Madras High Court
Rajalakshmi Gengusamy Charities vs The Inspector General Of Registration on 27 April, 2012
Author: S. Manikumar
Bench: S. Manikumar
IN THE HIGH COURT OF JUDICATURE AT MADRAS
DATED: 27.04.2012
CORAM:
THE HONOURABLE MR. JUSTICE S. MANIKUMAR
W.P.Nos.28017 and 28018 of 2010
and
M.P.Nos. 2 and 2 of 2010
Rajalakshmi Gengusamy Charities,
rep. By its Managing Trustee,
Venkata Nilayam ... Petitioner in both W.Ps.
Versus
1. The Inspector General of Registration
cum Chief Controlling Revenue Authority,
Chennai 600 028.
2. The District Registrar,
Tiruppur. ... Respondents in both W.Ps
Writ Petitions filed under Article 226 of the Constitution of India, praying for issuance of Writs of Certiorarified Mandamus, to call for the records of the second respondent in Na.Ka.No.6194 B.1/2010 and Na.Ka.No.6194 B.1/2010, dated 11.10.2010 and of the first respondent in his proceedings Pa.Mu.No.32963/P.1/2006, dated 06.08.2010, quash the said proceedings of the first and second respondents, dated 11.10.2010 and 06.08.2010 and consequently, direct the respondents to return the documents, which have been registered as Document Nos.3523 and 3524 of 2006, on the file of the Sub Registrar, Udumalaipettai.
For Petitioner .. Mr.R.Muthukumarasamy, SC
for Mr.A.Jenasenan
For Respondents .. Mr.L.S.M.Hasan Fizal, GA
O R D E R
The petitioner has challenged the orders of the Inspector General of Registration-cum-Chief Controlling Revenue Authority, Chennai, first respondent herein, dated 11.10.2010 and the District Registrar, Tiruppur, second respondent herein, dated 06.08.2010 and consequently, prayed for a direction to the respondents to return the documents, registered as Document Nos.3523 and 3524 of 2006, on the file of the Sub Registrar, Udumalaipettai.
2. It is the case of the petitioner-Trust that it was established by the deponent in the year 1980 under a Registered Document for educational and charitable purposes. Deponent and his wife are the Managing Trustee and Trustee of the said Trust respectively. In another Trust, viz., "G.V.Govindasamy Naidu Charities", wife of the deponent is the Managing Trustee and the deponent is the Trustee. Both the above Trusts/Charities own properties. G.V.Govindasamy Naidu Charities own properties comprised in S.No.202/A in Periyakottai Village, Udumalpet Taluk and some portions of the said property have been leased out to the petitioner-Trust for running Rajalakshmi Gengusamy Higher Secondary School.
3. The petitioner has further submitted that M/s.G.V.Govindasamy Naidu Charities, in its meeting of its Board of Trustees, resolved to effect transfer of the above property by a registered instrument, without any consideration. Accordingly, two documents were presented for registration on 20.12.2005, under which, the property covered in S.No.202/A, measuring 2.23 Acres and 2.76 acres, respectively were transferred by the wife of the deponent viz., G. Rajalakshmi Ammal, Managing Trustee of M/s.G.V.Govindasamy Naidu Charities, in favour of the deponent, who is the Managing Trustee of the petitioner-Charities.
4. The petitioner has further submitted that both the above documents, bearing stamp duty of Rs.116/- each, executed on 20.12.2005 were presented for registration before the Sub Registrar, Udumalaipettai. However, the Sub Registrar, Udumalaipettai, has kept the above documents as P.246/05 and P.No.247/05, pending, for certain doubts and referred the same to the District Registrar, Tiruppur, second respondent herein, regarding the chargeability of stamp duty to be collected with reference to the above instruments. The District Registrar, Tiruppur, second respondent herein, has clarified by his proceedings, dated 06.01.2006 that the documents in question can be registered following the proceedings of the Inspector General of Registration-cum-Chief Controlling Revenue Authority, Chennai, first respondent herein, in Ref.No.3798/C.3/1993, dated 25.03.1997, which has also been enclosed along with the proceedings of the District Registrar. It was also indicated by the second respondent that a similar instrument, under which, the property of one Trust was transferred to another Trust had been classified under Article 62(e) of Schedule I to the Stamp Act.
5. It is further submitted that based on the above proceedings of the District Registrar, dated 06.01.2006 and taking into consideration the order of the first respondent, dated 25.3.1997, the Sub Registrar, Udumalaipettai, has registered both the documents in Registration Nos.3523 and 3524 of 2006 on 28.07.2006. These two documents have been executed on stamp papers of Rs.116/-, each more than the stamp duty payable to an instrument falling under Article 62(e) and on payment of registration fee. Thereafter, the District Registrar viz., the 2nd respondent herein, has issued two notices, dated 02.02.2007, with reference to the above mentioned two documents, bearing Document Nos.3523 and 3524 of 2006, stating that the said documents can be treated only as gift deeds and therefore, they have been impounded on the ground of payment of deficit stamp duty, to an extent of Rs.6,48,000/- in respect of registered Document No.3523 of 2006 and Rs.8,00,000/- in respect of registered Document No.3524 of 2006 and that the petitioner was called upon to show cause, as to why the said amount should not be collected towards deficit stamp duty and penalty.
6. The petitioner has submitted a detailed explanation to the above notices, on 16.05.2007, pointing out that the documents presented had been originally assigned pending registration numbers and thereafter, after receiving a clarification from the District Registrar, they were duly registered on 28.07.2006. It was also pointed out that the documents would fall only within the ambit of Article 62(e) of Schedule I to the Stamp Act. However, the 2nd respondent has passed orders on 28.05.2008, holding that there are deficit stamp duty of Rs.6,48,892/- and Rs.7,98,188/- respectively along with a penalty of Rs.3,108/- and Rs.1,812/- respectively, under Section 40 of the Stamp Act.
