Madhya Pradesh High Court
Pacmor Flexible Limited Company … vs The State Of Madhya Pradesh on 31 July, 2026
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NEUTRAL CITATION NO. 2026:MPHC-IND:20954
IN THE HIGH COURT OF MADHYA PRADESH
AT I N D O R E
BEFORE
HON'BLE SHRI JUSTICE SANDEEP N. BHATT
WRIT PETITION NO. 11806 of 2026
PACMOR FLEXIBLE LIMITED COMPANY & ANOTHER
Versus
THE STATE OF MADHYA PRADESH & OTHERS
Appearance:-
Ms. Bhakti Vyas, advocate for the petitioners.
Shri Kushagra Singh, Government Advocate for respondents No. 1 and 3/State.
Shri Rishabh Singh Suryavanshi, advocate for respondent No.2.
Shri Amit Tatke, advocate for respondent No.4.
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(Reserved on : 21.07.2026)
(Delivered on: 31.07.2026)
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ORDER
Heard counsel for the parties on admission.
2. By way of this writ petition, the petitioners have prayed for following
reliefs:-
A. This Hon’ble Court be pleased to issue a writ, direction or order in the
nature of certiorari or other appropriate writ to set aside the impugned order dated
5.3.2026 issued under Section 33 of the Indian Stamp Act, 1899 (Annexure P-1).
B. This Hon’ble Court be pleased to issue a writ, direction or order in teh
nature of certiorari or other appropriate writ directing the respondent No. 3 to
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register the lease amendment.
C.For such other and further relief as this Hon’ble Court deems fit and
proper be granted.
3. Counsel for the petitioners has drawn my attention towards the fact that on
1.3.2014. a partnership deed was executed in the name of Gopal Print Pack and on 20 th
October 2020, lease deed executed by Gopal Print Pack for the plot in the Smart
Industrial Park Indore and the entire stamp duty on the lease deed was paid at the
relevant point of time. She has submitted that on 23.1.2025, supplementary agreement
was executed by Gopal Print Pack to convert the partnership firm into limited company
as per Section 366 of the Companies Act, 2013 and the liability of the original partners
in the partnership firm remained unchanged. She has further submitted on 10.2.2025,
the Registrar of Companies has issued the certificate of incorporation and the petitioner
has also a lease land at GIDC and the same was amended on the basis of the conversion
without any objection as regards stamp duty. She has submitted that on 7.7.2025, the
petitioner applied for lease amendment permission pursuant to name change on
conversion which was granted by MPIDC. She has further submitted that on 25.7.2025,
the amended lease deed was executed and on 30th July, 2025, the amended deed was
presented for registration with the Sub Registrar. On 14.8.2025, the respondent no. 2
had issued the notice under Section 33 of the Indian Stamp Act for the deficit stamp
duty. The petitioners have replied the said notice on 21.8.2025 and had placed the
relevant documents before respondent No.3. The respondent No.3 thereafter issued
several notices and on 15.1.2026 the respondent No.3 for the reasons best known to
him, though he is not having any jurisdiction, had conducted spot verification despite
there being no document to establish transfer of the assets or conveyance deed. On
28.1.2026, again notice was issued. By drawn attention towards Annexure P-13, counsel
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submitted that the identical case was registered on 29.5.2025 without asking any further
stamp duty. It is also contended that the impugned order is passed on 5.3.2026 which is
without jurisdiction and against the settled position of law. In support of her contention,
she has further submitted that the petitioners are challenging the impugned order on the
ground of malafide intention of the authority as respondent No.3 has already registered
the document which is of the similar nature which is Annexure P-13 in May 2025. She
has relied on para 16 of the judgment dated 5.1.2021 passed in Writ Petition No. 1874
of 2019 of this Hon’ble High court in the matter of Alok Choubey Vs. State of MP in
respect of the contention raised by counsel for respondents regarding the maintainability
of the writ petition. She has submitted that in the present case also the condition laid
down in para 16 more particularly conditions no. 2,3, 5 and 6 are applicable. She has
further submitted that Section 2(1) of Stamp Act defines a conveyance as an instrument
that transfers property between two living persons and since the partners and
shareholders are the same people, no such transfer has taken place. Referring to Section
3 of Stamp Act, learned counsel submits that this section applies duty only to
instruments that actually create or transfer rights in property. In this case, there was no
new transfer instrument and only a statutory conversion. She has further referred to
Article 25 of Schedule 1A of the Stamp Act and submitted that conveyance not being a
transfer, charged or exempted under No. 61. She has submitted that explanation for the
purposes of this Article market value of an property which is subject matter of
conveyance executed by or on behalf of the Central Government or the State
Government shall be the value shown in the instrument. She has further referred to
Article 32 of the Stamp Act and has submitted that the case of petitioners falls under
this Article of the Schedule 1A of Stamp Act as she has contended that the document
amending or correcting previously registered deed but not making any material
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alterations. She has submitted that Section 366 of the Companies Act which was
amended in 2017, unregistered entities like LLPs, partnership firms, societies, etc. with
seven or more members can with effect from 15 th August 2018 onwards opt for
conversion into a company limited by shares or guarantee or with unlimited liability in
accordance with the provisions of Part XXI of the Act, 2013. She has further referred to
Section 368 of Companies Act and has submitted that all property, movable and
immovable (including actionable claims), belonging to or vested in a company at the
date of its registration in pursuance of this part, shall, on such registration, pass to and
vest in the company as incorporated under this Act for all the estate and interest of the
company therein. She has lastly relied upon the following judgments in support of her
contentions.
(i) Order dated 5.1.2021 passed in Alok Kumar Choubey Vs. State of MP (WP
No. 1874/2019);
(ii) Order dated 26.8.2025 passed in Jupiter Wagans Ltd. Vs. Board of
Revenue (WP No. 24955/2018) by this Hon’ble High court;
(iii) Order dated 26.11.2019 passed by Hon’ble High court of Gujarat in JP
INN Vs. State of Gujarat SC 1226/2018 which was affirmed by Division Bench
in LPA No. 413/2021;
(iv) Order dated 3.7.2022 passed by Hon’ble High court of Gujarat in Anup
Industries Vs. State of Gujarat SCA 10795/2001;
(v) Order dated 7.1.2021 passed by Hon’ble High court of Himachal Pradesh
in the matter of M/s Sozin Flora Pharma LLP Vs. State of Himachal Pradesh in
CWP No. 4019/2020;
(vi) Valli Pattabhiram Rao and Another Vs. Sri Ramanuja Ginning & Rice
Factory (P) Ltd AIR 1984 AP 176;
(vii) CIT Vs. Texspin Engineering & Manufacturing Works, reported in (20030
263 ITR 345(Bom.)
(viii) Hindustan Lever Vs. State of Maharashtra reported in (2004) 9 SCC 438;
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(ix) State of Rajasthan Vs. Basant Agrotech (India) Ltd. (2013) 2 SCC 273;
(x) Commissioner of Income Tax, Udaipur Vs. M/s Chetak Enterprises Pvt
Ltd.
She has prayed that the present petition deserves to be allowed as impugned
action is perse illegal.
4. Counsel for the State has strongly opposed the submission by referring to
the affidavit in reply filed by HDFC Bank as well as State/ respondents No. 1,and 3 and
has contended that under Section 40(1)(d) of the Indian Stamp Act, against the
impugned order, the petitioners are having alternative efficacious remedy of preferring
an appeal before the Revenue Commissioner. He has further submitted that the
petitioner to avoid the deposition of 25% of the stamp duty for filing an appeal have
directly approached this court and therefore, the petitioner cannot be permitted to
surpass the legal remedy, which is efficacious as well. He has further submitted that the
contention raised by the petitioner that it is a conversion of partnership firm into a
company and therefore, no stamp duty is chargeable is entirely wrong. Learned counsel
submits that if it is merely a conversion of partnership firm into a company, no separate
instrument is required, but in the present case, the partners have entered into an
agreement by which the transfer of property is being taken place by executing amended
deed, which in fact is a transfer deed as per Transfer of Property Act since the property
is being transferred by partnership firm into a company and the partnership firm is
governed by Partnership Act, whereas the company is governed by Companies Act and
both are two separate entities. He has further submitted that while looking into an
instrument, the contents of the instrument are important and if instrument purports to be
in a manner to transfer of property and, therefore, all the documents are important while
deciding the aspect of the stamp duty. He has submitted that there is a notification of the
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State Government dated 2.1.2015 which clarifies such instruments are required to be
stamped. He has submitted that the original deed which is now sought to be amended is
a lease by which only lease hold rights were granted to the lease, but by way of
amendment ownership is being transferred and, therefore, the entire nomenclature of
the original deed is being changed and by way of amending lease deed the ownership of
the property is being transferred and, therefore, such amendment in this manner cannot
be permitted and therefore, the said instrument is chargeable by stamp duty under
Article 25 of the Indian Stamp Act. He has further submitted that the contention of
petitioners that it is not a transfer of property but statutory vesting of property by
operation of law, is merely an eye wash as bare perusal of the instrument would show
that it is not a statutory vesting of property by operation of law, but in fact is a transfer
of property by act and will of parties and it is apparent that to avoid the stamp duty, the
nomenclature of the document has been set forth as amendment, which is not actually
idea behind the instrument. He has further submitted that when there is alternative
efficacious remedy available to the petitioners, the writ petition deserves to be
dismissed on the ground of availability of alternative remedy.
