Andhra HC (Pre-Telangana)
M. Hari Narayana @ Hari Babu vs The Chief Controlling Revenue ... on 29 January, 2008
Equivalent citations: AIR2008AP117, 2008(2)ALD515, 2008(2)ALT556, AIR 2008 ANDHRA PRADESH 117, 2008 (4) ALL LJ NOC 846, 2008 (3) AIR KAR R 493, 2008 A I H C (NOC) 467 (AP), (2009) 106 REVDEC 292, (2008) 2 ANDH LT 556
Author: R. Subhash Reddy
Bench: R. Subhash Reddy
ORDER R. Subhash Reddy, J.
1. This writ petition is filed questioning the validity of the order dated 14th of December 2005 passed in Proceedings No. G1/85/2003 by the District Registrar of Assurances, Kadapa and order dated 2nd of August 2007 passed in Proceedings No. CCRA/19798/2005 by the Chief Controlling Revenue Authority and Commissioner and Inspector General of Registration and Stamps, Hyderabad. Few necessary facts in brief are as follows:
2. One Smt. P. Swaroopa Rani was the owner of a theatre which was being run in the name of 'Sri Venkateswara Picture Palace', situated in Survey No. 72/1 of Nagarajupalli village in 14th Ward in Kadapa Municipal limits. Petitioner has entered into an agreement of sale to purchase the said theatre for a total consideration of Rs. 64,00,000/-. The agreement was executed on 28th of March 2001 on Rs. 100/- Non-judicial stamp paper. In terms of the above agreement, a part consideration amount was paid and possession was to be handed over by the owner to the petitioner-purchaser on receiving the full sale consideration amount of Rs. 64,00,000/-. It is alleged that in spite of readiness by the petitioner to pay the balance consideration amount and to take possession of the property, the owner failed to perform the contract. Therefore, the petitioner herein filed a suit in O.S. No. 44 of 2002 on the file of the District Judge, Kadapa, seeking specific performance of the agreement. In the said suit, when the petitioner herein wanted to exhibit the agreement of sale dated 28th of March 2001, there was an objection from the owner of the theatre, who is defendant in the suit, on the ground that same is not admissible in evidence asmuch as it was under-stamped and the stamp duty paid was not in accordance with the provisions of the Indian Stamp Act, 1899 (for short 'the Act'). On such an objection, the learned District Judge, Kadapa has referred the document in I.A. No. 45 of 2003 for impounding and collection of stamp duty and penalty as per the provisions of the Act and the Rules made thereunder. On such reference, initially the District Registrar, Kadapa has passed orders dated 11.07.2003 in Proceedings No. G1/85/2003, determining the deficit stamp duty of Rs. 3,72,500/- and a penalty equivalent to one time of the deficit stamp duty i.e. Rs. 3,72,500/- and demanded totally an amount of Rs. 7,45,000/-. The said order was questioned before the appellate authority and the appellate authority has set aside the same on the ground that the District Registrar has passed orders dated 11.07.2003 without giving proper opportunity to the petitioner and remitted the matter to the primary authority-District Registrar, Kadapa for fresh consideration. After remand, the 2nd respondent-District Registrar has passed the impugned order dated 14.12.2005 by recording a finding that the market value of the property which is the subject matter of the agreement of sale dated 28.03.2001 was Rs. 74,52,000/- and confirmed the deficit stamp duty and penalty at Rs. 7,45,000/-.
3. It was the case of the petitioner before the primary authority that asmuch as the document is a simple agreement of sale, it falls within the purview of Article 6(C) of Schedule I-A of the Act and as such, the stamp duty paid was sufficient and there is no deficit stamp duty at all. But however, the primary authority, by recording a finding that the agreement of sale dated 28.03.2001 will fall within the purview of Article 6(B) of Schedule I-A of the Act for the purpose of chargeability of stamp duty, rejected the plea of the petitioner. As against the said orders, the petitioner filed a revision petition before the 1st respondent-Chief Controlling Revenue Authority purportedly under Section 56(1) of the Act. The said authority, by further impugned order dated 2nd of August 2007 in Proceedings No. CCRA/19798/2005, while setting aside the order dated 14.12.2005, has issued directions to the District Registrar i.e. respondent No. 2 herein to make a fresh order treating the case under Article 47-A of Schedule I- A of the Act. During the pendency of the proceedings before the primary authority and revisional authority, on the ground that they are not disposing of the matters, the petitioner earlier approached this Court in W.P. No. 13813 of 2004. But asmuch as final orders are now passed and are subject matter of challenge in the present writ petition, no further details need to be mentioned about the earlier writ petition. The revisional authority i.e. 1st respondent herein has recorded a finding that asmuch as pursuant to agreement of sale dated 28th of March 2001 possession was delivered to the petitioner by paying further amount under a receipt dated 18th of September 2002, as such, the said agreement has to be treated as a sale within the meaning of explanation 1 to Article 47-A of Schedule I-A of the Act. Though the primary authority has arrived at the deficit stamp duty and levied penalty on the ground that stamp duty was to be paid under Article 6(B) of the Act, but however, the revisional authority in the revision filed by the petitioner, by recording a finding that the stamp duty has to be collected under explanation 1 to Article 47-A of Schedule I-A of the Act, has set aside the order of the primary authority dated 14.12.2005 and ordered to make a fresh order treating the case under explanation 1 to Article 47-A of Schedule I-A of the Act.
