Allahabad High Court
Pawan Kumar Gupta And Anr. vs Mohammad Shakir And Ors. on 6 April, 2007
Equivalent citations: AIR2007ALL156, AIR 2007 ALLAHABAD 156, 2007 (4) ALL LJ 28, 2007 (5) AKAR (NOC) 629 (ALL.) = AIR 2007 ALLAHABAD 156, 2007 A I H C 2212, (2007) 102 REVDEC 765, (2007) 3 ALL WC 2901
Author: Krishna Murari
Bench: Krishna Murari
ORDER Krishna Murari, J.
1. Heard Sri Y.K. Sinha, learned Counsel for the petitioners, Sri R.K. Pandey, learned Counsel appearing for contesting respondent No. 2 and learned Standing Counsel;
2. Challenge in this petition has been made to the order dated 7-9-2004 passed by Civil Judge (Senior Division), Ghaziabad impounding the document/letter of possession produced by the petitioners in evidence.
3. Facts are that respondent No. 1 entered into an agreement for sale of the property in question in favour of the petitioners for a consideration of Rs. 12,85,000/-. A registered agreement to sell was executed on 21-6-2003 under the terms of which respondent No. 1 received a sum of Rs. 1,85,000/- as part payment. A sum of Rs. 51,500/- was paid as stamp duty. It was agreed between the parties that the balance amount of sale consideration would be paid at the time of execution of sale deed and the possession of the property in question shall also be delivered at that time. Subsequently, respondent No. 1 after receiving a sum of Rs. 2,00,000/- out of balance sale consideration, delivered the possession of the property in question in favour of the petitioners. The fact of delivery of possession in part performance of the agreement to sell as well as receipt of a sum of Rs. 2,00,000/ towards balance sale consideration was acknowledged by executing a letter of possession before Notary public dated 26-8-2003. The said document was executed on a non-judicial stamp worth Rs. 100/-. However, respondent No. 1 instead of executing sale deed in favour of the petitioners in performance of the agreement to sell between them, executed sale deed of the property in question in favour of respondent No. 2. Petitioners filed a suit for specific performance of contract and prohibitory injunction which was registered as original suit No. 706 of 2004. In the said suit, petitioners filed the document namely, letter of possession, in evidence. Respondent No. 2 moved an application to impound the same on the allegation that the aforesaid letter of possession is chargeable as a conveyance in view of Article 23 of Schedule 1B of the Indian Stamp Act as applicable in the State of U.P. and the deed being insufficiently stamped is liable to be impounded. The application was contested by the petitioners. The Court below holding that the document is chargeable as a conveyance as provided by Article 23 of Schedule 1B of the Act and was insufficiently stamped directed to impound the same and referred it to the Collector, Ghaziabad for realization of the proper stamp duty. Aggrieved by the same, the petitioners have approached this Court.
4. Article 23 of Schedule 1B of the Indian Stamp Act as applicable in the State of U.P. reads as under:
(a) if relating to immovable properly where the Sixty rupees
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.
Where it exceeds Rs. 500 but does not exceed One hundred and
Rs. 1000 twenty five rupees
and for every Rs. 1000 or part thereof in One hundred and
excess of Rs. 1000 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-- Twenty rupees
where the amount or value of the
consideration of such conveyance as
set forth therein does not exceed
Rs 1000.
and for every Rs. 1000 Twenty rupees
or part thereof in excess of Rs. 1000
23. CONVEYANCE as defined by Section 2(10) not being a transfer charged or exempted under No. 62 --
Assignment of copy right 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 the provisions of Section 47A shall mutatis mutandis apply to such agreement:
Provided further that when conveyance in pursuance of such agreement is executed, the stamp duty on the agreement shall be adjusted towards the total duty payable on the conveyance.
5. Based on the explanation quoted above, it has been sought to be urged by learned Counsel for the petitioners that full stamp duty as payable on conveyance is liable to be paid on an agreement to sell in three conditions namely, i) where possession is delivered before the execution of the agreement; ii) where possession is delivered at the time of execution of the agreement; and iii) where the delivery of possession is agreed to be made without executing the conveyance deed and since in the present case none of the three conditions specified exist inasmuch as the possession was neither delivered before the execution of the agreement nor at the time of execution of agreement nor none the parties agreed for delivery of possession without executing conveyance deed as such it cannot be treated as conveyance. It has further been urged that in the present case since the possession was delivered in part performance of the contract subsequent to the agreement to sell as such the provision of Article 23 of Schedule 1B of the Indian Stamp Act as applicable in the State of U.P. have wrongly been invoked by the Court below and the document has wrongly been impounded.
6. In reply, it has been contended by learned Counsel for contesting respondent No. 2 that since the possession has been delivered under the document dated 26-8-2003 which is nothing but an agreement between the parties or at best another agreement in furtherance of earlier agreement to self dated 21-6-2003 as such it would be covered under the definition of 'Conveyance' and has rightly been impounded.
7. I have considered the argument advanced by learned Counsel for the parties and perused the records.
8. There is no dispute about the factual aspect of the matter. Much emphasis has been laid by learned Counsel for the petitioners on the explanation contained in Article 23 of Schedule 1B. No doubt the explanation envisages three conditions for a document to be treated as conveyance for purposes of payment of stamp duty, namely, where possession is delivered before execution of an agreement to sell of an immovable property or at the time of execution or is agreed to be delivered without executing the conveyance. The argument advanced by learned Counsel for the petitioners that the letter of possession dated 26-8-2003 by which actual possession was delivered to the petitioners does not fall within the ambit of the three conditions is totally fallacious. The said document is nothing but an agreement between the parties to transfer the possession of the property on receiving a further consideration of Rs. 2 lacs out of the balance consideration agreed to be paid and the said delivery of possession is without executing the conveyance. It is thus clearly covered under the 3rd condition contained in the explanation i.e. 'agreed to be delivered without executing conveyance'. That being the position, the document has to be treated as a conveyance chargeable with stamp duty as provided for a conveyance and since the document was executed on stamp worth Rs. 100/- as such it was insufficiently stamped and has rightly been impounded by the Court below and I find no illegality in the same.
9. The intention of the legislature in enacting the explanation clause of Article 23 of Schedule 1B is more than apparent i.e. in any case where possession of any immovable property is transferred under an agreement or is agreed to be transferred without executing the conveyance, the document is to be treated as conveyance chargeable with stamp duty payable on a conveyance deed. The purpose for enactment is also clear. It is to prevent evasion of stamp duty in cases where the parties to an agreement transfer the possession of the immovable property without executing the conveyance deed and evade payment of stamp duty. In case the argument advanced by learned Counsel for the petitioners is accepted, the very purpose and object of enacting the provision would stand frustrated.
10. In view of the aforesaid discussions, the argument advanced by learned Counsel for the petitioners is devoid of any merit and is liable to be rejected. Insufficiently stamped document produced by the petitioners in evidence has rightly been impounded by the Court below and there is no scope of interference in the impugned order.
11. The writ petition accordingly, fails and is dismissed.