Chattisgarh High Court
Sanjay Kumar Jain vs Shambhulal Goyal And Another on 9 March, 2010
HIGH COURT OF CHATTISGARH AT BILASPUR
Writ Petition 227 No 4928 of 2008 & Writ Petition 227 No 4929 of 2008
Sanjay Kumar Jain
...Petitioners
versus
Shambhulal Goyal and another
...Respondents
! Shri Manoj Paranjpe counsel for the petitioner
^ Shri B P Sharma counsel for respondent No 1 & Shri S K Dadsena counsel for respondent No 2
CORAM: Honble Shri Justice Prashant Kumar Mishra
Dated: 09/03/2010
: Judgement
ORDER
(Passed on 9th March, 2010) Writ Petition under Article 227 of the Constitution of India This order shall govern the disposal of Writ Petition (227) No.4928 of 2008 and Writ Petition (227) No.4929 of 2008.
2. In both the writ petitions, the common petitioner/plaintiff Sanjay Kumar Jain has challenged the legality, validity and propriety of the order dated 17-3- 2008 (Annexure P-1) passed in Civil Suit No.84-A/2006 in Writ Petition (227) No.4928 of 2008 and the order dated 17-3-2008 (Annexure P-1) passed in Civil Suit No.83- A/2006 in Writ Petition (227) No.4929 of 2008.
3. Briefly stated the facts of the case are that the plaintiff preferred a suit for specific performance of contract dated 9-7-1992, a declaration that the building constructed over the suit land has been constructed by the plaintiff and he is the owner thereof and for permanent injunction to the effect that the defendants be restrained from interfering with the plaintiff's possession over the suit land and the building constructed thereon. The claim in the suit was based on the pleadings inter alia that defendant No.1 is the son of Dharampal Goyal, who had purchased the land by virtue of registered sale-deed dated 1-11-1990, his name having been duly entered in the records on the date of presentation of suit. The said Dharampal Goyal, the father of respondent/defendant No.1 entered into an agreement on 6-7-1992 with respondent/defendant No.2 Lalit Kumar Thawani for sale of the land for a consideration amounting to Rs.20,000/- and handed over possession thereof to the respondent/defendant No.2. The amount of consideration was also paid by the respondent No.2 Lalit Kumar Thawani to the said Dharampal Goyal at the time of execution of the said agreement.
4. In exercise of powers under clause (5) of the agreement dated 6-7-1992 (Annexure P-2), the respondent No.2 Lalit Kumar Thawani entered into an agreement with the petitioner/plaintiff Sanjay Kumar Jain on 24-7-1992 (Annexure P-3) for sale of the land. In pursuance of the said agreement Annexure P-3, the possession of the land was handed over to the plaintiff after receiving the entire sale-consideration of Rs.50,000/-, however, since defendant/respondent No.2 avoided to execute a sale-deed in plaintiff's favour, the present suit was filed. Both the defendants/respondents No.1 and 2 have already filed their written statements.
5. Respondent/defendant No.1, on 13-4-2007, filed an application (Annexure P-7) under Section 35 of the Indian Stamp Act, 1899 (henceforth `the Act, 1899') read with Section 151 of the Code of Civil Procedure raising an objection as to the admissibility of the agreements dated 6-7-1992 and 24-7-1992 on the ground that since at the time of execution of the agreements, possession of the land has also been handed over to the respective prospective purchasers, the agreements are liable to pay stamp duty under Article 23 of Schedule I-A of the Act, 1899 and not as agreements under Article 5 of Schedule I- A of the Act, 1899.
6. The petitioner/plaintiff filed his reply and denied the liability to pay stamp duty. According to him, since the defendant No.2 had obtained possession from defendant No.1 by virtue of the first agreement and has not paid the stamp duty, now the defendant No.1 cannot make this prayer to fasten the liability of payment of stamp duty on the plaintiff. The plaintiff stated that the stamp duty paid on the agreement is proper, therefore, the application be rejected.
7. I have heard learned counsel appearing for the parties. Learned counsel appearing for the parties have reiterated their arguments which they have made in the trial Court and in their respective pleadings before this Court.
