ANNA RAO v. BANDEPPA — 1970 DIGILAW 50 (KAR)

CHANDRASHEKHAR, J. ( 1 ) THIS is a petition for revising the order of the Munsiff at Chincholi, dated 5-10-1967, holding that a document sought to be produced in evidence by the plaintiff, was a deed of sale and not an agreement for sale, that the said document was insufficiently stamped and that it would be admitted in evidence only on payment of the deficient stamp duty and penalty. Feeling aggrieved by that order, the plaintiff has come up in revision. ( 2 ) MR. Murlidhar Rao, learned counsel for the petitioner-plaintiff, has produced before me a copy of this document. From a reading of it, it appears to me that it purports to transfer an interest in immovable property. Hence the document comes within the definition of 'conveyance' in S. 2 (d) of the Mysore Stamp Act, 1957. ( 3 ) BUT Mr. Murlidhar Rao contended thai under this deed there can be no legal transfer of the title in immovable property for two reasons. The first is that this document is not registered under S. 54 of the Transfer of property Act, and that a transfer of an immovable property of the value of one hundred rupees and upwards can be made only by a registered instrument. The second is that under S. 47 of the Hyderabad Tenancy and Agricultural Lands Act, 1950, no permanent alienation or transfer of an agricultural land shall be valid unless it has been made with the previous sanction of the Collector. It was further contended by Mr. Murlidhar rao that unless an instrument legally effects a transfer of a property, that instrument is not chargeable to stamp duty as deed of conveyance. in support of his contention, Mr, Murlidhar Rao rejued on the decision of this Court in Malkajappa v. Ayyamma, (1964)1 Mysl. J. 299. There, a deed purporting to be a deed of mortgage, was neither attested nor registered. The question that arose for determination was whether that deed was chargeable to stamp duty as a deed of mortgage. Following the decision of a Full bench of Madras High Court in Crompton Engineering Co. (Madras)Ltd. , v. Chief Controlling Rev. Authority Madras, AIR 1953 Mad. 764, Narayana Pai, J. , held that the document was not chargeable to stamp duty as a deed of mortgage because the same had not been registered. Following the decision of a Full bench of Madras High Court in Crompton Engineering Co. (Madras)Ltd. , v. Chief Controlling Rev. Authority Madras, AIR 1953 Mad. 764, Narayana Pai, J. , held that the document was not chargeable to stamp duty as a deed of mortgage because the same had not been registered. ( 4 ) THE decision of this Court relied on by Mr. Muriidhar Rao undoubtedly supports his contention. But Mr. K. Jagannatha Shetty, learned Counsel for the respondent-defendant, urged that the decision of this Court in malkajappa v. Ayyamma (1) requires reconsideration, in view of the decision of a Full Bench of five Judges of Andhra Pradesh High Court in hazrami Gangaram v. Kamlabai, A. I. R 1968 A. P. 213. The aforesaid decision of the Full bench of Madras High Couit followed by Narayana Pai, J. , was considered and dissented by the Full Bench of Andhra Pradesh High Court. Jaganmohan Reddy, C. J. , who spoke for the latter Full Bench, observed that an instrument need not be valid in law or meet the requirements of law as a valid document before it is chargeable to stamp duty under the stamp Act, and that the provisions of that Act do not require that the document must be validly executed under the provisions of the Transfer of Property Act or under the Registration Act, or for that matter, under any other provisions of law, before it is chargeable to stamp duty. With respect, it appears to me there is much to be said in favour of the reasoning of the Full Bench of the High Court of Andhra Pradesh, namely, that under the Stamp Act the liability to stamp the instrument would be at the time of signing it and that once the instrument is signed and executed, no other formality required to give legal validity to the instrument under the general law, such as delivery or attestation by witnesses, is necessary to make the Instrument liable to stamp duty under the Stamp Act. ( 5 ) WITH all respect to His Lordship, I think the decision of Narayana Pai, j. , in Maikajappa v. Ayyamma (1) requires reconsideration. Hence under the proviso to S. 8 (2) of the Mysore High Court Act, 1961, I refer this case to a Division Bench. ( 5 ) WITH all respect to His Lordship, I think the decision of Narayana Pai, j. , in Maikajappa v. Ayyamma (1) requires reconsideration. Hence under the proviso to S. 8 (2) of the Mysore High Court Act, 1961, I refer this case to a Division Bench. ( 6 ) THE petitioner before us is the plaintiff in O. S. No. 