5. Counsel for respondent No.2 has also drawn attention of this Court towards
the reply filed by respondent No.2 and has submitted that respondent No. 2 has granted
permission on 7.7.2025 for the limited purpose of updating the lease records in
accordance with the applicable industrial land management rules. The said permission
was an administrative permission granted on the petitioner’s own request, it was not an
insistence or direction by respondent No.2 for execution of an amendment deed, nor
was it intended to decide the legal effect and the stamp duties of any document which
the petitioner may thereafter choose to execute. He has further submitted that after the
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said permission the amendment deed was executed and presented by the petitioner
before the competent registration authority. The proceedings thereafter undertaken
before the competent registration authority. The proceedings thereafter undertaken in
relation to impounding of the document, determination of stamp duty, valuation, penalty
and registration arise under the independent statutory framework administered by the
concerned stamp and registration authorities. The respondent No. 2 does not exercise
powers under the Indian Stamp Act or the Registration Act and has no authority to
determine whether an instrument is chargeable to stamp duty, to assess its market value,
or impose any penalty and therefore, he has submitted that the respondent no.2 has
limited role to play and considering the submission of counsel for petitioner regarding
the reliance in case of Commissioner of Income Tax, Udaipur Vs. M/s Chetak
Enterprises Pvt Ltd., counsel for respondent No.2 submitted that the said submission
is regarding statutory vesting and the present respondent has neither disputed nor
adjudicated the principle sought to be relied upon by petitioners and present respondent
has no authority to determine the impact of such principles under the Stamp Act and
Registration Act and therefore, he has submitted that this Hon’ble court may pass
appropriate order.
6. Counsel for respondent No.4/HDFC Bank has submitted that HDFC bank has
granted commercial credit facility of aggregating to Rs. 40 crores by sanction letter
dated 20.8.2025 to the petitioners and some of the amount is yet to be disbursed and
some of amount is already disbursed and therefore, the respondent No.4 has limited role
to play in the present matter and as such huge finance is involved in the matter and
therefore, counsel submitted that the respondent No. 4 is as such proforma party to the
present petition and no relief or direction has been sought against the bank by the
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petitioners and it is further submitted that the core dispute rests entirely between the
petitioners company and respondent No. 3 regarding the alleged deficiency of stamp
duty on the amendment deed executed for release of all properties situated at plot No.
75 admeasuring 25010 sq.mt. at Smart Industrial Park Near Natrip District Dhar.
Therefore, he has submitted that the Court may consider the submission made at the bar
and pass appropriate orders.
7. I have considered the rival submissions made at the bar. It is relevant to note
the chronology of events as under:-
8. On 1.3.2014, a partnership deed was executed in the name of Gopal Print Pack
and on 20th October 2020, lease deed executed by Gopal Print Pack for the plot in the
Smart Industrial Park Indore and the entire stamp duty on the lease deed was paid at the
relevant point of time. On 23.1.2025, supplementary agreement was executed by Gopal
Print Pack to convert the partnership firm into limited company as per Section 366 of
the Companies Act, 2013 and the liability of the original partners in the partnership firm
remained unchanged. On 10.2.2025, the Registrar of Companies has issued the
certificate of incorporation and the petitioner has also a lease land at GIDC and the
same was amended on the basis of the conversion without any objection as regards
stamp duty. Thereafter on 7.7.2025, the petitioner applied for lease amendment
permission pursuant to name change on conversion which was granted by MPIDC. On
25.7.2025, the amended lease deed was executed and on 30 th July, 2025, the amended
deed was presented for registration with the Sub Registrar. On 14.8.2025, the
respondent no. 3 had issued the notice under Section 33 of the Indian Stamp Act for the
deficit stamp duty. The petitioner has replied the said notice on 21.8.2025 and had
placed the relevant documents before respondent No.3. The respondent No.3 thereafter
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issued several notices and on 15.1.2026 the respondent No.3 for the reasons best known
to him, though he is not having any jurisdiction, had conducted spot verification despite
there being no document to establish transfer of the assets or conveyance deed. On
28.1.2026, again notice was issued. It is also contended that the impugned order is
passed on 5.3.2026 which is without jurisdiction and against the settled position of law.
9. Considering the submission made at the bar, there is no doubt that
alternative remedy is available to the petitioners but looking to the subject matter of
petition and the judgments which are cited at the bar, more particularly the judgment
passed in case of Alok Kumar Choubey (supra), the writ court should entertain a
petition under Article 226/227 of the Constitution of India rather than requiring the
petitioner to avail alternative remedy. Relevant Para 16 of the judgment reads as
under:-
“16. Seven well recognized exceptions to the rule of alternative remedy,
which can be culled out from the afore-discussed judgments of the Supreme Court
for entertaining a writ petition under Article 226/227 of the Constitution, can be
summarized thus: (i) where the writ petition has been filed for enforcement of
fundamental rights; (ii) where there has been violation of principle of natural
justice; (iii) where the order of proceedings is wholly without jurisdiction; (iv)
where the vires of any Act is under challenge; (v) where availing of alternative
remedy subjects a person to very lengthy proceedings and unnecessary harassment;
(vi) where the writ petition can be entertained despite alternative remedy if the
question raised is purely legal one, there being no dispute on facts; and (vii) where
State or its intermediary in a contractual matter acts against public good/interest
unjustly, unfairly, unreasonably and arbitrarily. Despite afore-noted exceptions,
especially fifth and seventh of the above, whether or not in a particular case the writ
court should entertain a petition under Article 226/227 of the Constitution of India
rather than requiring the petitioner to avail alternative remedy, would always depend
on the facts situation of a given case, upon the petitioner making out a strong case.
If it is shown that the facts of the case are not disputed and the Government or its
instrumentality has been found acting unjustly, unfairly and unreasonably even in
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regard to its contractual obligations, the High Court would be justified in
entertaining the writ petition despite availability of alternative remedy.”
10. From the above paragraph and considering the celebrated judgment in the
case of Whirlpool Corporation Vs. Registrar of Trade Marks reported in (1998) 8
SCC 1, cited by counsel for petitioner, is helpful and prima facie matter requires
consideration for the reason that though there is equally efficacious remedy it seems
that the categories which are carved as an exception for exercising jurisdiction under
Article 226 of Constitution of India where the writ petition can be entertained despite
alternative remedy if the question raised is purely legal one and there being no dispute
on facts and also considering the criteria that where State or its intermediary in a
contractual matter acts against public good/interest unjustly, unfairly, unreasonably and
arbitrarily and where the petition is filed for enforcement of fundamental rights.
11. Considering the judgment in case of Alok Kumar Choubey (supra) and the
judgment in case of Whirlpool Corporation (supra) on the question of maintainability of
writ petition despite availability of alternative remedy, in that case also, it was held by
the Hon’ble Supreme Court that under Article 226 of Constitution of India, the High
Court having regard to the facts of the case has discretion to entertain or not to entertain
a writ petition. The High Court has imposed upon itself certain restrictions, one of
which is that if an effective and efficacious remedy is available, the High Court would
not normally exercise its jurisdiction but the alternative remedy has been consistently
held by the Supreme Court not to operate as a bar in at least four contingencies, namely,
where the writ petition has been filed for the enforcement of any of the fundamental
rights or where there has been a violation of the principle of natural justice or where the
order or proceedings are wholly without jurisdiction or where the vires of an Act is
challenged.
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12. In State of H.P. And Others v. Gujarat Ambuja Cement Limited and
Another – AIR 2005 SC 3936, the Supreme Court while considering the objection of
alternative remedy of filing of writ petition under Article 226 of the Constitution, held
that despite existence of alternative remedy, it is within the discretion of the High Court
to grant relief under Article 226 of the Constitution. But normally the High Court
should not interfere if there is efficacious alternative remedy is available. If somebody
approaches the High Court without availing alternative remedy provided, the High
Court should ensure that he has made out a strong case that there exists good ground to
invoke the extraordinary jurisdiction. Following observations of the Supreme Court are
reproduced herein for the facility of reference :-
“Where under a statute there is an allegation of infringement of fundamental
rights or when on the undisputed facts the taxing authorities are shown to have
assumed jurisdiction which they do not possess can be the grounds on which the
writ petitions can be entertained. But normally, the High Court should not
entertain writ petitions unless it is shown that there is something more in a case,
something going to the root of the jurisdiction of the officer, something which
would show that it would be a case of palpable injustice to the writ petitioner to
force him to adopt the remedies provided by the statute. It was noted by this
Court in L. Hirday Narain v. Income Tax Officer, Bareilly, AIR (1971) SC 33 that
if the High Court had entertained a petition despite availability of alternative
remedy and heard the parties on merits it would be ordinarily unjustifiable for the
High Court to dismiss the same on the ground of non exhaustion of statutory
remedies; unless the High Court finds that factual disputes are involved and it
would not be desirable to deal with them in a writ petition.”
