Allahabad High Court
Raghvendra Jeet Singh vs Board Of Revenue And Others on 26 February, 2015
Author: Suneet Kumar
Bench: Suneet Kumar
HIGH COURT OF JUDICATURE AT ALLAHABAD A.F.R. RESERVED Court No. In Chamber Case :- WRIT - C No. - 33430 of 2012 Petitioner :- Raghvendra Jeet Singh Respondent :- Board Of Revenue And Others Counsel for Petitioner :- Triveni Shankar,Ajay Shankar,Rajendra Kumar Pandey Counsel for Respondent :- C.S.C. Hon'ble Suneet Kumar,J.
Mahendra Jeet Singh created H.U.F. of immovable property, Banglow No. 15/198, Civil Lines, Kanpur, during his life time in the name and style "Mahendra Jeet Singh H.U.F.". He died in 2002 leaving behind his son petitioner KARTA of the H.U.F., Geeta Mitthal (daughter), Rohan Singh (grandson), Sunaina Shah (grand daughter) and Ratna Singh (grand daughter) as heirs.
Rohan Singh settled in Canada, Sunaina at Kathmandum, Ratna Singh in Bombay, since over 20 years and are blood relations of the petitioner, accordingly, executed a release deed on 19.04.2011 relinquishing their claim, interest and title in the H.U.F. property.
The Sub-Registrar on 21.04.2011 declined to register the document, accordingly, referred the instrument to the Collector, stating that stamp duty of Rs. 500 has been paid, whereas, the deed seeks to transfer the share of the co-owners without consideration, in favour of the petitioner, therefore is a gift within the meaning of sub-section (14A) of section 2 of the Act. Collector by order dated 25.07.2011 assessed the property under Article 33 of Schedule 1-B of the Indian Stamp Act, 18991, accordingly, determined the deficiency of stamp duty at Rs. 1,13,74,710/-, penalty of Rs. 11,37,471/- and interest @ 1.5 per month from the due date was imposed. Aggrieved, by the order passed of the Collector Kanpur Nagar, petitioner preferred revision before the Chief Controlling Revenue Authority, which was dismissed by order dated 28.05.2012. The revisional authority was of the view that since the instrument is covered within the definition of conveyance, under sub-section (10) of Section 2 of the Act, as amended on 01.08.1981, being transfer by a co-owner of their share and interest to another co-owner would also be a conveyance, thus affirming the order of the Collector.
The petitioner is assailing the orders dated 25.07.2011 and 28.05.2012 passed by the Collector and Chief Controlling Revenue Authority.
I have heard learned counsel for the parties and perused the record.
Sub-section (10) of Section 2 defines conveyance as follows:-
"(10) "Conveyance".- includes a conveyance on sale and every instrument by which property, whether movable or immovable, is transferred inter vivos and which is not otherwise specifically provided for [by schedule 1, Schedule 1-A or Schedule 1-B]2, [as the case may be]3"
Explanation.-An instrument whereby a co-owner of a property having defined share therein, transfers such share or part thereof to another co-owner of the property, is for the purposes of this clause an instrument by which property is transferred.
Explanation was inserted vide U.P. Act No. 19 of 81 w.e.f. 01.08.1981.
Article 55 of the Schedule 1-B defines "Release" which is as follows:-
"55. Release, that is to say, any instrument not being such a release as is provided for by Section 23(A) whereby a person renounces a claim upon another person or against any specified property-
(a) if the amount or value of the claim does not exceed Rs. 2,500
(b) in any other case."
Gift has been defined in sub-section (14-A) of Section 2 which reads as follows:-
"(14-A) "Instrument of Gift"- "Instrument of Gift" includes an instrument whether by way of declaration or otherwise, for making or accepting an oral gift."
Article 33 provides for duty payable on gifts. Article 33 is as follows:-
"Gift-Instrument of, not being a Settlement (No. 58), or Will or Transfer (No. 62)."
Having noted the provisions of the Act, I proceed to examine the instrument and the pleadings of the parties.
Facts are not in dispute. The instrument is titled release deed and recites that the releasers, mentioned earlier, do declare, relinquish and release all rights, title, claims and interest which they might have or had in H.U.F. be land and a Pakka house/building thereon. Release was in favour of the petitioner and Smt. Geeta Mittal, the releasor namely Rohan Singh, Sunaina and Ratna together were having 1/3rd share in the property (1/9th each). The release is on free will and without any consideration.
The question, however, to be determined is as to whether the co-owners/co-parcener by relinquishing their interest and title in the H.U.F. property to another co-owner/co-parcener would fall within the Explanation to the definition of conveyance under section 2(10) of the Act.
The Explanation was incorporated on 01.04.1981, providing that, where a co-owner of a property having defined share therein, transfers such share or part there of to another co-owner of the property, is for the purpose of the sub-section an instrument by which the property is transferred.
