Delhi High Court
Dr. (Mrs.) Hem Lata vs Collector Of Stamps And Another on 22 May, 1996
Equivalent citations: AIR 1997 DELHI 63, (1996) ILR(DEL) 2 DEL 769, (1997) 1 RECCIVR 229, (1996) 38 DRJ 132, (1998) 1 CIVILCOURTC 230, (1996) 4 LANDLR 96, (1997) 1 BANKLJ 236, (1996) 63 DLT 198, (1996) ILR 2 DEL 769
ORDER
1. This is a writ petition whereby the petitioner prays for quashing of the order of the first respondent dated January 29, 1996. The facts giving rise to this petition are as follows :--
2. The DDA by a deed dated April 16, 1990 leased a piece of land measuring 3,650 acres situated at Mayur Vihar to respondent No. 2 Parwana Co-operative Group Housing Society Limited (for short 'the society'). Over this piece of land, the society constructed flats for its members with the funds contributed by them. Flat No. A-37 was allotted by the society in the joint names of Prashant Kumar Roy and Pranab Roy. On February 2, 1995, the aforesaid allottees entered into an agreement with the petitioner whereby the former agreed to sell their rights in the flat to the latter for a consideration of Rs. 5,51,000/-which stands paid by the petitioner to the allottees. The allottees appointed and constituted Mr. Ramesh Chandra, husband of the petitioner, as their lawful General Attorney authorising him to execute on their behalf sale/conveyance deed in favour of the petitioner. On February 20, 1995 the aforesaid attorney of the allottees applied to the DDA for converting lease-hold tenure of the flat into free-hold. By letter dated September 11, 1995 the DDA sent unsigned and unexecuted conveyance deed forms to the attorney and also informed him that his request has been accepted and was required to get the unsigned and unexecuted conveyance deed forms stamped from the office of the Collector of stamps. The petitioner has placed on record, a copy of one of the unexecuted conveyance deeds. Copy of the deed, inter alia, states that the allottees applied to the DDA through the attorney for grant of reversionary interest of the DDA in the land underneath the flat to the petitioner and the DDA agreed to convey the same to the petitioner for a consideration of Rs. 10,000/-. On receipt of the letter of the DDA dated September 11, 1995, the petitioner on October 27, 1995 submitted the unsigned and unexecuted conveyance deed forms to the respondent for adjudicating the quantum of stamp duty payable on the same. The respondent Stamp Collector by a communication dated January 29, 1996 informed the petitioner to deposit a sum of Rs. 44,884/- as stamp and transfer duty payable on the conveyance on the basis that the consideration in respect of transfer of the interest of the allottees in the property to the petitioner was Rs. 5,51,000/- and the amount paid to the DDA as conversion charges was Rs. 10,000/-. At this stage it will be convenient to set out the aforesaid communication of the DDA addressed to the petitioner :--
"With reference to your letter No. Nil D/- 2-l-96. on the above cited subject you are hereby informed that on the scrutiny of your Conveyance Deed and other documents submitted by you vide receipt No. 13108/95-96 D/- 27-10-95 for adjudication under S. 31 of Indian Stamp Act, 1899. It has been observed that you bought this property from Sh. Prasanta Rai for a total consideration of Rs. 5,51,000 through agreement to sale and G.P.F.D/- 3-3-95 and thereafter no sale deed or conveyance deed was executed. Hence no stamp duty and transfer duty has been paid by you till date.
Now DDA has executed this conveyance deed in your favour by charging some consideration in respect to conversion charges. Hence you are supposed to pay the stamp duty and transfer duty on the consideration amount of agreement to sale and conversion charges under S. 28(3) read with Art. 23 of Schedule 1A of Indian Stamp Act 1899.
In View of the above duty has been calculated as per detail below :
Agreement of sale Conversion Charges 5,51,000 10,000 Total 5,61,000 Stamp Duty Transfer Duty Copy Charges 16,830 28,050 4 44,884
3. The petitioner being aggrieved of the aforesaid letter has preferred the instant petition.
4. Learned counsel appearing for the petitioner submitted that the respondent was not right in invoking S. 28(3) of the Indian Stamp Act, 1899 (for short 'Stamp Act) as the same is not attracted to the facts of the instant case. He pointed out that since the consideration mentioned in the unsigned conveyance deed sent by the D. D. A. to the petitioner is Rs. 10,000/-, the duty applicable and chargeable would be governed by Art. 23 of the Schedule I to the Stamp Act. Learned counsel also submitted that the duty on a conveyance is upon the agreed price as set forth therein and is chargeable @ 3% of the consideration. Learned counsel also contended that the petitioner is liable to pay a total duty of 8%, 5% on account of transfer duty and 3% on account of stamp duty on the conveyance. According to the learned counsel for the petitioner, the demand of Rs. 13,884/- raised by the respondent on account of stamp duty for the conveyance is illegal.
