The Bombay High Court has held that a sale certificate issued by a liquidator under the IBC in respect of property sold by public auction is not compulsorily registrable under Section 17 of the Registration Act, and when it is sent only for filing in Book No. 1 under Section 89(4), it does not attract stamp duty or registration fees. The Maharashtra amendment in Section 17(1)(g) does not apply because the IBC is not a recovery Act, and in any event the case is directly covered by the exemption in Section 17(2)(xii) relating to public auction sale certificates.
Holding that the IBC is not a recovery law, the Bombay High Court ruled that a sale certificate issued by a liquidator in a public auction need only be filed in Book No. 1 under Section 89(4) of the Registration Act and does not attract stamp duty or registration fees unless later used for another purpose.
The Division Bench comprising Justice Manish Pitale and Justice Shreeram V. Shirsat first noted that the impugned order itself relied only on Article 16 of Schedule I of the Stamp Act and did not refer to Section 17(1)(g) of the Registration Act at all. Therefore, the respondents were attempting to support the order by reasons not found in the order itself, which was impermissible. The Court nevertheless examined the State’s additional argument on merits as well.
The Court then examined the statutory scheme of Sections 17, 17(2)(xii), and 89(4) of the Registration Act. It emphasised that Section 17(2)(xii) specifically exempts from compulsory registration a certificate of sale granted to the purchaser of property sold by public auction by a Civil or Revenue Officer, and Section 89(4) requires only a copy of such certificate to be sent to the registering officer and filed in Book No. 1. The Court contrasted this with Section 17(1)(g), inserted by the Maharashtra amendment, which speaks of a sale certificate issued under a recovery Act, but does not specifically refer to a public auction sale certificate.
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The High Court relied heavily on the Supreme Court ruling in State of Punjab v. Ferrous Alloy Forgings Pvt Ltd. [2024 SCC OnLine SC 3372], which held that a sale certificate issued after confirmation of an auction sale is merely evidence of title, and that title passes on confirmation of sale, not on issuance of the certificate. Therefore, so long as the certificate is only forwarded for filing under Section 89(4), it is not compulsorily registrable and does not attract stamp duty. Stamp duty arises only if the auction purchaser later seeks to use the original sale certificate for some other purpose.
The Court further held that the State could not successfully invoke Section 17(1)(g) because the IBC is not a recovery legislation. Referring to Supreme Court rulings including Glas Trust Company LLC vs. Byju Raveendran [(2025) 3 SCC 625], Tottempudi Salalith vs. State Bank of India [(2024) 1 SCC 24] and Hindustan Construction Company Limited and another vs. Union of India [(2020) 17 SCC 324], the Court reiterated that the IBC is a framework for revival and resolution/liquidation of a company in debt, and not a debt recovery mechanism. Accordingly, a sale certificate issued by a liquidator under the IBC could not be treated as one issued under a “recovery Act” for the purpose of Section 17(1)(g).
The Court also found that, in the context of a public auction conducted by the liquidator under orders of the NCLT, the liquidator would qualify as an officer covered by Section 17(2)(xii). Therefore, the exemption clause squarely applied to the petitioner’s case. The Court said that, viewed from any angle, the authority was not justified in insisting on stamp duty merely by relying on Article 16 of the Stamp Act while ignoring the settled legal position.
Briefly, the case concerned Rajaram Food Products India Limited, an auction purchaser, which challenged an order passed by the Joint District Registrar and Collector of Stamps, Nashik, directing payment of stamp duty on a sale certificate issued in its favour after purchase of an immovable property in liquidation proceedings. The petitioner’s case was that the corporate debtor, M/s. Gonglu Agro Pvt Ltd., had gone into liquidation under the Insolvency and Bankruptcy Code, 2016, an e-auction was conducted by the liquidator on Dec 30, 2024, the petitioner emerged as the successful bidder, paid the full consideration, and was issued a sale certificate dated Jan 30, 2026. Thereafter, the liquidator forwarded the sale certificate to the registering authority for action under Section 89(4) of the Registration Act, 1908, and the petitioner also represented that the certificate only needed to be entered in Book No. 1 and did not attract stamp duty.
Despite this, the stamp authority held that the sale certificate issued in the course of IBC proceedings attracted stamp duty under Article 16 of Schedule I of the Maharashtra Stamp Act, 1958. The petitioner’s appeal was dismissed as not maintainable, following which the writ petition was filed before the Bombay High Court. The State defended the demand by relying not only on the Stamp Act but also on the Maharashtra amendment to Section 17(1) of the Registration Act, especially Section 17(1)(g), which covers sale certificates issued by a competent officer or authority under a recovery law.