13. In Zonal Manager, Central Bank of India vs. Devi Ispat Limited, (2010) 11
SCC 186, the Supreme Court held that writ of mandamus can be issued even in
contractual matters and in paragraph- 28 of the said judgment, the apex Court held as
under:-
“28. It is clear that (a) in the contract if there is a clause for arbitration,
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normally, a writ court should not invoke its jurisdiction; (b) the existence of
effective alternative remedy
provided in the contract itself is a good ground to decline to exercise its
extraordinary jurisdiction under Article 226; and (c) if the instrumentality of the
State acts contrary to the public good, public interest, unfairly, unjustly,
unreasonably discriminatory and violative of Article 14 of the Constitution of
India in its contractual or statutory obligation, writ petition would be
maintainable. However, a legal right must exist and corresponding legal duty on
the part of the State and if any action on the part of the State is wholly unfair or
arbitrary, writ courts can exercise their power. In the light of the legal position,
writ petition is maintainable even in contractual matters, in the circumstances
mentioned in the earlier paragraphs.”
14. In Joshi Technologies International Inc. v. Union of India and Others,
reported in (2015) 7 SCC 728, the Supreme Court held that the State in its executive
capacity, even in the contractual field, is under obligation to act fairly and cannot
practice some discrimination. If the facts of such case are disputed and require
assessment of evidence the correctness of which can only be tested satisfactorily by
taking detailed evidence, Involving examination and cross-examination of witnesses,
the case could not be conveniently or satisfactorily decided in proceedings under
Article 226 of the Constitution.
15. In case of State of Gujarat Vs. JP INN Pvt Ltd. passed in LPA No. 413
of 2021, the Gujarat High Court by order dated 20.9.2023 in paragraphs 6, 7 and 8 has
held as under:-
“6. In the present case, the partnership firm has converted itself into a
private limited company. There is no change in the business, no change in the
ratio of shares and all the assets, liabilities, existing contracts, engagements,
obligations of the partnership firm came to be vested in the Private Limited
company on and from the date of its incorporation. All the partners of the
partnership firm have become the directors of the Private Limited Company in
accordance with their ratio in the partnership firm. There is no transfer of theSignature Not Verified
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property from the partnership firm to any individual person or to any individual
director in the new company. The partner firm itself has become a new entity as
private limited company by getting itself registered under the provisions of
Companies Act, 2013. It would be pertinent to note that the property of the
partnership firm has vested in the Private Limited company, and no
consideration has been paid for the same. Therefore, Article 20(1) of Schedule I
to the Stamp Act as relied upon by the appellants would not apply in the present
case. The provisions of the Stamp Act have to be read together with the
charging sections of the Stamp Act so as to arrive at the computation of the
stamp duty. The present case would not fall under the charging sections of the
Stamp Act, as there is no consideration mentioned in the instruments of
Memorandum of Association and Articles of Association, and therefore, it will
not be possible to compute the stamp duty under Article 20(1) of Schedule-I of
the Stamp Act. The stamp duty in the present case will have to be computed in
relation to the amount of consideration as would be mentioned in the
instruments of conveyance, which, in the present case, are Memorandum of
Association and Articles of Association. On conversion from the partnership
firm to a Private Limited Company, in the present case, there is no change of
composition and no any consideration has been transferred to any of the parties.
7. With reference to the judgment relied upon by the learned advocate for
the appellants in the case of M/s Mahalaxmi Saw Mills P. Ltd. (supra) the
same is not applicable in the present case, as in the said case before the Delhi
High Court, the constitution of the Partnership firm had changed from time to
time and no intimation thereof was given to the relevant authority. The property
sought to be transferred to the company in said case was a leasehold property,
which had undergone change of composition of the partners till its conversion
from partnership firm into a company, and certain persons, who were not
partners at the time of acquiring the leasehold rights, had also become the
partners on the date when the said firm changed into a company. Therefore, the
reliance placed on said decision will be of no avail to all the appellants herein.
8. The reliance placed by the learned advocate for the respondents in the
case of Anup Industries (supra) is squarely applicable in the facts and
circumstances of the present case.
16. It is also relevant to refer to the judgment dated 3.7.2001 passed by
Single Bench of Gujarat High Court in case of Anup Industries Vs. State of
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Gujarat in Special Civil Application No. 10795 of 2001, wherein following
observations were made:-
5. Having heard both the sides, it is apparent that the impugned notices
cannot be allowed to be stand. Articles 20 and 57 of the Bombay Stamp Act, 1958
which respectively deal with ‘Conveyance’ and ‘Transfer of Lease’
specifically require that stamp duty has to be computed in relation to the
amount of the consideration for conveyance. Even if for the purpose of
argument the contention on behalf of the respondents is accepted that the
declarations fall within the meaning of conveyance, in absence of any
consideration the computation provisions fail. It is an admitted position as
can be seen from the declarations that as per Paragraph 3, it is specifically
stated in unequivocal terms that no consideration is paid. If this be the
position the provisions on which reliance has been placed by the respondents
cannot be invoked against the petitioner. The provisions of the Bombay Stamp
Act, 1958 have to be read together i.e. the charging section and the
computation provisions constitute an integrated code. When there is a case to
which the computation provisions cannot apply at all, it is evident that such a
case was not intended to fall within the charging section. [Commissioner of
Income-Tax, Bangalore v. B.C. Srinivasa Setty, 1981 (128) ITR 294 (SC)].
6. In support of the various contentions raised on behalf of the
petitioner, the learned Advocate relied upon decisions of (i) Sotvex Oils and
Fertilizers v. Bhandari Cros-Fields (P.) Ltd., 1978 Comp. Cases, 260; (ii)
Pioneer Protective Glass Fibre Pvt. Ltd, v. Fibre Glass Pilkington Ltd., 1986
Comp. Cases 707.
17. It is also relevant to refer to the judgment dated 7.1.2021 passed by High
Court of Himachal Pradesh in case of M/s Sozin Flora Pharma LLP Vs. State of
Himachal Pradesh in CWP No. 4019 of 2020:
4. Observations:-
4(i)(a). First and foremost, nature and concept of conversion of a partnership firm to a
Limited Liability Partnership, is to be seen. Reference in this regard can be made to
Section 58 of the Limited Liability Partnership Act, relevant portion whereof reads as
under:-
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“58. Registration and effect of conversion. (1) to (3) ………………………………….. (4)
Notwithstanding anything contained in any other law for the time being in force, on and
from the date of registration specified in the certificate of registration issued under the
Second Schedule, the Third Schedule or the Fourth Schedule, as the case may be,-
(a) there shall be a limited liability partnership by the name specified in the certificate
of registration registered under this Act;
(b) all tangible (movable or immovable) and intangible property vested in the firm
or the company, as the case may be, all assets, interests, rights, privileges,
liabilities, obligations relating to the firm or the company, as the case may be, and
the whole of the undertaking of the firm or the company, as the case may be, shall
be transferred to and shall vest in the limited liability partnership without further
assurance, act or deed; and
(c) the firm or the company, as the case may be, shall be deemed to be dissolved and
removed from the records of the Registrar of Firms or Registrar of Companies, as the
case may be.”
4(i)(b). Upon conversion, all tangible and intangible assets of a registered partnership
firm shall get automatically transferred to and shall vest in the limited liability
partnership. The transfer and vestment of property of erstwhile partnership firm in favour
of a converted LLP is statutory. Bombay High Court in Commissioner of Income-Tax
vs Texspin Engg. & Mfg., (2003) 180 CTR Bom 497, while dealing with a case where
partnership firm was being treated as a company under the statutory provisions of the
Companies Act, held that when a firm is treated as a company, there is no conveyance of
the property executable in favour of the Limited Company. The vesting of property of
firm in the Limited Company was not incidental to a transfer but statutory. Therefore,
there was no question of capital gain. Relevant extracts from para 6 of the judgment are
as under:-
“6. ……………………. Now, in the present case, it is argued on behalf of the
department before the Tribunal, for the first time, that in this case, on vesting of
the properties of the erstwhile Firm in the Limited Company, there was a transfer
of capital assets and, therefore, it was chargeable to income-tax under the head
“Capital gains” as, on such vesting, there was extinguishment of all right, title
and interest in the capital assets qua the Firm. We do not find any merit in this
argument. In the present case, we are concerned with a Partnership Firm being
treated as a company under the statutory provisions of Part IX of the Companies
Act. In such cases, the Company succeeds the Firm. Generally, in the case of
a transfer of a capital asset, two important ingredients are : existence of a
party and a counterparty and, secondly, incoming consideration qua the
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conditions are not attracted. There is no conveyance of the property
executable in favour of the Limited Company. It is no doubt true that all
properties of the Firm vests in the Limited Company on the Firm being
treated as a Company under Part IX of the Companies Act, but that vesting
is not consequent or incidental to a transfer. It is a statutory vesting of
properties in the Company as the Firm is treated as a Limited Company. On
vesting of all the properties statutorily in the Company, the cloak given to
the Firm is replaced by a different cloak and the same Firm is now treated as a
Company, after a given date. In the circumstances, in our view, there is no
transfer of a capital asset as contemplated by Section 45(1) of the Act. Even
assuming for the sake of argument that there is a transfer of a capital asset under
Section 45(1) because of the definition of the word “transfer” in Section 2(47)
(iii), even then we are of the view that liability to pay capital gains would not
arise because Section 45(1) is required to be read with Section 48, which
provides for mode of computation…………………………..”