7. It is the contention of the petitioner that invoking Section 40 of the Stamp Act is wholly illegal and without jurisdiction when the documents had already been registered. It is also contended that the reasoning contained in the order, that the documents in question, amounted to a transfer deed and therefore, the documents have to be stamped to the extent indicated above, is arbitrary. Being aggrieved by the aforesaid order, dated 28.05.2006, the petitioner has preferred Revision Applications in June' 2008 before the first Respondent, under Section 56(1) of the Stamp Act. In the said appeal, the petitioner has pointed out that the documents were duly registered on 28.07.2006 only after getting the clarification from the District Registrar, which was also based on the orders of Inspector General of Registration, Chennai the first respondent herein.
8. Without considering the abovesaid aspects, the first respondent has rejected the revision petitions on 06.08.2010, stating that the document in question was a gratuitous transfer and held that Article 62(e) would apply only in the cases of transfer of a Trust property by a Trustee to another Trustee of the same Trust, the transfer of property from one Trust to the other would constitute a "gift" falling within Article 33 to Schedule I of the Stamp Act. By the said orders, the petitioners have been called upon to pay the deficit stamp duty immediately. The District Registrar, second respondent herein, has also been directed to reckon the deficit stamp duty at the rate of Rs.596/- per square feet.
9. Assailing the impugned orders, Mr.R.Muthukumarasamy, learned Senior Counsel submitted that the provisions of the Stamp Act contemplated consideration of documents at the time of presentation and in the event of the documents bearing insufficient stamp duty, it may be impounded under Section 33 of the Act and action can be taken by the Collector, upon issuance of a certificate, reckoning the proper stamp duty under Section 33-A of the Act. However, in the present case, the documents presented were considered by the Sub Registrar, only after getting the clarification from the second respondent and therefore, there is no question of impounding the same under Section 40 of the Act.
10. Learned counsel for the petitioner further submitted that the first respondent, before whom, an appeal was filed against the order of the second respondent, has committed a grave irregularity in issuing a fresh notice, by adding a new ground in the said order. He therefore submitted that the impugned order is liable to be set aside on the ground of violation of principles of natural justice.
11. He further submitted that when the documents in question, constitute a transfer of Trust property by the Managing Trustee of Gengusamy Naidu Charities, in favour of the deponent, who is the Managing Trustee of Rajalakshmi Gengusamy Charities, Article 62(e) would stand attracted and therefore, the transfer of Trust property from one Trustee to another Trustee of the same Trust, cannot be said to be arbitrary. Hence, he submitted that the order of the first respondent is illegal and liable to be set aside.
12. He further submits that a similar transaction under which a Trustee of a Trust who had transferred a property of a Trust, in favour of the Trustee of another Trust, has been held by the I.G. of Registration in the year 1997 would attract Art 62(e) of Schedule I to the Stamp Act. In fact the above proceedings has been referred to and relied upon by the District Registrar and the Sub Registrar while registering the documents. The above proceedings of the I.G. of Registration of the year 1997 has not been set aside and held to be invalid by any Court. In the circumstances, the impugned orders which takes a contrary view cannot be sustained.
13. He further submitted that apart from the above findings rendered by the first respondent, which is illegal, the first respondent has proceeded further in the impugned order by directing the District Registrar to impose stamp duty reckoning the value of the property at Rs.596/- per sq.feet. The petitioner submits that such direction issued by the first respondent is while disposing of the Revision filed by the petitioner is wholly without jurisdiction and hence the said direction contained in the impugned order is also liable to be set aside.
14. Per contra, reiterating the averments made in the affidavit filed in support of the petition, learned Government Advocate submitted that two deeds labeled as "Transfer Deed" dated 20.12.2005 executed by M/s.G.V.Govindasamy Naidu Chanties in favour of M/s. Rajalakshmi Gengusamy Charities conveying the properties owned by the Transferor Trust without receiving any consideration for the transfer. Each document is borne by the stamp duty of Rs.116/-. When the documents were presented for registration, before the Sub Registrar, Udumalaipettai, the same were registered as Document Nos.3523 and 3524 of 2006. Subsequently after registration, the same were impounded and referred to the 2nd Respondent under Section 33 read with section 40 of the Indian Stamp Act. The Second Respondent after affording an opportunity of defence to the Petitioner and after considering the statement passed final orders in his proceedings No.685/B1/2007, dated 28.05.2008, treating document Nos.3523 and 3524/2006, as Transfer, under Article 62(e) and determined the deficit stamp duty of Rs.6,44,892/- and Rs.7,98,188/- respectively and imposed a penalty of Rs.3,108/- and Rs.1,812/- respectively, and called upon the petitioner to pay the same. On appeal before the 1st respondent, the petitioner was called upon to appear, either in person or through the Advocate for an enquiry and after perusing all the materials, and the provisions in the Indian Stamp Act, 1899, the first respondent, by his proceedings No.32963/Pl/2006, dated 06.08.2010, dismissed the revision petitions filed by the Petitioners, treating the nature of the instruments in question as "Gift" chargeable under Article 33 of Schedule-I to the Indian Stamp Act, 1899 and also directed the 2nd Respondent to issue revised orders.