8. The question involved in this petition is no longer res integra inasmuch as in Avinash Kumar Chauhan vs. Vijay Krishna Mishra, 2009 (3) MPHT 6 (SC), the Hon'ble Supreme Court, after reproducing the definition of the words "conveyance", "receipt" and "stamp" from the Act, 1899 and after reproducing and referring to Sections 3, 35 and 36 together with Explanation to Article 23 of Schedule I-A of the Act, 1899, as applicable in the State of Madhya Pradesh (now Chhattisgarh), has held thus:
"21. It is not in dispute that the possession of the property had been delivered in favour of the appellant. He has, thus, been exercising some right in or over the land in question. We are not concerned with the enforcement of the said agreement. Although the same was not registered, but registration of the document has nothing to do with the validity thereof as provided for under the provisions of the Registration Act, 1908.
22. We have noticed heretobefore that Section 33 of the Act casts a statutory obligation on all the authorities to impound a document. The Court being an authority to receive a document in evidence is bound to give effect thereto. The unregistered deed of sale was an instrument which required payment of the stamp duty applicable to a deed of conveyance. Adequate stamp duty admittedly was not paid. The Court, therefore, was empowered to pass an order in terms of Section 35 of the Act.
24. In the present case, by reason of the statutory interdict, no transfer at all is permissible. Even transfer of possession is also not permissible. [See: Pandey Oraon vs. Ram Chander Sahu, 1992 Supp (2) SCC 77 and Amrendra Pratap Singh vs. Tej Bahadur Prajapati, (2004) 10 SCC 65]. The Registration Act, 1908 provides for such a contingency in terms of the proviso appended to Section 49 thereof, which reads as under:-
49. Effect of non-registration of documents required to be registered.- No document required by Section 17 or by any provision of the Transfer of Property Act, 1882 (4 of 1882), to be registered shall-
(a) affect any immovable property comprised therein, or
(b) confer any power to adopt, or
(c) be received as evidence of any transaction affecting such property or conferring such power, unless it has been registered:
Provided that an unregistered document affecting immovable property and required by this Act or the Transfer of Property Act, 1882 (4 of 1882), to be registered may be received as evidence of a contract in a suit for specific performance under Chapter II of the Specific Relief Act, 1877 (1 of 1877) or as evidence of any collateral transaction not required to be effected by registered instrument.
25. Section 35 of the Act, however, rules out applicability of such provision as it is categorically provided therein that a document of this nature shall not be admitted for any purpose whatsoever. If all purposes for which the document is sought to be brought in evidence are excluded, we fail to see any reason as to how the document would be admissible for collateral purposes."
9. In Avinash Kumar Chauhan vs. Vijay Krishna Mishra (supra), the Hon'ble Supreme Court has referred to the judgment of Privy Council in Ram Rattan vs. Parma Nand, AIR (33) 1946 Privy Council 51 and other judgments in Bhaskarabhotla Padmanabhaiah and others vs. B. Lakshminarayana and others, AIR 1962 AP 132, Sanjeeva Reddi vs. Johanputra Reddi, AIR 1972 AP 373 and T. Bhaskar Rao vs. T. Gabriel and others, AIR 1981 AP 175 to hold that if a document is not stamped properly, it cannot be received in evidence even for collateral purpose unless it is duly stamped, or duty or penalty is paid under Section 35 of the Act, 1899.
10. In Shiv Kumar Saxena and others vs. Manishchand Sinha and another, 2004 (II) MPJR 269, a Division Bench of the High Court of Madhya Pradesh, relying on a Supreme Court judgment in Veena Hasmukh Jain and another vs. State of Maharashtra and others, (1999) 5 SCC 725, has also held that where possession of immovable property is transferred to purchaser under the agreement to sell, the agreement is required to be stamped as a conveyance.
11. Learned counsel for the petitioner has also argued that in any case the petitioner is not liable to pay stamp duty on the first agreement dated 6-7-1992 (Annexure P-2) because the petitioner was not a party to the first agreement and it is the respondent/defendant No.2 who has obtained possession in pursuance to the first agreement dated 6-7-1992 (Annexure P-2), therefore, it is for the said defendant No.2 to pay stamp duty as required by law.
