IBC Liquidation Sale Certificates Not Liable to Stamp Duty Unless Used Otherwise: Bombay HC

The Hon’ble Bombay High Court, in Rajaram Food Products India Ltd. v. Joint District Registrar (Class-I) & Collector of Stamps, Nashik & Ors. (Writ Petition No. 3018 of 2026), decided on July 14, 2026, held that a sale certificate issued by a liquidator pursuant to a public auction conducted under the Insolvency and Bankruptcy Code, 2016 (“IBC”) is not compulsorily registrable and does not attract stamp duty when it is merely forwarded for entry in Book No. 1 under Section 89(4) of the Registration Act, 1908. The Hon’ble High Court further held that the Maharashtra amendment requiring registration of sale certificates issued under a “recovery Act” does not apply to sales conducted under the IBC, as the IBC is not a debt recovery legislation.

The dispute arose after Rajaram Food Products India Ltd. purchased an immovable property in an e-auction conducted by the liquidator of a corporate debtor undergoing liquidation under the IBC. Upon issuance of the sale certificate, the liquidator forwarded a copy to the registering authorities under Section 89(4) of the Registration Act, 1908 for filing in Book No. 1. However, the Collector of Stamps directed the petitioner to pay stamp duty on the sale certificate under Article 16 of Schedule I to the Maharashtra Stamp Act, 1958. Aggrieved by the said direction, the petitioner approached the Hon’ble High Court.

The petitioner contended that the sale certificate was exempt from compulsory registration under Section 17(2)(xii) of the Registration Act, 1908 and that the Supreme Court had consistently held that such certificates merely require filing in Book No. 1 without attracting stamp duty. The State, on the other hand, argued that the Maharashtra amendment to Section 17(1)(g) of the Registration Act, 1908 and the provisions of the Maharashtra Stamp Act, 1958 rendered the sale certificate liable to stamp duty.

The Hon’ble High Court observed that the Hon’ble Supreme Court in State of Punjab v. Ferrous Alloy Forgings Pvt. Ltd. had conclusively held that a sale certificate issued pursuant to a public auction does not require compulsory registration and does not attract stamp duty so long as it is merely forwarded for filing under Section 89(4) of the Registration Act, 1908. The Hon’ble High Court further held that the Maharashtra amendment relating to sale certificates issued under a “recovery Act” was inapplicable, as the IBC is a legislation intended for insolvency resolution and revival of distressed companies, and not for recovery of debts. The Hon’ble High Court further observed that the impugned order had rested solely upon Article 16 of Schedule I to the Maharashtra Stamp Act, 1958 and had made no reference whatsoever to the Maharashtra amendment, and that an order can be defended only on the reasons contained in it and not on grounds subsequently advanced in an affidavit. It also noted that the exemption under Section 17(2)(xii) squarely applied to sale certificates issued upon public auctions conducted by a liquidator under the IBC pursuant to orders of the National Company Law Tribunal (NCLT). Accordingly, the High Court held that stamp duty would become payable only if the auction purchaser subsequently sought to use the sale certificate for some other purpose.

Accordingly, the Hon’ble High Court set aside the order directing payment of stamp duty, directed the registering authorities to accept the sale certificate and file it in Book No. 1 without insisting on stamp duty or registration fees, and declared that the sale certificate would remain exempt from stamp duty unless subsequently used for some other purpose.