15. Learned Government Advocate further submitted that even though Dr.V.Gengusamy and his wife, are the trustees of both the Transferor and Transferee Trusts and the objects are one and the same for both the Trusts, each Trust has different Identity in the eye of law and one has nothing to do with the other. When the instruments in question were presented for registration, the Sub Registrar, Udumlaipettai kept the same, as pending registration, assigning pending Document Nos.P.246 and 247 of 2005 and sought clarification from the 2nd Respondent. The second Respondent in his letter No.l0451/Bl/2005, dated 06.01.2006, has directed the Sub Registrar, Udumalaipettai to act according to the proceedings of the 1st Respondent, dated 25.03.1997.
16. Learned Government Advocate submitted that the Sub Registrar has no authority under the Indian Stamp Act, 1899, to seek for clarification from the second respondent, and the correct procedure laid down in the statute is that if the registering officer has raised a doubt, regarding the nature of an instrument, he has to decide subjectively and impound the same, under section 33 of the Indian Stamp Act, 1899 and then, refer the same to the 2nd Respondent to take a quasi-judicial decision under Section 40 of the Indian Stamp Act, 1899. The proceedings of the 1st Respondent issued in another matter, as pointed out by the Petitioner, need not be followed, since the nature of document is decided based on the facts, tenor, substance and intention of the parties to the documents.
17. He further submitted that Article 62(e) speaks about "Transfer of property between one trustee to another trustee or to the beneficiary. A beneficiary of one Trust cannot be construed as the beneficiary of another Trust. Both the words, 'Trustees' and 'beneficiaries' denote an individual Trust. Since both the Transferor and Transferee Trusts are different entities in the eye of law, the explanation offered by the Petitioner cannot be accepted.
18. Learned Government Advocate further submitted that by virtue of the powers conferred under a Deed of Trust, if a Trustee who holds the property of the Trust on behalf of beneficiaries in fiduciary capacity appoints another Trustee to administer the said Trust and transfer the properties to the beneficiaries in the case of private trust, Article 62(e) squarely applies. In the instant case, there is no mutual relationship between the Trusts and therefore, the first respondent has rightly come to the conclusion that the instruments are to be treated only as Gift deeds. For the abovesaid reasons, he prayed for dismissal of the writ petition.
19. Heard the learned counsel for the parties and perused the materials available on record.
20. Schedule-1 to Article 33 of the Act Gift Instrument of, not being a settlement (No.58) or Will or Transfer (No.62).
21. Perusal of the documents 3523 and 3524 of 2006, dated 20.12.2005, respectively, shows that Smt.G.Rajalakshmi Ammal in the capacity of the Managing Trustee of M/s.G.V.Govindasamy Naidu Charities, has executed a documents captioned as transfer deed in favour of Mr.V. Gengusamy Naidu, Managing Trustee of M/s.Rajalakshmi Gengusamy Charities. Admittedly, they are two different trusts. Two documents have been presented for transfer of property covered in S.No.202/A measuring 2.23 Acres and 2.76 Acres, respectively. Both the documents bearing stamp duty of Rs.116/- executed on 20.12.2005 have been presented for registration before the Sub Registrar Udumalpet. The said authority has kept the documents pending as P.246/05 and 247/05 and he has sought for reference to the District Registrar, Tiruppur. Vide proceedings in Mu.Mu.Ka.No.10451/B2/2005 dated 06.01.2006, the District Registrar, Tiruppur, has issued orders directing the Sub Registrar, Udumalpet to act as per the proceedings of the Registrar or Co-operative Societies in proceedings No.3798/C3/1993 dated 25.03.1997.
22. The proceedings of the Inspector General of Registration cum Chief Controlling Revenue Authority, Chennai, in Pa.Mu.No.3798/E3/93 dated 25.03.1997 is extracted hereunder.
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gjpt[j;Jiw jiytUf;fhf Translated version of the above proceedings is as follows:
Proceedings of the Inspector General of Registration cum Chief Controlling Revenue Authority, Chennai 28.
Present : Thiru.S.Savarkkar, I.A.S. D.Dis.No.3798/E3/93 Dated : 25.03.97. Sub: Appeal pending Document NO.18/96, Office of the Sub- Registrar, Kothagiri Appeal against deficit stamp duty and penalty Final Order Reg. Ref: Petition dated 15.01.93 from M/s.Gonsalves and Gonsalves, Advocates for The Superior. 2. Order No.I.15/A1/89 dated 22.2.94, of the District Registrar, Udhagamandalam. ORDER:
M/s.Gonsalves and Gonsalves, Advocates have filed this Revision Petition under Sect.56(1) of Indian Stamp Act against the order of District Registrar directing to pay Rs.8980/- towards deficit stamp duty and the penalty of Rs.20/-, totally Rs.9,000/- related to the pending document No.18/96 in the Office of the Sub Registrar, Kothagiri.
2. The pending document No.18/1996 in the Office of the Sub-Registrar, Kothagiri has been executed as the Deed of Transfer falling under Section 62(E) of Indian Stamp Act. The District Registrar considered this deed as a deed of gift and directed to remit the deficit stamp fee and penalty and a Revision Petition has been filed against the Order of the District Registrar.
3. On 28.3.94, the Advocate appeared for the personal enquiry and stated that no consideration amount was obtained and that the property belonging to one trust has been transferred to another trust. The details regarding the property purchased in the name of the trust was called for from the petitioner and obtained.
4. The Revision petition, copy of the document, the original file of the Office of the District Registrar and the details obtained from the petitioner were examined.
5. The document No.18/86 of the Office of the Sub Registrar, Kothagiri was classified as transfer deed and executed by the Superior, Carmalite Fathers, Mount Carmel Monastery, Carmel Nagar, Pothanur in favour of the Superior, Carmalite House of Prayer, Kothagiri. Accordingly, the property belonging to one trust is transferred to another trust. No consideration amount whatsoever, was received.
