Bombay High Court
Ajay Bipinchandra Jhaveri And Anr vs Sanjay Pandurang Kalate And Ors on 16 December, 2020
Author: C.V. Bhadang
Bench: C.V. Bhadang
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IN THE HIGH COURT OF JUDICATURE AT BOMBAY
CIVIL APPELLATE JURISDICTION
CIVIL WRIT PETITION NO.11336 OF 2019
Ajay Bipinchandra Jhaveri & Anr. .. Petitioners.
V/s.
Sanjay Pandurang Kalate & Ors. .. Respondents.
----
Mr. Prasad Dani, Senior Advocate a/w. Prabhakar M. Jadhav, for
the Petitioners.
Mr. Ranjit Thorat, Senior Advocate a/w. Sandeep Salunkhe, for the
Respondents.
----
CORAM : C.V. BHADANG, J.
RESERVED ON: 7th DECEMBER, 2020
PRONOUNCED ON : 16th DECEMBER, 2020
JUDGMENT :
. Rule. Rule made returnable forthwith. Mr. Sandeep Salunkhe, the learned counsel for the respondents waives service. Heard finally by consent of the parties.
2. The challenge in this petition, is to the common order dated 22/8/2019 (Below Exh.176 and 177) passed by the learned Senior Civil Judge at Pune, in Special Suit No.935/2012. By the impugned order, the learned Trial Court, has refused to impound the Mamta Kale page 1 of 19 ::: Uploaded on - 11/01/2021 ::: Downloaded on - 10/02/2021 06:52:45 ::: 6-WP-11336-19-final agreement of sale dated 11/9/2009 and to refer it to the Collector of Stamps for determination of deficit stamp duty and penalty.
3. The facts necessary for the disposal of the petition, may be stated thus-
The first respondent has filed the aforesaid suit against the second respondent (defendant No.1), the petitioners (defendant Nos.2 and 3) and the third respondent (defendant No.4) for cancellation of documents, specific performance, declaration and permanent injunction etc.
4. The subject matter of dispute happens to be ¼ th joint share of the defendant No.1 out of land, bearing survey No.185 of Muze Wakad, Taluka Mulshi, District Pune, alongwith structures standing thereon, within the limits of Pimpri Chinchwad Municipal Corporation (PCMC), more specifically described in plaint para No.1. According to the plaintiff, the defendant No.1 for himself and on behalf of the Hindu Undivided Family ('the HUF' for short) has executed an agreement of sale dated 11/9/2009 in favour of the plaintiff which is a notarised document, thereby agreeing to sale the suit property to the plaintiff for a consideration of Rs.3 Lakhs per acre.
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5. The plaintiff learnt that the defendant No.1 has executed a sale deed on 2/3/2010 in respect of 4H 28R from out of the suit property in favour of defendant No.2 and has failed to execute the sale deed as agreed in the agreement dated 11/9/2009. It is in these circumstances that the suit is filed for declaration, cancellation of sale deed and for specific performance etc.
6. The suit claim is resisted on behalf of the petitioners and others.
7. The first respondent (original plaintiff) filed his affidavit in examination-in-chief (Exh.144) on 6/7/2019 and on the same date, his further examination-in-chief was recorded on oath in which the plaintiff tendered the original agreement of sale dated 11/9/2009 which was marked as Exh.146. It appears that the cross examination on behalf of the defendants was deferred till the next date. On the next date, an additional affidavit of examination-in- chief (Exh.175) was filed and after his further examination-in-chief was recorded, the plaintiff was cross-examined on behalf of the defendant No.1.
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8. It may be mentioned that there was no objection raised to the agreement of sale being marked as Exh.146 during the course of the chief-examination. On 9/8/2019, the defendant No.1 filed application (Exh.176) while the defendant Nos.2 and 3 filed application (Exh.177) for impounding of the agreement of sale on the ground that it is insufficiently stamped. The contention is that the said agreement of sale would be a 'conveyance', within the meaning of Explanation (I) to Article 25 of the Maharashtra Stamp Act (the 'Act' for short) particularly in view of para 5 and 13 of the said agreement.
9. The application was opposed on behalf of the plaintiff on the ground that only notional possession has been delivered by virtue of the said agreement, and not the physical possession.
