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Allahabad High Court · body

2017 DIGILAW 1264 (ALL)

Ram Lakhan v. Commissioner, Kanpur Division

2017-05-11

SUNITA AGARWAL

body2017
JUDGMENT : SUNITA AGARWAL, J. 1. By means of the present writ petition, the petitioners are challenging the decision of the stamp authorities in impounding the document namely the agreement for sale and imposition of stamp duty treating it as a conveyance under Article 23 of Schedule 1-B of Indian Stamp Act, as applicable in the State of U.P. 2. The contention of the petitioner is that the document in question is an agreement for sale which contemplates completion of transaction in favour of the petitioner only after execution of another instrument i.e. sale-deed. The contention is that there is no averment in the agreement regarding delivery of possession either prior to the execution of the agreement for sale or at the time of its execution. There is no assertion in the agreement regarding delivery of possession without execution of the sale-deed. The respondent authorities have erred in treating the said document as Conveyance within the meaning of Article 23 of Schedule 1-B of the Indian Stamp Act. 3. Learned Standing counsel on the other hand submits that as the report of Tehsil has been obtained to verify the factum of possession and it was found that the petitioner was given actual physical possession of the land, subject matter of the agreement, the order of impounding the document and imposition of stamp duty by determining the market value passed by the Collector, Stamps cannot be faulted with. 4. The question before this Court, therefore, arises as to whether the instrument in question can be considered as sale-deed or conveyance of sale and would fall under Article 23 of Schedule 1-B of the Act. 5. To decide this question, it would be relevant to go through the relevant provisions. 6. Articles 5 and 23 as contained in scheduled 1-B of the Indian Stamp Act, 1899 are quoted as under:- Article 5 - Agreement or memorandum of an agreement:- "(b-1) if relating to the sale of an immovable property where possession is not admitted to have been delivered nor is agreed to be delivered without executing the conveyance: The same duty as on conveyance (No. 23 clause (a) on one half of the amount of consideration as set forth in the agreement. Provided that when conveyance in pursuant of such agreement is executed, the duty paid under this clause in excess of the duty payable under clause (c) shall be adjusted towards the total payable on the conveyance. 23. Conveyance as defined by Section 2(10) not being a Transfer charged or exempted under no. 62:- (a) If relating to immovable property where the amount or value of the consideration of such conveyance as set forth therein or the market value of the immovable property which is the subject of such conveyance, whichever is greater does not exceed Rs. 500. Sixty rupees Where it exceeds Rs. 500 but does not exceed Rs. 1,000. One hundred and twenty-five rupees For every Rs. 1,000 or part thereof in excess of Rs. 1,000 One hundred and twenty-five rupees Provided that the duty payable shall be rounded off to the next multiple of ten rupees. (b) If relating to movable property where the amount or value of the consideration of such conveyance as set forth therein does not exceed Rs. 1,000. Twenty rupees. Exemption Assignment of copyright in musical works by resident of, or first published in India. Explanation For the purposes of this Article, in the case of an agreement to sell an immovable property, where possession is delivered before the execution or at the time of execution, or is agreed to be delivered without executing the conveyance, the agreement shall be deemed to be a conveyance and stamp duty thereon shall be payable accordingly: Provided that provisions of Section 47-A shall mutatis mutandis apply to such agreement: Provided further that when conveyance in pursuant of such agreement is executed, the stamp duty paid on the agreement shall be adjusted towards the total duty payable on the conveyance." Section 2(10) of the Indian Stamp Act is also relevant and is quoted as under:- “Conveyance - "Conveyance" includes a conveyance on sale and every instrument by which property, whether movable or immovable, is transferred inter vivos and which is not otherwise specifically provided for [by Schedule I, Schedule I-A or Schedule I-B] [as the case may be]. Explanation - An instrument whereby a co-owner of a property having defined share therein, transfers such share or part thereof to another co-owner of the property, is for the purposes of this clause an instrument by which property is transferred.” 7. Explanation - An instrument whereby a co-owner of a property having defined share therein, transfers such share or part thereof to another co-owner of the property, is for the purposes of this clause an instrument by which property is transferred.” 