4. The order of the District Registrar, dated 14th of December 2005 and the order of the Chief Controlling authority, dated 2nd of August 2007 which are impugned in the present writ petition, are mainly questioned on the ground namely, that the agreement of sale dated 28th of March 2001 is a simple agreement of sale without delivery of possession, as such, it was executed on a Rs. 100/- Non-judicial stamp paper in accordance with the provisions as contained in Article 6(A) of Schedule I-A of the Act, therefore, it is their case that the primary authority erred in computing the deficit stamp duty by applying Article 6(B) of Schedule I-A of the Act. It is also the further case of the petitioner that asmuch as the agreement of sale dated 28th of March 2001 is not followed by delivery of possession and there is no endorsement with regard to delivery of possession on any subsequent date, as such, it cannot be construed as a sale within the meaning of explanation 1 to Article 47-A of Schedule I-A of the Act.
5. Counter affidavit is filed by the Commissioner and Inspector General of Registration and Stamps, who is the Chief Controlling Revenue authority. In the counter affidavit, while generally denying various allegations of the petitioner, it is stated that the case of the petitioner falls within explanation 1 to Article 47-A of Schedule I-A of the Act, because this explanation says that an agreement to sell followed by or evidencing delivery of possession of the property agreed to be sold shall be chargeable as a "Sale" under this Article, and it is further stated that the agreement dated 28th of March 2001 is an agreement to sell followed by evidencing delivery of possession of property agreed to be sold. It is stated that from the receipt dated 18th of September 2002, it is clear that possession has been handed over pursuant to agreement to sell, therefore, asmuch as there is an evidence of delivery of possession pursuant to agreement of sale dated 28th of March 2001, the stamp duty is to be charged treating the same as a sale under explanation 1 to Article 47-A of Schedule I-A of the Act.
6. Heard learned Counsel for the petitioner Sri S.Niranjan Reddy appearing for Sri V.R. Reddy and the learned Government Pleader appearing for the respondents.
7. It is submitted by learned Counsel Sri S.Niranjan Reddy that in terms of the agreement dated 28th of March 2001, possession remained with the owner of the property and in that view of the matter, it is a simple agreement of sale and as per the schedule of rates notified for chargeability of stamp duty under Schedule I-A of the Act, the stamp duty was only Rs. 100/-. It is submitted that there was no deficit stamp duty at all and the primary authority has erred in applying the rates as contemplated under Article 6(B) of Schedule I-A of the Act. It is further contended by learned Counsel for petitioner that asmuch as there is no follow-up delivery of possession pursuant to agreement of sale and in the absence of any other evidence by way of endorsement on the agreement regarding delivery of possession, the revisional authority has also erred in applying explanation 1 to Article 47-A of Schedule I-A of the Act. It is the contention of the learned Counsel that the receipt dated 18th of September 2002 should not have been relied on while considering the chargeability of stamp duty on the agreement of sale dated 28th of March 2001. The learned Counsel has placed reliance on a judgment of this Court in the case of M.Madusudan Reddy v. M.Kamalamma and Ors. and also on the judgment in the case of Pechitti Ramakrishna v. Nekkanti Venkata Manohara Rao and Ors. . On the other hand, it is contended by learned Government Pleader appearing for the respondents that in the instant case there is evidence of delivery of possession vide receipt dated 18th of September 2002 which is pursuant to agreement of sale dated 28th of March 2001, as such, the agreement of sale has to be treated as a sale for the purpose of chargeability of stamp duty and the same falls within the purview of explanation 1 to Article 47-A of Schedule I-A. It is further submitted that inspite of evidence of delivery of possession, asmuch as the primary authority erred in applying the rates contemplated under Article 6(B) of the Act, as such, the revisional authority, as a Chief Controlling authority, has correctly ordered to make a fresh order, applying the provisions under Article 47-A of Schedule I-A of the Act. It is submitted that in view of delivery of possession vide receipt dated 18th of September 2002, there is no illegality or any irregularity committed by the Chief Controlling authority which warrant an interference by this Court in its writ jurisdiction. The learned Government Pleader has placed reliance on a judgment of this Court in the case of Mekapothula Linga Reddy v. Durgempudi Gangi Reddy and Anr. 1995 (2) ALD 59 in support of his argument.
