Karnataka High Court
A.M. Sunilkumar S/O A.M.Lokanath vs Manjunath S/O Mallikarjuna Hebbali on 30 January, 2020
Author: K.N.Phaneendra
Bench: K.N.Phaneendra
1
IN THE HIGH COURT OF KARNATAKA
DHARWAD BENCH
DATED THIS THE 30TH DAY OF JANUARY 2020
BEFORE
THE HON'BLE MR. JUSTICE K.N.PHANEENDRA
W.P. No. 113704/2015 (GM-CPC)
Between:
A.M. Sunilkumar s/o A.M. Lokanath,
aged about 33 years,
Occ.: Public Service and business,
r/o Indrakeela Nagar, Gadag Road,
Taluk & District Koppal.
- Petitioner
(By Sri Santosh B. Malligawad, Advocate for
Sri Y. Lakshmikant Reddy and
Smt. Y. Malathi Reddy, Advocates)
And:
Manjunath s/o Mallikarjuna Hebbali,
Aged about 46 years, Occ: agriculture,
r/o Yathnatti village,
Post Bhaghyanagar Village,
Taluk and District Koppal.
- Respondent
(by Sri Santosh Naragund, Advocate for
Sri D.V. Pattar, Sri G.N. Badiger and
Sri G.F. Hiregoudar, Advocates)
This Writ Petition is filed under Article 226 and 227 of the
Constitution of India praying to set aside the order dated
20.01.2014 passed in O.S. No. 72/2012 on the file of the
learned Civil Judge and JMFC Court, Koppal vide Annexure-E &
etc.
2
This Writ Petition coming on for Preliminary Hearing-B
Group this day, the Court made the following:
ORDER
The present writ petition is filed seeking setting aside the order dated 20.01.2014 passed in O.S. No. 72/2012 by the Civil Judge & JMFC, Koppal and also seeking setting aside the order dated 21.10.2013 passed by the said Court in impounding the document for sending the same to the concerned District Registrar.
2. I have heard arguments of the learned counsel for the petitioner and the learned counsel for the respondent. The two orders passed by the trial court sought to be quashed by this Court are extracted below.
21.10.2013 The document is unregistered and stamped Rs.50 only send the copy of the document for verification of market value and stamp duty of the same to district registrar and await report call on 18.11.2013.
20.01.2014 Report received from District registrar. That deficit stamp duty is Rs.15,422/- and penalty is 10 (ten) times the deficit for payment of duty and penalty SVH prays time. Call on 04.03.2014.
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33. The trial Court has come to the conclusion that the document was unregistered but stamped, written on Rs.50/-
stamp paper. Therefore, it sent the same for evaluation of the market value in order to demand stamp duty and penalty on the same and on 20.01.2014 deficit stamp duty was calculated and penalty was imposed. Those two orders are called in question on the ground that if the document is an unregistered document and by virtue of the document if no possession is delivered, in such an eventuality, it neither requires any registration nor duty penalty can be imposed. In this context the learned counsel has relied upon the ruling of this court in W.P. No. 100567/2013 wherein this Court vide order dated 21.02.2013 has observed at paragraph No.5 in the following manner.
5. A reading of the aforesaid provision makes it clear that it is stated that the first party agreed that soon after delivery of physical possession of the said premises from the tenants, the proper conveyance, registered sale deed will be executed by him in favour of the second party. This recital shows that property is neither in the possession of the plaintiff nor the defendant No.1. It is in the possession of the tenants. Further, the recital shows symbolic and nominal physical possession of the said property has been delivered to the second party. Such a nominal or legal possession is permissible only after conveyance of a property which is not in the occupation of the vendor. He could call upon tenant to attorn in 4 favour of the purchaser by giving symbolic or constructive physical possession. Under an agreement of sale no right in immovable property is transferred to the purchaser, when no right and interest in immovable property is created I the said document, question of giving symbolic or nominal possession would not arise. It is in this background, let us see article 5(e)(i) of the Act, which reads as under:
"5. agreement or [its records or] Memorandum of an Agreement,-
(e) If relating to sale of immovable property wherein part performance of the contract,-
(f) Possession of the property is delivered or is agreed to be delivered without executing the conveyance."