Earlier interpreting the expression conveyance, as it stood prior to 01.08.1981, a Full Bench of this Court in Smt. Balwant Kaur and others Versus State of U.P.4, held that a document executed by one heir renouncing for consideration his claim in the inherited property in favour of other heir cannot be construed as a deed of conveyance.
After the amendment, Explanation to Section 2(10) was incorporated, this court (Single Judge) in State of U.P. Versus Dharam Pal and another5, interpreting the Explanation held that the co-sharers transferring their share to another co-sharers-having pre-existing right in property did not amount to transfer, rather, it only amounted to extinguishing of their existing share. Since there was no transfer to an outsider it would not amount to sale or conveyance.
Sri P.K. Jain, Senior Advocate, assisted by Sri Rajendra Kumar Pandey, learned counsel for the petitioner, would submit that the impugned orders are without application of mind. The document is a release document, does not fall within the Explanation to the expression of conveyance, the Collector has valued the entire property of the H.U.F., whereas, admittedly, only 1/3rd of the property has been released, the property, being a nazul property, belonging to the State could not have been sold and finally, the penalty could not have been imposed as every fact had been disclosed in the instrument, there was no suppression of any material fact in order to avoid payment of stamp duty.
Per contra, learned Standing Counsel, Sri Nimai Das, would submit that the instrument itself states that the releasors are co-owners/coparcener of the H.U.F. property, their share was released in favour of the KARTA and other coparcener, which would amount to transfer falling within the Explanation to Section 2(10), and is covered by the judgment rendered in Sarla Agarwal Versus Ashiwini Kumar Agarwal6 by the High Court of Delhi.
Rival submission fall for consideration.
The Collector was of the view that since there is no consideration mentioned in the instrument, therefore, the instrument would fall under Article 33 of Schedule 1-B of the Act, being a gift, whereas, the Chief Controlling Revenue Authority was of the opinion that the instrument would be covered under the expression conveyance being a transfer by a co-owner to another co-owner. In either case, stamp duty is chargeable on the value of the property.
Formal renunciation of a claim which the party relinquishing is entitled to put forward is a release chargeable under Article 55, whether the claim is legally correct or not is not relevant. Where by a document a person voluntarily renounces for consideration coparcenary rights of succession to impartible estate it is a release. There can be no release by one person in favour of another, who is not already entitled to the property as co-owner. Thus, by release, there is no transfer of interest or title to another person, who has no preexisting right to such property. A release can, therefore, be made in favour of a person who has a preexisting right and interest in the property. It would make no difference even where the release is without consideration.
Where the property is owned by two co-owners each having undivided equal share therein and one of them by a deed claims title while the other possession, the document would be a release and not a conveyance. Even where one of the co-sharers of the joint agricultural land had simply renounced his claim in favour of another co-sharer in respect of the same agricultural land, the document in question would be release deed and not a gift deed. (Vide State of Rajasthan Versus Alokik Jain7).
To distinguish between a release deed, or a gift deed or a sale deed, the decisive factor is the actual character of the transaction and precise nature of the rights created by the instrument. In the case of co-owners each co-owner is in theory entitled to enjoy the entire property in part or in whole. It is not therefore necessary for one of the co-owners to convey his interest to the other co-owner. It is sufficient if he released his interest. The result of such a release would be the enlargement of the share of the other co-owner. The result of such a release should be the enlargement of the share of the other co-owner. A release can only feed title and cannot transfer title. (Vide Kuppuswami Versus Arumugam8, and Kuppuswami Chettiar v. S.P.A. Arumugam Chettiar9) A document under which a Hindu coparcener purports to give up his right to the family property in favour of the remaining coparcener would not be a deed of conveyance but a deed of release. There is no difference in principle between such a document as between members of a coparcenary and as between co-owners. In order to class as a release, the executant of the instrument having common or joint interest along with other should relinquish his interest which automatically results in the enlargement of the interest and others. But where he executes the document in respect of his share in favour of a particular co-owner, it cannot be treated as a release and must come within the definition of conveyance. (Vide Kothuri Venkata Subba Rao Versus Deputy Registrar Gudur10).
A transaction to assume a character of conveyance, what is necessary is, transfer of interest from one co-owner to another co-owner. As against this, the provision of Article 55 of Schedule 1B of the Act stipulates that the release is that whereby a person renounces a claim upon another person or against any specified property.
A similar provision as contained in the Explanation to Section 2(10) of the Act (section 2g of the Bombay Stamp Act) came up for interpretation before the Bombay High Court. In Sri Shailesh Harilal Poonatar v. District Collector of Stamps and others11, the Court held that the co-owner having defined share or undefined share in the property will make no difference in order to be release.
