Punjab-Haryana High Court
Narinder Kapoor vs Inderjit Since Deceased Thru Lr on 12 February, 2020
Author: Anil Kshetarpal
Bench: Anil Kshetarpal
CR-1931-2017 (O&M) and
CR-3172-2018 (O&M) -1-
IN THE HIGH COURT OF PUNJAB AND HARYANA AT
CHANDIGARH
1. CR-1931-2017 (O&M)
Date of decision : 12.02.2020
Narinder Kapoor ...Petitioner
Versus
Inderjit (since deceased) through his legal heir ...Respondent(s)
2. CR-3172-2018 (O&M)
Date of decision : 12.02.2020
Vijay Kumar Goyal ...Petitioner
Versus
Neena Rani and others ...Respondents
CORAM: HON'BLE MR. JUSTICE ANIL KSHETARPAL.
Present: Mr. Kanwaljit Singh, Sr. Advocate with
Mr. Namit Gautam, Advocate for the petitioner
(In CR-1931-2017)
Mr. Abdul Shehbaz Thind, Advocate for the petitioner.
(In CR-3172-2018)
Mr. Aayush Gupta, Advocate for the respondents
(In CR-1931-2017)
Mr. Abhimanyu Kalsy, Advocate for the respondents.
(In CR-3172-2018)
****
ANIL KSHETARPAL, J.
By this judgment, CR-1931-2017 and CR-3172-2018 shall stand disposed of. An interesting issue arises for consideration. Question is "whether an agreement to sell followed by or evidencing delivery of 1 of 9 ::: Downloaded on - 01-03-2020 05:18:31 ::: CR-1931-2017 (O&M) and CR-3172-2018 (O&M) -2- possession of immovable property agreed to be sold after introduction of Entry No.5 in Schedule 1-A as applicable to the State of Punjab, the stamp duty is leviable under Column No.2 of Entry No.23 or not?
Before this Court proceeds to answer the question, it would be appropriate to extract the relevant amendments brought in by the State of Punjab in the Indian Stamp Act, 1899 or the Schedule attached thereto:-
"Sub-Section 10 of Section 2:-
(10) "Conveyance"- "Conveyance" includes a conveyance on sale and every instrument by which property, whether moveable or immovable, is transferred inter vivos and which is not otherwise specifically provided for by Schedule I or by Schedule 1-A [or by (Schedule 1-B or] Schedule 1-C], as the case may be;
SCHEDULE 1-A:-
Entry No.5:-
AGREEMENT OF MEMORANDUM OF AN 5 AGREEMENT-]
(a) if relating to the sale of a bill of Twenty-five rupees.
exchange;
(b) if relating to the sale of a Government Five rupees for every ten thousand security or share in an incorporated company or part thereof, of the value of the or other body corporate; security or share.
(c) if relating to the sale of immovable Three hundred rupees property (cc) in the case of agreement to sell followed The same duty as is leviable under by or evidencing delivery of possession of the column 2 of entry No.23 of this immovable property agreed to be sold;] schedule, subject to the adjustment of duty chargeable at the time of execution of conveyance made in pursuance of such agreement; and 2 of 9 ::: Downloaded on - 01-03-2020 05:18:31 ::: CR-1931-2017 (O&M) and CR-3172-2018 (O&M) -3-
(d) if not otherwise provided for Fifteen rupees Exemption Agreement or memorandum of agreement-
(a) for or relating to the sale of goods or merchandise exclusively, not being a note or memorandum chargeable under No.43:
(b) made in the form of tenders to the Central Government for or relating to, any loan;
AGREEMENT TO LEASE - See Lease No. (35) Entry No.23:-
CONVEYANCE as defined in Section Where conveyance Other conveyances 2(10) not being a transfer charged or amounts to sale of 23 exempted under No.62. immovable property 1 2 3 where the value or amount of the Two rupees and fifty Two rupees consideration for such conveyance as paise set forth therein does not exceed Rs.50 Where it exceeds Rs.50, but does not Five rupees Three rupees exceed Rs.100 Where it exceeds Rs.100, but does not Ten rupees Six rupees exceed Rs.200 Where it exceeds Rs.200, but does not Fifteen rupees Nine rupees exceed Rs.300 Where it exceeds Rs.300, but does not Twenty rupees Twelve rupees exceed Rs.400 Where it exceeds Rs.400, but does not Twenty five rupees Fifteen rupees exceed Rs.500 Where it exceeds Rs.500, but does not Thirty rupees Eighteen rupees exceed Rs.600 Where it exceeds Rs.600, but does not Thirty five rupees Twenty one rupees exceed Rs.700 Where it exceeds Rs.700, but does not Forty rupees Twenty four rupees exceed Rs.800 Where it exceeds Rs.800, but does not Forty five rupees Twenty seven rupees exceed Rs.900 Where it exceeds Rs.900, but does not Fifty rupees Thirty rupees exceed Rs.1000 And for every Rs.500 or part thereof in Twenty five rupees Fifteen rupees excess of Rs.1000
3 of 9 ::: Downloaded on - 01-03-2020 05:18:31 ::: CR-1931-2017 (O&M) and CR-3172-2018 (O&M) -4- Exemption Assignment of copyright under the Copyright Act, 1957, Section 18 Co-