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4. The Andhra Pradesh High Court in a decision reported in 2011 DGLS (A.P.) Page No. 78 between R. Venkatramana Reddy and R.Amarkanth Reddy Vs. Jetamoni Gouramma w/o Vishnu at paragraph Nos.7 and 8 it is observed as under:
7. Learned counsel appearing for the respondent-Plaintiff submits that possession is not delivered pursuant to the receipt-
cum-agreement of sale. What is stated in the plaint is that the Defendants have handed over possession of the lands under sale in Sy. Nos.11 and 16 to the Plaintiff for survey and demarcation and therefore, Ex.A-1 agreement of sale cannot be construed as sale deed and accordingly, the order impugned in the revision is not liable to be interfered with. In support of his submission, reliance has been placed on the decisions of this Court in Cheryala Srinivas 5 V. Moola Sujatha: 2010 (1) ALT 448, Sri Lakshmi Housing enterprises, Hyderabad v. Haji Begum 2010 (5) ald 819; AND Vijayalakshmi v. Boyapali Shantamma 2002 (5) ALT 406. In Sri Lakshmi Housing Enterprises case (3rd supra), a learned Single Judge of this court held tht when the agreement of sale does not contain recital to the effect that possession was delivered, it is not liable to be stamped as sale deed. Learned single Judge referred the earlier decision in Housing (P) Ltd. Case (1 supra) and distinguished the same on facts. Para (5) of the cited judgment needs to be noted and it is thus: (5). Learned counsel for the Respondents places reliance upon the judgment of this court in sri Tirumala Housing (P) Ltd. V. GPR Housing (P) Ltd. : 2006 (5) ALD 359: 2006 (5) alt 532. In that case, permission accorded to the purchaser to get the lay out approved to advertise the sale of plots and to book the sales to prospective purchases by receiving consideration etc. was treated as symbolic possession to attract Article 47-A. The recitals in the instant case are at variance. In Cheryala Srinivas v. Moola Sujatha and Ors.: 2010 (1) ALT 448:
2010 (1) ALD 246 this Court held that it is only when the purchaser under an agreement of sale gets actual and legal possession of the property under the agreement of sale, that he can be required to pay the stamp duty.
8. I have gone through the plaint averments. The Respondent-
Plaintiff pleaded in the plaint that Defendants handed over possession for survey and demarcation. Therefore, it can be construed that possession is not absolute and it is only for limited purpose. The possession mentioned in Explanation-1 must be effective, actual and the one recognized in law. Unless the party under the agreement has the benefit of possession of the property, 6 without any dispute, or challenge, from a party to the agreement, he cannot be mulcted with the liability to pay the stamp duty, as though it is a sale deed, vide decision of this court in cheryala srinivas v. Moola sujatha (2nd supra). The issue involved in this revision is squarely covered by the judgment of this court in S.Vijayalakshmi v. Boyapali Shanthamma (4 supra), wherein it has been held that mere placing of land in the hands of purchaser under the agreement for dividing it into plots and to lay roads does not constitute handing over possession of the land and therefore, it does not require stamp duty as sale deed.
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5. On perusal of the above said two decisions, in order to ascertain whether under the agreement any possession was delivered, in order to send the document for deficit stamp duty and evaluation of the market value of the said document. In this particular case the document itself is produced at Annexure-A.
6. On plain recital it shows that possession was delivered but the plaintiff has categorically stated in the plaint at paragraph No. 2 that the plaintiff and the defendants entered into an agreement of sale on 02.04.2009 mutually agreeing to settle the consideration amount at rs.2,28,250/- and plaintiff has paid the full consideration amount on the same day and the defendant has agreed to execute sufficient registered sale deed in favour of the 7 plaintiff as per law and also agreed to deliver possession of the land on the date of registration of the document and accordingly the defendant has executed an agreement of sale on a Rs.50/-
stamp paper. The defendant also in his pleading denied handing over the possession of the said land in favour of the plaintiff and agreed to deliver possession of the property on the date of registration. At paragraph No. 7 of the written statement a special plea was taken by the defendant stating that the defendant is the absolute owner in possession and enjoyment of the said property but the defendant has availed hand loan of Rs.10,000/- for which the plaintiff has taken signature of the defendant upon a blank Rs.50/- stamp paper. Thereafter the defendant has repaid the hand loan amount in favour of the plaintiff within three months.
At that time, the defendant has demanded the plaintiff for returning of the stamp paper as he repaid the amount but the plaintiff has falsely stated that, he would return the blank Rs.50/-
stamp paper few days later but he did not return the same.
7. Therefore, from the above said pleadings it is crystal clear that possession of the property was not delivered to the plaintiff and the possession continued with the defendant and it is 8 contended, now the defendant has sold the said land in favour of some third party and delivered possession as per the sale deed.
8. Article 5 of the Karnataka Stamp Act refers to agreement or memorandum of an agreement. Article 5(e) of the act deals with the agreement relating to the sale of immovable property wherein dealt purpose of the contract,
(i) possession of the property is delivered or is agreed to be delivered before executing the conveyance.
Sub clause (2) says that possession of that property is not delivered, ten paise for every one hundred rupees or part thereof on the market value equal to the amount of consideration subject to a maximum of rupees twenty thousand but not less than rupees Five hundred;
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9. Therefore, the duty penalty cannot be collected on the market value of the property as if the possession of the property has been delivered when it is evident from the records that possession of the property has not been delivered by the defendant. Therefore, under the above said circumstances, the order passed by the trial Court dated 20.01.2014 and 21.10.2013 in O.S. No. 72/2012 is not proper and correct and both of them 9 are liable to be quashed. However, the trial Court has to re-look into the Karnataka Stamp Act and pass appropriate orders in accordance with law. Accordingly, the writ petition is disposed off.
SD/-
JUDGE bvv