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2017 DIGILAW 561 (KER)

Harris v. Sub Registrar

2017-03-22

DEVAN RAMACHANDRAN

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JUDGMENT : Devan Ramachandran, J. 1. The petitioners are impugning Exhibits P4 to P6, under which they were asked to pay an amount of Rs. 81,000/-, being the stamp duty at the rate of 13.5%, towards cancellation of a lease deed, which was entered into by them with the lessee. In fact the pleadings of this case would reveal that the lease was originally entered into by a certain M/s. Skymart Sales and Services Ltd. in favour of a certain Sri. Himamudeen and that pending such lease agreement the petitioners purchased the property in question. The petitioners, therefore, stepped into the shoes of the original lessor and when the lease deed was surrendered, they presented it before the Registrar, who, however, impounded the document saying that it was insufficiently stamped and issued the order impugned in this Writ Petition directing the, petitioners to pay an amount of Rs. 81,000/- as alleged stamp duty. The petitioners challenge these orders as being illegal, unlawful and contrary to the provisions of the Kerala Stamp Act. 2. I have heard Sri. N.M. Madhu, the learned counsel for the petitioners and the learned Government Pleader for the respondents. 3. The provisions of the Kerala Stamp Act, 1959 ('the Act' for brevity) relating to such transactions have two branchlets. One is the general provision with respect to the release, which is covered by Article 48 of the Act. The other is a specific provision relating to surrender of lease, which is Article 54 of the Act. Under Article 54 of the Act, in the case of a surrender of lease when the duty with which the lease is chargeable does not exceed Rs. 100/-, the stamp duty is the same with which such lease is chargeable and in any other case it is Rs. 100/-. In the case at hand, the lease agreement was entered into by M/s. Skymark Sales and Services Ltd. initially and when the property was purchased by the petitioner he stepped into the shoes of such lessor. When the lease was surrendered, obviously he was obligated to return the amount of security deposit shown in the lease deed to the lessee. This was seen by the authorities to be a release under Article 48(b) and that duty was charged ad valorem on the security deposit of Rs. 6 lakhs. 4. When the lease was surrendered, obviously he was obligated to return the amount of security deposit shown in the lease deed to the lessee. This was seen by the authorities to be a release under Article 48(b) and that duty was charged ad valorem on the security deposit of Rs. 6 lakhs. 4. The respondents have placed on record a counter affidavit in which they say that Exhibits P4 and P5 orders were issued because it was found that the petitioner was not the original lessor and that Rs. 6 lakhs was sought to be returned by the petitioner to the original lessee. Therefore, they maintain that it is a release and not merely a surrender of lease during its currency. 5. I have examined the documents and the orders involved in this case. I am afraid that I cannot find the impugned orders to obtain sustenance in law. What is being sought to be cancelled is indisputably a lease deed which was entered into by the lessor with the lessee and the petitioner, as the purchaser of the property, has merely stepped into shoes of the lessor. It cannot, therefore, be said that the amount shown in the lease deed, being the security deposit, is a consideration for the release and that, therefore, that ad valorem stamp duty is applicable. What is being returned by the lessor is only the security deposit accepted at the time of creating the lease deed and it cannot, by any stretch of imagination, be seen as a consideration for release. The view of the authorities to the contrary is completely without forensic basis. 6. In such circumstances, I have no other option but to quash Exhibits P4 and P5 and the consequential Exhibit P6 order and direct the respondents to complete the registration of Exhibit P3 after charging the petitioner the duty under Article 54(b) of the Act. Since this Writ Petition has been pending before this Court for the last more than four years, it is apposite that the authorities complete this process as expeditiously as possible but not later than one month from the date of receipt of a copy of this judgment. The Writ Petition is ordered as above. In the facts and circumstances of the case, I make no order as to costs and the parties are directed to suffer their respective costs.