Karnataka High Court
Kapoor Constructions vs Leela Nagaraj And Anr. on 3 March, 2005
Equivalent citations: AIR2005KANT302, 2005(5)KARLJ602, AIR 2005 KARNATAKA 302, AIR 2005 KARNATAKA 285, 2006 (2) ABR (NOC) 263 (KAR), 2005 AIR KANT HCR 1172, 2005 AIHC 2436, (2005) 3 RECCIVR 30, (2005) 5 KANT LJ 602, (2005) 2 KCCR 972
Author: K.L. Manjunath
Bench: K.L. Manjunath
ORDER K.L. Manjunath, J.
1. The petitioner is a registered partnership firm and has filed a suit against the respondents herein in .S. No. 9066 of 2003 on the file of the City Civil Judge, Bangalore, for the relief of specific performance to enforce the agreement of sale dt. 27-11-2002 in respect of the suit property. The suit property is a site bearing No. 2, Khaneshumari No. 74 measuring 9250 sq. ft. carved out of Sy. No. 156/2 and 144/3 of Chellakere village, K. R. Puram Hobli, Bangalore South Taluk. The plaintiff has agreed to purchase the above property from the defendants for Rs. 18,00,000/-.
2. As per Clause 5 of the agreement, the petitioner was put in possession of the property which reads as hereunder :
"That the First Party puts the Second Party in physical possession of the schedule property for the purpose of developing the same."
On the ground that the defendants did not execute the sale deed as agreed upon though the petitioner war, ready and willing to perform his part of the contract, the petitioner requested the Court to direct the defendant No. 1 to execute the sale deed by receiving the balance sale consideration of Rs. 3,00,000/- and to direct the defendants not to interfere with the peaceful possession and enjoyment of the suit property. In Para 13 of the plaint, plaintiff states as hereunder :
"It is submitted that as per Paragraph 5 of the suit agreement the plaintiff herein was put into physical possession of the suit property and permitted to develop the same in part performance of the suit agreement."
The plaintiff thereafter has invested lakhs of rupees borrowed from banks and financial institutions into the development activities of the suit schedule property.
3. In the suit the 1st defendant filed an application under Section 33 of the Karnataka Stamp Act, 1957 ("the Act" for short) requesting the Court to impound the agreement of sale dt. 27-11-2002 on the ground that it is not duly stamped and requested the Court to pass appropriate order. The Court below after hearing both the parties has held that the plaintiff was put in possession of the property under the part performance of the contract and that the agreement has been drawn on a stamp paper of Rs. 200/- and the same is not in conformity with the Article 5 (c) of the Act and directed the plaintiff to calculate the duty and penalty and to pay the same by its order dt. 11-2-2004. The legality and correctness of the same is called in question in this writ petition.
4. I have heard Sri S. V. Prakash for the petitioner and Sri G. S. Vishveswara learned Senior counsel for the respondents.
5. "According to the learned counsel for the petitioner, the petitioner was not put In possession of the property under the part performance of the agreement: of sale in order to pay the stamp duty as required under Article 5 (e) of the Act. Relying upon Clause 5 of the agreement, he contends that the plaintiff was put in possession of the property only for the purpose of developing the property and not under part performance of the agreement.
6. According to Mr. Vishveshara, though in Clause 5 of the sale agreement the word "'developing" is included, the said clause has to be construed as if possession was delivered to the petitioner under the performance of the contract. Relying upon the averments made In the plaint, tie contends that the plaintiff having occupied the possession of the properly under the part performance of the agreement, cannot contend that he was put in possession of the property only to develop the same. Therefore, he request this Court to dismiss the petition.
7. After hearing the learned counsel for both the parties, the short question that arises for consideration is whether the petitioner was put in possession of the property under the part performance of the agreement or not.
8. Section 53A of the Transfer of Property Act reads as hereunder:
"Where any person contracts to transfer for consideration any immoveable property by writing signed by him or on his behalf from which the terms necessary to constitute the transfer can be ascertained with reasonable certainty, and the transferee has, in part performance of the contract taken possession of the property or any part thereof, or the transferee, being already in possession, continues in possession in part performance of the contract and has done some act in furtherance of the contract, and the transferee has performed or is willing to perform his part of the contract, then, notwithstanding that the contract, though required to be registered, has not been registered, or, where there is an instrument of transfer, that the transfer has not been completed in the mariner prescribed therefor by the law for the time being in force, the transferor or any person claiming under him shall be debarred from enforcing against the transferee and persons claiming under him any right in respect of the property of which the transferee has taken or continued in possession, other than a right expressly provided by the terms of the contract:
Provided that nothing in this section shall affect the rights of a transferee for consideration who has no notice of the contract or of the part performance thereof."
9. The learned counsel for the petitioner does not dispute that under the said document the petitioner has been put in possession of the property. But according to him it is only for the purpose of developing the property. Whether in such circumstances, the Court can hold the possession of the petitioner either for developing the property or in possession of the property under part performance of the contract.
10. The suit is filed by the plaintiff based on the very agreement to direct defendant No. 1 to sell the property absolutely by receiving the balance sale consideration. Even according to the plaint, averments, it is not the case of the plaintiff that he has entered into an agreement to develop the property and treating the agreement, as a joint development agreement. When it is the specific case of the plaintiff that he has entered into an agreement to purchase the property for a sum of Rs. 18,00,000/-, the possession delivered to the plaintiff under the document cannot be treated for the purpose of development. In other words, even though the word "developing" is used, the petitioner has been put in possession of the property to develop the property as the owner under the agreement of sale. Therefore, such possession has to be treated only in terms of Article 5 (e) of the Stamp Act and under Section 53(A) of the Transfer of Property Act. Considering the averments made in the plaint and Clause 5 of the agreement, this Court cannot come to the conclusion that the petitioner was not put in possession under the part performance of the agreement. In the circumstances, this Court is of the opinion that the trial Court is justified in directing the plaintiff to pay deficit stamp duty and penalty.
At this stage, the learned counsel for the petitioner requests the Court to grant three months time to pay the stamp duty and penalty contending that the petitioner has to pay heavy amount nearly Rs. 19,00,000/- as deficit stamp duty and penalty.
Considering the amount payable by the petitioner, three months time is granted for the petitioner to pay the stamp duty and penalty. All other contentions raised by the parties are lift open.