# M/S Kranti Steel Pvt. Ltd. Bahraich v. Chief Controlling Revenue Authority & Ors

- **Citation:** (2014) 3 ILRA 1094
- **Court:** High Court of Judicature at Allahabad
- **Decided:** 2014-03-07
- **Case number:** Civil Misc. Writ Petition No. 5441 of 2002
- **Bench:** Sudhir Agarwal
- **Source:** https://unisonlegal.in/judgment/allahabad-high-court/m-s-kranti-steel-pvt-ltd-bahraich-v-chief-controlling-revenue-authority-ors-43092
- **Pages:** 7

## Headnote

Indian Stamp Act, Section 33/47-ADemand of additional stamp duty with
penalty-property
purchases
being
factory premises-no where in sale deedmentioned the machinery and tools shall
be removed-hence demand proper-in
view of Full Bench decision Girish Kumar
Srivastava-penalty can not be imposed.

Held: Para-21 & 22

## Text

1094 INDIAN LAW REPORTS ALLAHABAD SERIES
different place, but for rejecting his objection
and setting aside the orders passed by
subordinate authorities, the DDC has not at
all looked into this objection and has gone to
decide the matter only on the ground that
since initially objection was raised by
petitioner and not by others, against the
proposed allotment of Chak, therefore,
scheme
proposed
initially
should
be
accepted. He has followed a majoritarian
way. He has failed to consider that right of
objection against allotment of Chak has been
conferred upon aggrieved tenure holder by
the statute. If such objection has been made,
raising valid and relevant issue(s), it is
incumbent upon consolidation authorities to
decide the same and those issues cannot be
bye-passed or ignored or omitted on
irrelevant considerations, as has been done
by DDC in the case in hand. The location of
chak, its value, are all interconnected issues.
The same cannot be ignored for fanciful
conjectures and unmindful whims of
consolidation authorities. It shows mere
arbitrary act on their part, instead of an
attempt to decide the matter by doing justice
in accordance with law with the poor tenure
holder whose entire livelihood depends on it.
If a chak is altered by another one which is
much inferior for various reasons, then what
he initially held, it amounts to deprives him
of his valuable property, by giving another
land which is not equivalent as far as
possible, but is apparently inferior in various
ways and thereby he would stand deprived of
his
right
to
property
affecting
his
constitutional right under Article 14 read
with 300A of the Constitution of India.
Consolidation authorities are therefore,
bound to act more cautiously and objectively.

34. In the result, the writ petition is
allowed. The impugned order passed by
DDC is hereby set aside. The matter is
remanded to DDC to decide petitioner's
revision afresh, in the light of observations
made above, and, in accordance with law
expeditiously and, in any case, within two
months from the date of production of a
certified copy of this order before him, after
giving due opportunity of hearing to all
concerned parties.

35. No costs.
--------
ORIGINAL JURISDICTION
CIVIL SIDE
DATED: ALLAHABAD 07.03.2014

BEFORE
THE HON'BLE SUDHIR AGARWAL, J.

Civil Misc. Writ Petition No. 5441 of 2002

M/S Kranti Steel Pvt. Ltd. Bahraich Petitioner
Versus
Chief Controlling Revenue Authority &
Ors. .Respondents

Counsel for the Petitioner:
Sri Shashi Nandan, Sri Pooja Agarwal
Sri Sanjiv Kumar, Sri Udayan Nandan

Counsel for the Respondents:
C.S.C.

Indian Stamp Act, Section 33/47-ADemand of additional stamp duty with
penalty-property
purchases
being
factory premises-no where in sale deedmentioned the machinery and tools shall
be removed-hence demand proper-in
view of Full Bench decision Girish Kumar
Srivastava-penalty can not be imposed.

Held: Para-21 & 22
21. In view of above, I find no error on the
part of respondents-Revenue Authorities in
holding that stamp duty was chargeable on
entire sale consideration of Rs. 118 lacks
and to this extent the impugned orders
warrants no interference.

