Andhra HC (Pre-Telangana)
V.L. Narasimha Rao vs K.T. Pentaiah And Ors. on 14 February, 2002
Equivalent citations: 2002(3)ALD321, 2002(3)ALT703
JUDGMENT Dudagunta Subrahmanyam, J.
1. The defendant in O.S. No. 11 of 1997 on the file of the Subordinate Judge, Asifabad filed this revision-petition. The plaintiff filed the suit for specific performance of an agreement of sale deed 2-7-1994 executed by the defendant in the suit. During the pendency of the suit, the plaintiff wanted to exhibit the said document dated 2-7-1995 as a piece of evidence. The defendant objected for the making of the document taking the contention that the said document is a sale deed and it requires to be stamped as a sale deed and the document is insufficiently stamped, and therefore, inadmissible in evidence. The learned Senior Civil Judge, by his order dated 29-9-1997, held that the document is only an agreement of sale and not sale deed, and therefore, it is not liable for further stamp duty. The document was executed on non-Judicial stamp papers worth Rs. 100/-. Questioning the order of the Senior Civil Judge, this revision-petition is filed by the defendant.
2. During the pendency of this revision-petition, the respondent-plaintiff died and his L.Rs. were brought on record.
3. The question to be decided in the present revision-petition is whether transaction covered by the document dated 2-7-1994 is to be treated as a 'sale' for the purpose of levy and collection of stamp duty?
4. Article 47-A of the Indian Stamp Act deals with stamp duty payable on conveyance. During the year 1986, the State of Andhra Pradesh amended the said provision and inserted an explanation. As per that explanation, 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 the instrument of sale in pursuance of such agreement subsequently executed shall be chargeable with a duty of Rs. 5/-.
5. The learned counsel for the revision-petitioner relied upon three decisions. The 1st decision is Mekapothula Linga Reddy v, D. Gangl Reddy, , wherein it was held that as the object of introduction of explanation to Article 47-A and proviso to Article 20 is to plug the loopholes in evasion of stamp duty by persons Invoking the theory of part performance under Section 53-A of the Transfer of Property Act, the word 'possession' has to be in-terpreted as including possession pursuant to the agreement of sale and not restricted to possession that must immediately follow the execution of the agreement.
6. The 2nd decision relied upon is a Division Bench judgment of this Court in B. Ratnamalav. G. Rudramma, 1996 (6) ALT 59 (DB) : AIR 2000 AP 167 in which it was held as follows (at page 170 of AIR) :
"..... Therefore, the expression followed by delivery of possession should have a direct nexus to the agreement and should be read in Juxtaposition to the word 'agreement' and it cannot be independent or outside the agreement. Therefore, the delivery of possession should follow the agreement i.e., through the agreement. It takes in its sweep the recital in the agreement Itself that delivery of possesson is being handed over. It will also cover cases of delivery of possession contemporaneous with the execution of agreement, even if there is no specific recital in the agreement. In other words, the delivery of possession should be intimately and inextricably connected with the agreement. And in the second type, i.e., agreements evidencing delivery of possession, if the document contains evidence of delivery of possession by a recital in that behalf, that is sufficient. Such delivery of possession can be prior to the date of agreement and need not be under the agreement. If the agreement records the fact that the possession was delivered earlier and such recital serves as evidence of delivery of possession, though prior to the agreement, it falls under the second limb. Therefore, on a proper Interpretation of the said expressions, it would follow that an agreement containing specific recital of delivery of possession or indicating delivery of possession even in the past is liable for stamp duty as a 'sale' under Explanation I."