Reference in this regard can also be made to a judgment of Andhra Pradesh High Court in
Vali Pattabhirama Rao and another Versus Sri Ramanuja Ginning and Rice Factory
(P.) Ltd. and others, AIR 1984 AP 176. The Court was considering a situation where a
previous firm was converted into company under the provisions of Companies Act. The
Court held that there was statutory vesting of title of all the property of the previous firm
in the newly incorporated company, therefore, there was no need for any separate
conveyance. The relevant para from the judgment reads as under:- .
“18. We have already held that the partnership firm in which the original lessee is
partner was legally constituted, and the firm continues to be lawful and the properties
belonging to all the partners have become the properties of the firm. The question is
whether the property of the said firm had vested in the first defendant company when
the firm was registered under the provisions of the Indian Companies Act, 1913. For
that it is necessary to notice the terms of section 263 of the Indian Companies Act,
1913, that corresponds to section 575 of the present Companies Act, 1956. Section 263
reads as follows:
“S. 263. All property, movable and immovable, including all interests and rights in, to
and out of the property, movable and immovable, and including obligations and
actionable claims as may belong to or be vested in a company at the date of its
registration in pursuance of this part, shall, on registration, pass to and vest in the
company as incorporated under this Act for all the estate and interest of the company
therein.”
The word ‘company’ occurring in section 263 is not a company registered under the Act. It
is used in the sense of a group, assembly or association of persons. In fact, throughout the
Act the word “company” was used in several sections in the general sense of association of
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persons. In fact, section 11 of the present Companies Act (section 4 of the previous Act)
itself which enacted the prohibition of associations exceeding certain members for
carrying on trade starts with saying that no company or association or partnership
consisting of more than ten members shall be formed. Section 253 of the previous Act
corresponds to section 565 of the present Act. Section 565(1) (b) of the present Act
corresponds to section 253(1) (ii) of the 1913 Act, which permits any company otherwise
duly constituted according to law consisting of seven or more members to be registered as
a company. A partnership must be one such. This is made clear by the provisions of section
255 of the 1913 Act (present Act section 567) and section 256 of the 1913 Act (present Act
section 568) where under a deed of partnership has to be filed before the Registrar before
seeking the registration. Hence, a partnership which was treated as a company for the
purposes of the Companies Act can be registered under Part 8 of the previous Act (Part 9
of the present Act) and the vesting is provided by section 263 of the 1913 Act (section 575
of the present Act). The provision is mandatory and there will be statutory vesting in the
corporation so incorporated under the provisions of the Companies Act. The Registrar is
bound to give a certificate of registration under section 262 (present section 574) which is
a conclusive proof of incorporation, vide section 35 of the present Act that corresponds to
section 24 of the previous Act. Hence, it is clear that no conveyance is necessary when a
partnership is converted and registered as a company. However, it is not possible to
acquire such title statutorily under this section if the previous firm purports to convey title
to the company in which event a separate deed of conveyance is necessary. Thus, we hold
that if the constitution of the partnership firm is changed into that of a company by
registering it under Part 9 of the present Act (Part 8 of the previous Act), there shall
be statutory vesting of title of all the property of the previous firm in the newly
incorporated company without any need for a separate conveyance. A similar view
was taken in Ramasundari Ray v. Syamendra Lal Ray, ILR [1947] 2 Calcutta 1. D.W. 2
deposed that in 1920 the partnership was converted into a private limited company and
filed the articles of association, exhibit B-54. This evidence stood uncontradicted. In fact,
the plaintiffs and their predecessors-in-title treated the first defendant as successor- in-
interest of the previous firm and hence we are of the opinion that the leasehold interest that
has become firm’s property by virtue of the original lessee bringing into the firm has
vested in the first defendant company after its registration.”
The above judgment was quoted with approval by the Hon’ble Apex Court in Jai Narain
Parasrampuria (Dead) and others Versus Pushpa Devi Saraf and others, (2006) 7 SCC
756, in following manner:-
“26. The said decision has been followed by a Division Bench of the Andhra Pradesh
High Court in Vali Pattabhirama Rao v. Sri Ramanuja Ginning & Rice Factory (P) Ltd.
wherein it was held: (AIR pp. 184-85) “
Thus we hold that if the constitution of the partnership firm is changed into that of a
company by registering it under Part 9 of present Act (Part 8 of previous Act), there
shall be statutory vesting of title of all the property of the previous firm in the newly
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incorporated company without any need for a separate conveyance.”
In Commissioner of Income Tax, Udaipur Versus M/s. Chetak Enterprises Pvt. Ltd., AIR
2020 SC 4305, Hon’ble Apex Court while considering the effect of conversion of partnership
firm into a company under Part IX of Companies Act, held that on statutory vesting all
properties of the firm, in law, vest in the company and the firm is succeeded by the company.
Para 7 of the judgment reads as under:-
“7. The question is: what is the effect of conversion of partnership firm into a company
under Part IX of the Companies Act? That can be discerned from Section 575 of the
Companies Act, which reads thus:
“575. Vesting of property on registration. All property, movable and immovable
(including actionable claims), belonging to or vested in a company at the date of its
registration in pursuance of this Part, shall, on such registration, pass to and vest in the
company as incorporated under this Act for all the estate and interest of the company
therein.”
It is manifest that all properties, movable and immovable (including actionable claims)
belonging to or vested in a company at the date of its registration would vest in the
company as incorporated under the Act. In other words, the property acquired by a
promoter can be claimed by the company after its incorporation without any need for
conveyance on account of statutory vesting. On such statutory vesting, all the properties of
the firm, in law, vest in the company and the firm is succeeded by the company. The firm
ceases to exist and assumes the status of a company after its registration as a company.”
In view of provisions of Section 58(4)(b) of the Limited Liability Partnership Act, consequent
upon conversion of firm to limited liability partnership, there is automatic vesting/transfer of
all assets of firm to the LLP. Sub-section (4) of Section 58 of LLP Act starts with non-obstante
clause ‘notwithstanding anything contained in any other law for the time being in force’.
Therefore, principles of statutory vesting of properties will apply to the instant case as well.
4(ii)(a). Next arises the question about necessity of execution of an instrument upon
conversion of a partnership firm to limited liability partnership. In the judgments cited above,
it has been held that noseparate conveyance or instrument of transfer etc. is required to be
executed in cases of statutory vesting. LLP is required to notify the concerned authority about
the conversion. After the conversion, firm getting converted into LLP does not remain in
existence. Clauses 7 and 9 of ‘The Second Schedule’ relatable to Section 55 of LLP Act provide
as under:-
“7. Effect of registration.- On and from the date of registration specified in the
certificate of registration issued under paragraph 5,-
(a) there shall be a limited liability partnership by the name specified in the certificate
of registration registered under this Act;
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(b) all tangible (movable and immovable) property as well as intangible property vested
in the firm, all assets, interests, rights, privileges, liabilities, obligations relating to the
firm and the whole of the undertaking of the firm shall be transferred to and shall vest
in the limited liability partnership without further assurance, act or deed; and
(c) the firm shall be deemed to be dissolved and if earlier registered under the Indian
Partnership Act, 1932 (9 of 1932) removed from the records maintained under that Act.
9. Pending proceedings.- All proceedings by or against the firm which are pending in
any Court or Tribunal or before any authority on the date of registration may be
continued, completed or enforced by or against the limited liability partnership.”
Second Schedule ensures continuity of the firm after its dissolution and conversion to LLP.
The words ‘shall be transferred to-shall vest’ in the LLP Act are to be read harmoniously to
give it purposive interpretation in tune with the object and provisions of the Act. The transfer
of assets is only by way of statutory vesting requiring no other separate instrument of
transfer. There is automatic vesting and divesting. Thus, no further act or deed is required.
This is also evidnced by Clause 7(b) of Second Schedule (extracted above).
4(ii)(b). Section 3 of the Indian Stamp Act pertains to charging stamp duty on certain
instruments. The section starts with following words:-
“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 therefore, respectively,
that is to say…………………”
Section 3 of the Indian Stamp Act talks about the instruments, which are chargeable with
duties.Once there is no instrument of transfer of assets of erstwhile partnership firm to LLP, then
question of payment of stamp duty and registration charges on it does not arise.
In this regard, it will be profitable to refer to a judgment passed by this Court in CWP No.1293
of 2019, titled Reckitt Benckiser (India) Private Limited Versus State of H.P. & Another,
decided on 29th February, 2020. In that case, name of petitioner (therein) was changed from
public limited company to a private limited company in accordance with the provisions of
Companies Subsequent to change of name, the petitioner therein intended to transfer its assets
and for that purpose, it Act moved an application for reflecting change of its name in the
revenue record. The approval was granted by the State, but subject to the condition of payment
of stamp duty and registration fee on account of addition of word ‘Private’ in its name. The
question before the Court was whether on such change of name of the Company, transfer of its
immovable property takes place, which is chargeable to stamp duty and registration fee or not.
Noticing the instructions of respondent No.2, dated 16.02.2012 (already extracted above), the
provisions of the Act and facts, it was held that mere change of name of company not
accompanied by any transfer of assets would not warrant payment of stamp duty or registration
charges. It was also observed that there being no instrument of transfer of assets and property in
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existence, therefore, there was no question of any instrument requiring compulsory registration.
