Gujarat High Court
Shalin Mukeshbhai Patel vs State Of Gujarat on 12 December, 2022
Author: Biren Vaishnav
Bench: Biren Vaishnav
C/SCA/387/2021 CAV JUDGMENT DATED: 12/12/2022
IN THE HIGH COURT OF GUJARAT AT AHMEDABAD
R/SPECIAL CIVIL APPLICATION NO. 387 of 2021
FOR APPROVAL AND SIGNATURE:
HONOURABLE MR. JUSTICE BIREN VAISHNAV
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1 Whether Reporters of Local Papers may be allowed YES
to see the judgment ?
2 To be referred to the Reporter or not ? YES
3 Whether their Lordships wish to see the fair copy NO
of the judgment ?
4 Whether this case involves a substantial question NO
of law as to the interpretation of the Constitution
of India or any order made thereunder ?
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SHALIN MUKESHBHAI PATEL
Versus
STATE OF GUJARAT
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Appearance:
MR RV DESHMUKH(300) for the Petitioner(s) No. 1
MS DHWANI TRIPATHI, ASST GOVERNMENT PLEADER for the
Respondent(s) No. 1,3
NOTICE SERVED for the Respondent(s) No. 2,4
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CORAM:HONOURABLE MR. JUSTICE BIREN VAISHNAV
Date : 12/12/2022
CAV JUDGMENT
1. This petition, under Article 226 of the Constitution of India, has been filed for quashing and setting aside the Page 1 of 50 Downloaded on : Sat Dec 24 02:51:22 IST 2022 C/SCA/387/2021 CAV JUDGMENT DATED: 12/12/2022 orders dated 02.07.2019 and 03.06.2020 passed by the authorities under the Gujarat Stamp Act, 1958 (for short 'the Stamp Act').
2. It is the case of the petitioner that when a release document is presented for registration by which a co-
owner relinquishes her right in the property, the same cannot be impounded by treating the transaction as a sale and stamp duty imposed on it based on the market value.
3. Facts in brief would indicate that the father of the petitioner Mr. Mukeshbhai Hirabhai Patel purchased agricultural land in Zundal village of Gandhinagar district admeasuring Are 0, Hectare 51 and 60 sq. mts as Survey No. 11/1 as HUF property and land admeasuring Are 0, 54 Hectares and 62 sq. mtrs Survey No. 11/2. The said land was purchased by two separate sale deeds registered on 24.02.2000. The father then got the land converted into N.A. Page 2 of 50 Downloaded on : Sat Dec 24 02:51:22 IST 2022 C/SCA/387/2021 CAV JUDGMENT DATED: 12/12/2022 3.1 On 26.03.2013 and 07.07.2013, the petitioner's father declared the pedigree stating that his family comprises of his wife Ranjanben, daughter Shreya and the son Shalin - petitioner. In the year 2015, the names of the wife Ranjanben, daughter Shreya and the son Shalin - petitioner were shown in the Revenue Record Form 6 and 7/12 along with the owner father - Mr. Mukesh Patel. The petitioner's sister and daughter of Mukeshbhai Patel by a release deed on a stamp paper of Rs.100/- dated 27.12.2016 relinquished her right in share in favour of her brother Mr. Shalin Patel in respect of two properties. The document was presented for registration before the Sub-Registrar, Gandhinagar bearing document nos. 18488/2016 in respect of Survey No. 11/2 and document no. 18491/2016 in respect of Survey No. 11/1.
3.2 A show-cause notice was issued on 08.05.2017 and 14.09.2017 under the signature of Deputy Collector, Stamp Duty Valuation Authority, Gandhinagar. The Page 3 of 50 Downloaded on : Sat Dec 24 02:51:22 IST 2022 C/SCA/387/2021 CAV JUDGMENT DATED: 12/12/2022 documents were impounded under Section 33 of the Act in light of the Government Notification dated 08.05.2013 considering the recital of the document stating that the stamp duty of Rs.100/- was inadequate and the petitioner was asked to show cause as to why stamp duty on the basis of market value of the relinquished portion of the share should not be levied.
3.3 On response to the show-cause notice, the Deputy Collector on 02.07.2019 passed an order and the petitioner was liable to pay deficit stamp duty details of which are as under:
Particulars Document Rupees Document Rupees No/s. No. No/s. No. Deficit stamp duty 18491/2016 7,31,185.00 18488/2016 7,87,266.00 for entering names of S. No. 11/1 S.No. 11/2 family members in the property as co-
owners during lifetime.
U/Sec. 39(1)
(b) & Sch I Page 4 of 50 Downloaded on : Sat Dec 24 02:51:22 IST 2022 C/SCA/387/2021 CAV JUDGMENT DATED: 12/12/2022 Art. 49(b) & Art. 20 Penalty U/s.
39(1)(b) of 18491/2016 73,000.00 18488/2016 79,000.00 the Act.