22. Now coming to second aspect
regarding
penalty,
I
find
that
the
3 All]. M/S Kranti Steel Pvt. Ltd. Bahraich Vs. Chief Controlling Revenue Authority & Ors. 1095
transaction
of
sale
took
place
on
02.03.1995 and the impugned order was
passed by Additional Collector (Finance &
Revenue), Bahraich on 30.01.1996. On that
day under Section 33/47-A of Act, 1899
there
was
no
provision
empowering
Collector to impose penalty in case the
value of property set forth in document
presented for registration is not true
market value of the entire value and there
is a deficiency of stamp duty. Such a
provision has been brought in statute book
by amendment made in U.P. vide Act No. 38
of
2001.
This
amendment
is
not
retrospective. The law before aforesaid
amendment was clear that no penalty could
have
been
imposed
and,
therefore,
imposition of penalty in the present case is
without jurisdiction. A Full Bench decision
of this Court in Girish Kumar Srivastava Vs.
State of U.P and others, 1998 (1) All.C.J.
199, has held that in the absence of any
provision authorizing
the Collector
to
impose penalty, the same cannot be
imposed.

Case Law discussed:
AIR 1959 All 247; 1904 ACJ 466; AIR 2000 SC
355; AIR 1998 SC 1489; 2004 (135) STC 90;
1998 (1) All. C.J. 199; AIR 1986 All 107; AIR
2007 Alld. 39.

(Delivered by Hon'ble Sudhir Agarwal, J.)

1. Heard Sri Udayan Nandan,
learned counsel for the petitioner and
perused the record.

2. This writ petition under Article 226
of the Constitution of India has arisen from
the orders passed by stamp authorities
raising a demand on account of deficiency
of stamp duty in respect of a transaction of
sale whereby the petitioner has purchased
an industrial unit of M/s Gauri Steels and
Alloys (P) Ltd. for consideration of Rs.
23,20,000/- and paid stamp duty of Rs.
33,600/-. The Sub-Registrar made reference
under Section 33/47-A of Indian Stamp Act,
1899 (hereinafter referred to as the "Act,
1899") whereafter a show cause notice was
issued to petitioner and after considering reply
dated 01.01.1996, the Additional Collector
(Finance & Revenue), Bahraich, vide order
dated 30.01.1996, has determined market
value of entire property under transaction, as
Rs. 118 lacs, whereupon the stamp duty
chargeable comes to Rs. 17,11,000/-, hence
deficiency of Rs. 13,74,600/- has been
determined and demanded from the petitioner.
Penalty of Rs. 13,74,500/- has also been
imposed upon petitioner.

3. Against aforesaid order, the
petitioner preferred revision which has
been dismissed by Chief Controlling
Revenue Authority, U.P., Allahabad, vide
order dated 06.12.2001.

4. Learned counsel for the petitioner
submitted that the value of plant and
machinery ought not to have been included
in the sale consideration and the Revenue
Authorities have committed a patent error
of law in including the value of plant and
machinery and other item as the same were
liable to be treated as "movable property". It
is however not in dispute that the entire
industrial unit was purchased alongwith its
land, building, plant, machinery etc. for a
total consideration of Rs. 118 lacs but the
stamp duty was paid on partial sale
consideration of Rs. 23,20,000/-, treating it
to be the value of land and building only.

5. The only question up for
consideration is, "whether plant and
machinery, in the present case, have
rightly been included towards part of sale
transaction of immoveable property so as
to attract chargeability of stamp duty on
entire consideration of Rs. 118 lacs".

6. Copy of sale deed dated
04.03.1995 is Annexure-2 to the writ
1096 INDIAN LAW REPORTS ALLAHABAD SERIES
petition. Para 3 thereof shows that the
U.P. Financial Corporation took over
possession of entire industrial unit of M/s
Gauri Steel & Alloys (P) Ltd., situate at
Plot No. 217, Mauza Vishunpur Rahu,
Pargana, Tehsil and District Bahraich by
exercising its power under Section 29 of
State Financial Corporation Act, 1951 and
the entire mortgaged property together
with free hold right of land, building etc.
was transferred to vendee, i.e., petitioner,
vide para 4 of the sale deed.

7. Learned counsel for the petitioner
has not disputed that another agreement
was
executed
between
parties
on
02.03.1995 (Annexure-7 to the writ
petition),
whereby
entire
property,
building, plant and machinery was shown
as purchased by petitioner for a total
consideration of Rs. 118 lacs. Para 5
thereof would be relevant to reproduce
hereat:

"5.
It
is
agreed
between
the
corporation and the purchaser that the
former will sell and later will purchase
the entire mortgaged properties together
with the free hold/lease hold land,
building, plant and machinery etc. on as
is where is basis more specifically stated
in the schedule attached herewith."

