Karnataka High Court
H.P. Basavarajappa vs K. Vijayalakshmi And Ors. on 6 July, 2006
Equivalent citations: 2007(4)KARLJ326, 2006 (5) AIR KAR R 307
Author: Ram Mohan Reddy
Bench: Ram Mohan Reddy
ORDER Ram Mohan Reddy, J.
1. In this petition, the order dated 6.8.2003 of the Civil Judge (Senior Division) and JMFC, Nanjangud Annexure-"D" passed in O.S.No. 104/2000 is called in question.
2. The petitioner-plaintiff who instituted O.S.No. 104/2000 for the relief of specific performance of the agreement of sale dated 28.9.1998 sought to introduce, in evidence, the said agreement engrossed on stamp paper of value of Rs. 100/-. The defendants in the suit objected to the marking of the said document for being insufficiently stamped. The Trial Court, having regard to the convenants in the agreement disclosing delivery of possession of the immovable property to the petitioner, held that Article 5(e)(i) of the Kamataka Stamp Act applies and the document liable for payment of duty and penalty on account of being insufficiently stamped.
3. Smt. Geetha Devi, learned Counsel for the petitioner contends that the Trial Court fell in error in recording a finding that the convenants in the agreement of sale dated 28.9.1998 discloses delivery of possession of the immovable property to the plaintiff. learned Counsel further contends that it was not the case of either of the parties that possession of the immovable property was delivered under the agreement of sale nor did the plaintiff plead part performance of the agreement Under Section 53-A of the Transfer of Property Act, 1882. According to the learned Counsel, having regard to the plaint averments and that of the written statement of the defendants, being one of denial of the agreement of sale, the Trial Court was not justified in recording the finding that the terms of the agreement disclose delivery of possession of the immovable property and the agreement having not been sufficiently stamped, is subject to payment of duty and penalty.
4. Per contra, Sri S.M. Chandrashekar, learned Counsel for the respondents seeks to support the order impugned as being -well-merited, fully justified and not calling for interference. learned Counsel would hasten to add that the convenants in the agreement when read in entirety discloses the payment of the entire sale consideration of Rs. 1,00,000/- the delivery of possession of the suit schedule property and what remained was only the due execution of the Sale Deed, after two years therefrom. According to the learned Counsel, though the defendant's plea is one of denial of the agreement, but for the purpose of marking in evidence the unregistered agreement, not duly stamped, what is relevant is the convenants in the said document and not the pleadings of the parties or the oral evidence. learned Counsel would buttress his argument by placing reliance upon the decision of this Court in the case of Jayalakshmi Reddy v. Thippanna and Ors. .
5. The suit of the plaintiff is for specific performance of the agreement of sale dated 28.9.1998 and the prayer is for a direction to execute and lodge for registration the sale deed conveying the immovable property, subject matter of agreement. The plaint averments do not disclose a plea of part performance of the agreement by delivery of possession of the suit property, under the agreement, as required by Section 53A of the Transfer of Property Act, 1882, nor a relief for delivery of possession of the suit property. The defence in the written statement is one of denial of the agreement and that the defendants are in possession of the suit property. According to the learned Counsel for the parties, there is no issue as regards possession, and that in the evidence PW1 has not deposed as regards having been put in possession of the suit property on the date of the agreement of sale. At the stage of introducing the sale agreements and marking the same in the evidence of PW1, the defendants having objected to the same as insufficiently stamped as required by the Karnataka Stamp Act, 1957, the Trial Court, examined the contends of the agreement, and passed the order impugned.
6. The incidence of stamp duty on the agreement of sale, under Article 5 of the Karnataka Stamp Act, 1957 is not in dispute. From a plain reading of Article 5(e)(i) what is discernable is that when possession of property is delivered without executing a conveyance, attracts stamp duty as a conveyance No. 20 on the market value of the property. Section 2(d) of the said Act defines a conveyance to include a conveyance on sale and every instrument by which property, whether movable or immovable is transferred. Section 34 of the Act provides that an instrument chargeable with duty shall be admitted in evidence provided the instrument is duly stamped.
