LexM/S GODWIN CONSTRUCTION PVT. LTD. versus COMMISSIONER, MEERUT DIVISION & ANR.
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[2025] 10 S.C.R. 368 : 2025 INSC 1207 M/s Godwin Construction Pvt. Ltd. v. Commissioner, Meerut Division & Anr. (Civil Appeal No. 7661 of 2014) 08 October 2025 [Ahsanuddin Amanullah and Prashant Kumar Mishra,* JJ.] Issue for Consideration Whether the stamp duty on the instrument “Security Bond cum Mortgage Deed”, is chargeable under Article 40 or Article 57 of Schedule 1-B of the Indian Stamp Act 1899. Headnotes† Indian Stamp Act 1899 – Article 40 or Article 57 of Schedule 1-B – Stamp duty on the instrument “Security Bond cum Mortgage Deed”, if chargeable u/Article 40 or Article 57 of Schedule 1-B: Held: 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 – Court is duty-bound to ascertain the true legal character of the instrument – In the instant case, the appellant executed a “Security Bond cum Mortgage Deed” in favour of the Meerut Development Authority – The instrument executed by the appellant fulfils the essential characteristics of a mortgage deed – In substance and effect, the deed confers a right over specified properties in favour of the Meerut Development Authority to secure performance of an obligation, while preserving the appellant’s interest until full discharge of obligation – The nomenclature “Security Bond cum Mortgage Deed” is, therefore, inconsequential, as it is the substance and operative provisions of the instrument which govern its character for the purposes of stamp duty – Further, it is apparent from the recitals of the instrument titled “Security Bond cum Mortgage Deed” executed by the appellant that only two parties are involved viz. the Meerut Development Authority and the appellant – The deed was not executed by a * Author [2025] 10 S.C.R. 369 M/s Godwin Construction Pvt. Ltd. v. Commissioner, Meerut Division & Anr. surety but by the principal debtor/appellant, the company, through its director – The company itself mortgaged the properties and not the director in his individual capacity – A company, though a juristic person, is not a sentient being, consequently, it must act through its directors – Thus, the properties were not mortgaged by a third party, but by the principal debtor itself, which does not attract Article 57 – In the absence of any surety, to attract Article 57 of the Indian Stamp Act, the deed executed by the appellant cannot be termed as a security bond – It, however, fulfils all the requirements of a mortgage deed, falling under the ambit of Article 40 of Schedule 1-B of the Indian Stamp Act – Impugned judgments not interfered with. [Paras 14, 17, 24-26] Indian Stamp Act 1899 – Article 57 of Schedule 1-B – Operation of, explained – Contract Act, 1872 – s.126 – “Contract of guarantee”, “surety”, “principal debtor” and “creditor”. [Paras 20-23] List of Acts Indian Stamp Act, 1899; Indian Contract Act, 1872. List of Keywords Article 40 or Article 57 of Schedule 1-B of the Indian Stamp Act 1899; “Security Bond cum Mortgage Deed”; Security Bond or Mortgage Deed; Nature and substance of the deed; Chargeability of the instrument under the Indian Stamp Act, 1899; Stamp duty; Nomenclature; Not nomenclature assigned to the instrument; Substance of rights and obligations; Mortgage deed; Deed not executed by a surety but by the principal debtor; Section 126, Contract Act, 1872; “Contract of guarantee”; “Surety”; “Principal debtor”; “Creditor”. Case Arising From CIVIL APPELLATE JURISDICTION: Civil Appeal No. 7661 of 2014 From the Judgment and Order dated 22.01.2013 of the High Court of Judicature at Allahabad in WP No. 31966 of 2012 With Civil Appeal No. 12552 of 2025 370 [2025] 10 S.C.R. Supreme Court Reports Appearances for Parties Advs. for the Appellant: Jitendra Mohan Sharma, Ms. Kavita Jha, Sr. Advs., Akshat Sharma, Amrit Pradhan, Sandeep Singh, Pahlad Singh Sharma, Vaibhav Kulkarni, Aniket Deepak Agrawal, Aditeya Bali. Advs. for the Respondents: Shaurya Sahay, Aditya Kumar, Ruchil Raj, Bhakti Vardhan Singh. Judgment / Order of the Supreme Court Judgment Prashant Kumar Mishra, J. 1. Leave granted in SLP (Civil) No.36434 of 2014. FACTUAL MATRIX IN CIVIL APPEAL NO. 7661 OF 2014 2. Civil Appeal No.7661 of 2014 calls in question the impugned order dated 22.01.2013 passed by the High Court of Judicature at Allahabad in Writ Petition No. 31966/2012, whereby the High Court dismissed the writ petition filed by the appell
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