The Court thus concluded that for these reasons, change of name of the company does not entail
payment of stamp duty and registration fee. Relevant paras from the judgment are extracted
hereinafter:-
“16) The stand of the respondents that the present is not a case of mere change of name
and rather a case of conversion of public limited company to private limited company,
hence stamp duty is chargeable under Section 3 of the Indian Stamp Act, 1899 though
has been taken by the respondents-State to make an attempt just to mislead this Court
and confuse the whole issue, however, unsuccessfully. Section 3 of the Stamp Act speaks
about the instruments, which are chargeable with duties, subject to the exemptions
contained in Schedule-I. The instrument referred to herein and also Schedule-I,
nowhere show that on mere addition of word ‘private’ in the name of a company without
transfer of its assets and liability, is an instrument, which is chargeable thereunder. So
far as the Registration Act is concerned, only that instrument is chargeable, which
needs registration.
17) In the case in hand, land and building remained with the petitioner-company, even
after addition of word ‘private’ to its name. Therefore, there is no question of existence
of an instrument of transfer of its assets and property and the compulsorily registration
thereof. The respondents though have made an attempt to draw the distinction between
a public limited and private limited company from its definition finds mentioned in
Section 2 of the Companies Act, 2013 and has canvased that two companies are quite
different and distinct However, learned Senior Additional Advocate General has failed
to satisfy this Court about the justifiability of such distinction drawn and how the
addition of word ‘private’ in the name of the petitioner company amount to transfer of
its assets and liability and consequently levying of stamp duty and Registration charges.
The respondent-State rather seems to have taken such stand in reply filed to the writ
petition merely for rejection.
18) It is worth mentioning that the circular dated 16.2.2012 Annexure P-2 clearly
distinguishes between cases pertaining to change of name simplicitor under the
provisions of Companies Act 1956 and for that matter Companies Act 2013 and those
with transfer of assets. The second category of cases cover transaction like merger,
demerger and amalgamation etc., which involve two separate entities and transfer of
assets from one entity to another. Annexure P-2 clearly postulates that no stamp duty or
registration fee is payable in a case of change of name of the Company. In the case in
hand since no transfer of assets occurred on account of change of the name of the
petitioner Company, hence neither stamp duty nor registration charges is payable on
such change of name of the petitioner and its name is required to be entered in the
revenue record pertaining to the land and building in question. The respondents,
therefore, are under an obligation to update the entries in the revenue record pertaining
to the land with the new name of the petitioner Company by addition of word ‘private’
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without payment of any stamp duty and registration charges.”
The registration fee is payable on an instrument compulsorily registerable under Section 17
of the Registration Act. Once there is no transfer of immovable property under an
instrument, then the question of compulsory registration of that non-existent instrument and
payment of stamp duty on it is not warranted. Neither the stamp duty nor the registration fee,
therefore, is payable in such circumstances.
4(iii). Another facet to be determined is whether conversion of firm to LLP involves change
in constitution. Conversion of petitioner-firm to LLP is admittedly without any consideration.
Neither any sale deed nor any conveyance deed has been executed. Transfer of assets of
erstwhile partnership firm to LLP is by operation of law. Conversion to LLP is normally
undertaken for restructuring exercises. One of the object of Limited Liability Partnership Act
is to view it as an alternative corporate business vehicle providing the benefits of limited
liability, while allowing its members the flexibility of organizing their internal structure as a
partnership, based on a mutually arrived agreement. Owing to flexibility in its structure and
operation, LLP has been considered a suitable vehicle for small enterprises. Petitioner firm’s
legal entity is not changed after conversion. Only the identity of the petitioner firm as a legal
entity gets changed without any change in the constitution of petitioner-firm.
4(iv). Reliance placed by the respondent-State on the judgment passed by the Hon’ble
Supreme Court in Delhi Development Authority v. Nalwa Sons Investment Ltd. and
Another, 2019 SCC Online SC 586, is misplaced as the controversy involved in that case
did not pertain to conversion of a partnership firm to a Limited Liability Partnership. The
question involved before the Hon’ble Apex Court in that case was “if the original lessee
(respondent No.1, a public limited company) in respect of the plot given on lease by the
appellant, transfers the same to another public limited company, albeit an alter ego of the
former, consequent to an order of arrangement and demerger passed by the Company Judge,
then whether it is liable to pay 50% unearned increase (UEI) on the market value of the plot
to the appellant (lessor)”.
5. Conclusion:- From the above discussion, following conclusions are drawn:-
5(a) Upon conversion of a registered partnership firm to an LLP under the provisions of the
Limited Liability Partnership Act all movable and immovable properties of erstwhile
registered partnership firm, automatically vest in the converted LLP by operation of Section
58(4)(b) of the Limited Liability Partnership Act.
5(b). The transfer of assets of firm to the LLP is by operation of law. Being statutory
transfer, no separate conveyance/instrument is required to be executed for transfer of assets.
5(c). Since there is no instrument of transfer of assets of the erstwhile partnership firm to the
limited liability partnership, the question of payment of stamp duty and registration charges
does not arise as these are chargeable only on the instruments indicated in Section 3 of the
Indian Stamp Act and Section 17 of the Indian Registration Act.
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change. Only the identity of the firm as a legal entity changes. Such conversion or change in
the name does not amount to change in the constitution of partnership firm.
5(e) Stamp duty and registration fee cannot be levied upon conversion of a partnership firm
to LLP. Therefore, permission under Section 118 of the H.P. Tenancy and Land Reforms Act
for recording such change of name in the revenue documents, i.e. M/s Sozin Flora Pharma
to M/s Sozin Flora Pharma LLP cannot be made dependent upon deposit of stamp duty and
registration fee.
For the foregoing discussion, we allow the instant writ petition. The impugned Annexures P-
8, dated 28.08.2017 and P-10 dated 23.08.2019, insofar they direct the petitioner to deposit
the stamp duty and registration fee consequent upon change of its name from M/s Sozin
Flora Pharma to M/s Sozin Flora Pharma LLP, are quashed and set aside. The respondents
are directed to enter the name of the petitioner as ‘M/s Sozin Flora Pharma LLP’ in the
revenue record within a period of four weeks from today.
The writ petition stands disposed of in the above terms, so also the pending miscellaneous
application(s), if any.
18. It is also fruitful to refer to the order dated 26.8.2025 passed by this
Hon’ble court in WP No. 24955/2018 in the matter of M/s Jupiter Wagons Ltd. Vs.
Board of Revenue and others, wherein it has been held as under:-
09. In the case of Professor P.C. Mahajan Foundation (Supra) which was a case as regards
change of name in one of the property in respect of a company whose name had been
changed, this Court held that change of company name does not result in transfer of any right,
title and interest in any immovable property. It has been held as under:-
“6. Section 23 of Companies Act, 1956 the Central Government may direct the companies
to change its name or new name as the case may be. The company shall apply to the
Registrar who shall carry out the necessary changes in certificate of incorporation and
the memorandum. It not affect any debts, liabilities, obligations or contracts incurred or
entered into, by or on behalf of the company before conversion and such debts, liabilities,
obligations and contracts may be enforced in the manner as if such registration had not
been done, therefore, the Writ Court has rightly held in case of change of company name
will not result in transfer of any right or title and interest in any immovable property,
hence, the registration under Section 17 of Registration Act is not required.”
10. In the decision of the Single Bench which had been affirmed by the Division Bench as
aforesaid, it was held as under :-
“In light of Section 23 and Sub-section 3 of the Companies Act, mere change of name of
the company does not require registration of title deed in respect of change of name of the
property already owned by the company. The Apex Court in the case of M/s. S.K. Industries
Vs. State of Chattisgarh and Ors, reported in AIR 2013 Chhattisgarh (8) in paragraph No.
17 has held as under:-
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“17. It is a settled principle of law relating to payment of stamp duty and registration of any
document under the provisions of the Stamp Act and Registration Act that only those
documents require registration and payment of stamp duty which are specified in the Acts.
Equally well settled principle of law is that unless the execution of any document results in
transfer of any right, title and interest in any immovable property by the act of the parties in
lieu of consideration ie. price, for such transfer, the documents cannot be subjected to
payment of stamp duty and registration as a document of sale/transfer as defined under the
Transfer of Property Act.” In light of the aforesaid, as there is no transfer of any right or
title in respect of the immovable property, the question of payment of stamp duty and fresh
registration duty does not arise.
The Division Bench of Allahabad High Court in the case of Ingersoll Rand Wadco Tools
Ltd. Vs. U.P.S.I.D. Corpn., Kanpur, reported in 2004 AIHC, 2389 has taken a similar
view. Paragraph Nos. 12 to 15 has held as under:-
“12. We do not agree with the respondents. There is nothing in clause 2 (p) of the lease deed
which permits demand of transfer charges. On the contrary, if a company in reconstituted
then it has to enter into a binding contract with the lessor to carryout the same terms,
conditions, stipulations as mentioned in the agreement. We agree with the learned Counsel
for the petitioner that the impugned demand of transfer charges has no statutory sanction
nor can it be charged under the lease deed copy of which is Annexure 4 to the writ petition.