7. The 3rd decision relied upon is a judgment of this Court in U. Subrahmanyam v.
K. Dhanamma, . It was held in this decision that an unregistered document can be Impounded under Section 33 of the Stamp Act and admitted in evidence under Section 37 of the Stamp Act as a contract. For the disposal of this revision-petition, this decision is not necessary,
8. The recitals in the document have to be considered to give a finding whether the document dated 2-7-1994 is to be treated as a sale for the purpose of stamp duty. Before taking up the consideration of the recitals in the document, I would like to mention one aspect referred to by both the parties at the time of hearing of this revision-petition. The plaintiff filed interim injunction application in I.A. No. 56 of 1997 on the file of the trial Court. The learned counsel for the revision-petitioner drew the attention of this Court to para 3 of the affidavit wherein the plaintiff stated that in pursuance of the agreement of sale dated 2-7-1994, the plaintiff was put in possession of the suit property on 2-7-1994 for development of suit property by levelling the land, laying roads and demarcating plots etc. A counter was filed by the defendant opposing the interim injunction application. The learned counsel for the respondents drew the attention of this Court to the recitals in para 3 of the counter. The present revision-petitioner pleaded that indeed, the plaintiff was never put in possession of the suit land. For the purpose of levy of stamp duty'on any document, the recitals in the document alone are to be considered and not the pleadings of the respective parties.
9. I would now propose to consider the recitals in the document. The document is styled as 'Agreement of Sale.' it is well known principle of law that the nomenclature given by the parties to any document will not by itself determine the nature of the document. It may be one of the indicators regarding the nature of the document. In the document, the defendant categorically stated that he sold the property for a consideration of Rs. 12,10,000/-. The recital is not to the effect that the defendant agreed to sell the said property to the plaintiff. On the other hand, the specific recital is to the effect that the defendant had sold the property to the plaintiff. The other recitals relate to the receipt of the part of sale consideration on the date of the agreement and the dates on which the balance of sale consideration is to be paid later by the plaintiff.
10. Regarding the crucial aspect relating to possession, the recital is to the effect that from the date of the document, the plaintiff is entitled to develop the land, lay roads and plots in the land purchased for the purpose of house plots and absolute right was given to the plaintiff to sell the property to whomsoever the plaintiff wants to sell the plots. The defendant agreed to execute sale deeds in favour of the persons to whom the plaintiff had sold the plots.
11. According to the learned counsel for the revision-petitioner, the said recital indicates that possession was delivered to the plaintiff on the date of the document. On the other hand, it is contended on behalf of the respondents that the said possession was delivered to the plaintiff only for the purpose of dividing the purchased property into plots, to lay roads and develop the land. On reading the document as a whole, I agree with the contention advanced on behalf of the revision-petitioner. The defendant did not retain any sort of or partial possession of the property sold with him after executing the document. He did not retain the power with him to sell house plots to the persons of his choice. He did not also retain the power to divide the property sold into plots of his choise and develop it to his likes or dislikes. The powers to develop the land and also divide it into different house plots and also to lay roads, etc., are absolutely given to the plaintiff. Therefore, when the plaintiff is given the said power or authority to enter the land purchased and develop it, lay the roads and also divide it into different plots, that possession is to be treated as possession given to the vendee under the document, That possession can never be treated as the possession of the vendor. In the impugned order, the learned Senior Civil Judge stated that absolute possession was not given to the vendee, and therefore, the document cannot be treated as a sale deed for the purpose of stamp duty and penalty. I fail to understand what the lower Court means by saying that absolute possession was not given. In the explanation to Article 20 as well as Article 47-A of the Stamp Act, it is nowhere stated that unless and until absolute possession is given to the vendee, the sale agreement cannot be treated as sale deed for the purpose of levy of stamp duty and penalty. The interpretation given by the learned senior Civil Judge is wrong and it cannot be accepted.
12. For all the reasons stated above, I hold that the transaction covered by the document dated 2-7-1994 is a sale for the purpose of stamp duty and penalty. As the said document is engrossed on insufficiently stamped paper, further stamp duty and penalty have to be collected or paid before the said document is admitted in evidence on behalf of either of the parties.
13. In the result, I allow this revision-petition. I set aside the order dated 29-9-1997 of the Senior Civil Judge. I hold that the transaction covered by the document dated 2-7-1994 is a 'sale' for the purpose of levy and collection of stamp duty and it becomes inadmissible in evidence till full stamp duty and penalty are paid. No costs.