12. To appreciate the submission made by learned counsel for the petitioner, this Court feels proper to refer to Section 29 of the Act, 1899, which makes a provision regarding the person who is liable to pay stamp duty on a particular document. The relevant part of the said provision is extracted hereunder:
"29. Duties by whom payable.- In the absence of an agreement to the contrary, the expense of providing the proper stamp shall be borne-
xxxxx xxxxx
xxxxx
(c) in the case of a conveyance (including a reconveyance of mortgaged property) by the grantee; in the case of a lease or agreement to lease- by the lessee or intended lessee; "
13. A Division Bench of Hyderabad High Court in Madho Rao vs. (Bhao deceased L.R.) Patelba and others, AIR 1953 Hyderabad 225 has held thus:
"8. It would thus appear that the document embodies a complete sale and not merely an executory contract. In such a case, it seems difficult to agree with the contention that the document falls within the purview of Sub-s. 2(1), cl. (5) of S. 10 of the Registration Act. It can neither be said to be a contract for sale within the meaning of S. 54, Hyderabad Transfer of Property Act. That section defines it in the following words:
"A contract for the sale of immovable property is a contract that a sale of such property shall take place on terms settled between the parties. It does not by itself create any interest in or charge on such property".
The tenor of document as referred to above shows that not only terms were settled, but transfer of ownership effected in exchange for a price. In - `Horsfall v. Hey', (1848) 154 E.R. 705 (C) it has been held that if the parties to an instrument have so expressed themselves as to make it apparent on the face of the instrument that the writing was intended to be the record of the transfer then being made, the instrument will operate as a conveyance and it is immaterial whether the words used be in the past tense or in the present tense. At this stage, the question of registration assumes importance. It is argued on behalf of the appellant that under the document discussed above, it was part of the obligation of the respondents to get the deed that was in contemplation by the agreement drawn up, executed and registered. S. 27 (c) of the Hyderabad Stamp Act provides that in the case of sale the expense for providing the stamp shall be borne by the transferee.
Paragraph 1, clause (d) of Section 55 of the Hyderabad Transfer of Property Act makes it the duty of the buyer to prepare a conveyance and tender it to the seller for execution. The appellant-buyer instead of complying with the above provisions of law contended himself with a sale-deed upon a plain paper. It has been observed in the case of - `Valambalachi v. Durai Swami Pillai', AIR 1928 Mad 344 (D) by Srinivasa Aiyangar, J. that:
"If a document duly executed by vendor is tendered by the vendor to the purchaser and the delivery of the document is accepted by the purchaser, we must take it that the purchaser who accepts the document undertakes to see the registration himself, he feeling assured that he has got provisions of Registration Act, under which he can compel the other party to the contract to come and register the document. I am therefore inclined to regard that in all cases where the purchaser of property accepts an unregistered document he may be regarded as relieving the other party, the vendor from his obligation to tender a registered document in performance of the contract. It seems to me impossible to accede to the contention that a person who agrees to sell and convey property is bound not only to execute a proper conveyance once but go on executing as many conveyances as may be required by the vendee in respect of that property"."
