Madras High Court
K.Uma Shankar vs The Inspector General Of Registration on 21 April, 2011
Author: T.Raja
Bench: T.Raja
IN THE HIGH COURT OF JUDICATURE AT MADRAS
DATED:21.04.2011
CORAM
THE HONOURABLE MR. JUSTICE T.RAJA
W.P.No.22200 of 2010 and
M.P.No.1 of 2010
K.Uma Shankar ... Petitioner
Vs.
1.The Inspector General of Registration,
Tamil Nadu and the Chief Controlling
Revenue Authority,
100, Santhome High Road,
Chennai - 600 028.
2.District Registrar,
Central Chennai,
Pycrofts Road,
Royapettah,
Chennai - 600 014.
3.The Sub Registrar,
Thousand Lights,
Phcrofts Road,
Royapettah,
Chennai - 600 014. ... Respondents
PRAYER: Writ Petition filed under Article 226 of Constitution of India praying to issue Writ of certiorarified mandamus to call for the records leading to the order passed by the 1st respondent herein bearing reference No.PM/41958/P1/2009, dated 13.05.2010 confirming the order dated 28.05.2009 bearing Reference No.1546/A1/2009 passed by the 2nd respondent herein directing the petitioner to pay the deficit stamp duty of Rs.10,02,600/- and a penalty of Rs.1000/- in respect of the release deed dated 20.02.2008 bearing document No.P-14/2008 on the file of the 3rd respondent executed by Thiru K.Bhavani Shankar in favour of the petitioner and quash the same and direct the respondents 1 to 3 to register and release the release deed dated 20.02.2008 bearing document P-14 of 2008 on the file of the 3rd respondent herein without insisting on the payment any deficit stamp duty or penalty as demanded by the 2nd respondent vide its order dated 28.05.2009 bearing reference No.1546/A1/2009 and handover the same to the petitioner.
For Petitioner :Mr.P.V.Sabaridas
For Respondents :Mrs.Lita Srinivasan, GA
ORDER
The case of the petitioner is that the petitioner's maternal uncle Mr.C.R.Manickavelu, in terms of a trust deed dated 12.06.1967, registered as document No.416 of 1967 in the office of the Registrar of Madras-Chengleput, created a private family trust as GUB Trust with a Corpus of a sum of Rs.50,000/-. The primary object of the said trust is to provide education, maintenance and marriage expenses of the said C.R.Manickavelu's nephews, namely, K.Gowri Shankar, who is the petitioner's elder brother, a minor then aged about 14 years, K.Uma Shankar/the petitioner herein, then aged about 12 years and K.Bhavani Shankar, who is the petitioner's younger brother and was then aged about 10 years. All of them are sons of Late Kasi Viswanathan and Late Ambika Kasi Viswanathan. The author of the trust also appointed himself and his Late Ambika Kasi Viswanathan as the first trustee to the said trust. In terms of Clause 3 of the said trust, the trustees were at liberty to invest funds and properties or any part thereof of the said trust in the form of investments as permitted under the Indian Trust Act including acquisition of immovable properties.
Clause 7 of the aforementioned trust deed also says that each of the beneficiaries are entitled for his/her maintenance, education including education in foreign countries, advancement, medical expenses and marriage expenses out of the income coming to his/her share till the happening of death or attainment of age of 25 years, whichever is earlier and not after and on the youngest beneficiary completing the age of 25 years, the entire corpus will be divided equally among the three beneficiaries and accumulations in their accounts will be paid to them and the trust will be dissolved. Only in terms of Clause 7 of the said trust deed, on the youngest beneficiary, namely, K.Bhavani Shankar, who is the petitioner's younger brother, completing the age of 25 of years, since the trust will stand dissolved, the trustees on 07.07.1967, executed a supplemental deed, which was also registered as document No.511 of 1967 in the office of the Registrar of Madras-Chengaleput. Subsequently, on the demise of C.R.Manickavelu, since the affairs of the said trust could not be managed solely by the surviving trustee Smt.Ambika Kasiviswanathan, she has co-opted her eldest son, namely, K.Gowri Shankar, who had by then became a major, as a trustee in the year 1972 and thereafter, in the year 1975, both the trustees, namely, Ambika Kasiviswanathan and K.Gowri Shankar, co-opted K.Uma Shankar/the petitioner herein, who had by then attained majority, as a third trustee. Subsequently, since the next beneficiary, namely, K.Bhavani Shankar, completed the age of 25 years on 29.11.1982, as per the provisions contained in Clause 7 of the said trust deed, the trust stood dissolved, whereupon the ownership in the said property will accordingly vest with equally in favour of the said beneficiaries. On that basis, each of the said beneficiaries will hold a 1/3rd of the share in the said property.
