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2021 DIGILAW 1474 (ALL)

Vimlesh Chandel v. State Of U. P.

2021-12-02

JAYANT BANERJI

body2021
JUDGMENT : JAYANT BANERJI, J. 1. Heard Sri Sukhendu Pal Singh, learned counsel for the petitioner and Sri Sanjay Goswami, learned Addl. Chief Standing Counsel appearing for the respondents. 2. By means of this writ petition, the following prayers have been sought : (i) to issue a writ in the nature of certiorari quashing the impugned order dated 7.4.2014 (vide Annexure no. 1) passed by the respondent no. 2 -Additional District Magistrate (Finance & Revenue)/Collector, Stamp, Kanpur Nagar in Suit No. 01 of 2013-14 (Smt. Vimlesh Chandel Vs. State of UP and others). (ii) to issue a writ in the nature of mandamus directing the respondents to compute stamp duty on the proposed deed (Vide Annexure No. 18) transfer of entire rights by lessee Baldev Raj Verma regarding plot no. 621/12, Block No. W, Scheme II, Juhi Kalan, Kanpur, District Kanpur Nagar in favour of petitioner in pursuance of agreement for sale dated 13.11.1990 (Annexure No. 4 of the writ petition) in accordance with Article 63 of Schedule I B of Indian Stamp Act, 1899 i.e. according to consideration for transfer and not according to market value of land as contemplated under Article 23(a) of Schedule I B of Indian Stamp Act. 3. The facts as appearing in the writ petition are that plot no. 621/12, Block No. W, Scheme II, Juhi Kalan, Kanpur and was leased between Baldev Raj Verma by the Nagar Mahapalika (the lessor, in respect of which property, later, the Kanpur Development Authority became the lessor). The lease deed executed on 11.2.1975 for a period of 99 years was for an open plot of land over which Baldev Raj Verma was required to make constructions. By means of a registered agreement for transfer of property in question registered on 13.11.1990 Baldev Raj Verma agreed to transfer the property in favour of the petitioner for consideration. The abovenamed Baldev Raj Verma also executed a registered power of attorney in favour of Smt. Ram Kumari regarding the property in question which could also give rights to Smt. Ram Kumari to execute the sale deed in respect of the property in question. It is stated that some constructions were made by Smt. Ram Kumari and the agreement for sale and the power of attorney is still subsisting. It is stated that some constructions were made by Smt. Ram Kumari and the agreement for sale and the power of attorney is still subsisting. The petitioner submitted an application dated 15.9.2011 to the Additional District Magistrate (Finance & Revenue), district Kanpur Nagar alongwith a proposed deed for transfer of the property in question on which an endorsement was made by the Magistrate to the Sub-Registrar to submit his report. Since the application was not being decided, a writ petition was filed by the petitioner which came to be disposed of with a direction that the matter be decided within two months. The petitioner then submitted an application under section 31 of the Indian Stamp Act, 1988[The Act.] before the Additional District Magistrate (Finance & Revenue). A report from the Sub Registrar was called for and on the report being received, the petitioner filed her objections stating that the stamp duty is required to be computed on the basis of the consideration mentioned in the deed in view of Article 63 of Schedule I-B of the Act and not on the basis of the market value. By the order dated 7.4.2014, the Additional District Magistrate held that the deed in question was a sale deed as the words 'sale deed' and 'sale' had been used in the deed in some places, and, it was further held that the instrument would be chargeable under Article 35(a)(vi) of Schedule I-B of the Act that pertains to a lease deed for period exceeding 30 years. 4. The contention of learned counsel for the petitioner is that once the lease deed was duly executed in favour of the lessee, Baldev Raj Verma, the transfer made by him pertaining to the property in question would be in the nature of an assignment of lease and not of sale or sub lease. It is contended that the provisions of Article 63 of Schedule I-B of the Act, which deals with transfer of lease by way of assignment, and not by lease, provides for proper stamp duty which is the same duty as of a conveyance as provided in Article 23 Clause (a) of the Act for a consideration equal to the amount of the consideration for the transfer. It is contended that in view of the express provision of proper stamp duty chargeable, there was no occasion for the Additional District Magistrate to hold in the impugned order that it would be chargeable as per the market value. 5. Learned Counsel in support of his contention has relied upon the judgment of this Court in the case of Narendra Dhar Vs. State of UP and another; [ 2010 (5) ADJ 383 ], Shashank Singh Chandel Vs. State of UP and others, [Writ-C No. 29672 of 2009 decided on 26.7.2010], M/s Resident Welfare Association, Noida Vs. State of UP and others; [ 2009(14) SCC 716 ] and Madras Refineries Ltd Vs. Chief Controlling Revenue Authority, Board of Revenue, Madras; [ AIR 1977 SC 500 ]. 6. Additional Chief Standing Counsel has strongly opposed the writ petition and has urged that the directions were made after the execution of the lease deed. Since constructions standing thereon are also property that is proposed to be transferred by means of the deed, they ought to have valued on the basis of Article 23 Clause (a) of the Act on the basis of its market value. 