39/1 of 1967 on the file of the Court of the Munsiff at Chincholi. That was a suit brought for specific performance of an alleged agreement of sale of land. With the plaint, the plaintiff produced a document dated 23rd January 1863 which was unregistered. The Office took the objection that the document is a deed of conveyance on which stamp duty ought to have been paid under item 20 of the Schedule of the Mysore Stamp Act, 1957. The learned Munsiff, after hearing the pleaders for the parties, came to the conclusion that the document in question is a deed ot sale of land liable to stamp duty under item 20 of the Schedule of the Act. He overruled the contention of the plaintiff's pleader that it is only an agreement of sale. Accordingly, he directed that duty and penalty should be levied on the document. Aggrieved by the said order, the plaintiff has preferred the above revision petition. ( 7 ) WHEN the matter came up before Chandrashekhar, J. , he referred the case to a Division Bench in view of the fact that a Full Bench of the Andhra Pradesh High Court had differed from the decision of the Full bench of the Madras High Court which decision had been followed by narayana Pai, J. , in Maikajappa v. Ayyamma (1 ). ( 8 ) THE submission of Sri Murlidhar Rao, the learned counsel for the petitioner before us was that the instrument does not amount to a conveyance by way of sale because it is unregistered and also because it contravened s. 47 of the Hyderabad Tenancy and Agricultural Lands Act, 1950 and that it would attract stamp duty as an instrument under item 20 of the Schedule of the Act only if the instrument could convey title to the land. ( 9 ) ACCORDING to the schedule of the Act, as seen from S. 54 and 57, important questions relating to the interpretation of its provisions are required to be decided by not less than three Judges of the High Court. The question raised in this revision petition is of considerable importance. Therefore, in exercise of our powers under S. 7 of the Mysore High Court act, 1961, we refer the following question to a Full Bench. "whether the instrument in question is not liable for stamp duty under item 20 of the Schedule of the Mysore Stamp Act, 1957?" ( 10 ) THE question referred to the Full Bench for opinion is:"whether the instrument in question is not liable for stamp duty under item 20 of the schedule of the Mysore Stamp Act, 1957?"the English translation of the document which is in Kannada reads thus: date: 23-1-1963. Sale deed executed in favour of Siddappa S/o. Erappa Tiralapur, resident of Karakmukul village, Chincholi Taluk, District Gulbarga, by bandappa s/o. Sangappa Para, resident of Karakmukul village, Chincholi taluk is as follows: the land 'anehola' bearing survey No. 157-A, measuring 14 acres and 29 guntas, assessed at 5-57, stands entered in the patta in my name and I have sold the same for a sum of Rs. 3000 (Three thousand) of India currency. At present, a sum of Rs. 2700 (Rules two thousand and seven hundred) in cash has been received. I have delivered the said survey number to your possession. I have agreed to receive the remaining amount on the ensuing Ugadi day. For getting the patta made in respect of the said survey number which is sold, I will come to any office where I am called and give my consent. Hereafter, my family members and I shall have no right over the said survey number. I have executed this sale deed out of my own free will and with full consciousness, and the contents thereof are correct. Sd/- Bandappa Para. Witnesses: sd/ -. Gundappa Pyati. Sd/ -. Rachappa Bhandar. "thumb mark of Revappa Rayappa. Attestation of Rachappa. Handwriting of Shiva Rao Patil Elmandi. I have executed this sale deed out of my own free will and with full consciousness, and the contents thereof are correct. Sd/- Bandappa Para. Witnesses: sd/ -. Gundappa Pyati. Sd/ -. Rachappa Bhandar. "thumb mark of Revappa Rayappa. Attestation of Rachappa. Handwriting of Shiva Rao Patil Elmandi. " ( 11 ) THE contention of Sri Muralidhar Rao, the learned counsel for the petitioner is that the document is not a 'conveyance' within the meaning of the definition of the term found in S. 2 (1) (d) of the Mysore Stamp Act, 1957 (hereinafter called the 'act' ). The learned counsel argued that a transfer by way of sale of immovable property of a value of more than rs. 100 can be effected only by a registered instrument as provided by s. 54 of the Transfer of Property Act, 1882 and that where a document purporting to transfer immoveable property of a value of more than rs. 100 is not registered, it does not in law convey any valid title; that since S. 47 of the Hyderabad Tenancy and Agricuulural Lands Act, 1950 provides that