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2019 DIGILAW 307 (ALL)

VINOD KUMAR JAIN v. COMMISSIONER AGRA DIVISION

2019-02-06

VIVEK KUMAR BIRLA

body2019
JUDGMENT VIVEK KUMAR BIRLA, J. 1. Heard learned counsel for the petitioner as well as Sri Ratan Deep Mishra, learned Standing Counsel appearing for the State respondents and perused the record. 2. Present petition has been filed challenging the impugned order dated 27.3.2004 passed by the respondent no. 2 and the order dated 3.8.2005 passed by the respondent no. 1. 3. By the impugned order dated 27.3.2004 in exercise of powers under Section 33/47-A of the Indian Stamp Act, 1899 (hereinafter referred to as the 'Act') treating the document to be covered in Explanation 2 Section 2(10) of the Act as a conveyance, a deficiency of stamp to the tune of Rs. 81,990/-, Registration fees Rs. 4,900/- and interest at the rate of Rs. 1.5% was found. Revision against the same was also dismissed. 4. It is not in dispute that one Meri Lal executed a registered Will dated 21.8.1942 giving all his property to his grand children. Meri Lal has only one son, namely, Ram Kumar and he was appointed as executor of Will and the property was given to his grand children. Meri Lal died in the year 1945 and Ram Kumar, son of Meri Lal, became executor and he has only right of maintenance from out of this property and he has no right to sell or alienate the same. Ram Kumar died in the year 1961 leaving behind three sons, namely, Jai Prakash, Vinod Kumar and Pramod Kumar. He also left behind Smt. Kiran Devi, his widow. After death of Ram Kumar, property came to grand sons of Meri Lal who enjoyed the property till 1974 and in the year 1974 grand children of Meri (children of Ram Kumar) and widow of Meri Lal decided to divide the property amicably through the court decree. As such, Original Suit No. 20 of 1974 (Pramod Kumar vs. Jai Prakash) was filed by Pramod Kumar, son of Ram Kumar, which was decreed in view of the family settlement/compromise between the parties. These facts are not in dispute. Subsequently sons of Jai Prakash, Anil Kumar, Arun Kumar and Ajeet Kumar and other family members got prepared a release deed to get the share registered to avoid future complications in their peaceful relationship. Thereafter a deed was prepared and got registered. 5. These facts are not in dispute. Subsequently sons of Jai Prakash, Anil Kumar, Arun Kumar and Ajeet Kumar and other family members got prepared a release deed to get the share registered to avoid future complications in their peaceful relationship. Thereafter a deed was prepared and got registered. 5. Submission of learned counsel for the petitioner is that as a matter of fact in view of decree of Civil Court in Original Suit No. 20 of 1974 there was no such requirement to get the shares registered and as a natural consequence the property would have automatically come to the persons who are party to this deed of release. He submits that there is no dispute about the fact that this relinquishment is without consideration between the co-owners of the property and therefore, this deed would not be covered by Explanation to Section 2(10) of the Act and as such, the provisions of Section 41-A are not attracted in this case. He further submits that at the worst, the deed is covered under Article 55 of Schedule 1-B of the Act and duty shall be payable as per bond no. 15. He however submits that it is settled law that even such family settlements are not compulsorily registerable and therefore, there is not question of any such document attracting the duty as conveyance. In support of his submissions, he has placed reliance on a judgment Hon'ble Apex Court rendered in the case of Kale vs. Deputy Director of Consolidation, (1976) 3 SCC 119 as well as judgment of this Hon'ble Court rendered in the case of Raghvendra Jeet Singh vs. Board of Revenue, Allahabad and others, (2015) 4 ADJ 53 . 6. Learned Standing Counsel appearing for the State respondents has supported the orders impugned herein and submits that co-owner has transferred his right to the other co-owner and as such, it will be a conveyance and Explanation 2 Section 2 (1) of the Act would be attracted. 7. I have considered the rival submissions and perused the record. 8. On perusal of record, I find that undisputed fact is that Meri Lal was owner of the property and he executed a Will in favour of Ram Kumar as executor of Will. 7. I have considered the rival submissions and perused the record. 8. On perusal of record, I find that undisputed fact is that Meri Lal was owner of the property and he executed a Will in favour of Ram Kumar as executor of Will. Original Suit No. 20 of 1974 was filed by Pramod Kumar, one son of Ram Kumar against other two sons (all grand sons of Meri Lal), which was decreed on the basis of family settlement/compromise. As such, the decree of the Civil Court was in existence and nothing further was required to be done for the purpose of registered shares of co-owners. It is also not in dispute that this deed was executed without consideration between co-owners. Clearly, the instrument howsoever it may be titled, therefore, would not attract Explanation 2 Section 2(10) of the Act and the same is chargeable only as per Article 55 Schedule B of the Act as per bond no. 15. 9. The Hon'ble Apex Court in Kale (supra) has held that a mere memorandum prepared after the family settlement had already been made either for the purpose of the record or for information of the Court for making necessary mutation. In such a case the memorandum itself does not create or extinguish any rights in immovable properties and therefore, does not fall within the mischief of Section 17 of the Registration Act and is, therefore, not compulsorily registerable. The family settlements may be even oral in which case no registration is at necessary. 