8. Before referring to various submissions made by the learned Counsel for the parties, it is appropriate to refer to certain provisions of the Act that are relevant for the purpose of this case. Under the provisions of the Act, instruments are to be charged in terms of Section 3 of Chapter-II of the Act. The nature of instrument and the amount of duty chargeable is indicated in Schedules I and I-A of the Act. In the instant case, Articles 6 and 47 of Schedule I-A of the Act are relevant. Article 6 of Schedule I-A of the Act reads as follows:
6. AGREEMENT or MEMORANDUM OF AN AGREEMENT not otherwise provided for:
(A) Where the value-
(i) does not exceed Rs. 5,000/- Ten Rupees
(ii) exceeds Rs. 5,000/- but does Twenty Rupees
not exceed Rs. 20,000/-
(iii)exceeds Rs. 20,000/- but does
not exceed Rs. 50,000/- Fifty Rupees
(iv) exceeds Rs. 50,000/- One hundred Rupees.
(B) If relating to construction of a Five Rupees for every one hundred
house or building including a multi- rupees or part thereof on the
unit house or building or unit of market value or the estimated
apartment/flat/portion of a multi- cost of the proposed construction
storied building or for development /development of such property
/sale of any other immovable as the case may be, as mentioned
property. in the agreement or the value
arrived at in accordance with the
schedule of rates prescribed by
Note: Registration under this clause the Public Works Department
Rs. 1000/- authorities whichever is higher.
Vide G.O. Ms. No. 2045 (Reg.I)
dt. 28.11.05 w.e.f. 01.12.05.
(C) In any other case One hundred rupees.
9. An agreement of sale coupled with delivery of possession was also covered under Article 6 of Schedule I-A of the Act. But however, by virtue of A.P. Amendment Act No. 21 of 1995 with effect from 01.04.1995, an agreement to sell followed by or evidencing delivery of possession of the property agreed to be sold, is brought within the purview of Article 47 in view of the explanation added by such amendment. Explanation 1 to Article 47-A of Schedule I-A of the Act reads as follows-
An agreement to sell followed by or evidencing delivery of possession of the property agreed to be sold shall be chargeable as a "Sale" under this Article:
Provided that, where subsequently a sale deed is executed in pursuance of an agreement of sale as aforesaid or in pursuance of an agreement referred to in Clause (b) of Article 6, the stamp duty, if any, already paid or recovered on the agreement of sale be adjusted towards the total duty leviable on the sale deed.
10. Coming to the facts of the case on hand, the petitioner has entered into an agreement to purchase the theatre in question by an agreement of sale dated 28th of March 2001 and in terms of the said agreement, possession remained with the owner and was to be delivered by the owner to the petitioner-purchaser only after paying the full sale consideration amount of Rs. 64,00,000/-. When there was an objection with regard to the admissibility of the document, it was referred for adjudication by the Civil Court, in the suit filed by the petitioner. Before the primary authority, though it was the case of the petitioner that the document falls within the purview of Article 6(C) of Schedule I-A of the Act, but however, by recording a finding that it has to be charged under Article 6(B) of Schedule I-A, the primary authority i.e. 2nd respondent-District Registrar, has arrived at the deficit stamp duty of Rs. 3,72,500/-. Further, he has also imposed a penalty equivalent to one time of the deficit stamp duty i.e. Rs. 3,72,500/- and totally he has demanded an amount of Rs. 7,45,000/- on account of deficit stamp duty and penalty. Though the petitioner has valued the property under the agreement of sale at Rs. 64,00,000/- , but however, as per the guidelines issued by the Chief Controlling authority, the 2nd respondent-District Registrar has arrived at the market value of the property at Rs. 74,52,000/-. Since the petitioner is not disputing the market value of the property, this Court need not go into that aspect of the matter. However, it is the case of the petitioner that asmuch as it is a simple agreement of sale without any delivery of possession, it was properly stamped on Rs. 100/- Non-judicial stamp and the same is in accordance with the notified rates under Schedule I-A of the Act. The primary authority applied the stamp duty indicated under Article 6(B) of Schedule I-A of the Act by recording a finding that the agreement of sale is in respect of a cinema theatre as such, it is for the sale of immovable property i.e. site as well as the structure and hence, Article 6(B) of Schedule I-A is applicable for the purpose of chargeability of the stamp duty.