10. The learned Trial Court by the impugned order has rejected both these applications, interalia on the ground that the instrument having already been 'admitted in evidence', could not have been called in question in view of Section 35 of the said Act. Secondly, it has been found that the physical possession was agreed to be given at the time of sale deed or final payment of the consideration. Thus, the Trial Court has refused to accept that the agreement would be a Mamta Kale page 4 of 19 ::: Uploaded on - 11/01/2021 ::: Downloaded on - 10/02/2021 06:52:45 ::: 6-WP-11336-19-final 'conveyance' within the meaning of Explanation (I) to Article 25 of the said Act. Feeling aggrieved, the petitioners are before this Court.
11. I have heard Mr. Dani, the learned Senior counsel for the petitioners and Mr. Ranjit Thorat, learned Senior counsel for the first respondent. Perused record.
12. Mr. Dani, the learned Senior counsel for the petitioners has made following submissions.
(i) That Explanation (I) to Article 25 of the Stamp Act does not refer to "physical possession" alone. It is submitted that the 'possession' as is referred to in the said Explanation (I) would take into its ambit even notional or legal possession which is transferred as per agreement (Exh.146). It is pointed out that Explanation (I) has been amended thrice after its introduction. However, there is no amendment specifying that the 'possession', as contemplated under said Explanation is confined to 'physical possession'.
(ii) It is submitted that, even otherwise the agreement contemplates that the physical possession would be delivered at the time of the execution of the sale deed or the payment of the balance consideration. In the submission of learned Senior counsel, once the Mamta Kale page 5 of 19 ::: Uploaded on - 11/01/2021 ::: Downloaded on - 10/02/2021 06:52:45 ::: 6-WP-11336-19-final possession is agreed to be handed over, at any time, prior to the execution of the conveyance / sale deed, the document would come within the mischief of Explanation (I) to Article 25.
(iii) It is submitted that various articles of the Stamp Act are a piece of fiscal legislation, which need to be strictly interpreted and there is no scope for any interpretation other than what is found in the plain reading of the section / article.
(iv) It is submitted that, while deciding the issue whether the document amounts to a conveyance or not, the Court has to confine to the document and the recitals therein and cannot travel beyond the same or look into the pleadings of the parties. It is thus submitted that notwithstanding the case of the defendants, that they are in possession, still the document (Exh.146) will have to be seen as it is, to find out whether it amounts to a 'conveyance' or not.
(v) Lastly, it is submitted that the document cannot be said to be 'admitted' in evidence so as to attract Section 35 of the Stamp Act. It is pointed out that mere marking of the document, as Exhibit does not tantamount to proof. On behalf of the petitioners, reliance is placed on the decision of this Court in the case of (i) Durgashankar Mamta Kale page 6 of 19 ::: Uploaded on - 11/01/2021 ::: Downloaded on - 10/02/2021 06:52:45 ::: 6-WP-11336-19-final S. Trivedi & Ors. Vs. Babubhai Bhulabhai Parekh of Bombay High Court, 2003(2) Mh.L.J. 576 (ii) Bhupendrabhai Rambhai Patel Vs. Lilabai Mahadeorao Labde and Anr. of Nagpur High Court, 2010 (5) Mh.L.J. 990 (iii) Ashok Ganagsahai Singhal & Ors. Vs. Ramdhar Nankulal Yadav and Ors. of Bombay High Court, 2013 (4) Mh.L.J. 202 (iv) Bama Kathari Patil Vs. Rohidas Arjun Madhavi and Anr. of Bombay High Court, 2004(2) Mh.L.J. 752 and the decision of the Supreme Court in Veena Hasmukh Jain and Anr. Vs. State of Maharashtra & Ors. (1999) 5 SCC 725 and (vi) Omprakash Vs. Laxminarayan and Ors. (2014) 1 SCC 618.