10. The issue involved in this petition has been very appropriately dealt with in Raghvedra Jeet Singh (supra), relevant paragraphs thereof are quote as under: "6. Sub-section (10) of Section 2 defines conveyance as follows:- "(10) "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 1, Schedule 1-A or Schedule 1-B]2, [as the case may be]3" 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 was inserted vide U.P. Act No. 19 of 81 w.e.f. 01.08.1981. 8. Article 55 of the Schedule 1-B defines "Release" which is as follows:- "55. 7. Explanation was inserted vide U.P. Act No. 19 of 81 w.e.f. 01.08.1981. 8. Article 55 of the Schedule 1-B defines "Release" which is as follows:- "55. Release, that is to say, any instrument not being such a release as is provided for by Section 23(A) whereby a person renounces a claim upon another person or against any specified property- (a) if the amount or value of the claim does not exceed Rs. 2,500 (b) in any other case." 13. The question, however, to be determined is as to whether the co-owners/co-parcener by relinquishing their interest and title in the H.U.F. property to another co-owner/co-parcener would fall within the Explanation to the definition of conveyance under section 2(10) of the Act. 14. The Explanation was incorporated on 01.04.1981, providing that, where a co-owner of a property having defined share therein, transfers such share or part there of to another co-owner of the property, is for the purpose of the sub-section an instrument by which the property is transferred. 15. Earlier interpreting the expression conveyance, as it stood prior to 01.08.1981, a Full Bench of this Court in Smt. Balwant Kaur and others Versus State of U.P.4, held that a document executed by one heir renouncing for consideration his claim in the inherited property in favour of other heir cannot be construed as a deed of conveyance. 16. After the amendment, Explanation to Section 2(10) was incorporated, this court (Single Judge) in State of U.P. Versus Dharam Pal and another, interpreting the Explanation held that the co-sharers transferring their share to another co-sharers-having pre-existing right in property did not amount to transfer, rather, it only amounted to extinguishing of their existing share. Since there was no transfer to an outsider it would not amount to sale or conveyance. 21. Formal renunciation of a claim which the party relinquishing is entitled to put forward is a release chargeable under Article 55, whether the claim is legally correct or not is not relevant. Where by a document a person voluntarily renounces for consideration coparcenary rights of succession to impartible estate it is a release. There can be no release by one person in favour of another, who is not already entitled to the property as co-owner. Thus, by release, there is no transfer of interest or title to another person, who has no preexisting right to such property. There can be no release by one person in favour of another, who is not already entitled to the property as co-owner. Thus, by release, there is no transfer of interest or title to another person, who has no preexisting right to such property. A release can, therefore, be made in favour of a person who has a preexisting right and interest in the property. It would make no difference even where the release is without consideration. 23. To distinguish between a release deed, or a gift deed or a sale deed, the decisive factor is the actual character of the transaction and precise nature of the rights created by the instrument. In the case of co-owners each co-owner is in theory entitled to enjoy the entire property in part or in whole. It is not therefore necessary for one of the co-owners to convey his interest to the other co-owner. It is sufficient if he released his interest. The result of such a release would be the enlargement of the share of the other co-owner. The result of such a release should be the enlargement of the share of the other co-owner. A release can only feed title and cannot transfer title. (Vide Kuppuswami Versus Arumugam, (1967) AIR SC 1395, and Kuppuswami Chettiar v. S.P.A. Arumugam Chettiar, (1967) AIR SC 1395) 24. A document under which a Hindu coparcener purports to give up his right to the family property in favour of the remaining coparcener would not be a deed of conveyance but a deed of release. There is no difference in principle between such a document as between members of a coparcenary and as between co-owners. In order to class as a release, the executant of the instrument having common or joint interest along with other should relinquish his interest which automatically results in the enlargement of the interest and others. But where he executes the document in respect of his share in favour of a particular co-owner, it cannot be treated as a release and must come within the definition of conveyance. (Vide Kothuri Venkata Subba Rao Versus Deputy Registrar Gudur, (1986) AIR A.P. 42). 25. A transaction to assume a character of conveyance, what is necessary is, transfer of interest from one co-owner to another co-owner. (Vide Kothuri Venkata Subba Rao Versus Deputy Registrar Gudur, (1986) AIR A.P. 42). 25. A transaction to assume a character of conveyance, what is necessary is, transfer of interest from one co-owner to another co-owner. As against this, the provision of Article 55 of Schedule 1B of the Act stipulates that the release is that whereby a person renounces a claim upon another person or against any specified property. 30. This Court in the case of Nand Kumar Agarwal Versus State of U.P., observed that: "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; and (2) The duty is on the instrument and not on the transaction." 11. I am in respectful agreement of the reasoning quoted above. 12. Accordingly, present petition stands allowed. The impugned order dated 27.3.2004 passed by the respondent no. 2 and the order dated 3.8.2005 passed by the respondent no. 1 are quashed. The stamp duty shall be payable as per Article 55 of Schedule B of the Act on which a fixed stamp duty as a bond no. 15 is payable 13. No order as to costs.