13. Moreover, the change in the name of the company does not mean that it became a
different legal entity. Even the change of share-holders will not make the company a
different legal entity because it is well settled that a company is a distinct legal entity
separate from its shareholders vide Soloman v. Soloman & Co. Ltd., 1897 AC 22; R.C.
Cooper v. Union of India, AIR 1970 SC 564 (para 13), etc. 13-A. In M/s. Economic
Investment Corporation Ltd. v. The Commissioner of Income Tax, AIR 1970 Calcutta 389,
it was held that the change of name of the company does not occasion any substitution or
succession. In M/s. Gur Narain Jagat Narain & Co. v. M/s. Motor & General Sales Ltd.,
1980 ALJ 508, the Allahabad High Court held that the change in the name of a company
does not change its rights and obligations.
14. In Pioneer Protective Glass Fibre (P) Ltd. v. Fibre Glass Pilkington Ltd., (1985) 3
Comp. L.J. 309, the Calcutta High Court held that despite change in the name of a company
the legal entity continues, and such change does not result in dissolution of the company
and incorporation of a new company. Hence, to a fresh certificate of the corporation under
section 23 of the companies act on a change of the name of the company does not imply
that a new company has come to in existence.
15. So far as the alleged guidelines of the corporation copy of which is Annexure 14 to the
writ petition is concerned, it may be mentioned that these guidelines have no statutory force
and hence they cannot justify imposition of transfer charges. Any such charge or fee must
have statutory backing, as held by a Division Bench of this Court in Shaukat Ali 7-2003.”
In light of the aforesaid, this Court is of the considered opinion that mere change of name
of the company in light of Section 23 of the Companies Act, does not require the fresh
registration or execution of fresh deed, title deed as observed by the District Registrar.”
11. In M/s. Om Metals Infra Projects Ltd. (Supra), the issue before the Rajasthan High
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Court was whether mere change in the name of a company tantamounts to an assignment of
the lease held by it to attracts stamp duty under the Stamp Act. It was held as under:-
“In the above context of law, the merits of the case at hand, show that the demand for stamp
duty against the petitioner Company for mere change of its name by resort to Section 21 of
the Act of 1956 is patently illegal, arbitrary and ultra vires the Act of 1998. The foundation
of that demand is the circular No.6/2009 issued by the DIG (Stamps and Registration). Even
the Circular whatever its legal standing; does not cover the situation where a mere change
in the name of the company by resort to the provisions of Section 21 of the Companies Act
without any change of shareholders, memorandum of associations, directors of the Company
or its management would entail a demand for stamp duty. The said circular only provides
that there would be a transfer of lease by way of assignment in situations where the legal
character of the company is altered or partnership is changed by induction of new partners
following which an amended deed has been executed qua the immovable assets of the
company/ firm. In the instant case, the change visualized under the Circular dated 6/2009
has not been made inasmuch as the “legal character” of the Company has not changed. A
legal character entails certain legal incidents, rights and liability. There is nothing to show
nor was it even alleged that by change of the name of the petitioner company by resort to
Section 21 of the Act of 1956, any of its rights or liabilities were altered and/lor entailed
legal incident/s not earlier attracting to it in its earlier avtar. Further under Article 55 of the
Act of 1998 stamp duty is leviable on a conveyance / transfer which by its very definition will
entail giving away of immovable property by one to another. This court fails to fathom, and
counsel for the respondent-State department is of little assistance to show, as to how a
company which alone is involved in a change of its name, can transfer immovable property
to self. It obviously cannot. Aside of the aforesaid, the Apex Court in the case of Prasad
Technology Park (P) Ltd. (supra) held that “only because the name of the Company was
changed, the same would not mean a fresh transaction took place.” The Apex Court
proceeded to point out that it was weli settled that the real and true meaning of the
instrument must be ascertained for the purpose of levy of stamp duty and if there was no
conveyance, from one to another, stamp duty was not leviable. Even otherwise, an
assignment entails a conveyance from one to another– two entities natural born or juristic
have to obtain – such a situation does not obtain on a mere change in the name of the
company.”
12. In the case of Reckitt Benckiser (India) Private Limited (Supra) the Division Bench of the
Shimla High Court which was considering asimilar issue held as under:-
“17. The stand of the respondents that the present is not a case of mere change of name and
rather a case of conversion of public limited company to private limited company, hence
stamp duty is chargeable under Section 3 of the Indian Stamp Act, 1899 though has been
taken by the respondents-State to make an attempt just to mislead this Court and confuse the
whole issue, however, unsuccessfully. Section 3 of the Stamp Act speaks about the
instruments, which are chargeable with duties, subject to the exemptions contained in
Schedule-I. The instrument referred to herein and also Schedule-I, nowhere show that on
mere addition of word ‘private’ in the name of a company without transfer of its assets and
liability, is an instrument, which is chargeable thereunder. So far as the Registration Act isSignature Not Verified
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concerned, only that instrument is chargeable, which needs registration.
18. In the case in hand, land and building remained with the petitioner-company, even after
addition of word ‘private’ to its name. Therefore, there is no question of existence of an
instrument of transfer of its assets and property and the compulsorily registration thereof.
The respondents though have made an attempt to draw the distinction between a public
limited and private limited company from its definition finds mentioned in Section 2 of the
Companies Act, 2013 and has canvased that two companies are quite different and distinct
However, learned Senior Additional Advocate General has failed to satisfy this Court about
the justifiability of such distinction drawn and how the addition of word ‘private’ in the
name of the petitioner company amount to transfer of its assets and liability and
consequently levying of stamp duty and Registration charges. The respondent-State rather
seems to have taken such stand in reply filed to the writ petition merely for rejection.
19. It is worth mentioning that the circular dated 16.2.2012 Annexure P-2 clearly
distinguishes between cases pertaining to change of name simplicitor under the provisions of
ompanies Act 1956 and for that matter Companies Act 2013 and those with transfer of
assets. The second category of cases cover transaction like merger, demerger and
amalgamation etc., which involve two separate entities and transfer of assets from one entity
to another. Annexure P-2 clearly postulates that no stamp duty or registration fee is payable
in a case of change of name of the Company. In the case in hand since no transfer of assets
occurred on account of change of the name of the petitioner Company, hence neither stamp
duty nor registration charges is payable on such change of name of the petitioner and its
name is required to be entered in the revenue record pertaining to the land and building in
question. The respondents, therefore, are under an obligation to update the entries in the
revenue record pertaining to the land with the new name of the petitioner Company by
addition of word ‘private’ without payment of any stamp duty and registration charges.”
13. The principles which have been laid down in the aforesaid cases are to the effect that mere
change of name of the company in light of the provisions of the Companies Act does not
require fresh registration or execution of fresh deed or title deed in respect of the property held
by the company hence registration under Section 17 of the Registration Act is not required, nor
is stamp duty required to be paid thereupon. Change of name of Company does not result in
transfer of any right, title and interest in anyimmovable property. The impugned orders have
also been passed only for the reason of change of name of the petitioner company from M/s
Commercial Engineers and Body Builders Company Private Limited to Commercial Engineers
and Body Builders Company Limited, on the basis of which it has been held that the amended
lease deed presented by the petitioner for registration requires stamp duty thereupon as
directed. The same in view of the aforesaid judgements cannot be upheld.
19. In the recent judgment of Hon’ble Apex court in the matter of M/s
Godwin Construction Pvt Ltd. Vs. Commissioner Meerut Division, 2025 INSC
1207, it has been held as under:-
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14. It is trite that, in matters of stamp duty, the decisive factor is not the nomenclature assigned
to the instrument, but the substance of rights and obligations it embodies. The Court is duty-
bound to ascertain the true legal character of the instrument. In the instant case, the appellant
has executed a “Security Bond cum Mortgage Deed” in favour of the Meerut Development
Authority. Unless the nature and effect of such an instrument are conclusively identified, the
application of any provision for the determination of stamp duty on instruments under the
Indian Stamp Act, 1899, cannot be undertaken. It is necessary to have regard to the operative
recitals and clauses of the deed executed by the appellant. For this purpose, the relevant
portions of the “Security Bond cum Mortgage Deed dated 19.12.2006 are extracted below:
“STAMP DUTY RS 100/- IMPROVEMENT TRUST DUTY NILL TOTAL RS 100/-
THIS SECURITY Bond CUM MORTGAGE DEED is being executed by surety to
secure due performance of contract and for due discharge of liability. The stamp duty is
being paid under Article 57 of the schedule I-B of the Indian Stamp Act, 1989, as
amended in its application of Uttar Pradesh.
THIS INDENTURE IS MADE at Meerut on the 19th day December 2006.
BETWEEN
Godwin Construction Pvt. Ltd. through Director Shri Jitender Bajwa R/o A-151,
Defence Colony, Meerut hereinafter called SURETIES of the one part which expression
shall, unless repugnant to the context or in consistent with the subject, include their
heirs, executors and administrators etc.AND
MEERUT DEVELOPMENT AUTHORITY, Vikas Bhawan, Meerut hereinafter called
MDA of the other part, which expression, unless repugnant to the context or
inconsistent with the subject shall include its interest assigns, transferees in interest etc.