Partnership-Deed - See Partnership (No.46) Entry No.62:-
TRANSFER (whether with or without 62 consideration)-
(a) of shares in an incorporated company or other As in Schedule I body corporate;
(b) of debentures, being marketable securities, One-half of the duty payable whether the debenture is liable to duty or not, except on a debenture (No.27) for a debentures provided for by Section 8; consideration equal to the face amount of the debenture.
(c) of any interest secured by a bond, mortgage-deed The duty with which such or policy of insurance; bond, mortgaged deed or policy of insurance is chargeable subject to a maximum of five hundred rupees.
(d) of any property under the Administrator General's Fifty rupees Act, 1918, Section 25;
(e) of any trust-property without consideration from Fifty rupees one trustee to another trustee, or from a trustee to a beneficiary.
Exemption Transfers by endorsement
(a) of a bill of exchange, cheque or promissory note;
(b) of a bill of lading, delivery, order, warrant for goods, or other mercantile document of title to goods;
(c) of a policy of insurance;
(d) of securities of the Central Government See also Section 8; and [(f) by way of assignment of debt or securitization of 0.1% of the amount, subject loans. to a maximum of one lakh rupees.] In Entry No.5, Clause CC was added by the Indian Stamp (Punjab Amendment) Act, 2001 notified on 21.12.2001. Entry No.23 was 4 of 9 ::: Downloaded on - 01-03-2020 05:18:31 ::: CR-1931-2017 (O&M) and CR-3172-2018 (O&M) -5- amended by the Indian Stamp (Punjab Amendment) Act, 2007 w.e.f. 25.01.2008.
On careful reading of phraseology used in the definition of "Conveyance" as defined in Sub-Section 10 of Section 2, it become clear that the word conveyance includes a conveyance on sale and every instrument by which the property is transferred. The definition of the word 'conveyance' starts with word "includes", however, the significant word used subsequently is "transferred". User of the word "includes" means that such definition is ordinarily not exhaustive. As per Section 54 of the Transfer of Property Act, contract for sale or agreement to sell is not an instrument of transfer. Section 54 of the Transfer of Property Act, is extracted as under:-
"54. "Sale" defined - "Sale" is a transfer of ownership in exchange for a price paid or promised or part-paid and part-promised.
Sale how made - Such transfer, in the case of tangible immovable property of the value of one hundred rupees and upwards, or in the case of a reversion or other intangible thing, can be made only by a registered instrument.
In the case of tangible immovable property of a value less than one hundred rupees, such transfer may be made either by a registered instrument or by delivery of the property.
Delivery of tangible immovable property takes place when the seller places the buyer, or such person as he directs, in possession of the property.
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CR-1931-2017 (O&M) and
CR-3172-2018 (O&M) -6-
Contract for sale - 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, of itself, create any interest in or charge on such property."
Now, let us examine further amendments in Schedule 1-A. Entry No.5 is with respect to agreement of memorandum of an agreement. Clause CC of Entry No.5 clearly takes in its sweep agreement to sell followed by or evidencing delivery of possession of all the immovable property agreed to be sold. Thus, even if the agreement to sell followed by or evidencing delivery of possession of immovable property does not fall within the definition of the word 'conveyance', however, it would not be appropriate to hold that no stamp duty as is leviable under Column No.2 of Entry No.23 of this Schedule is payable. Column No.2 clearly specifies that an agreement to sell followed by or evidencing delivery of possession of immovable property shall be charged same duty as is leviable under Column No.2 of Entry No.23 of this Schedule. However, significance has also to be given to the second part of the sentence which reads as "subject to adjustment of duty chargeable at the time of execution of the conveyance made in pursuance of such agreement". This second part is also to be kept in mind while interpreting the entries. However, this aspect would be discussed in the later part of this judgment, in view of the amendment in entry No.5 for the purpose of determining the amount of stamp duty payable.