14. In Board of Revenue, Chepauk, Madras, Now Andhra at Madras Referring Officer vs. Poosarla China Appalanarasimhulu, AIR 1957 AP 237, a Full Bench of Andhra Pradesh High Court has held thus:
"4. ..... Under the aforesaid provisions, a partition deed is defined and a particular stamp duty is prescribed. The document will have to be stamped before execution. The said charges should be borne by the parties, in the absence of an agreement to the contrary, in proportion to their respective shares in the whole property partitioned. If not duly stamped, the document will be impounded & the deficient duty will be collected by the Collector in the same manner prescribed from the persons liable to pay. Reading the provisions, uninfluenced by the case law on the subject, I do not see any difficulty in holding that the persons liable to pay the stamp duty under S. 29 are the persons from whom the same is due within the meaning of S. 48 of the Act. The fact that S. 29 is not exhaustive of all the persons from whom the stamp duty under the Act may create the difficulty for ascertaining the persons from whom the stamp duty on the documents not provided by S. 29 is recoverable. That circumstance in itself cannot make me ignore the express provisions of S. 29 creating a liability in the case of documents dealt with by that section. Indeed, S. 48, which empowers a Collector to recover the duties and penalties from the persons from whom the same are due, was not in existence in the old Act, and the only effect of non-payment of any duty before the present Act was that the instrument in respect of which the payment of duty and penalty was ordered could not be admitted in evidence. It may be that in respect of documents not mentioned in S. 29, the legislature did not intend to depart from the old procedure, or it may be that the liability of persons to pay duty in respect of such documents will have to be inferred from other sections of the Act. It, therefore, appears to me to that the parties to a partition deed are liable to pay stamp duty in proportion to their respective shares in the whole property partitioned unless there is an agreement to the contrary, and they are the persons from whom the duty and penalty are due. The Collector can, therefore, proceed under S. 48 only against each of the parties in respect of the proportionate amount of the duty due from him."
15. To decide the question as to whether the petitioner would be liable to pay the deficit stamp duty and the penalty on both the agreements or it will be the liability of the respective grantee, the scheme of the Act, 1899 is to be seen and examined. Section 29 of the Act, 1899 makes provisions as to who shall be liable to pay the stamp duty. Section 33 of the Act, 1899 is with respect to examination and impounding of instruments and Section 35 of the Act, 1899 makes provision with regard to the inadmissibility of an instrument in evidence, which is not duly stamped. Under Section 40 of the Act, 1899, the Collector's power to stamp instrument impounded has been provided and Section 48 of the Act, 1899 makes provision regarding recovery of duties and penalties. Under this provision, contained in Section 48 of the Act, 1899, it is provided that "all duties, penalties and other sums required to be paid under this Chapter may be recovered by the Collector by distress and sale of the movable property of the person from whom the same are due, or by any other process for the time being in force for the recovery of arrears of land-revenue". On appreciation and upon conjoint reading of the scheme of the stamp duty vis--vis the person who is liable to pay stamp duty on the instrument and the mode of recovery provided therein and from whom it can be recovered, it appears clearly that on a deed of conveyance, it is the grantee, i.e., the person who is the purchaser of the property shall be liable to pay the stamp duty.
16. In the present case, it has already been found that both the agreements are in the nature of conveyance within the meaning of Explanation to Article 23 of Schedule I-A of the Act, 1899 (as applicable in the State of Madhya Pradesh now Chhattisgarh). Once the document is treated as conveyance, the provision of Section 29(c) of the Act, 1899 becomes operative and by virtue of this provision, it is the person who has purchased the property, i.e., the grantee is liable to pay stamp duty, therefore, this Court finds that on the first agreement the appropriate stamp duty and penalty is to be paid by the respondent/defendant No.2 and not by the petitioner/plaintiff.
17. When the matter is further scrutinized on equitable principle also, this Court finds that defendant No.2 was the beneficiary/purchaser of the first agreement and he has later on conveyed it to the plaintiff on a higher amount, i.e., on an amount more than double of the amount mentioned in the previous agreement within a month, therefore, having derived benefit from the document, respondent/defendant No.2 cannot be allowed to argue that since in the present suit the petitioner is tendering the document in evidence, it is the petitioner who would be liable to pay the stamp duty on both the instruments. Having derived benefit, defendant No.2 cannot be permitted to wriggle out of the legal obligation fastened upon him under Section 29 of the Act, 1899.
18. In the result, both the writ petitions are disposed of with a direction that the deficit stamp duty and penalty on the first agreement shall be liable to be paid by the respondent/defendant No.2 and on the second agreement the petitioner/plaintiff shall be liable to pay deficit stamp duty and penalty in accordance with the provisions of the Act, 1899. The admissible stamp duty and penalty shall be borne by the respective parties to the suit, who are liable to deposit such stamp duty and penalty before exhibiting the said documents, i.e., the two agreements in the trial Court.
19. A copy of this order be placed on the record of Writ Petition (227) No.4929 of 2008.
JUDGE