8. For total consideration of Rs. 118
lacs, Rs. 35 lacs were already deposited
by petitioner and balance Rs. 82.60 lacs
were to be paid in installments of Rs.
10.32 lacs payable in August, 1995;
February, 1996; August, 1996; February,
1997; August, 1997; February, 1998;
August, 1998; and, February, 1999
together with interest at the rate of Rs.
18% per annum. It is also not disputed by
learned counsel for the petitioner that
plant
and
machinery
was
fixed
throughout. It is thus evident that
petitioner has purchased entire industrial
undertaking, alongwith its building, plant
and machinery, for a total consideration
of Rs. 118 lacs, but in order to evade
stamp duty, in the sale deed in question,
in a clandestine manner, the words land,
building etc. have been used and partial
sale consideration alleging to be the value
of only land and building has been set
forth as market value of property under
transfer, excluding other properties which
have also been purchased in the single
sale transaction.

9. Learned counsel for the petitioner
argued that "plant and machinery" even if
attached to earth, but since it is/was
removable, therefore, it is/was a moveable
property, and not chargeable for stamp
duty for the purpose of the document in
question.

10. In my view the orders impugned
in this writ petition are perfectly valid and
just, except to the extent of penalty, which
has been imposed upon petitioner though
no such power vested in the authorities at
that time.

11. Now coming to first part of the
matter, whether sale consideration of
plant and machinery etc. is chargeable
alongwith building and land, I find that it
is not disputed that plant and machinery
in the case in hand is the one which is
affixed to earth or to the things embedded
to earth. Now the only question which is
to be considered is, whether these items
can be termed as "moveable property" or
"immoveable property".

12. The term "immoveable property"
has been defined in General Clauses Act
(Central), 1897 and reads as under:
3 All]. M/S Kranti Steel Pvt. Ltd. Bahraich Vs. Chief Controlling Revenue Authority & Ors. 1097

"'immovable property' shall include
land, benefits to arise out of land, and
things
attached
to
the
earth,
or
permanently fastened to anything attached
to the earth."

13. Under Section 3 of the Transfer
of Property Act 1882 (hereinafter referred
to as "Act, 1882") the term "immoveable
property" has also been defined and it
reads as under:

"immoveable property" does not
include standing timber, growing crops or
grass."

14. Whether plants and machinery set
up in a factory premises, fastened to earth or
things attached to earth, can be held to be a
moveable or immoveable property, came to
be considered before this Court in Official
Liquidator Vs. Sri Krishna Deo and Ors., AIR
1959 All 247. The Court appointed an
Advocate Commissioner to inspect premises
of company to ascertain whether machinery
and plants were fixed and attached to earth or
not. The report submitted shows that plants
and machinery of company were either
embedded in the earth or permanently
fastened to things attached to earth. On behalf
of State, argument was raised that most parts
of machinery are fixed to their bases with
bolts and nuts, and can be removed by
removing the nuts. It thus cannot be said that
such machineries are permanently fastened
inasmuch as, the same can be moved away by
removing the nuts and hence should be held
"movable property". The argument was
noticed and rejected, by following House of
Lords decision in Reynolds Vs. Ashby & Son,
1904 ACJ 466, wherein Lord Lindley has
observed:

"The purpose for which the machines
were obtained and fixed seems to me
unmistakable; it was to complete and use
the building as a factory. It is true that the
machines could be removed if necessary,
but the concrete beds and bolts prepared
for thorn negative any idea of treating the
machines
when
fixed
as
movable
chattels."

15. This decision in Official
Liquidator Vs. Sri Krishna Deo (supra)
has been affirmed and approved in
Duncans Industries Ltd. Vs. State of U.P.
and Ors., AIR 2000 SC 355. The Court
held :

"We are inclined to agree with the
above finding of the High Court that the
plant and machinery in the instant case
are immovable properties. The question
whether a machinery which is embedded
in the earth is movable property or an
immovable property, depends upon the
facts and circumstances of each case.
Primarily, the court will have to take into
consideration the intention of the parties
when it decided to embed the machinery
whether such c was intended to be
temporary or permanent. A careful
perusal of the agreement of sale and the
conveyance deed along with the attendant
circumstances
and
taking
into
consideration the nature of machineries
involved
clearly
shows
that
the
machineries which have been embedded
in the earth to constitute a fertiliser plant
in
the
instant
case,
are
definitely
embedded permanently with a view to
utilise the same as a fertiliser plant. The
description of the machines as seen in the
Schedule
attached to the
deed
of
conveyance also shows without any doubt
that they were set up permanently in the
land in question with a view to operate a
fertilizer plant and the same was not
embedded to dismantle and remove the
1098 INDIAN LAW REPORTS ALLAHABAD SERIES
same for the purpose of sale as machinery
at any point of time. The facts as could be
found also show that the purpose for
which these machines were embedded
was to use the plant as a factory for the
manufacture of fertiliser at various stages
of its production. Hence, the contention
that these machines should be treated as
movables cannot be accepted. Nor can it
be said that the plant and machinery could
have been transferred by delivery of
possession on any date prior the date of
conveyance of the title to the land."