11. This Court, in the judgment relied upon by the learned Counsel for petitioner in the case of Pechitti Ramakrishna (2nd supra), has held as follows:
A careful reading of Article 6(B) of Schedule I-A of the Act goes to show that it is applicable if the agreement relates to construction of a house or building including a multi-unit house or building or unit of apartment/flat/portion of a multi-storied building or for development/sale of any other immovable property. A further reading of the stamp duty payable specified in column No. 2 also makes it clear that this provision was introduced in relation to the construction agreements or agreements of the like nature. No doubt, emphasis was laid on the language "sale of any other immovable property". These words "sale of any other immovable property" in Article 6(B) of Schedule I-A of the Act may have to be read along with the rest of the provision and also with column No. 2. As far as any other case specified in Article 6(C) of Schedule I-A of the Act is concerned, it should be construed to be a case not falling under either A or B of Schedule I-A of the Act. It is needless to say that Article 6(A) of Schedule I-A of the Act is a general provision. It is no doubt true that in the present case, the sale consideration recited in the agreement of sale is Rs. 42,500/- and it is in relation to the sale of a vacant site. On a careful reading of the language employed in Article 6 (A, B & C) of Schedule I-A of the Act and also the stamp duty payable specified in column No. 2 and taking into consideration the object of introducing B by A.P.Act 21 of 1995, I am of the considered opinion that Article 6(B) of Schedule I-A of the Act would be applicable only in such specified cases and the same cannot override the general provision of Article 6(A) of Schedule I-A of the Act and agreement in question would definitely fall under the general provision of Article 6(A)(iii) of Schedule I-A of the Act and hence, the stamp duty already paid is sufficient. It is also clarified that in the light of the nature of the document Article 6(B) of Schedule I-A of the Act is not applicable to the present case. Hence, the impugned order holding that the stamp duty and penalty relating to the document in question is liable to be paid under Article 6(B) of Schedule I-A of the Act and cannot be sustained.
12. From a reading of Article 6(B) of Schedule I-A, it is also clear that it is applicable only in relation to agreements for development/sale in relation to construction of a house or building including a multi-unit house or building or unit of apartment/flat/portion of a multi-storied building or for development/sale of any other immovable property. In the instant case, from the recitals of agreement of sale dated 28th of March 2001, it is clear that it is not an agreement for any of the purposes mentioned under Article 6(B) of Schedule I-A of the Act. It is the contention of learned Counsel for petitioner that asmuch as the value of the property was more than Rs. 50,000/-, it makes no difference whether it falls within the ambit of Article 6(C) or 6(A), as in either case, the stamp duty prescribed is only Rs. 100/-. The language used in Article 6(B) and also the judgment of this Court in Pechetti Ramakrishna's case (2nd supra) clearly supports the case of the petitioner that for the agreement dated 28th of March 2001, the chargeable duty indicated in Article 6(B) of Schedule I-A cannot be applied. In such an event, the further question which is to be considered by this Court is whether in view of the recitals of the agreement and in the absence of any endorsement on the agreement regarding delivery of possession, can such an agreement be construed as a sale within the meaning of explanation 1 to Article 47-A of Schedule I-A. In this regard, the counsel for petitioner has placed reliance on a judgment of this Court in the case of M.Madusudan Reddy (1st supra). In this judgment, while considering the similar situation, a learned Single Judge of this Court has held that pursuant to an agreement, if delivery of possession at a subsequent point of time is evidenced by the very agreement in the form of an endorsement, explanation 1 to Article 47-A of Schedule I-A gets attracted. In the same judgment, it is further held that even if delivery of possession has taken place at a subsequent date, but the same is not evidenced by the agreement, it does not attract explanation 1 of Article 47-A of Schedule I-A. Paragraph 4 of the judgment is relevant for the purpose of the present case and it reads as under-- "It is settled principle of law that the nomenclature of a document is not a decisive factor. From the point of view of admissibility, it is the contents of the document that assume importance. If a document, though named as agreement of sale, contains all ingredients of sale, it is to be treated as a sale deed. In such cases, its admissibility would depend upon the compliance with the requirements, such as, stamp duty and registration. The amendment brought about through A.P. Act 21 of 1995 to Article 47A of Schedule 1A of the Stamp Act had narrowed down the distinction between an agreement of sale and a sale deed from the point of view of stamp duty. The Explanation added through the amendment reads as under:
An agreement to sell followed by or evidencing delivery of possession of the property agreed to be sold shall be chargeable as a "Sale" under this Article: Provided that, where subsequently a sale deed is executed in pursuance of an agreement of sale as aforesaid or in pursuance of an agreement referred to in Clause (b) of Article 6, the stamp duty, if any, already paid or recovered on the agreement of sale be adjusted towards the total duty leviable on the sale deed.