6. The District Registrar has considered the said document as a gift deed, since no consideration amount, whatsoever, was obtained. Since the property belonging to a trust is transferred to another trust through this document, this document is considered as "transfer from one trustee to another trustee" as per sec.62(E) of Indian Stamp Act and the Revision Petition is allowed and the Order of the District Registrar is set aside.
Sd/- xxxx 25.03.97 Inspector General of Registration /True Copy/ for Inspector General of Registration
23. Perusal of the same shows that in respect of a similar dispute as to whether a transfer of property of one trust to another should be treated as gift or transfer with or without consideration under Article 62(2) to the schedule -1 to the Indian Stamp Act, the District Registrar by observing that the said transfer of property had been made by way of gift, has imposed penalty under Section 40(1)b of the Indian Stamp Act. Being aggrieved by the same, the executant has filed a revision petition under Section 56(1) of the Act. The said provision is extracted hereunder.
"Control of, and statement of case to, Chief Controlling Revenue-authority.(1) The powers exercisable by a Collector under Chapter IV and Chapter V and under clause (a) of the first proviso to section 26 shall in all cases be subject to the control of the Chief Controlling Revenue-Authority.
24. Upon perusal of the recitals of the document and also the fact that there was payment of consideration, the Inspector General of Registration cum Chief Controlling Revenue Authority, Chennai, held that the documents presented for registration should be treated as one under article 62(e) of Schedule -I to the Indian Stamp Act and accordingly allowed the revision petition. The order of the District Registrar has been set aside. Following the orders made in the revision stated supra, the documents which were kept pending as P.246/05 and 247/05 have been subsequently registered as Document Nos.3523 and 3524 of 2006 on 28.07.2006, by the Sub Registrar, Udumalaipettai.
25. It is relevant to extract Section 33 and Section 33-A of the Indian Stamp Act.
Section 33: Examination and impounding of instruments.(1) Every person having by law or consent of parties authority to receive evidence, and every person in charge of a public office, except an officer of police, before whom any instrument, chargeable, in his opinion, with duty, is produced or comes in the performance of his functions, shall, if it appears to him that such instrument is not duly stamped, impound the same.
(2) For that purpose every such person shall examine every instrument so chargeable and so produced or coming before him, in order to ascertain whether it is stamped with a stamp of the value and description required by the law in force in India when such instrument was executed or first executed:
Provided that
(a) nothing herein contained shall be deemed to require any Magistrate or Judge of a Criminal Court to examine or impound, if he does not think fit so to do, any instrument coming before him in the course of any proceeding other than a proceeding under Chapter XII or Chapter XXXVI of the Code of Criminal Procedure, 1898 (5 of 1898);
(b) in the case of a Judge of a High Court, the duty of examining and impounding any instrument under this section may be delegated to such officer as the Court appoints in this behalf.
(3) For the purposes of this section, in cases of doubt,
(a) the State Government may determine what offices shall be deemed to be public offices; and
(b) the State Government may determine who shall be deemed to be persons in charge of public offices.
Section 33(1) (b) reads as follows:
"Notwithstanding anything contained in section 31, but without prejudice to the provisions of clause (a), the Collector before whom any instrument is brought under section 31 for determining the duty with which the instrument is chargeable, shall,if it appears to him that such instrument is not duly stamped, impound the same:
provided that nothing contained in this clause shall be deemed to authorise the Collector to impound any instrument which has not been executed but is brought to him under section 31 for determining the duty with which the instrument is chargeable or any instrument which he is authorised to endorse under section 32."
Section 33-A:
Recovery of deficit stamp duty:-(1) Notwithstanding anything contained in section 33 or in any other provisions of this Act, if, after the registration of any instruments under the Registration Act, 1908 (Central Act XVI of 1908), it is found that the proper stamp duty payable under this Act in respect of such instrument has not been paid or has been insufficiently paid, such duty or the deficit, as the case may be, may, on a certificate from the Registrar of the district under the Registration Act, 1908 (Central Act XVI of 1908) berecovered from the person, liable to pay the duty, as an arrear of land revenue:
Provided that no such certificate shall be granted unless due inquiry is made and such person is given an opportunity of being heard;
provided further that no such inquiry shall be commenced after the expiry of three years from the date of registration of the instrument.
(2) The certificate of the Registrar of the district under sub-section (1) shall, subject only to appeal under sub-section(3), be final and shall not be called in question in any Court or before any authority.
26. By proceedings in R.C No.685/B1/2007 dated 02.02.2007, the District Registrar, Tiruppur, had demanded a sum of Rs.6,44,892/- as deficit court fee and Rs.3108/- as penalty, in respect of Document No.3523 of 2006. A total demand of Rs.648000/- has been determined. Vide proceedings dated 02.02.2007, the petitioner has been directed to submit his explanation. within one month as to why, the said amount should not be recovered. Similar order has been issued in respect of Document No.3524 of 2006, with a demand of Rs.8,00,000/- has been made, vide proceedings in R.C No.686/B1/2007 dated 02.02.2007.
27. Perusal of the proceedings of the District Registrar, Tiruppur, the 2nd respondent, in respect of both the documents, does not indicate that the District Registrar has issued any notice to the petitioner or provided an opportunity as contemplated under the proviso -I to Section33-A of the Indian Stamp Act. Thus it could be seen that there is a violation of the statutory provision. Subsequently, proceedings under Section 40 of the Indian Stamp Act, 1899, have been taken. Section 40 of the Act, is extracted hereunder.