13. Mr. Thorat, the learned Senior counsel for the respondent has submitted that the agreement (Exh.146) has rightly been held not to amount to 'conveyance', under Explanation (I) to Article 25 of the Stamp Act. It is submitted that it is all along the case of the petitioners that they are in possession of the suit property. Thus, by no stretch of imagination can it be said that by the said agreement, physical possession was either agreed or was actually delivered. The learned counsel has referred to the order passed on the temporary injunction application in this regard. It is submitted that there was no objection raised when the document was exhibited on 6/7/2019 and subsequent thereto when P.W.1 was cross examined on behalf of Mamta Kale page 7 of 19 ::: Uploaded on - 11/01/2021 ::: Downloaded on - 10/02/2021 06:52:45 ::: 6-WP-11336-19-final the defendant No.1. It is submitted that the objection was raised only when the applications (Exh.176 and 177) were filed on 9/8/2019. It is submitted that thus in view of Section 35 of the Stamp Act, the objection could not have been raised. It is submitted that Explanation (I) to Article 25 was added with the avowed purpose / object, to ensure that there is no evasion of stamp duty by actual delivery of possession, without executing the conveyance. It is thus submitted that having regard to the object of said provision, 'possession', as is referred to in the said Explanation ought to be 'physical possession' and not notional possession or legal possession. On behalf of the respondent, reliance is placed on the decision in the case of Vikrant Vikas Raikar Vs. State of Maharashtra & Ors. MANU/ MH/0395/2020 and the decision of the Supreme Court in the case of Javer Chand & Ors. Vs. Pukhraj Surana 1961 0 AIR (SC) 1655.
14. I have considered the rival circumstances and the submissions made.
15. In order to appreciate the rival contentions, it is necessary to reproduce Clause Nos.2, 5, 12, 13 and 15 of the agreement (Exh.146) as under -
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2. The total price and the entire consideration payable in the matter of the said property is agreed to be is Rs.4,18,50,000/- (Rupees Four Crores Eighteen Lakhs Fifty Thousand Only). The said amount is payable in the following manner-
Total Consideration Rs.4,18,50,000/-
Four installments of Rs.25,00,000/-
each
Payable in- September 2009 Rs.25,00,000/-
March 2010 Rs.25,00,000/-
September 2010 Rs.25,00,000/-
September 2011 Rs.25,00,000/-
Remaining at the time of Rs.3,18,50,000/-
conveyance
5. Legal possession of the said property is today handed over by the Purchaser to the Vendor and the Purchaser has accepted the said possession. Physical possession will be given at the time of sale deed.
12. The Vendor shall establish marketable title and possession of the said property within 24 months hereof.
13. Though symbolic possession is given today, the actual possession will be given on final payment or registration of sale deed.
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15. An amount of Rs.25,00,000/- is paid today and further amounts as may be paid in future, shall be paid under written receipts towards part consideration/s paid and/or to be paid shall always remain charge on the said property.
(Emphasis supplied) It can thus be seen that the total consideration agreed was Rs.4,18,50,000/- out of which an amount of Rs.25 Lakhs was paid when the agreement was executed and the balance was to be paid thereafter, half yearly, in four installments of Rs.25 Lakhs each and the remaining amount of Rs.3,18,50,000/- at the time of conveyance. It can thus clearly be seen that only part consideration was paid at the time of execution of the agreement and the balance was to be paid at the time of conveyance. Only legal / symbolic possession was said to be given and actual possession was to be given on final payment or registration of sale deed.
16. Before adverting to the contentions based on Explanation (I) to Article 25 of the Stamp Act, it may be noted that the Supreme Court in Omprakash (supra) has held that the Court has to confine to the recitals in the document while deciding whether it is insufficiently stamped and is required to be impounded. The said Mamta Kale page 10 of 19 ::: Uploaded on - 11/01/2021 ::: Downloaded on - 10/02/2021 06:52:45 ::: 6-WP-11336-19-final question cannot be decided on the basis of the pleadings raised by the parties. To that extent, the learned Senior counsel for the petitioners, would be right in contending that pleadings of the petitioners being in possession of the suit property and the fact that the temporary injunction was refused to the plaintiff, would not be material. Therefore, in view of the settled position, it is necessary to confine to the recitals in the agreement Exh.146 itself which have been reproduced above.