5. On the other hand, learned counsel for the respondent submitted that the allottees sold the flat to the petitioner for a total consideration of Rs. 5,51,000/- by means of an agreement to sell dated February 2, 1995 but no sale deed or conveyance was executed by the petitioner and the allottees. He pointed out that the petitioner has not paid stamp duly on the sum of Rs. 5,51,000/- which she paid to the allottees as sale consideration for the flat. Learned counsel further contended that the petitioner is liable to pay stamp duty on Rs. 5,61,000/- in accordance with S. 28(3) of the Indian Stamp Act read with Art. 23 of Schedule I thereof.
6. I have heard the submissions of learned counsel for the parties. It is not disputed that the allottees had applied to the respondent for grant of reversionary interest of the DDA in the land underneath the flat in favour of the petitioner and the DDA agreed to convey its reversionary interest therein to her in consideration of a sum of Rs. 10,000/-. The consideration of Rs. 10,000/- for grant of reversionary interest to the petitioner is not disputed. A copy of the conveyance deed does not mention any consideration apart from a sum of Rs. 10,000/-. A perusal of the various clauses of the conveyance (Annexure 'C' at page 23 of the writ record) show that the agreement to sell executed between the petitioner and the allottees has not been incorporated in the conveyance. From the said document it is not possible to hold that the terms and conditions of the agreement to sell have been made a part thereof. There is no provision in the Stamp Act empowering the Revenue Assistant to make an independent enquiry regarding the value of the property conveyed by a sale deed/conveyance for determining the duty chargeable thereon. Under S. 27 of the Stamp Act the parties to a document are required to mention the consideration fully and truly and all other facts and circumstances affecting the chargeability of the document with the duty or the amount of duty with which it is chargeable but failure to comply with the requirement of that Section is merely punishable under S. 64 of the Stamp Act. The Collector is not supposed to make an enquiry regarding the value of the property conveyed or the consideration for conveying the same for determining the duty chargeable. He has to go by the consideration mentioned in the document for calculating the stamp duty payable thereon. The Collector cannot say that the consideration mentioned in the document is not the real consideration and to find out the actual consideration he would look elsewhere, either at some other document not incorporated in the conveyance, or the market price of the property as that would serve as the index of the consideration paid. The duty payable on a transfer of the type in question, is governed by Art. 23. This Article, in so far as it is relevant, reads as follows :--
"23. Conveyance (as defined by S. 2(10)), not being a Transfer, charged or exempted, under No. 62 -
where the amount or value of the consideration for such conveyance, as set forth therein, does not exceed Rs. 50."
7. This Article came up for consideration before the Supreme Court in Himalaya House Co. Ltd. v. Chief Controlling Revenue Authority, . The Court noticed and approved the following decisions of the various Courts :--
1. Calcutta High Court -- In Raman Chelty v. Mahomed Ghouse, (1889) ILR 16 Cal 432 it was held that in determining whether a document is sufficiently stamped for the purpose of deciding upon its admissibility in evidence, the document itself as it stands and not any collateral circumstance which may be shown in evidence must be looked at.
2. Bombay High Court -- In Bakharam Shankar v. Ramchandra Babu Mohire, (1903) ILR 27 Bom 279, it was held that in determining the question whether a particular document is sufficiently stamped, the Court should look at the.instrument as it stands.
3. Full Bench of Allahabad High Court --In the matter of Muhammad Muzaffar Ali, ILR 44 All 339 :(AIR 1922 All 82) (FB), it was held that where in a deed of gift the value of the property dealt with is not set forth, the deed does not require any stamp, and it is not within the competence of the Collector to have the said property valued in order to assess the duty payable.
4. Patna High Court -- In Sitaram Kamalia v. State of Bihar, , it was held that the Collector had no power under the Stamp Act to embark upon an inquiry with regard to the market value of the property covered by the document and require the payment of further stamp duty in accordance with his finding as to valuation.