WHEREAS M/S Godwin Construction Pvt. Ltd., A-151, Defence Colony, Meerut
hereinafter referred to as the COLONIZER is developing a colony, under the name and
style of Global City, Abdullapur Meerut hereinafter referred to as colony and,
WHEREAS MDA has agreed to approve the lay out plan of the colony and colony itself
provided to Colonizer discharges all the liability to develop and colony together with all
required amenities and for due discharge of the liabilities of the Colonizers the MDA
has asked to furnish security of Rs. 1,15,44,000/- for external development charge
which will be released after the payment of external development charge of the colony
as per terms and conditions and bye laws (sic) of the MDA And.
WHEREAS the sureties or the Guarantors have in consideration of approving the lay
out of colony by the MDA has agreed to give security of 1,00,44,000/- in the manner
hereinafter mentioned & have deposited Rs. 15,00,000/- as advance in the shape ofSignature Not Verified
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Demand Draft.
NOW THIS DEED WITNESSES :-
1. THAT the sureties to secure the due performance the contract and for due discharge
of the liability to pay of external development charge of the colony Global City,
Abdullapur, Meerut and all amenities, work of the Colony, the surety hereby transfer to
MDA all their interests in the property detailed in the schedule here to with intent that
the same shall remain and be charged by way of mortgage.
2. THAT the Sureties declare that:-
a. THAT Sureties are the absolute owners of the property and free from encumbrances
of any kind.
b. THE SURETIES are entitled to sell, transfer or alienate the said property.
c. THAT SURETIES have not deposited delivered that the title deed/s of the property
with any one else and have not created any charge by way of mortgage or any other
encumbrance on the property.
3. THAT SURETIES undertake not be create charge or mortgage or transfer or part with
possession of the said property without the consent of the MDA in writing.
4. THAT SURETIES hereby authorise and appoint the Colonizer as agent to
acknowledge on behalf of the Sureties the liability and security hereby created.
SURETIES covenant in case of non-discharge of the liability by the Colonizer within the
stipulated period, the MDA shall be within its rights so cause the property mortgaged to be sold
for the realization of the amount to the extent of Rs. 1,00,44,000/-.
NOW THIS CONDITIONS of the written bond are such that if the colonizer performs and
fulfills the obligations and discharge all the liability regarding Completion of the said company,
the said surety under the above said written bond and obligation shall be void and of no effect
otherwise the same shall be and remain in full force. …..
18. With the nature and substance of the deed thus established, we now turn to the
pivotal question of chargeability of the instrument under the Indian Stamp Act, 1899. In light of
its nomenclature as a “Security Bond cum Mortgage Deed”, the relevant provisions for
determining the stamp duty are confined to Articles 40 and 57 of Schedule 1-B of the Indian
Stamp Act, 1899. The relevant provisions are reproduced below for ready reference:
“40. MORTGAGE-DEED, not being an AGREEMENT RELATING-TO DEPOSIT
OF TITLE-DEEDS, PAWN OR PLEDGE (NO. 6), BOTTOMRY BOND (NO. 16),Signature Not Verified
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MORTGAGE OF A CROP (NO. 41), RESPONDENTIA BOND (No. 56), OR
SECURITY BOND (NO. 57)–
(a) when possession of the property or any part of the property comprised in such deed
is given by the mortgagor or agreed to be given;
(b) when possession is not given or agreed to be given as aforesaid;
Explanation.–A mortgagor who gives to the mortgagee a power-of-attorney to collect rents or a
lease of the property mortgaged or part thereof, is deemed to give possession within the meaning
of this Article.
(c) when a collateral or auxiliary or additional or substituted security, or by way of further
assurance for the abovementioned purpose where the principal or primary security is duly
stamped– for every sum secured not exceeding Rs.1,000 and for every Rs. 1,000 or part thereof
secured in excess of Rs. 1,000.
Exemptions
(1) Instruments, executed by person taking advances under the Land Improvement Loans Act,
1883 (XIX of 1883), or the Agriculturists’ Loan Act, 1884 (XII of 1884), or by their sureties as
security for the repayment of such advances.
(2) Letter of hypothecation accompanying a bill of exchange.
***
57. SECURITY-BOND OR MORTGAGE-DEED, executed by way of security for the due
execution of an office, or to account for money or other property received by virtue thereof or
executed by a surety to secure the due performance of a contract,–
(a) when the amount secured does not exceed Rs. 1,000;
(b) in any other case……”
28. This Court finds that the instrument satisfies the essential characteristics of a mortgage deed
as defined under Section 2(17) of the Indian Stamp Act, 1899. The nomenclature “Security
Bond or Mortgage Deed” is not determinative; the substance of the instrument governs its
character while assessing stamp duty.
29. As observed by us in the preceding paragraphs, the second limb of Article 57 of Schedule
1-B of the Indian Stamp Act, 1899, is confined to instruments executed by a surety to secure
the obligations of another. In the present case, although clause III of the deed stipulates that the
mortgagor shall be personally liable to repay the loan, a careful reading of the deed makes it
manifestly clear that Shri Naveen Mittal executed the deed solely in his capacity as the director
of the company M/s Ajay Forging Pvt. Ltd, acting on behalf of the company. No distinct surety
exists apart from the principal debtor. Accordingly, reference to personal liability in the deed
pertains to the director acting on behalf of the company and does not transform the instrument
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into a security bond under Article 57 of Schedule 1-B of the Indian Stamp Act, 1899. In
substance and effect, the deed constitutes a mortgage executed by the principal debtor itself,
thereby attracting the provisions of Article 40 of the Schedule 1-B of the Indian Stamp Act,
1899, for the purposes of stamp duty.
20. At this stage, it is relevant to quote Sections 366 and 368 of Companies
Act as under:
366. Companies capable of being registered.–(1) For the purposes of this Part, the
word “company”includes any partnership firm, limited liability partnership, cooperative society,
society or any other business entity formed under any other law for the time being in force
which applies for registration under this Part.
(2) With the exceptions and subject to the provisions contained in this section, any company
formed,whether before or after the commencement of this Act, in pursuance of any Act of
Parliament other than this Act or of any other law for the time being in force or being otherwise
duly constituted according to law, and consisting of 1[two or more members], may at any time
register under this Act as an unlimited company, or as a company limited by shares, or as a
company limited by guarantee, in such manner as may be prescribed and the registration shall
not be invalid by reason only that it has taken place with a view to the company’s being wound
up:
Provided that–(i) a company registered under the Indian Companies Act, 1882 (6 of 1882) or
under the Indian Companies Act, 1913 (7 of 1913) or the Companies Act, 1956 (1 of 1956),
shall not register in pursuance of this section;
(ii) a company having the liability of its members limited by any Act of Parliament other than
this Act or by any other law for the time being in force, shall not register in pursuance of this
section as an unlimited company or as a company limited by guarantee;
(iii) a company shall be registered in pursuance of this section as a company limited by shares
only if it has a permanent paid-up or nominal share capital of fixed amount divided into shares,
also of fixed amount, or held and transferable as stock, or divided and held partly in the one way
and partly in the other, and formed on the principle of having for its members the holders of
those shares or that stock, and no other persons;
(iv) a company shall not register in pursuance of this section without the assent of a majority of
such of its members as are present in person, or where proxies are allowed, by proxy, at a
general meeting summoned for the purpose;
(v) where a company not having the liability of its members limited by any Act of Parliament or
any other law for the time being in force is about to register as a limited company, the majority
required to assent as aforesaid shall consist of not less than three-fourths of the members present
in person, or where proxies are allowed, by proxy, at the meeting;
(vi) where a company is about to register as a company limited by guarantee, the assent to its
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being so registered shall be accompanied by a resolution declaring that each member undertakes
to contribute to the assets of the company, in the event of its being wound up while he is a
member, or within one year after he ceases to be a member, for payment of the debts and
liabilities of the company or of such debts and liabilities as may have been contracted before he
ceases to be a member, and of the costs, charges and expenses of winding up, and for the
adjustment of the rights of the contributories among themselves, such amount as may be
required, not exceeding a specified amount.
[(vii) a company with less than seven members shall register as a private company.]
(3) In computing any majority required for the purposes of sub-section (1), when a poll is
demanded, regard shall be had to the number of votes to which each member is entitled
according to the regulations of the company.
368. Vesting of property on registration.–All property, movable and immovable
(including actionable claims), belonging to or vested in a company at the date of its registration in
pursuance of this Part, shall, on such registration, pass to and vest in the company as incorporated
under this Act for all the estate and interest of the company therein.
Section 33 of Indian Stamp Act reads as under:
33. Examination and impounding of instruments. — (1) Every person having by law or
consent of parties authority to receive evidence, and every person in charge of a pubic office,
except an officer of police, before whom any instrument, chargeable, in his opinion, with duty, is
produced or comes in the performance of his functions, shall, if it appears to him that such
instrument is not duly stamped, impound the same.