"Collectors power to stamp instruments impounded.(1) When the Collector impounds any instrument under section 33, or receives any instrument sent to him under section 38, sub-section (2), not being an instrument chargeable with a duty not exceeding ten naye paise only or a bill of exchange or promissory note, he shall adopt the following procedure:
(a) if he is of opinion that such instrument is duly stamped, or is not chargeable with duty, he shall certify by endorsement thereon that it is duly stamped, or that it is not so chargeable, as the case may be:
(b) if he is of opinion that such instrument is chargeable with duty and is not duly stamped, he shall require the payment of the proper duty or the amount required to make up the same, together with a penalty of the five rupees, or, if he thinks fit, an amount not exceeding ten times the amount of the proper duty or of the deficient portion thereof, whether such amount exceeds or falls short of five rupees:
Provided that, when such instrument has been impounded only because it has been written in contravention of section 13 or section 14, the Collector may, if he thinks fit, remit the whole penalty prescribed by this section.
(2) Every certificate under clause (a) of sub-section (1) shall, for the purposes of this Act, be conclusive evidence of the matter stated therein.
(3) Where an instrument has been sent to the Collector under section 38, sub-section (2), the Collector shall, when he has dealt with it as provided by this section, return it to the impounding officer."
28. In response to the notices dated 02.02.2007 issued by the Deputy Registrar, Tiruppur, in respect of both the documents, the petitioner has offered his explanation that both the trustees are different, that there was no consideration and pursuant to the resolution passed by the trustees as Managing Trustee of M/s.G.V.Govindasamy Naidu Charities and M/s.Rajalakshmi Gengusamy Charities, transfer has been effected and that the documents registered could not be treated as gift deeds and should be treated only under Section Article 62(e) to Schedule -I of the Act.
29. The Managing trustee of Rajalakshmi Gengusamy Charities, Mr.V.Gengusamy Naidu in his explanation has also indicated that the registration has been done, only after considering the earlier proceedings of the District Registrar, Tiruppur, who had acted, as per the orders in the revision, stated supra.
30. Perusal of the order passed under Section 40 (1)b of the Indian Stamp Act, 1899, by the District Registrar in R.C.No.685/B1/2007 dated 28.05.2008 in respect of both the documents does not reflect any reasons, for rejecting the explanation, except to state that it was not satisfactory. The orders dated 28.05.2008 stated supra, are on the same lines and hence, this Court deems it fit to extract the order made in respect of Doc.No.3523/06.
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Translated version of the above proceedings is as follows:
Proceedings of the District Registrar (in the grade of Deputy Inspector General of Registration, Tiruppur) Present : Thiru.M.Rajamanickam R.C.No.685/A1/2007 Date: 28.05.2008 Sub: Stamp Act impounded document No.3523/2006 in the Office of the Sub Registrar Reg.
Ref: 1. Letter No.685/A1/2007 dated 2.2.2007 and 28.5.2008 of the District Registrar, Tiruppur.
2. Report NO.Mu.A.1/2007 dated 12.01.2007 of the District Registrar, Udumal.
3. Your letter No.Nil dated 16.05.2007.
ORDER:
Your letter 3rd cited under reference was examined in accordance with the letter of this Office 1st cited under reference, on examining, it was found that your averment was not admissible. The clauses in the document 2nd cited under the reference was considered to be a deed of transfer of right without the consideration having been received as per section 62(e) of the Stamp Act. It has been decided in the capacity of a Collector and as per Section 40 of the Stamp Act, that the aforesaid document must have been executed in a Stamp Paper for the value of Rs.6,45,008/- as per Indian Stamp Act, 1899.
Therefore, since the aforesaid document has been written in a Stamp paper for the value of Rs.116/-. It has been notified that a sum of Rs.6,44,892/- shall be collected towards deficit of stamp duty and Rs.3,108/- as penalty U/s.40(1)(B) of Stamp Act.
Note: It is informed that an appeal could be preferred before the Inspector General of Registration and the Chief Revenue Controlling Authority (Stamp Act) Chennai 28.
District Registrar (in the grade of Deputy Inspector General of Registration).
Tiruppur.
31. Being aggrieved by the same, the petitioner has filed revision petitions to the Inspector General of Registration cum Chief Controlling Revenue Authority, Chennai.
32. While adverting to the contentions, the Inspector General of Registration cum Chief Controlling Revenue Authority, Chennai has framed the following point for consideration.
"whether transfer of property belonging to one trust to another would fall under Schedule I to Article 62(e) of the Indian Stamp Act."
33. While considering the abovesaid issue, the Inspector General of Registration cum Chief Controlling Revenue Authority, Chennai, has extracted Article 62(e) as hereunder.
Transfer: Whether with or without consideration of any Trust property from one trustee to another trustee or from a trustee to beneficiary Thirty rupees or such smaller amount as may be chargeable under clause (b) and (c) of this articles.
34. Article 62(e) of Schedule I of the Act, "Transfer of trust property without consideration: - The words "without consideration" in this clause are not consistent with the words "whether with or without consideration" in the opening part of the Article. But the special words in this clause must prevail and transfers to beneficiaries must be chargeable with stamp duty as a conveyance if they purport to be for consideration, ostensible or real.
35. While answering the above issue, the Inspector General of Registration cum Chief Controlling Revenue Authority, Chennai has held that the abovesaid Article would apply only in the following circumstances,
(i) If the trustee is not able to administer the property, he could nominate another trustee and transfer the property.
(ii) Trust properties could be transferred to the beneficiaries.
(iii) The transfer made through the trustee in question is neither a trustee nor beneficiary of the transferee trust.