S. No. 11/1 S.No. 11/2 Interest U/S. 46 of 18491/2016 1,26,247.00 18488/2016 1,35,992.00 the Act S. No. 11/1 S.No. 11/2 Registration fees on 18491/2016 1,49,250.00 18488/2016 1,60,690.00 Release Document S. No. 11/1 S.No. 11/2 TOTAL 10,79,682.00 11,62,948.00 - - Do - - - - Do - -
3.4 The total stamp duty on both documents was Rs.22,42,630/-. Aggrieved by this order, the petitioner filed appeals under Section 53(1) of the Gujarat Stamp Act. After depositing 25% of the stamp duty, by the orders dated 04.06.2020, the appeals were rejected.
Hence the present petition.
4. Mr. R.V. Deshmukh, learned advocate appearing for the petitioner would submit that the action of imposing huge stamp duty on the transaction of entry of names of Page 5 of 50 Downloaded on : Sat Dec 24 02:51:22 IST 2022 C/SCA/387/2021 CAV JUDGMENT DATED: 12/12/2022 family members in the revenue records and thereafter on the release document is bad. He would submit that the action of entering the names in the revenue record cannot be considered as alienation of properties so as to charge stamp duties. He would submit that there is no provision under the Act to recover stamp duty for entering the names of the family members as co-owners in self acquired properties during the life time.
4.1 Mr. Deshmukh would submit that the instrument of release presented for registration cannot be said to attract stamp duty under Schedule I of Article 20 of the Act by saying that the documents fall within the ambit of Schedule I of Article 49(b), Section 2(g), Sections 5 and 39(1)(b) of the Stamp Act.
4.2 Mr. Deshmukh would further submit that the instrument of relinquishing her share in properties by the sister in favour of her real brother was out of love and affection and without any consideration and therefore it Page 6 of 50 Downloaded on : Sat Dec 24 02:51:22 IST 2022 C/SCA/387/2021 CAV JUDGMENT DATED: 12/12/2022 cannot be said that the transaction should be considered for the purposes of stamp duty at market value.
4.3 Mr. Deshmukh would further submit that there is no attraction of Section 5 of the Act by saying that there were instruments relating to several distinct matters inasmuch as by entering the names of the family members in the revenue records was only for the purposes of fiscal matters and thereafter the release deed was the only deed which was signed relinquishing the right of one co-owner in favour of the other. Section 5, therefore, was clearly inapplicable in the facts of the present case.
4.4 Mr. Deshmukh would rely on Section 17 of the Registration Act and submit that it was not necessary for a release document to be registered. In support of his submissions, Mr. Deshmukh would rely on the following decisions:
Page 7 of 50 Downloaded on : Sat Dec 24 02:51:22 IST 2022C/SCA/387/2021 CAV JUDGMENT DATED: 12/12/2022 (I) Sankalchand Jaychandbhai Patel vs. Vithalbhai Jaychandbhai Patel [(1996) 6 SCC 433]. Reading para 7 thereof, he would indicate that entries are only one of the modes of proof for enjoyment of properties. Mutation entries do not create any right or title.
(ii) Anup Industries Limited vs. State of Gujarat [2003 (1) GLR 434]. He would rely on para 5 of the judgement to submit that conveyance in absence of any consideration cannot be made in a manner to attract Article 20 of the Stamp Act.
(iii) Suraj Bhan vs. Financial Commissioner [(2007) 6 SCC 186]. He would rely on para 9 thereof to submit that the entry in revenue records does not confer a title on a person.
(iv) Rajinder Singh vs. State of Jammu and Kashmir [(2008) 9 SCC 368]. He would rely on Page 8 of 50 Downloaded on : Sat Dec 24 02:51:22 IST 2022 C/SCA/387/2021 CAV JUDGMENT DATED: 12/12/2022 paras 17 & 18 for the same purposes.
5. Ms. Dhwani Tripathi, learned AGP appearing for the respondent State would support the orders passed by the authorities under the Stamp Act. She would submit that, on the facts which indicate that a release deed was signed on 27.12.2016 by which the petitioner's sister Ms. Shreya Patel had relinquished her rights in favour of her own brother Mr. Shalin Patel, the document was rightly impounded under Section 33 of the Act in view of the Government Notification dated 08.05.2013. She would submit that in the revenue record in the year 2015, names of the petitioner and the mother and sister were entered in and originally one property which was in the name of HUF and the other in the name of the petitioner's father entries were mutated in the revenue records without executing a registered instrument. The land was subsequently converted into N.A. 5.1 Ms. Tripathi would rely on the provisions of Sections Page 9 of 50 Downloaded on : Sat Dec 24 02:51:22 IST 2022 C/SCA/387/2021 CAV JUDGMENT DATED: 12/12/2022 2(g), 5, Schedule I to Article 49(b) and submit that if a person is still alive and if other co-owners' name are required to be mutated, then such incident is liable to stamp duty as per Article 20 of the Act. She would further submit that in case of a self acquired property when the person wants to transfer the said property in his lifetime, it is conveyance within the meaning of Section 2(g) of the Act and therefore Article 49 (b) is applicable and stamp duty is accordingly to be paid on the instrument which is a sale deed. Relying on the definition of 'instrument' she would submit that it includes every document by which any right or liability is created or transferred. Reading the explanation, she would submit that the term document would also include electronic record and therefore any instrument which transfers limited rights is an instrument which has to be charged under Article 20 of the Stamp Act.