no transfer of agricultural land shall be valid unless it has been made with the previous sanction of the Collector any transfer of agricultural land made without the previous sanction of the Collector is invalid in law; that in the instant case the previous sanction of the collector not having been obtained for the transfer of the agricultural land, the sale is invalid. Therefore, both on the ground that the document is not registered and that the previous sanction of the collector for the transfer of the land has not been obtained, the sale deed is invalid and does not operate to convey any title. Since the document in question does not effect a valid transfer, it does not amount to a 'conveyance'. ( 12 ) IN support of his contention. Sri Muralidhar Rao relied on the decision in Crompton Engineering Go. (Madras) Ltd. v. Chief Controlling revenue Authority, Madras, A. I. R. 1953 Mad. 764. In the said case, the document in question purported to be a mortgage deed but was neither attested nor registered. The contention was that there could be no transfer of rights over or in respect of 'specified" property unless the requirements of S. 59 of the Transfer of Property Act were satisfied. 764. In the said case, the document in question purported to be a mortgage deed but was neither attested nor registered. The contention was that there could be no transfer of rights over or in respect of 'specified" property unless the requirements of S. 59 of the Transfer of Property Act were satisfied. S. 59 of the Transfer of Property act provides that mortgage other than a mortgage by deposit of title deeds where the principal money secured ia Rs. 100 or upwards can be effeced only by a registered instrument signed by the mortgagor and attested by at least two witnesses. It was held that the transfer contemplated by S. 2 (17) of the Stamp Act, 1899 is transfer valid in law; that such a transfer would not have been effected under the document in question which was neither attested nor registered. Since the document was neither attested nor registered, it was held that it does not amount to a deed of mortgage. The decision in Crompton Engg. Co. 's case (1) was followed by this Court in Malkajappa v. Awamma, (1964) 1 Mys. LJ. 299. That is a decision by a learned single Judge. A Full Bench of five Judges of the Andhra Pradesh High court in Hazrani Gangaram v. Kamalabcu, A. I. R. 1968 A. P. 213 has dissented from Crompton engineering Co. 's case (1 ). After referring to the relevant provisions of the Stamp Act, 1899 Jaganmohan Reddy, CJ. , who delivered the judgment of the Full Bench stated:"there is no warrant for the importation of the requirements of either of the Transfer of Property Act or the Registration Act to construe documents or instruments under the Stamp Act as the latter act itself specifically defines the terms used therein. . . . . . . . It is clear that the document must be stamped without reference to any other formality or requirement of law to make the instrument valid at or before the execution of the document. . . . . . . . It is clear that the document must be stamped without reference to any other formality or requirement of law to make the instrument valid at or before the execution of the document. " ( 13 ) THE learned Chief Justice concluded as follows at page 218:"in our opinion, there is not the slightest indication in any of the provisions of the Stamp Act to lend support to the contention that a document must be validly executed either under the provisions of the Transfer of Property Act or under the Registration Act or for that matter, under any other provisions of law, before it is chargeable to stamp duty. In the view we have taken, we must, with great respect, dissent from the views of the eminent Judges of the Full Bench of the Maddras high Court in Crompton Engineering Co. 's case, before whom the several aspects to which we have referred, were not argued nor were they otherwise considered-and hold that for the purpose of the stamp Act, the crucial time for determining whether an instruments chargeable with duty is duly stamped or not, is before or at the time of execution, and that apart from its execution, no other formalities under any other law need be satisfied " ( 14 ) IN Chief Controlling Revenue Authority v Canara Industrial and Banking syndicate Ltd. , A. I. R. 1969 Mad. 1 FB, a later Full Bench of the Madras High Court has stated that the dicta in ATR 1953 Mad 764 (F. B ) will have to be interpreted as of restricted scope and with reference to the facts of that case anantanarayanan, CJ. 1 FB, a later Full Bench of the Madras High Court has stated that the dicta in ATR 1953 Mad 764 (F. B ) will have to be interpreted