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2003 DIGILAW 1791 (ALL)

ASHOK KUMAR KEDIA v. STATE

2003-08-08

T.GEORGE JOSEPH

body2003
T. GEORGE JOSEPH, C. C. R. A., J. Heard the learned Counsel for the revisionist and departmental representative. 2. The facts of the case are as follows: Radhey Shyam son of Brij Lal exeuted a lease deed in favour of Smt. Kalawati, his wife, Ashok Kumar, his son, and Smt. Vijaya Devi, wife of Ashok Kumar. This lease-deed was for a period of 32 years. However, this deed is not in question in the present proceedings. The relevant document under scrutiny in these proceedings is a Power of Attorney executed by Smt. Kalawati and Smt. Vijaya Devi in favour of Sri Ashok Kumar. This Power of Attorney authorises Ashok Kumar to obtain a loan from LIC, construct a building on the land and let out the building to any person on rent. He was also authorised to sell the land, if required. The relevant portion in the document says as follows: "we further agree and convenant that the so long as the advances made by the LIC of India or any other financial Bodies on the basis of the document executed by our Attorney in pursuance of this power have not been re-paid in full, the power shall be irrevocable. " 3. The learned Counsel for the revisionist has argued that irrevocability is conditional and therefore the document cannot be said to be irrevocable. In order to examine these questions, it is useful to look at the specific entry in the Schedule I-B of Stamp Act. The relevant entry is as follows: 48. When irrevocable authority is given to the Attorney to sell immoveable property. The same duty as a conveyance on the market value of the property forming subject of such authority. A reading of the entry makes it clear that it makes a distinction between revocable Power of Attorney and irrevocable Power of Attorney. There is no other attributies to the documents which makes any difference to the chargibility. If the Power of Attorney is revocable it will be treated as an ordinary Power of Attorney chargeable with Rs. 100 or less. But if it is irrevocable, it will be chargeable as a conveyance. Therefore this Court has an option to treat the document either as revocable or as irrevocable only. 4. The relevant paragraph of the Power of Attorney makes it clear that the document is irrevocable for a period. 100 or less. But if it is irrevocable, it will be chargeable as a conveyance. Therefore this Court has an option to treat the document either as revocable or as irrevocable only. 4. The relevant paragraph of the Power of Attorney makes it clear that the document is irrevocable for a period. It may be 10 years or may be even a month, but there is no doubt that the document is irrevocable for some period of time. 5. If the Court is under compulsion to categorise the document either as irrevocable or as revocable and the document clearly declares itself as irrevocable for a specific period, this Court finds it impossible and illogical to term the document as revocable. Therefore the document has to be put in the category of irrevocable document. 6. In the impugned order the Power Court has calculated the chargebility on certain other additional grounds of one of which one is the value of the building calculated on the basis of 300 times of the monthly rent. The learned Counsel for the revisionist has argued that at the time of the execution of the Power of Attorney the new building was not in existence. There was a disfunctional petrolpump and some rooms attached to it. However, the Power of Attorney in question itself speaks of the executants desire for constructing a building for Padrauna branch of L. I. C. of India. The revisionist has also produced a copy of letter from the branch of Divisional Office, Gorakhpur dated 1-5-92 which has accepted the proposal for the construction of a buildings. Therefore it is not proper to calculate the value of the present building for the purpose of evaluating the property involved in the document in question. Justice demands that the department makes a fresh enquiry and finds out the value of the property that existed on the land in question on the date of the execution of the document. 7. Another question that has arisen is the value of the whole of the property calculated for the assessment of the document. As mentioned earlier, Ashok Kumar himself is a co-lessee of the property alongwith two others, who have executed the deed in his favour. Therefore, it will be judicious to presume that his share of the property will be 1/3rd of the total. As mentioned earlier, Ashok Kumar himself is a co-lessee of the property alongwith two others, who have executed the deed in his favour. Therefore, it will be judicious to presume that his share of the property will be 1/3rd of the total. The document in question confers authority only for 2/3rd of the property because he is already lessee of 1/3rd of the property does not require any Power of Attorney for his own share. 8. The lower Court has made an error in calculating the total value of the property for the sake of assessment of the stamp duty. It should, however, to only 2/3rd of the total value of the property. 9. There is one more question about the penalty imposed on the revisionist. In a normal case penalty imposed by the authority cannot be said to execessive. But after looking to the circumstances of the case and the fact that the arrangement was made between mother and wife on one side and the son on the other side, there was no probability that it was intended to be a permanent arrangement. The circumstances of the case persuade me to believe that it was an arrangement to facilitate the preparation of papers of formalities for obtaining the loan etc. I do not find any wilful effort to defeat the provisions of the Stamp Act. Therefore, I think it proper to waive off the penalty imposed by the lower Court. As the amendment for charging interest was legislated later, there is no question of imposing any interest on the stamp duty chargeable on the date of the execution of the document. 10. Finally the following decisions are made in respect to the document: (i) The Power of Attorney will be treated as irrevocable. It will be charged as a conveyance. (ii) The value of the property for assesment of stamp duty will not include the value of the present building. The lower Court will make fresh enquiries to find out the value of the property that existed on the date of the execution of the document and make a fresh order on the basis of the value of the property on that date. (iii) Only 2/3rds of the total value of the property will be included for the assessment of the stamp duty chargeable on the Power of Attorney. (iii) Only 2/3rds of the total value of the property will be included for the assessment of the stamp duty chargeable on the Power of Attorney. (iv) Penalty and the interest on the stamp duty will not be charged. 11. The revisionist has prayed that the amount already paid may be adjusted againstthe re-calculated amount of stamp duty. This prayer is granted. The case is remanded accordingly for fresh assessment of the document in question. Case remanded .