36. However, the Inspector General of Registration cum Chief Controlling Revenue Authority, Chennai has categorically observed that both the transferor and the transferee are separate and individual trusts. He has further stated that though, both the trusts have separate identities, and since the transfer is inter vivos between separate persons, the documents submitted for registration would fall under Section 122 of the Indian Stamp Act viz., 'Gift' and therefore, the stamp duty payable is under Article 33 to schedule -I of the Indian Stamp Act. Accordingly, the Inspector General of Registration cum Chief Controlling Revenue Authority, Chennai has dismissed the revision petition vide order dated 06.08.2010. Consequently, orders dated 11.10.2010 in R.C.No.6194/B1/2010 and 6197/B1/2010, have been issued by the District Registrar, demanding payment of deficit fee.
37. As stated supra, the transfer of the properties under both the documents by Smt.Rajalakshmi Ammal, Managing Trustee of Ms/.G.V.Govindasamy Naidu Charities, has been done only after passing a resolution by the said charity. The decision is unanimous.
38. In Shanthi Vijay and Co. And Others Vs. Princess Fatima Fouzia and Others, reported in 1979 (4) SCC 602, Supreme Court considered a case as to whether a contract effected in absence of one of the trustees by the remaining trustees in the absence of any stipulation to that effect in the trust deed and without obtaining the express and specific authorisation from the other absent trustee, in contravention of Sections 47 & 48 of the Trusts Act. Answering the question, the Supreme Court held that when there are more than one trustees, all of them and not merely majority of them should unanimously agree to the sale, subject to any express direction of the settlor. Delegation or authorisation of the sale by a trustee to his co-trustees, is possible only if it is express, specific and clear. The sale effected in suspicious circumstances by the co-trustee in absence of Chairman of the Board of Trustees or his specific authorisation and without any stipulation to that effect in the trust deed, has been held as void. Paragraph Nos. 26 to 29 require reproduction. The same are as follows:
"26. The law governing the execution of trusts is well settled. In the case of a private trust, where there are more trustees than one, all must join in the execution of the trust. The concurrence of all is in general necessary in a transaction effecting the trust property, and a majority cannot bind the trust estate. In order to bind the trust E. estate, the act must be the act of all. They constitute one body in the eye of law, and all must act together. This is, of course, subject to any express direction given by the settlor. The Judicial Committee in Lala Man Mohan Das v. Janki Prasad [LR (1944) 72 IA 39] quoted a passage from Lewin's Law of Trusts, 15th ed., p. 190, to the effect :
"In the case of co-trustees the office is a joint one. Where the administration of the trust is vested in co-trustees they all form as it were but one collective trustee, and there fore must execute the duties of the office in their joint capacity. It is not uncommon to hear one of several trustees spoken of as the acting trustee but the Court knows no such distinction: all who accept the office are in the eye of the law acting trustees. If any one refuses or be incapable to join, it is not competent for the others to proceed without him, but the administration of the trust must in that case devolve upon the Court. However, the act of one trustee done with the sanction and approval of a co- trustee may be regarded as the act of both. But such sanction or approval must be strictly proved."
which, in their opinion, contains a correct statement of law applicable in England and that the same doctrine applied to India also. The' decision in Lala Man Mohan Das's case has been followed with approval by this Court in L.Jankirama Iyer & Ors. v. Neelakanta Iyer & ors [1962 Supp 1 SCR 206].
27. It follows as a necessary corollary, that where there are several trustees they must act unanimously in making a sale or a contract of sale, unless it is provided otherwise by the terms of the deed. In exercising the power of sale, as in the exercise of other powers, a trustee cannot, therefore, properly delegate the performance of the acts which he ought personally perform. Although a trustee may listen to the opinions and wishes of others, he must exercise his own judgment. Thus a trustee for sale of property, cannot leave the whole conduct of the sale to his co-trustees. The reason for this is the settlor has entrusted the trust property and its management to all the trustees, and the beneficiaries are entitled to the benefit of their collective wisdom and experience: [Underhill's Law of Trusts and Trustees, 12th Ed., pp. 434, 442-43: Scot on Trusts, vol. 2, p. 1033].
28. In L. Janakirama Iyer's case this Court observed that all acts which the trustees intend to take for executing the trust, must be taken by all of them acting together, as provided by s. 48 of the Trusts Act, 1882. Section 48 of the Trusts Act provides as follows:
"48. When there are more trustees than one, all must join in the execution of the trust, except where the instrument of trust otherwise provides."
29. It is axiomatic that where there are more trustees than one, all must join in the execution of the trust, except where the instrument of trust otherwise provides. Therefore, as laid down by this Court in L. Janakirama Iyer's case, if the validity of an alienation effected by the trustees falls to be considered only in the light of s 48, the fact that out of the three trustees only two have executed the sale deed would by itself make the transaction invalid and would not convey a valid title to the transferee."
39. From the above judgment it could be seen that if there is a consensus of all the trustees to effectuate transfer of a property, it could be done, and on facts and circumstances of the reported case, the Supreme Court held that in the absence of any express, specific or clear authorisation or without specific authorisation of the Chairman of the Board of Trustees and without any stipulation to that effect in the trust deed, the document is void.
40. Applying the said judgment to the facts of this case, it could be seen that the transfer effected by Smt.G.Rajalakshmi Ammal, as the Managing Trustee of M/s.G.V.Govindsamy Naidu Charities in favour of Mr.V.Gengusamy Naidu, Managing Trustee of M/s. Rajalakshmi Gengusamy Charities, is only after a consensus decision.