7. The only issue that arises for consideration is whether the proposed transfer of the property in question, in view of the application filed by the petitioner under Section 31 of the Act, would be a deed of assignment chargeable under Article 63 of Schedule I-B of the Act, or a deed covered by Article 35 that would be accordingly chargeable. A perusal of the deed that has been enclosed as Annexure2 to the writ petition reflects the words 'sale deed' at various places with the words 'sale consideration', 'seller' and 'buyer' reflected at various places. This Court in the case of Narendra Dhar Vs. State of UP (Supra) has exhaustively referred to the distinction between sub-lease and transfer of lease by way of assignment and has also referred to the observation of the Apex Court in the case of Madras Refineries Ltd. Vs. Chief Revenue Authority (Supra) that one has look at the substance of the lease and not to the nomenclature of the document to determine whether a particular document is a lease or a deed of assignment. Chief Revenue Authority (Supra) that one has look at the substance of the lease and not to the nomenclature of the document to determine whether a particular document is a lease or a deed of assignment. While referring to the judgment of the Supreme Court in the case of M/s Resident Welfare Association, Noida (Supra), this Court, in Nar e nd ra D ha r has observed as follows: I have gone through the lease executed by the Agra Development Authority in favour of Kishan Chand Shivhare dated 13.3.2003. It is undoubtedly a document of lease-cum-sale leasing out land for 80 years outright sale of superstructure with the right of reversion in land in favour of Agra Development Authority in the event of cancellation, expiry or surrender of the lease. On the other hand, the so called lease/sale dated 31.3.2003 executed by Kishan Chand Shivhare in favour of the petitioner is concerned, it is an absolute transfer of all rights possessed of Kishan Chand Shivhare in the entire property including land and building in favour of the petitioner. It does not stipulate that in any eventuality or contingency the property would revert back to aforesaid Kishan Chand Shivhare. It in effect brings the petitioner in direct contact with the original lessee i.e. Agra Development Authority. It is not a partial transfer keeping any right of reversion reserved. Apart from the above, there is no material on record to establish that the petitioner has acquired rights in the aforesaid properly as a sublessee or that he is paying or is liable to pay any rent to Kishan Chand Shivhare. In this view of the matter, it is a document of transfer of lease by way of assignment by Kishan Chand Shivhare as distinguished from sub lease. In the case of M/s. Residential Welfare Association, NOIDA v. State of U.P. & others 2009(2) ADJ 204 (SC) which has been been relied upon by the learned counsel for the petitioner the Supreme Court was dealing with a similar situation with regard to the chargeability of the stamp duty wherein, the NOIDA authority had initially leased out a land to several cooperative societies by executing lease deeds. Societies in turn leased out the same in favour of its members. Societies in turn leased out the same in favour of its members. In that context the Apex Court treated those documents of subsequent transfer of rights executed between the societies and the members as transfer of lease by assignment and it accordingly, held that the instrument is chargeable to stamp duty under Article 63 of Schedule I-B of the Act and that the stamp duty shall be paid on the consideration of the amount shown in the deed itself and not on the market value of the land or construction. It may not be out of context to clarify here under Article 63 of Schedule I-B stamp duty is chargeable on transfer of lease by way of assignment on the sale consideration like a conveyance under Article 23(a) and there is no reference of market value of the property under transfer. On the other hand, under Article 35(a)(vi) of Schedule I-B of the Act stamp duty is payable on the market value as conveyance under Article 23(a) of Schedule I-B of the Act. In view of the above discussions, I am of the opinion the aforesaid document of lease/sale deed dated 31.1.2003 falls exclusively within Article 63 of Schedule I-B of the Act and is chargeable to stamp duty as deed of conveyance as provided under Article 23(a) of the Schedule I-B on sale consideration. 8. The lease deed dated 11.02.1975 was executed between the Development Authority of the one part, and, Sri Baldev Raj Verma, the lessee of the other part. The term of the lease deed was 99 years, and apart from the premium amount, the lessee was required to pay an advance annual rent. Under the terms of the lease, the building to be constructed on the land was to remain hypothecated for the payment of the yearly rent, balance amount of premium, etc. It was provided that if the lessee or his transferee or permitted assignees sublet or transfer the demised premises as a whole for the residue of the term of the lease, he would deliver a copy of the deed together with a notice within a month of the deed being registered, to the Development Authority. Further, the right of reversion of the land in favour of the Development Authority on happening of eventualities exists in the lease deed. 9. Further, the right of reversion of the land in favour of the Development Authority on happening of eventualities exists in the lease deed. 9. The proposed deed, which is mentioned on the first page as format of sale by means of lease deed, reflects that it proposes to transfer absolutely all rights possessed by Baldev Raj Verma in the property including the land and building in favour of the petitioner. It does not provide any eventuality that may lead the to the property being reverted to Baldev Raj Verma. It brings the petitioner in direct contact with the lessor, that is the Development Authority. The tenor, contents and the background of the proposed instrument reveals that it is a deed of assignment of the lease and not sale, and so it would not be amenable to charge of stamp duty under Article 23(a) of the Act. It is, therefore, held that the proposed instrument in question is a deed of assignment and that it will be chargeable in accordance with Article 63 of Schedule I-B of the Act on the basis of the amount of sale consideration reflected in the proposed deed. 10. In view of the aforesaid finding that the proposed instrument in question is a deed of assignment and that it will be chargeable in accordance with Article 63 of Schedule I-B of the Act on the basis of the amount of sale consideration reflected in the proposed deed, the impugned order dated 7.4.2014 passed by the respondent no. 2 Additional District Magistrate (Finance & Revenue)/Collector, Stamp, Kanpur Nagar in Suit No. 01 of 2013-14 (Smt. Vimlesh Chandel Vs. State of UP and others) cannot be sustained and is hereby quashed. 11. This writ petition is allowed in view of the observations made above. 12. It is, however, made clear that the discussion in this judgement is for the sole purpose of considering the provision under which the proposed instrument is chargeable, and not for any other purpose.