17. Article 25 deals with the stamp duty on a conveyance. The Explanation (I) to Article 25 of the Stamp Act to the extent relevant reads thus-
"Explanation I- For the purposes of this article, where in the case of agreement to sell an immovable property, the possession of any immovable property is transferred (or agreed to be transferred) to the purchaser before the execution, or at the time of execution, or after the execution of, such agreement without executing the conveyance in respect thereof, then such agreement to sell shall be deemed to be a conveyance and stamp duty thereon shall be leviable accordingly;
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18. It can thus be seen that under the said explanation where in a case of an agreement to sell, an immovable property, the possession of any immovable property is transferred, or agreed to be transferred, to the purchaser before the execution, or at the time of execution, or after the execution of such agreement, then such agreement to sale shall be deemed to be a conveyance and stamp duty thereon shall be leviable accordingly. There was an amendment to the said explanation in the year 1994 (By Act No.38 of 1994) by which words "without executing the conveyance in respect thereof" were deleted. Thus, essentially, the agreements contemplated under Explanation (I) are the ones, where the possession of the immovable property is "transferred" or "agreed to be transferred" to the purchaser before execution or at the time of execution or after the execution of such agreement. It is not possible to accept that the possession as is referred to in the said explanation would take into its ambit even notional possession. This is because there is no actual transfer of any possession in such a case. That apart, clause 12 of the agreement would indicate that the vendor was supposed to establish marketable 'title' and 'possession' of the said property within 24 months. Thus, the possession could not be said to be transferred as such. Thus, reading the agreement as a whole and in particular clause 2, 5, 12, 13 and 15 (as referred Mamta Kale page 12 of 19 ::: Uploaded on - 11/01/2021 ::: Downloaded on - 10/02/2021 06:52:45 ::: 6-WP-11336-19-final above), there is no manner of doubt that the said agreement does not envisage or contemplate delivery of physical possession, so as to come within the mischief of the Explanation I to Article 25 of the Stamp Act.
19. In the case of Bhupendrabhai Patel (supra), the existence of stipulation of handing over the possession in the instrument, was not in dispute. It was in these circumstances held that the circumstances in which the possession was not or could not be handed over, were not relevant for the purpose of Section 34 of the Stamp Act. A perusal of para 6 of the judgment would make it clear that in the relevant document (Exhibit 51 therein), the recital that possession of the suit field, as per measurement was given by the defendant No.1 to the plaintiff and the plaintiff having accepted the same was not in dispute.
20. In the case of Ashok Singhal (supra), again the agreement which was styled as a memorandum of understanding was found to be a development agreement in which it was implicit that the possession was handed over for the purpose of carrying out the intent and the object of the development, which was agreed to be carried out within three years. It was in these circumstances held Mamta Kale page 13 of 19 ::: Uploaded on - 11/01/2021 ::: Downloaded on - 10/02/2021 06:52:45 ::: 6-WP-11336-19-final that the memorandum of understanding was a development agreement and was a conveyance chargeable to stamp duty in terms of Article 25 of the Stamp Act.
21. In the case of Veena Jain (supra), before the Supreme Court, there was an agreement for sale of a flat alongwith delivery of possession which was held to be a conveyance under sub-section 2(g) of the Stamp Act.
22. It is evident that the question whether a particular document would be chargeable as a 'conveyance' as per Explanation I to Article 25 of the Stamp Act, would depend on the facts and circumstances of the each case. In the present case, confining to the recitals in the agreement, it is not possible to accept that the agreement would be chargeable as a conveyance. Clause 2 of the agreement stipulates that the balance consideration of Rs.3,18,50,000/- was to be paid at the time of conveyance. Clause 13 contemplates actual possession being given on final payment or registration of sale deed. Thus, a conjoint reading of Clause 2 and 13 would make it clear that the actual possession in any event was agreed to be delivered at the time of conveyance / registration of the sale deed and not before, in Mamta Kale page 14 of 19 ::: Uploaded on - 11/01/2021 ::: Downloaded on - 10/02/2021 06:52:45 ::: 6-WP-11336-19-final as much as, the final payment itself was agreed to be made at the time of conveyance.
23. There is one more reason why the objection has rightly not been entertained which is based on Section 35 of the Stamp Act. Section 35 reads thus-
"Section 35 - Where an instrument has been admitted in evidence, such admission shall not, except as provided in Section 58, be called in question at any stage of the same suit or proceeding on the ground that the instrument has not been duly stamped."
24. It is submitted by the learned senior counsel for the petitioners that merely marking of the document as an exhibit would not amount to the document being, "admitted in evidence"
within the meaning of Section 35 of the Stamp Act. It is submitted that the marking of the document as an exhibit does not amount to proof of the document and consequently, unless it is proved, the same cannot be said to be admitted in evidence.