16. The decision in Sirpur Paper
Mills Vs. Collector of Central Excise
Hyderabad, AIR 1998 SC 1489 was
distinguished observing that it was on
account of particular facts in that case that
plants and machinery, therein was found
moveable property. However, where there
is no agreement to severe machines and
plants and entire factory is leased out with
plants and machinery, which are fastened
to earth or attached or fixed to the things
permanently attached to earth and such
positions is necessary for the purpose of
beneficiary enjoyment thereof, it would
be an "immoveable property" and no
otherwise view can be taken. This is how
the facts of this case also find distinction
from what was involved in Sirpur Paper
Mills Vs. Collector of Central Excise
Hyderabad (supra).

16. Whether chattel attached to the
earth
or
building
constitute
an
immoveable property, would depend upon
degree, manner, extent and strength of
attachment of chattel to earth or building.
Broadly speaking, there are certain broad
features, which are to be looked into in
such cases. The attachment should be
such as to partake the character of
attachment of trees or shrubs, rooted to
earth, or walls or buildings, embedded in
that sense, and, further test is whether,
such an attachment is for permanent
beneficial
enjoyment
of
immovable
property to which it is attached. For a
property and to be regarded as such
property, it must become attached to
immovable property as permanently as a
building or a tree is attached to earth. If,
in the nature of things, the property is a
movable property and for its beneficial
use or enjoyment, it is necessary to embed
it or fix it on earth, though permanently,
that is, when it is in use, it may not be
regarded as immovable property, but not
otherwise.

17. The term "permanently fastened
or attached to earth" has to be read, in the
context, for the reason that nothing can be
fastened to earth permanently, so that it
can never be removed. When machines
are attached to earth, not only they are
attached for beneficial enjoyment of
machines
but
also
for
beneficial
enjoyment of land which is on lease. A
similar
question
came
up
before
Rajasthan High Court also in C.T.O. Vs.
Sadulshahar Krai Vikrai Sahkari Samiti,
2004 (135) STC 90, and learned Single
Judge, said in para 31 of the judgment, as
under:

"If a comprehensive reading is done
of all the relevant provisions, then what
goes to show that the whole factory
premises including the plant, machinery,
land and building were given on lease. A
lease
of
entire
establishment
was
necessary for beneficial enjoyment of
rights under the lease. If from the lease,
plant and machinery is excluded, the land
could not have been used for any
purposes designed to be fulfilled by lease.
The machinery and plant embedded to
3 All]. M/S Kranti Steel Pvt. Ltd. Bahraich Vs. Chief Controlling Revenue Authority & Ors. 1099
earth to give it a character of immovable
property for beneficial use of land
facilitated the lease otherwise, the lessee
would not take the premises on lease and
land could only be used if the plant and
machinery was attached to earth. Thus,
according to the definition of "plant and
machinery" as contained in General
Clauses Act, makes it a immovable
property."

18. In the present case it is not
disputed
that
besides
plants
and
machinery, entire land and building was
sold
and
there
was
no
provision/agreement
that
plants
and
machinery shall be severed or removed
from earth. In fact, the industrial unit has
been leased out for the purpose of
running.
Removal
of
plants
and
machinery would not have allowed the
factory to run. There is no agreement
between parties that plants and machinery
shall be severed or removed from earth.

19. Even according to definition of
'goods' under Sale of Goods Act, in my
view it cannot be included therein. One
has to understand the concept of fastening
of plants and machinery to earth or its
fixing or attached to earth in a reasonable
and practicable manner. Scientifically
speaking,
nothing
can
be
treated
immoveable. In the context of plants and
machinery, where it is permanently
fastened or attached to earth, it has to be
seen from the point of utility also. If it
cannot be used without being attached to
earth, it may be immovable property in
the
industries
like
one
up
for
consideration in this matter. Unless, such
fastening is there, the plant and machinery
cannot be put to a rational use. They
generally do not move or taken away
unless a particular plant and machinery
has become obsolete or when the factory
is closed or otherwise circumstances so
warrant and the owner decide to remove
and sell it. Such contingency do not arise
every day. They are very rare and
occasional.
Removal
of
plants
and
machinery from earth in a working unit is
a decision which is not normally taken in
ordinary circumstances, that too when
entire
land,
building
along
with
machinery is leased out for the purpose of
running the same.