21. It is also relevant to refer the contention raised by the State Government
that petitioner is having alternative efficacious remedy by way of appeal. There is no
quarrel for normally the Court will not entertain such petition where alternative
efficacious remedy is available more particularly under particular statute, however, in
the facts and circumstances of present case in view of the above mentioned sections of
the Companies Act and looking to the chronology of events in the matter, it seems that
vesting of property in the company who is converted from partnership firm to private
limited company in view of the settled provision of law, the impugned action by the
respondent authority squarely falling under the criteria of Alok Kumar Choubey
(supra) as well as the judgment of Whirlpool Corporation (supra). It is also relevant to
refer to the later judgment in later point of time of the Hon’ble Apex Court in the matterSignature Not Verified
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of Godrej Sara Lee Ltd. Vs. Excise and Taxation Officer-cum-Assessing Authority
reported in 2023 SCC Online SC 95. Paragraphs 4, 5,6, 7 and 8 are relevant, which are
reproduced as under:-
4. Before answering the questions, we feel the urge to say a few words on the exercise of writ
powers conferred by Article 226 of the Constitution having come across certain orders passed
by the high courts holding writ petitions as “not maintainable” merely because the alternative
remedy provided by the relevant statutes has not been pursued by the parties desirous of
invocation of the writ jurisdiction. The power to issue prerogative writs under is plenary in
nature. Any limitation on the exercise of such power must be traceable in the Constitution
itself. Profitable reference in this regard may be made to Article 329 and ordainments of other
similarly worded articles in the Constitution. Article 226 does not, in terms, impose any
limitation or restraint on the exercise of power to issue writs. While it is true that exercise of
writ powers despite availability of a remedy under the very statute which has been invoked and
has given rise to the action impugned in the writ petition ought not to be made in a routine
manner, yet, the mere fact that the petitioner before the high court, in a given case, has not
pursued the alternative remedy available to him/it cannot mechanically be construed as a
ground for its dismissal. It is axiomatic that the high courts (bearing in mind the facts of each
particular case) have a discretion whether to entertain a writ petition or not. One of the self-
imposed restrictions on the exercise of power under Article 226 that has evolved through
judicial precedents is that the high courts should normally not entertain a writ petition, where
an effective and efficacious alternative remedy is available. At the same time, it must be
remembered that mere availability of an alternative remedy of appeal or revision, which the
party invoking the jurisdiction of the high court under Article 226 has not pursued, would not
oust the jurisdiction of the high court and render a writ petition “not maintainable”. In a long
line of decisions, this Court has made it clear that availability of an alternative remedy does not
operate as an absolute bar to the “maintainability” of a writ petition and that the rule, which
requires a party to pursue the alternative remedy provided by a statute, is a rule of policy,
convenience and discretion rather than a rule of law. Though elementary, it needs to be restated
that “entertainability” and “maintainability” of a writ petition are distinct concepts. The fine
but real distinction between the two ought not to be lost sight of. The objection as to
“maintainability” goes to the root of the matter and if such objection were found to be of
substance, the courts would be rendered incapable of even receiving the lis for adjudication.
On the other hand, the question of “entertainability” is entirely within the realm of discretion
of the high courts, writ remedy being discretionary. A writ petition despite being maintainable
may not be entertained by a high court for very many reasons or relief could even be refused to
the petitioner, despite setting up a sound legal point, if grant of the claimed relief would not
further public interest. Hence, dismissal of a writ petition by a high court on the ground that
the petitioner has not availed the alternative remedy without, however, examining whether an
exceptional case has been made out for such entertainment would not be proper.
5. A little after the dawn of the Constitution, a Constitution Bench of this Court in its decision
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reported in 1958 SCR 595 (State of Uttar Pradesh vs. Mohd. Nooh) had the occasion to
observe as follows:
“10. In the next place it must be borne in mind that there is no rule, with regard to
certiorari as there is with mandamus, that it will lie only where there is no other equally
effective remedy. It is well established that, provided the requisite grounds exist,
certiorari will lie although a right of appeal has been conferred by statute, (Halsbury’s
Laws of England, 3rd Edn., Vol. 11, p. 130 and the cases cited there). The fact that the
aggrieved party has another and adequate remedy may be taken into consideration by
the superior court in arriving at a conclusion as to whether it should, in exercise of its
discretion, issue a writ of certiorari to quash the proceedings and decisions of inferior
courts subordinate to it and ordinarily the superior court will decline to interfere until
the aggrieved party has exhausted his other statutory remedies, if any. But this rule
requiring the exhaustion of statutory remedies before the writ will be granted is a rule of
policy, convenience and discretion rather than a rule of law and instances are numerous
where a writ of certiorari has been issued in spite of the fact that the aggrieved party had
other adequate legal remedies. ***”
6. At the end of the last century, this Court in paragraph 15 of the its decision reported in (1998)
8 SCC 1 (Whirlpool Corporation vs. Registrar of Trade Marks, Mumbai and Others) carved out
the exceptions on the existence whereof a Writ Court would be justified in entertaining a writ
petition despite the party approaching it not having availed the alternative remedy provided by
the statute. The same read as under:
(i) where the writ petition seeks enforcement of any of the fundamental rights;
(ii) where there is violation of principles of natural justice;
(iii) where the order or the proceedings are wholly without jurisdiction; or
(iv) where the vires of an Act is challenged.
7. Not too long ago, this Court in its decision reported in [2021] SCC OnLine SC 884
(Assistant Commissioner of State Tax vs. M/s. Commercial Steel Limited) has reiterated the
same principles in paragraph 11.
8. That apart, we may also usefully refer to the decisions of this Court reported in (1977) 2
SCC 724 (State of Uttar Pradesh & ors. vs. Indian Hume Pipe Co. Ltd.) and (2000) 10 SCC
482 (Union of India vs. State of Haryana). What appears on a plain reading of the former
decision is that whether a certain item falls within an entry in a sales tax statute, raises a pure
question of law and if investigation into facts is unnecessary, the high court could entertain a
writ petition in its discretion even though the alternative remedy was not availed of; and,
unless exercise of discretion is shown to be unreasonable or perverse, this Court would not
interfere. In the latter decision, this Court found the issue raised by the appellant to be
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pristinely legal requiring determination by the high court without putting the appellant through
the mill of statutory appeals in the hierarchy. What follows from the said decisions is that
where the controversy is a purely legal one and it does not involve disputed questions of fact
but only questions of law, then it should be decided by the high court instead of dismissing the
writ petition on the ground of an alternative remedy being available.
22. It is also relevant to refer another judgment of Hon’ble Apex court in the matter
of Assistant Commissioner of State Tax Vs. Commercial Steel Limited reported in
(2022) 16 SCC 447, para 10 of the judgment reads as under:-
10. The respondent had a statutory remedy under section 107. Instead of availing of the
remedy, the respondent instituted a petition under Article 226. The existence of an alternate
remedy is not an absolute bar to the maintainability of a writ petition under Article 226 of the
Constitution. But a writ petition can be entertained in exceptional circumstances where there
is:
(i) a breach of fundamental rights;
(ii) a violation of the principles of natural justice;
(iii) an excess of jurisdiction; or
(iv) a challenge to the vires of the statute or delegated legislation.
23. The Court has consistently not entertained the writ petition on the ground of
availability of alternative efficacious remedy, but in the facts and circumstances like
present one, the Court has consistently held that there is no absolute bar to entertain writ
petition even there any statutory remedy available with the petitioner. Therefore, in this
background the contention raised by respondent authority is not required to be accepted
and in view of the above mentioned discussion, the petition is required to be entertained
under Article 226 of Constitution of India as it is falling under the exception carved out
by the various judgments of Hon’ble Apex Court.
24. Considering these relevant Sections and considering the fact that when the
directors/shareholders of petitioner company are having same profit and sharing ratio as
that of the partnership firm, it cannot be said that there is transfer of any asset by
partnership to the petitioner company and considering the judgment of Anup Industries
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(supra) and other judgments of other High Courts, the case is with regard to the change
in ownership/title to the leasehold rights of the erstwhile partners of the partnership
firm to the private limited company. Whereas in the facts of the case, the stamp duty has
to be computed in relation to the amount of consideration as mentioned in the
instrument of conveyance. Even if for the sake of arguments, the contention raised on
behalf of respondents is accepted that the document will fall within the meaning of
conveyance but in absence of any consideration the computation provision for levy of
stamp duty would fail and therefore, considering the above mentioned settled position
of law and considering that there is no as such transfer of any asset which can be
considered under the conveyance or any other provision which can attract the payment
of stamp duty under the provisions of Stamp Act, therefore, in view of the fact that
authority concerned has failed to consider these aspects in proper perspective and
therefore, the prayers made in the present petition are required to be granted. It is
evident from record of this petition that there is statutory vesting of the property of
partnership firm in the company registered under the provisions of Companies Act and
the amended lease deed is executed by the petitioners, is only in view of conditions
indicated by the respondent no. 2 authority and can not be considered as new transfer of
assets. Therefore, considering the above totality of facts and circumstances and
considering the judgment of Hon’ble Apex Court in case of Commissioner of Income
Tax, Udaipur Vs. M/s Chetak Enterprises Pvt Ltd. reported in AIR 2020 SC 4305
(para 7), the prayers are required to be granted.
25. Therefore, the petition is required to be allowed in terms of para 7A by
setting aside the impugned order dated 5.3.2026 by respondent authority which is
passed under Section 33 of Indian Stamp Act, 1899 and respondent No. 3 is also
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directed to register the lease amendment in appropriate manner without insisting for any
stamp duty, as expeditiously as possible, but preferably within 15 days from receipt of
copy of this order.
26. The writ petition is allowed accordingly to the aforesaid extent. No order as
to costs.
(SANDEEP N. BHATT)
JUDGE
BDJ
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