7. A careful perusal thereof indicates that an agreement relating to sale of immovable property where possession is not admitted to have been delivered nor is aggrieved to be delivered without execution of the Conveyance would be an agreement which would fall under Article 5 of Schedule 1-B of the Act. The stamp duty payable thereon would be on the amount of consideration set forth in the instrument. 8. However, as per the explanation attached to Article 23 of Schedule 1-B of the Stamp Act, three conditions are required to be fulfilled before treating the document as conveyance under the said provision. These conditions are:- (i) The possession has been delivered prior to the execution of the agreement. (ii) The possession is delivered at the time of execution. (iii) Is agreed to be delivered without execution of the conveyance. 9. The factum of delivery of possession either prior to the execution of the agreement or at the time or thereafter has to be recorded in the instrument itself. It is settled principle of law that the stamp duty is payable on the instrument itself and not on any other transaction. Reference be made to Nand Kumar Agarwal and Others vs. State of U.P. and Others 2009 (3) AWC 3118 (All). 10. To ascertain the nature of transaction, a plain reading of the instrument is required. Any other fact apart from the averments contained in the document would not be relevant for the purpose of determination of nature of the instrument. The nomenclature or the title of the instrument would also not be relevant. The plain and simple reading of the instrument is required before proceeding to impound the same and determining the market value. 11. Two acknowledged principles as noted in Nand Kumar (supra) are as follows:- “14. It is an acknowledged legal position that there are two guiding principles for applicability of the Stamp Act in respect of a particular document. They are: (1) The Court is not bound by the apparent tenor of an instrument, it shall decide according to the real nature or substance of the document. It is an acknowledged legal position that there are two guiding principles for applicability of the Stamp Act in respect of a particular document. They are: (1) The Court is not bound by the apparent tenor of an instrument, it shall decide according to the real nature or substance of the document. (2) The duty is on the instrument and not on the transaction.” 12. In the instant case, the agreement dated 4.4.2001 has been impounded by the Sub- Registrar and referred to the Collector under Section 47-A of the Stamp Act, as applicable in the State of U.P. The Collector without looking to the document at all proceeded to determine the deficit stamp duty. The order dated 24.10.2002 passed by the Collector indicates that the order of imposition of stamp duty was passed in absence of the petitioner. The appellate authority, however, has rejected the objection of the petitioner regarding the nature of the instrument and proceeded to affirm the order of imposition of the stamp duty merely on the ground that physical possession of the land, subject matter of agreement, had been delivered to the petitioner. This finding has been recorded in appeal on the basis of report submitted by the Tehsildar. 13. A careful perusal of the agreement, the instrument impounded by the Collector shows that it was stated therein that it had been agreed between the parties that the house in question would be sold by execution of a sale-deed after receiving the balance sale consideration. The sale consideration of Rs. 19,000/- has been received by the seller in advance. It is also stated therein that the possession of the house in question would be delivered at the time of execution of the sale-deed. 14. This fact recorded in the instrument in question itself is sufficient to hold that the said agreement would fall under Article 5(b-1) of Schedule 1-B of the Act and cannot be said to be a conveyance within the meaning of explanation attached to Article 23 of Schedule 1-B of the Act. 15. Reference may also be made to the judgment of this Court in the case of Raj Kumar vs. Commissioner, Jhansi Division and Others, 2012 (4) ADJ 400 . 16. In view thereof, the orders impugned cannot be sustained. 15. Reference may also be made to the judgment of this Court in the case of Raj Kumar vs. Commissioner, Jhansi Division and Others, 2012 (4) ADJ 400 . 16. In view thereof, the orders impugned cannot be sustained. Both the orders dated 24.10.2002 passed by Additional District Magistrate (Finance and Revenue), Kannauj and 14.2.2005 passed by Commissioner, Kanpur Division, Kanpur are hereby quashed. 17. It is reflected from the record that an amount of Rs. 28,895/- had been deposited by the petitioner in order to maintain his appeal before the Chief Controlling Revenue Authority. The Chief Controlling Revenue Authority namely the Commissioner, Kanpur Division, Kanpur is, therefore, directed to refund the money deposited by the petitioner with interest accrued thereon within a period of one month from the date of production of certified copy of this order. In case of default in making the payment, an additional interest @ 10% would be payable from the date of deposit till the date of payment. 18. Subject to the above observations and directions, the writ petition is allowed.