20. It is worthy to mention that in
the entire writ petition there is no
pleading that the plant and machinery
which has been purchased by petitioner is
to be removed or displanted or that it is
not affixed or attached to earth etc.
Though it has been pleaded that only land
and building has been purchased but paras
3 and 4 of sale deed clearly show that
U.P. Financial Corporation took over
physical possession of entire building and
its assets. In para 4 it is mentioned that
entire mortgaged property including free
hold rights of land, building etc. on as is
where is basis transferred to vendee, i.e.,
petitioner.

21. In view of above, I find no error
on the part of respondents-Revenue
Authorities in holding that stamp duty
was
chargeable
on
entire
sale
consideration of Rs. 118 lacks and to this
extent the impugned orders warrants no
interference.

22. Now coming to second aspect
regarding
penalty,
I
find
that
the
transaction
of
sale
took
place
on
02.03.1995 and the impugned order was
passed by Additional Collector (Finance
& Revenue), Bahraich on 30.01.1996. On
that day under Section 33/47-A of Act,
1100 INDIAN LAW REPORTS ALLAHABAD SERIES
1899 there was no provision empowering
Collector to impose penalty in case the
value of property set forth in document
presented for registration is not true
market value of the entire value and there
is a deficiency of stamp duty. Such a
provision has been brought in statute book
by amendment made in U.P. vide Act No.
38 of 2001. This amendment is not
retrospective. The law before aforesaid
amendment was clear that no penalty
could have been imposed and, therefore,
imposition of penalty in the present case
is without jurisdiction. A Full Bench
decision of this Court in Girish Kumar
Srivastava Vs. State of U.P and others,
1998 (1) All.C.J. 199, has held that in the
absence of any provision authorizing the
Collector to impose penalty, the same
cannot be imposed.

23. The Full Bench, referred to
above, approved earlier Division Bench
judgment of this Court in Kaka Singh Vs.
Additional
Collector
and
District
Magistrate,
(Finance
and
Revenue)
Bulandshahr, AIR 1986 All 107. This has
been reiterated in a recent Full Bench
judgment in Ramesh Chandra Srivastava
vs. State of U.P., AIR 2007 Alld. 39.

24. In view thereof, the writ petition
is partly allowed. The impugned orders
dated 30.01.1996 and 06.12.2001, in so
far as penalty of Rs.13,74,500/- has been
imposed upon petitioner, being wholly
without jurisdiction, cannot be sustained
and are hereby set aside. Rest part of
orders is held valid and to that extent the
writ petition shall stand dismissed.

25. In view of partial success of both
the sides, there shall be no order as to
costs.
--------
ORIGINAL JURISDICTION
CRIMINAL SIDE
DATED: ALLAHABAD 15.09.2010

BEFORE
THE HON'BLE SHRI KANT TRIPATHI, J.

Criminal Misc. Application No. 6277 of 2003
(U/s 482 Cr.P.C.)

Mubassir @ Musavir @ Guddoo & Ors.
 ...Applicants
Versus
State of U.P. & Anr. ...Opp. Parties

Counsel for the Applicants:
Sri Nasiruzzaman

Counsel for the Opp. Parties:
A.G.A.

Cr.P.C.-Section 482-Quashing of Criminal
proceeding-offence u/s 364 IPC-read
with
Section
3(2)(v)
of
SC/SC
(prevention
of
atrocities)
Actprosecutrix-on her own proceeded with
applicant-solemnized marriage-living as
husband and wife-with their wedlock
two children born-as per statement
recorded before C.J.M.-in view of Lalta
Singh case-futile exercise to proceed
with Trail-quashed-application allowed.

Held: Para-7
In view of the fact that the prosecutrix and
the petitioner no. 1 have solemnized
marriage and are peacefully living together
as husband and wife and two children have
also born from their wedlock, it would be a
futile exercise to proceed with the trial
against the petitioners, therefore, quashing
of the proceedings of the aforesaid criminal
case would not only be in the interest of
justice but also would be in accordance
with the aforesaid verdict of the Apex
Court.

Case Law discussed:
2006(2) Supreme Court Cases (Crl.)

(Delivered by Hon'ble Shri Kant Tripathi, J.)