Now let us examine Entry No.23 which is with respect to the 6 of 9 ::: Downloaded on - 01-03-2020 05:18:31 ::: CR-1931-2017 (O&M) and CR-3172-2018 (O&M) -7- documents which are conveyance or deemed to be conveyance. Although, as noticed above, the agreement to sell followed by or evidencing delivery of possession does not fall in the definition of the word 'conveyance', however, in view of Entry No.5 for the purpose of stamp duty payable, Entry No.23 is applicable.
However, it is important to note that Column No.2 has been divided in two different sub-columns. Sub-Column No.1 of Column No.2 give the rate at which the stamp duty is payable where the conveyance amounts to sale of immovable property. In other words, the duty payable under Sub-Column No.1 of Column No.2 would be leviable only when the conveyance amounts to sale of property. An agreement to sell does not amounts to sale of immovable property. Thus, the stamp duty payable on agreement to sell followed by or evidencing delivery of possession would be regulated by Sub-Column No.2 of Column No.2. It needs to be clarified that stamp duty shall be payable on the amount paid/payable under the agreement to sell by the intended purchaser (vendee) to the intended seller (vendor) and not on the entire sale consideration. The reason is obvious, because of the language of Column No.2 with respect to Entry No.5. The duty which is to be charged at the time of entering into agreement to sell is subject to the adjustment of duty chargeable at the time of execution of the conveyance made in pursuance of such agreement. If the Court interprets that the same duty shall be charged as is leviable on the total sale consideration agreed to between the parties, the second part of Entry No.5 in Column No.2 would be rendered otiose.
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CR-1931-2017 (O&M) and
CR-3172-2018 (O&M) -8-
Legislature, in the considered view of this Court, never intended that the entire stamp duty as is payable on the conveyance deed, be recovered at the time of agreement to sell. Had this been the intention, then the second part in Column No.2 of Entry No.5, would not have in the statute.
Keeping in view the aforesaid facts, the question, which has been framed is answered in the manner that the agreement to sell followed by or evidencing delivery of possession of the immovable property agreed to be sold, shall be leviable with same stamp duty as is leviable under Sub Column No.2 of Column No.2 of Entry No.23 of Schedule 1-A as amended by State of Punjab.
Let us now examine the facts of each case.
In CR-1931-2017, the learned Court has rejected the application filed under Section 33 of the Indian Stamp Act, for impounding the alleged agreement to sell dated 25.04.2009 by directing payment of `2200/- by assuming that the stamp duty is not payable as is payable on the conveyance deed. The order is erroneous. Accordingly, the order dated 21.02.2017 is set aside while directing learned Civil Judge (Junior Division) to pass fresh order.
Now let us examine the impugned order passed in CR-3172- 2018. In this case, the Court has ordered that the deficient stamp duty alongwith the penalty be paid. In view of the interpretation, there is no error in the impugned order passed in CR-3172-2018. Hence, the revision is dismissed.
At this stage, it would be important to note that counsels have 8 of 9 ::: Downloaded on - 01-03-2020 05:18:31 ::: CR-1931-2017 (O&M) and CR-3172-2018 (O&M) -9- also argued with respect to Section 36 of the Indian Stamp Act, 1899, by contending that once the document has been exhibited without any objection, the party is debarred from questioning the admission of the instrument. However, since, the impugned orders do not deal with the aforesaid contentions, therefore, it shall be open to the trial Court to adjudicate thereupon, if any of the party to the litigation moves an application in this regard.
Keeping in view the aforesaid facts, CR-1931-2017 is allowed whereas CR-3172-2018 is dismissed.
All the pending miscellaneous applications, if any, are disposed of, in view of the abovesaid judgment.
12.02.2020 (ANIL KSHETARPAL)
Pawan JUDGE
Whether speaking/reasoned:- Yes/No
Whether reportable:- Yes/No
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