7. Having regard to the aforestated provisions of the Statute, it is obvious that an unregistered agreement of sale with delivery of possession of immovable property, is deemed to be a conveyance attracting duty as conveyance No. 20, on the market value of the said property. If the stamp duty is paid on the instrument, at the rate specified, the document shall be admitted in evidence. It is only when the duty paid on the document is insufficient, that Section 34 of the Act applies and the document is not admissible in evidence, unless the required rate of duty and penalty is paid.
8. In the instant case, the suit document is the unregistered agreement of sale dated 28.9.1998, engrossed on stamp paper of value of Rs. 100/-, executed by one Dr. K. Rrishnappa, acknowledging the receipt of Rs. One Lakh, being the entire sale consideration for conveying the suit schedule property, in favour of the plaintiff. While it is the case of the plaintiff that the convenants in the agreement do not disclose delivery of possession of the suit property on the date of execution of the document, the defendant's plea though one of denial, maintains that the recitals are clear and distinct as to delivery of possession, of the suit property, to the plaintiff, by reason of which the document is deemed to be a conveyance, attracting stamp duty as conveyance No. 20, on the market value, as stipulated in Article 5(e)(i) of the Act.
9. Indeed what is to be seen is whether the convenants of the agreement to sell, could be understood to mean that the possession of the property was delivered to the plaintiff on its execution. A careful examination of the convenants in the agreement discloses that the executant Dr. K. Krishnappa, received an advance of Rs. 30,000/-and Rs. 70,000/- totalling to Rs. One Lakh, on the date of the agreement, being the entire sale consideration, and agreed to execute and lodge for registration the deed of conveyance within two years therefrom. In addition, the covenants disclose the discrepancy in the executant's earlier purchase deed mentioning the suit property to be the southern portion, while in fact it was the western portion and that the executant of his own willingness and consent, has handed over possession of the suit property to the purchaser. For an understanding of the said covenant it is better extracted which runs thus:
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10. The aforesaid covenant animates the factum of handing over of possession of the suit property to the plaintiff by the executant. The covenant that the plaintiff paid the entire sale consideration of Rs. 1 lakh to the executant, coupled with the other covenants in the agreement discloses that what is required to be done is to execute and lode for registration the deed of conveyance of the suit property. The plaint averments do not disclose that the suit property was handed over to the plaintiff on the date of execution of the agreement of sale, or that it was not handed over, nor a plea of part performance Under Section 53A ofthe Transfer of Property Act, 1882. The prayer in the suit is only for specific performance of the agreement and a direction to execute and lodge for registration the deed of conveyance. If possession of the property is to be delivered on the execution of the sale deed, such a covenant would have found a place in the agreement, which apparently is not forthcoming. It is highly improbable that the petitioner having paid the full sale consideration of Rs. 1 lakh, would seek an execution of the conveyance without delivery of possession of the property. These circumstances, probabalise the factum of delivery of possession of the property to the purchaser on the execution of the agreement of sale.
11. The Learned Trial Judge having extracted the relevant portions of the covenants in the agreement of sale, in my considered opinion, arrived at the correct finding that the agreement tantamounts to a conveyance chargeable to duty as a conveyance No. 20, under Article 5(e)(i) of the Act, and liable to penalty, as the stamp duty paid on the unregistered document is insufficient. The agreement of sale cannot but be said to fulfill all the conditions stipulated in Section 5(e)(i) of the Act, and can be regarded as a conveyance attracting the payment of stamp duty as a conveyance No. 20 at the time of execution of the same, and having not done so, even at the time of introducing the same in the evidence of the plaintiff, the order impugned cannot be found fault with.
12. Having concluded that the unregistered agreement of sale is a conveyance, indisputably Section 34 of the Act is attracted and the said instrument being insufficiently stamped is inadmissible in evidence. The contention of the learned Counsel for the petitioner that the pleadings of the parties essentially require to be considered to determine whether the possession of the property was in fact handed over to the plaintiff pales into insignificance. Such a contention is irrelevant for determination of the sufficiency or otherwise of the stamp duty paid on an instrument sought to be introduced in evidence.
13. The principles laid down in Jayalakshmi Reddys case (Supra), have their fullest application to the facts of this case. The order impugned is well merited, fully justified on the materials available on record and they are neither shown to suffer any infirmities in law or substantiated to be violative on account of any perversity of approach to call for a different conclusion and interfere with the verdict.
The writ petition is without merit and is accordingly rejected.