Sajeev Kumar K Gopal and Gopika S Nair