41. As stated supra, the Inspector General of Registration cum Chief Controlling Revenue Authority, Chennai has also fairly admitted that the transaction is between two trusts. He has stated that there cannot be a transfer of a trust property from one trustee to another trustee within the same trust. As all the trustees hold the property in fiduciary capacity, such transaction between the trustees under the same trust is not permissible. But in a given case, where one of the trustees, is not in a possible to administer the trust properties, there can be a change of trustee, for which the properties need not be transferred. The moment there is a change in the trusteeship, the trustee would hold the properties along with other trustees, and would continue to administer the properties.
42. As per Article 62(e) to schedule -I of the Indian Stamp Act, transfer whether with or without consideration of above property from one trustee to another or from the trustee to a beneficiary the stamp duty payable is Rs.30/- or such smaller amount as may be chargeable under clause (b) and (c) of this article. In the instant case, the Managing Trustee of Gengusamy Naidu Charities has transferred the trust property, in favour of the deponent of the supporting affidavits, who is the Managing Trustee of Rajalakshmi Gengusamy Naidu Charities. Therefore, the transfer of a trust property from one trustee to another trustee of the same trust attracts Section 62(e).
43. As rightly pointed out by the learned Senior counsel that there is no question of a trust property being transferred from one trustee to another trustee of the same trust. But there could be a transfer of property of one trust to another trust. Article 62(e) to schedule-I has to be read and interpreted in the manner of its enforceability and the interpretation of the Inspector General of Registration cum Chief Controlling Revenue Authority, Chennai to the contrary cannot be accepted.
44. Though,the Inspector General of Registration cum Chief Controlling Revenue Authority, Chennai, in his counter affidavit, has contended that the Sub registrar has no authority under the Indian Stamp Act to seek for clarification as to the nature of the documents in his administrative capacity and that the correct procedure laid down in the statute is that if the registering authority has any doubt regarding the nature of the document impounded under Article 33 of the Indian Stamp Act, he has to refer the same to the District Registrar, Tiruppur, the 2nd respondent, to take a decision under Section 40 of the Indian Stamp Act and further contended that the proceedings issued by the Inspector General of Registration cum Chief Controlling Revenue Authority, Chennai, 1st respondent in proceedings No.3798/C3/93 dated 25.03.1997, is not applicable to the facts of this case, this Court is not inclined to accept the said contention, for the reasons that the Inspector General of Registration cum Chief Controlling Revenue Authority, Chennai, in her counter affidavit has conspicuously not disputed the correctness of the orders passed by he Predecessor-in-office in the year 1997. Section 56 of the Act reads as follows:
"Control of, and statement of case to, Chief Controlling Revenue-authority.(1) The powers exercisable by a Collector under Chapter IV and Chapter V and under clause (a) of the first proviso to section 26 shall in all cases be subject to the control of the Chief Controlling Revenue-Authority.
(2) If any Collector, acting under section 31, section 40 or section 41, feels doubt as to the amount of duty with which any instrument is chargeable, he may draw up a statement of the case, and refer it, with his own opinion thereon, for the decision of the Chief Controlling Revenue-Authority.
(3) Such authority shall consider the case and send a copy of its decision to the Collector, who shall proceed to assess and charge the duty (if any) in conformity with such decision."
45. In the instant case, though the Sub Registrar acting under Section 31, Section 40 or Section 41, has not referred the matter, with his own opinion to the Chief Controlling Revenue Authority, he has certainly sought for clarifications from the District Registrar, who inturn has directed the Sub Registrar to act as per the orders passed by the Inspector General of Registration and Chief Controlling Revenue Authority. At this juncture, it has to be noted that what the Chief Controlling Revenue Authority, in his counter affidavit has stated is only about the procedure that ought to have been followed, but he has not said that the order dated 25.03.1997, is erroneous. When he has said that the order made in one case cannot be made applicable to another, he is bound to state as to how it is not applicable on same set of facts. Procedural irregularity cannot be a ground for extending the benefits of an order passed on similar set of facts.
46. The facts stated in the order dated 25.03.1997 squarely applies to this case also. When the Sub registrar of Udumalpet District has sought for clarification as to the course of action to be taken in determining the nature of the document, he has been rightly instructed by his superior officer viz., the District Registrar, Tiruppur district to follow the earlier order passed by the Head of the Departmet viz., Inspector General of Registration cum Chief Controlling Revenue Authority, Chennai.
47. In W.O.Holdsworth v. State of U.P., reported in AIR 1957 SC 887, the Apex Court, held as follows:
" 21. Whatever be the position in English Law, the Indian Trusts Act, 1882 (II of 1882) is clear and categoric on this point. Section 3 of that Act defines a Trust as an obligation annexed to the ownership of property, and arising out of a confidence reposed in and accepted by the owner, or declared and accepted by him, for the benefit of another, or of another and the owner: the person who accepts the confidence is called the "trustee": the person for whose benefit the confidence is accepted is called the "beneficiary": "the beneficial interest" or "interest" of the beneficiary is his right against the trustee as owner of the trust property; the subject matter of the trust is called "trust property" or "trust money."