25. On the contrary, it is submitted by the learned senior counsel for the respondent No.1 that the document being 'admitted in evidence' within the meaning of Section 35 is distinct from the proof Mamta Kale page 15 of 19 ::: Uploaded on - 11/01/2021 ::: Downloaded on - 10/02/2021 06:52:45 ::: 6-WP-11336-19-final of the document. It is submitted that once the witness enters into the witness box, tenders the document, and it is marked as exhibit and the adversary does not take any objection for the same, the document will be deemed to be 'admitted in evidence' under Section 35 of the Stamp Act, after which no objection to the document being insufficiently stamped can be entertained.
26. It is true that mere marking of the document as an exhibit is not same as proof of the document. The document is otherwise required to be proved in accordance with the provisions of the Evidence Act. However, it is necessary to see when the document can be said to be 'admitted in evidence', within the meaning of Section 35 of the Stamp Act. In my considered view, the issue is no longer res integra. This Court in the case of Durga Shankar Trivedi (supra) has noted the decision of the Supreme Court in the case of Ram Rattan (dead) by legal representatives Vs. Bajrang Lal AIR 1978 SC 1393 and the decision in the case of Javer Chand Vs. Pukhraj Surana, AIR 1961 SC 1655. This Court in the case of Durga Shankar Trivedi (supra) has observed thus in para 7 of the judgment-
"7. The Apex Court in Ram Rattan's case (supra) had clearly held that when the document is tendered Mamta Kale page 16 of 19 ::: Uploaded on - 11/01/2021 ::: Downloaded on - 10/02/2021 06:52:45 ::: 6-WP-11336-19-final in evidence by the plaintiff while in the witness box, and if objection is raised by the defendant that the document is inadmissible in evidence as it is not duly stamped and for want of registration, then it is obligatory upon the Court to apply its mind to the objection raised and to decide the objection in accordance with law. Similarly, in Javer Chand's case (supra) it was ruled by the Apex Court that where the question as to the admissibility of the document is raised on the ground that it has not been stamped or has not been properly stamped, the party challenging the admissibility of the document has to be alert to see that the document is not admitted in evidence by the Court. Once the Court rightly or wrongly decides to admit the documents, so far as parties are concerned, the matter stands closed. The party challenging the admissibility of the document has to be vigilant to see to it that the inadmissible document is not admitted in evidence by the Court and the Court has to judicially determine the matter as soon as the document is tendered in evidence and before it is marked as an exhibit in the case."
(Emphasis supplied)
27. It can thus clearly be seen that where the question as to admissibility of the document is raised on the ground that it has not been stamped or has not been properly stamped, the party challenging the admissibility of the document has to be alert to see Mamta Kale page 17 of 19 ::: Uploaded on - 11/01/2021 ::: Downloaded on - 10/02/2021 06:52:45 ::: 6-WP-11336-19-final that the document is not admitted in evidence by the Court and the parties so challenging the admissibility of the documents has to be vigilant to see to it that inadmissible document is not admitted in evidence by the Court. But once such objection is not raised, the question in so far as parties are concerned, stands closed. It is further observed in para 10 of Durga Shankar Trivedi (supra) as under-
10. The admissibility of the document cannot be established by mere filing of the affidavit by the parties but the documents are necessarily required to be tendered by the deponent, while allowing the other side to have an opportunity to contest the admissibility of the document and an appropriate decision of the Court on such contest by the parties is necessary. Undoubtedly, this decision has to be prior to exhibition of the documents in evidence as already stated above. Merely because under Rule 4 of Order 18 the parties are allowed to produce documents alongwith affidavit, it cannot be construed that such documents are to be exhibited without testing the admissibility of such documents. In fact, proviso to sub-rule (1) of Rule 4 of Civil Procedure Code itself discloses that the Court has to decide about the admissibility of documents before they are being exhibited in the evidence.
(Emphasis supplied)
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28. It is a matter of record that no objection was raised in this case when the agreement was marked as Exhibit 146 and therefore, the Trial Court was justified in refusing to entertain the objection based on Section 35 of the Stamp Act.
29. Looked from any angle, the objection as to the agreement being insufficiently stamped, has rightly been rejected.
30. In the result, the writ petition is dismissed. Rule is discharged, with no order as to costs.
C.V. BHADANG, J.
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