Stamp Duty On Security Documents In Favour Of Security Trustee: A Pandora's Box

The recent judgement of the Supreme Court on stamp duty on security documents executed in favour of the Security Trustee may have a more far-reaching impact on lending than one would expect

A division bench of the Supreme Court has recently, in its decision in Chief Controlling Revenue Authority vs. Coastal Gujarat Power Ltd. & others held that a mortgage deed executed between borrower and a security trustee, who acts for the benefit of the lending banks in a consortium lending, would not be treated as a single document but as a document encompassing 'distinct matters' or 'distinct transactions' and would be liable for stamp duty as if distinct mortgages were recorded in favour of each lending bank.