In view of that, a release deed presented for registration in the office of the Sub Registrar, Thousand Lights / the 3rd respondent herein on 20.02.2008, because the petitioner's younger brother K.Bhavani Shankar, on 20.02.2008, executed a release deed releasing his half share of the said property in favour of the petitioner and the petitioner was also paid the requisite maximum stamp duty of Rs.10,000/- as per the Article 55(A) of the Schedule to the Indian Stamp Act. Thereafter, the 3rd respondent instead of duly registering the said release deed, retained the said release deed pending registration and numbered the same as document No.P-14 of 2008. Subsequently, the 2nd respondent has also impounded the said release deed bearing document No.P-14 of 2008 on the ground that adequate stamp duty has not been paid on the said document at the time of registration vide his letter dated 19.02.2009 bearing No.1546/A1/2009. The petitioner, after receiving the said letter dated 19.02.2009, has sent a reply on 23.03.2009 to the 2nd respondent stating that in terms of Clause 7 of the trust deed, the said trust itself got dissolved, therefore, the said release deed executed by his brother in favour of the petitioner, is required to be stamped only in terms of Article 55(A). On that basis, further request was made to the 2nd respondent to direct the 3rd respondent to register the document and release the same without demanding any additional sum towards stamp duty. Thereafter, the 2nd respondent rejected the said request under Section 33 of the said Act by passing an order dated 28.05.2009 and again, given a direction to the petitioner to pay a stamp duty of Rs.10,02,600/- along with a penalty of Rs.1,000/-. The said order is under challenge now.
2. Learned counsel appearing for the petitioner submitted that the 1st respondent ought to have considered the fact that in terms of Clause 7 of the Trust Deed, after 1982, when K.Bhavani Shankar, had completed 25 years of age, the trust stood dissolved and therefore, the properties vested by it stood vested in favour of the beneficiaries.
Secondly, it was contended that when the trust itself has been formed with a corpus of Rs.50,000/-, on dissolution of the trust, the trustees have decided to divide the properties only in terms of Clause 3 of the said Trust, therefore, passing an order directing the petitioner to pay a stamp duty of Rs.10,02,600/- along with a penalty of Rs.1,000/-, is completely contrary to Article 62(e) of the Indian Stamp Act and on that basis prayed for setting aside the impugned order.
3. Learned counsel appearing for the respondents submitted that even though the petitioner and his siblings are the beneficiaries of the trust and the said trust dissolves on the attainment of 25 years of age by the last beneficiary, the properties of the trust do not automatically vest with the beneficiaries in terms of section 56 of the Indian Trust Act, 1882, unless the trustees transfers the same to the beneficiaries by deed of transfer duly registered.
4. The argument advanced by the learned counsel for the respondents is completely misconceived in terms what is prescribed in Article 55(c) of the Act, which is extracted as under:-
55-C. Release of Right in favour of co-owner, that is to say, any instrument whereby a co-owner of a property renounces his claim in favour of another co-owner who is not a family member, on any specified property over which they have common right.
The above said section applies only to the person who is not a family member. But, in the present case, all the trustees belong to one family. Therefore, Article 55(C) of Schedule-I to the Indian Stamp Act cannot be made applicable to the case of the petitioner.
5. In this context, it is useful to refer to Article 62(e) of Schedule-I of the Indian Stamp Act:-
62(e): Transfer whether with or without consideration of any trust property from one trustee to another trustee or from a trustee to a beneficiary.
A mere reading of Article 62(e) of the said Act will clearly suggest in a given case where the trustees belong to the very same family, the question of consideration will not arise as the trust property is transferred from one trustee to another or to a beneficiary. Further, it is relevant to keep it in mind that the 1st respondent failed to consider the fact that in terms of Clause 7 of the Trust Deed, after 1982, when K.Bhavani Shankar, had completed 25 years of age, the trust having stood dissolved, resultantly the properties vested on the trust automatically stood vested in favour of all the beneficiaries equally. Secondly, when the trust itself has been formed with a corpus of Rs.50,000/-, on dissolution of the trust, the trustees have decided to divide the properties only in terms of Clause 3 of the said Trust. Therefore, I do not know why the respondent failed to look into these aspects while passing the order directing the petitioner to pay a stamp duty of Rs.10,02,600/- along with a penalty of Rs.1,000/-, which is not only unsustainable, but also contrary to Article 62(e) of the Indian Stamp Act. Therefore, the impugned order directing the petitioner to pay a stamp duty of Rs.10,02,600/- along with a penalty of Rs.1,000/- is liable to be quashed and the same is accordingly quashed with a direction to the respondents to register and release the release deed dated 20.02.2008 bearing document No.P-14 of 2008 on the file of the 3rd respondent herein without insisting upon payment of any deficit stamp duty or penalty and handover the same to the petitioner within a period of three weeks from the date of receipt of a copy of this order.
6. The present writ petition is allowed with the above direction. No Costs. M.P.No.1 of 2010 is closed.
rkm To
1.The Inspector General of Registration, Tamil Nadu and the Chief Controlling Revenue Authority, 100, Santhome High Road, Chennai - 600 028.
2.District Registrar, Central Chennai, Pycrofts Road, Royapettah, Chennai - 600 014.
3.The Sub Registrar, Thousand Lights, Phcrofts Road, Royapettah, Chennai 600 014