22. These definitions emphasize that the trustee is the owner of the trust property and the beneficiary only has a right against the trustee as owner of the trust property. The trustee is thus the legal owner of the trust property and the property vests in him as such. He no doubt holds the trust property for the benefit of the beneficiaries but he does not hold it on their behalf. The expressions " for the benefit of " and " on behalf of " are not synonymous with each other. They convey different meanings. The former connotes a benefit which is enjoyed by another thus bringing in a relationship as between a trustee and a beneficiary or cestui que trust, the latter connotes an agency which brings about a relationship as between principal and agent between the parties, one of whom is acting on behalf of another. Section 11(1) therefore can only come into operation where the land from which agricultural income is derived is held by such common manager, receiver, administrator or the like on behalf of, in other words, as agent or representative of, persons jointly interested in such land or in the agricultural income derived therefrom. Even though such persons were the beneficiaries cestui que trust under a deed of trust, they would not be comprised within the category of persons on whose behalf such land is held by the trustees and the trustees would not be included in the description of common manager, receiver, administrator or the like so as to attract the operation of s. 11(1). Trustees do not hold the land from which agricultural income is derived on behalf of the benefi- ciaries but they hold it in their own right though for the benefit of the beneficiaries.
23. The beneficiaries are also not necessarily persons who are jointly interested in such land or in the agricultural income derived therefrom. The term "jointly interested" is well-known in law and predicates an undivided interest in the land or in the agricultural income derived therefrom as distinguished from a separate or an individual interest therein. If on a true reading of the provisions of the deed of trust the interest which is created in the beneficiaries is a separate or individual interest of each of the beneficiaries in the land or in the agricultural income derived therefrom, merely because they have a common interest therein, that cannot make that interest a joint interest in the land or in the agricultural income derived therefrom. The words "jointly interested" have got to be understood in their legal sense and having been used in a statute are not capable of being understood in a popular sense as meaning a common interest or an interest enjoyed by one person in common with another or others."
48. The words envisaged in Article 63(e) of Schedule I of the Stamp Act is unambiguous and therefore, the contention of the respondents that a beneficiary of one Trust cannot be construed as the beneficiary of another Trust and since the said Article does not say that transfer from one trustee of a Trust to a Trustee of another Trust, the words 'Trustees' and 'beneficiaries' found in the Article denote only an individual Trust, cannot be accepted. Useful reference can be made to a decision of the Apex Court in Union of India v. Deoki Nandan Aggarwal reported in 1992 (Supp) 1 SCC 323, wherein, at Paragraph 14, it has held as follows:
"14. We are at a loss to understand the reasoning of the learned Judges in reading down the provisions in paragraph 2 in force prior to November 1, 1986 as "more than five years" and as "more than four years" in the same paragraph for the period subsequent to November 1, 1986. It is not the duty of the Court either to enlarge the scope of the legislation or the intention of the legislature when the language of the provision is plain and unambiguous. The Court cannot re- write, recast or reframe the legislation for the very good reason that it has no power to legislate. The power to legislate has not been conferred on the courts. The Court cannot add words to a statute or read words into it which are not there. Assuming there is a defect or an omission in the words used by the legislature the Court could not go to its aid to correct or make up the deficiency. Courts shall decide what the law is and not what it should be. The Court of course adopts a construction which will carry out the obvious intention of the legislature but could not legislate itself. But to invoke judicial activism to set at naught legislative judgment is subversive of the constitutional harmony and comity of instrumentalities. Vide P.K.Unni v. Nirmala Industries [1990 1 SCR 482 at 488]; Mangilal v. Suganchand Rathi [1965] 5 SCR 239; Sri Ram Ram Narain Medhi v. The State of Bombay [1959] Supp.1 SCR 489; Smt. Hira Devi & Ors. v. District Board, Shahjahanpur, [1952] SCR 1122 at 113 1; Nalinkhya Bysack v. Shyam Sundar Haldar & Ors., [1953] SCR 533 at 545; Gujarat Steel Tubes Ltd., v. Gujarat Steel Tubes Mazdaor Sabha [1980] 2 SCR 146; S.Narayanaswami v. G. Pannerselvam & Ors., [1973] 1 SCR 172 at 182; N.S.Vardachari v. G.Vasantha Pai & Anr. [1973] 1 SCR 886; Union of India v. Sankal Chand Himatlal Sheth & Anr. [1978] 1 SCR 423 and Commissioner of Sales Tax, U.P.v. Auriaya Chamber of Commerce, Allahabad, [1986] 2 SCR 430 at 438. Modifying and altering the scheme and applying it to others who are not otherwise entitled to under the scheme, will not also come under the principle of affirmative action adopted by courts some times in order to avoid discrimination. If we may say so, what the High Court has done in this case is a clear and naked usurpation of legislative power."
49. Admittedly, when there are orders issued on the same set of facts by the Head of the Department in exercise of the appeal or revisional powers on the same set of facts, no illegality can be said to have been committed by the Sub Registrar, Udumalpet, in registering the documents as Doc.Nos.3523 and 3524 of 2006, respectively. Whereas, vide order in No.4082/B1/2006 dated 14.07.2006, the District Registrar Tiruppur has impounded the documents under Article 62(e) and proceeded to determine the stamp duty payable by the petitioner.
50. Going through the material on record and the statutory provisions, this Court is of the view that the interpretation given by the respondents to Article 62(e) to schedule -I of the Indian Stamp Act cannot be accepted.
51. In view of the above, the impugned orders are set aside and there shall be a direction to the respondents to return the documents, which have been registered as Document Nos.3523 and 3524 of 2006, on the file of the Sub Registrar, Udumalaipettai, within a period of two weeks from the date of receipt of a copy of this order.
52. In the result, the Writ Petitions are allowed. No costs. Consequently, connected Miscellaneous Petitions are also closed.
27.04.2012 Index: Yes/No Internet : Yes/No ars/skm To
1. The Inspector General of Registration cum Chief Controlling Revenue Authority, Chennai 600 028.
2. The District Registrar, Tiruppur.
S.MANIKUMAR, J., ars W.P.Nos.28017 and 28018 of 2010 27.04.2012