8. The Supreme Court in Himalaya House Co. Ltd. case (supra) while upholding the aforesaid decisions observed that the legislature may have good reasons for not empowering the Revenue to make an independent enquiry as regards the valuation of the rights sought to be assigned or transferred. At this stage, it will be relevant to mention the facts of that case. A lessee of the government land constructed a building consisting of several flats. Under the various agreements he assigned the right of occupation in those flats to several persons for consideration. The assignees/occupants formed a company under the Companies Act. The lessee also executed an assignment deed whereby he assigned all his rights in the land in favour of the company for no considera-
tion. The document was affixed with a stamp of 12 annas only. When it was presented for Registration, the Sub-Registrar, Bombay impounded the same and sent it to Assistant Superintendent of Stamps, Bombay. The Assistant Superintendent called upon the company to pay stamp duty at Rs. 95,997/-after valuing the building at Rs. 16 lakhs on the grounds, inter alia, that the real consideration for the assignment was made up partly of what was paid by the flat holders, the status of the appellant company was that of the nominee of the flat holders so far as the assignment was concerned and in absence of any mention of consideration in the Assignment Deed, the value of the premises would serve as the measure of the consideration paid. The company on receipt of the communication from the Assistant Superintendent of Stamps applied to the Chief Controlling Revenue Authority to revise the order of Assistant Superintendent of Stamps or in the alternative to refer the matter to the High Court for its opinion. The Chief Controlling Revenue Authority made the reference to the High Court. The Supreme Court in the aforesaid fact situation held as follows (paras 9 and 10) :--
"Mere reference to some earlier transactions in a document does not amount to an incorporation in that document, of the terms and conditions relating thereto. From the language used in the Assignment Deed, it is not possible to come to the conclusion that the, terms and conditions of the earlier transaction have been made a part of that deed. Further barring one particular agreement other agreements were not before the Court. Therefore, it is not possible to know what the terms and conditions of those agreements were. Before the terms and conditions of an agreement can be said to have been incorporated into another document, the same must clearly show that the parties thereto intended to incorporate them. No such intention is available in this case."
".....It is the true that in view of the provision, the parties to a document are required to set forth in the document fully and truly the consideration (if any) and all other facts and circumstances affecting the charge-ability of that document with the duty or the amount of the duty with which it is chargeable. But a failure to comply with the requirements of that section is merely punishable under S. 64 of the Stamp Act. No provision in the Stamp Act empowers the Revenue to make an independent inquiry of the value of the property conveyed for determining the duty chargeable. Article 23 is the Article that governs the charging of stamp duty on conveyance."
"..... Even if we had been inclined to place a different interpretation on Art. 23, we would have hesitated to do so in view of the long lino of decisions to some of which we have already made reference."
9. Having regard to the aforesaid decision of the Supreme Court, I have no hesitation in holding that the petitioner is liable to pay stamp duty on the consideration mentioned in the conveyance (Annexure 'C'), which is Rs. 10,000/- and the respondent was not right in 'applying' the provisions of S. 28(3) of the Indian Stamp Act to the instant case. At this stage, it will be advantageous to set out S. 28(3) :--
"Where a person, having contracted for the purchase of any property but not having obtained a conveyance thereof, contracts to sell the same to any other person and the property is in consequence conveyed immediately to the sub-purchaser, the conveyance shall be chargeable with ad valorem duty in respect of the consideration for the sale by the original purchaser to the sub-purchaser."
10. From the above, it is clear that subsection (3) prescribes that if a person contracts for the purchase of the property, but before it is duly conveyed to him, contracts to sell it to another person and in consequence the property is immediately conveyed to the sub-purchaser the duty is payable on the consideration paid by the sub-purchaser. This provision is meant to obviate the payment of double duty. This provision would have applied in case the conveyance would have incorporated the earlier transaction between the petitioner and the allottees. No agreement to sell has so far been executed between them. For the present the duty is payable on the consideration disclosed in the conveyance to be executed by the D.D.A. Learned counsel for the petitioner while arguing the matter stated that the petitioner would pay the duty chargeable on the sale deed which will be executed by the allottees in favour of the petitioner. In view of this statement, the interest of the Revenue is safeguard by the counsel for the petitioner.
11. In view of the aforesaid discussion and having regard to the above statement of the learned counsel for the petitioner which will be binding on the petitioner, the writ petition succeeds. The first respondent is directed to re-assess the duty on the basis of the consideration disclosed in the conveyance (Annexure 'C').
12. Petition allowed.