From a reading of the Explanation, it is evident that if an agreement evidenced delivery of possession of the property agreed to be sold, it is liable to be charged as a sale deed. An important distinction brought about by various situations, having relevance to this Explanation, needs to be noted. There are certain agreements, which contain a recital to the effect that the possession has already been delivered to the purchaser or is being delivered through the agreement itself. In such a case, undoubtedly, the agreement is liable to be charged as if it is a sale deed. There are also agreements, which provide for delivery of possession at a future point of time, be it subject to payment of the balance or any portion of consideration, or on occurrence of any event. Here again, two situations may be contemplated. If such delivery of possession at a subsequent point of time is evidenced by that very agreement in the form of an endorsement, etc., it gets attracted by Explanation 1. On the other hand, even if the delivery of possession has taken place at a subsequent date, but the same is not evidenced by the agreement, it does not attract Explanation 1. In such an event, the document deserves to be treated as agreement simplicitor, notwithstanding the fact that possession of the subject-matter of the agreement was delivered, otherwise than through an endorsement on the agreement itself."
13. The words "followed by or evidencing delivery of possession of the property agreed to be sold" used in explanation 1 to Article 47-A of Schedule I- A of the Act has necessarily to be interpreted only with reference to recitals in the agreement of sale and any evidence by way of endorsement on the very deed of agreement. Undisputedly, in the present case, there is no endorsement on the agreement of sale with regard to delivery of possession, but however, while referring the agreement for adjudication with regard to the applicability of stamp duty, it appears the Court below has also sent a receipt dated 18th of September 2002 relied upon by the petitioner, to the District Registrar and the same is taken note of by the respondents in support of their plea that there is a delivery of possession pursuant to the agreement of sale dated 28th of March 2001, so as to apply explanation 1 to Article 47-A of Schedule I-A of the Act. The words "followed by or evidencing delivery of possession of the property agreed to be sold" have to be considered with reference to the very recitals of the agreement of sale independent of any other document. The question of validity of delivery of possession on 18th of September 2002 under a receipt will not have any bearing on examining the chargeability of stamp duty on the agreement of sale dated 28th of March 2001. It is also open for the Court whether to accept such a possession independent of the agreement or not, but however, as far as the chargeability of stamp duty under the Act is concerned, the question whether possession was followed pursuant to an agreement of sale or any evidence with regard to delivery of possession of property agreed to be sold, shall be considered only with reference to recitals of the agreement and evidentiary endorsements on the agreement itself. In view of the same, the judgments of this Court relied upon by the petitioner also support his case that the chargeability of stamp duty cannot be by applying explanation 1 to Article 47-A of Schedule I-A of the Act. Though the learned Government Pleader appearing for the respondents has relied on the judgment in the case of Mekapothula Linga Reddy (3rd supra), but however, the facts of the said case are different and the ratio decided therein cannot be applied in view of the different factual situation in the present case. In the case of Mekapothula Linga Reddy (3rd supra), there was an endorsement on the agreement that the purchaser has paid a part consideration amount and balance was to be paid at a later date and on payment of balance consideration, possession was to be delivered to the vendee. In the said case, balance amount was paid subsequently and possession was delivered and such delivery of possession was also endorsed on the agreement of sale. In such an event, a learned Single Judge of this Court has held that full stamp duty was payable as of a regular sale deed. But however, in the present case on hand, there is no such endorsement and evidence so as to apply explanation 1 to Article 47-A of Schedule 1-A of the Act for the purpose of chargeability of stamp duty on the agreement of sale dated 28th of March 2001.
14. For the above said reasons, it is clear that the primary authority as well as the revisional authority have grossly erred in arriving at the deficit stamp duty and collecting an amount of Rs. 7,45,000/- from the petitioner towards the stamp duty and penalty. Asmuch as the petitioner has paid the said amount under protest, it is liable to be refunded to him. Accordingly, the orders passed by the 2nd respondent in proceedings No. G1/85/2005, dated 14.12.2005 and the orders of the 1st respondent-revisional authority passed in proceedings No. CCRA/19798/2005, dated 02.08.2007 are set aside and there shall be a direction to the respondents to refund the amount of Rs. 7,45,000/- collected from the petitioner towards the stamp duty and penalty levied on the agreement of sale dated 28th of March 2001 within a period of three months from the date of receipt of a copy of this order.
15. The writ petition is accordingly allowed to the extent indicated above. No order as to costs.