as of restricted scope and with reference to the facts of that case anantanarayanan, CJ. , after referring to the relevant provisions of the stamp Act, 1899 stated that the liability of an instrument to stamp duty arises on execution, that once a document is complete in execution, the question of its subsequent registration is a distinct matter altogether and the document is certainly liable to stamp duty with reference to the relevant article of the Stamp Act since execution is complete The question referred for the opinion of the Full Bench was whether the instrument in question was not liable to be stamped under Art 23 of Schedule I of the Stamp Act even though it was not registered and whether instruments in general are to be stamped on execution notwithstanding that other conditions which validate the transfer of rights which the instruments purport to make are not present The Full Bench answered the reference to the form that the document was liable for stamp duty under Art. 23 of schedule I of the Stamp Act and that the dicta in Crompton Engineering co. 's case (1) will have to be interpreted as of restricted scope and with reference to the facts of that case as pointed out earlier. ( 15 ) THE provisions of the Act are in pari materia with the provisions of the stamp Act of 1889. S. 3 is the charging section which makes the instruments mentioned in the schedule to the Act executed in the territories in the State of Mysore on or after the commencement of the Act chargeable with duty of the amount indicated in the schedule. S. 17 of the Act provides that all instruments chargeable with duty and executed by any person in the State of Mysore shall be stamped before or at the time of the execution. ( 16 ) SECTION 34 provides that no instrument chargeable with duty shall be registered unless such instrument is duly stamped. S. 17 of the Act provides that all instruments chargeable with duty and executed by any person in the State of Mysore shall be stamped before or at the time of the execution. ( 16 ) SECTION 34 provides that no instrument chargeable with duty shall be registered unless such instrument is duly stamped. If the contention of the learned Counsel for the petitioner, that where a document which requires registration under the law has not been registered, it is not liable to stamp duty, is accepted as valid, then the registration officer before whom an unstamped document or insufficiently stamped document is presented for registration cannot refuse to register the document! on the ground that it is not duly stamped nor can such an officer impound the document under S. 33. The registration officer before whom any document is presented for registration has the statutory duty to consider whether the instrument is duly stamped In accordance with the provisions of the Act in force at the time of its execution. Under the Registration Act, a document can be presented for registration before the appropriate officer within four months from the date of its execution. If the argument of the learned Counsel for the petitioner is accepted as valid, if there is any alteration in the rate of duty between the date of execution of a document and its registration, the rate of duty that will govern is the one In force at the time of the registration of the document. The provisions of the Act do not lend any support for such an argument. We are dearly of the opinion that stamp duty under the Act is chargeable on instruments on execution and the instruments should be stamped before or at the time of execution. The failure to register the instrument after execution is an irrelevant matter for the purpose of determining the question whether the document is chargeable to duty under the Act. Similarly, failure to obtain the previous sanction of the Collector for the transfer which invalidates the transfer has no bearing on the question of the liability of the document to stamp duty under the Act. ( 17 ) IN the instant case the document has been drawn up as a sale deed of immoveable property. It has been signed by the executant and attested by more than two witnesses. ( 17 ) IN the instant case the document has been drawn up as a sale deed of immoveable property. It has been signed by the executant and attested by more than two witnesses. The execution of the document being complete, it is chargeable to stamp duty as a 'conveyance' under item 20 of the Schedule of the Act nowithstanding that other conditions which validate the transfer of rights which the instrument purports to make are not present. ( 18 ) WE accordingly answer the question referred that the document is liable to stamp duty under item 20 of the Schedule of the Mysore Stamp act, 1957.