"9. We are not impressed by the argument of the learned counsel for the respondents. Firstly because in every case of a release it is the release of a share or interest which is a defined share or interest in favour of other co-owners or persons who are holding a joint title in respect of the said property. Even in the case of Hindu Undivided property, every co-parcener will have a defined share which may not have been partitioned and in our view this shall make no difference whether a person is having a defined share in the property or an undefined share in the property as long as the interest is held jointly and there is no partition of the said interest among co-owners. Thus, we find that even if there is a defined share or interest in the property it can still be released in favour of another person. In such a case share or interest of the other co-owner will be accelerated and acquire a larger share than what he was originally holding. In Mulla's Transfer of Property, the word 'release' is explained as under:-
"A relinquishment is not an alienation".
(Refer: Gyan Chandra Versus State and others12) The Explanation to the definition of conveyance under the Bombay Stamp Act refers to 'share' whereas the Uttar Pradesh amendment refers to 'defined share', thus the co-owner should have a defined share in the property which could be transferred.
From the record of the instant case, I find that the release deed does not transfer any defined share in favour of a particular co-owner. The instrument merely relinquishes the right and interest in the property to the other co-owners. The releasers though they are co-owners have merely relinquished their right and interest in the property in question, thus, enhancing the share of the other co-owners and is not transfer of interest from one co-owner to another co-owner. The property in question is held jointly and there is no partition of the said interest among the co-owners, the instrument could not fall within the Explanation to the definition of conveyance. Release can be with consideration or without consideration. The document of release, merely, being without consideration would not qualify the instrument as an instrument of gift, for gift there must be a donor and a donee.
Under Section 3 of the Act, it is the 'instrument' which is chargeable to duty, and not the transaction. If the instrument, as in the present case, cannot be said to fall under the import of the Explanation to section 2(10) of the Act, the revenue authorities, on the basis of their own assumed transaction cannot impose stamp duty This Court in the case of Nand Kumar Agarwal Versus State of U.P.13, observed that:
"It is an acknowledged legal position that there are two guiding principles for applicability of the Stamp Act in respect of a particular document. They are :(1) The Court is not bound by the apparent tenor of an instrument, it shall decide according to the real nature or substance of the document; and (2) The duty is on the instrument and not on the transaction."
While under the Mitakshara Hindu Law there is community of ownership and unity of possession of joint family property with all the members of the coparcenary, in a coparcenary governed by the Dayabhaga law, every coparcener takes a defined share in the property and he is the owner of that share. But there is unity of possession. The share does not fluctuate by births and death. Thus as regards the Dayabhaga law also the recognition of the right to a definite share does not militate against the owners of the property being treated as belonging to a family. (Refer: State of Maharashtra v. Narayan Rao14) Where a coparcener expresses his individual intention in unequivocal language to separate himself from the rest of the family, that effects a partition, so far as he is concerned, from the rest of the family. By this process, what was a joint tenancy has been converted into a tenancy in common. Tenancy-in-common means that the share of each owner is specified and on his death it devolves on his heirs. A tenant-in-common is as to his own share, precisely in the same position as an owner of a separate property. The change of status from a joint member of a coparcenary to a separated member having a defined share in the ancestral property, may be effected orally or it may be brought about by a document, so long as there has been no partition in that sense, the interest of the separated member continues to extend over the whole joint property as before. (Refer: Nani Bai v. Gita Bai15) Where the defendants acquired (purchased) the undivided interest of the coparceners in the joint property, it was held that they did not acquire the title to any defined share in the property and were not entitled to joint possession from the date of their purchase. They could work out their rights only by a suit for partition and their right to possession would date from the period when a specific allotment was made in their favour. (Refer: Subhodkumar v. Bhagwant Namdeorao Mehetre16) Explanation to the definition of conveyance requires a co-owner of property having a "defined share", meaning thereby, the Explanation will not cover those co-owners who merely have a share in the property and their share has not been defined; as in the case of H.U.F. property, every coparcener will have a definite share and in my view this will make no difference as long as the interest is held jointly and there is no partition of the said interest among the co-owners.
In H.U.F., the co-parceners do not have exclusive rights on any specific property of the family, the property allotted to their share become specified only on partition; same is the position in the case of a partner of a firm, though the co-parceners like partners of a firm have a definite share in the H.U.F./partnership. (Refer: Jagatram Ahuja Versus The Commissioner of Gift Tax17) In the facts of the present case, the releasors together released 1/3rd share (each having 1/9th share) in favour of Karta and other co-parcener and not to a particular co-owner, the property was being held jointly and there was no partition of the interest in the property among co-owners, the document in question would be a release deed and not conveyance or a gift deed.
I see no reason to take a different view as has been taken by this Court in Dharam Pal case (supra).
For the law and reasons stated, herein above, the impugned orders dated 28.05.2012 passed by the first respondent, Chief Controlling Revenue Authority/Board of Revenue, U.P. at Allahabad and order dated 25.07.2011 passed by the second respondent, Collector, Kanpur Nagar, respectively, is quashed.
The writ petition is allowed with cost.
Order Date :- 26.02.2015 kkm