5.2 In support of her submissions, Ms. Tripathi would rely on the decision in the case of Ruby Sales and Page 10 of 50 Downloaded on : Sat Dec 24 02:51:22 IST 2022 C/SCA/387/2021 CAV JUDGMENT DATED: 12/12/2022 Services (P) Limited vs. State of Maharashtra [1994(1) SCC 531].
6. It will be in the fitness of things to reproduce relevant provisions of the Gujarat Stamp Act, 1958.
Sections 2(g)(i), (ii) & (iii) which defines 'conveyance' reads as under:
(g) " Conveyance' includes,-
(i) a conveyance on sale,
(ii) every instrument,
(iii) every decree or final order of any civil Court 6.1 Section 2(l) which defines 'instrument' reads as under:
"instrument" includes every document by which any right or liability is, or purports to be, created, transferred, limited, extended, extinguished or recorded but does not include a bill of exchange, cheque, promissory note, bill of lading, letter of credit, policy of insurance, transfer of share, debenture, proxy and receipt;
6.2 Section 5 reads as under:Page 11 of 50 Downloaded on : Sat Dec 24 02:51:22 IST 2022
C/SCA/387/2021 CAV JUDGMENT DATED: 12/12/2022 Section 5 - Instruments relating to several distinct matters Any instrument comprising or relating to several distinct matters [30][distinct matters or distinct transactions] shall be chargeable with the aggregate amount of the duties with which separate instruments, each comprising or relating to one of such matters [31][or distinct transactions] would be chargeable under this Act.
6.3 Article 49 reads as under:
49. RELEASE- that is to say, any instrument (not being such a release as is provided for by section 24) whereby a person renounces a claim upon another person or against any specified property-
(a) if the release deed of an One hundred rupees.
ancestral property or part thereof is executed by or in favour of brother or sister (children of renouncer's parents) or son or daughter or son of pre-deceased son or daughter of pre-deceased son or father or mother or spouse of the renouncer or the legal heirs of the above relations;
(b) in any other case The same duty as is leviable on a conveyance under article 20 for the amount of consideration or, as the case may be, market value of the Page 12 of 50 Downloaded on : Sat Dec 24 02:51:22 IST 2022 C/SCA/387/2021 CAV JUDGMENT DATED: 12/12/2022 share, interest, part or claim renounced in immovable property whichever is greater.]
7. The question before the court therefore is whether a release deed purported to release the share in the interest of property would amount to a document which can be considered chargeable under Article 49(b) of the Stamp Act. What is evident from the facts of the case is that originally the property was purchased by the father Mr. Mukeshbhai Patel. The properties were then, by way of entries mutated in the revenue records, shown in the names as co-owners that of mother of the petitioner, the sister of the petitioner and the petitioner himself. What is evident from reading the judgements cited by Mr. Deshmukh especially in the case of Sankalchand Patel and Rajinder Singh (supra) is that no interest or title is transferred while revenue entries are mutated in the names of the petitioner and his sister.
7.1 Subsequently, when a release deed is entered into Page 13 of 50 Downloaded on : Sat Dec 24 02:51:22 IST 2022 C/SCA/387/2021 CAV JUDGMENT DATED: 12/12/2022 by the parties wherein the share of the petitioner's sister is released in favour of the petitioner, can the instrument be said to be the one which can be susceptible to stamp duty. The Madras High Court in the judgement in the case of The Chief Controlling Revenue Authority vs. K. Manjunatha Rai [AIR 1977 Mad 10] considered a question whether a deed of release is a deed of release or conveyance. Considering the provisions of the Stamp Act, what is evident is a release 'is a deed where or an instrument where a person renounces a claim upon another against a specified property. It is release pure and simple.' For a release, in law, it may be affected either for consideration or for no consideration. In either case, if a transaction operates as a relinquishment or a renunciation of a claim by one person against another, it is a release. It cannot be said to be a conveyance for consideration or other rights and therefore stamp duty has to be charged not in accordance with the reasoning given in the impugned order. The relevant paras of decision in K. Manjunatha Rai (supra) read as under:
Page 14 of 50 Downloaded on : Sat Dec 24 02:51:22 IST 2022C/SCA/387/2021 CAV JUDGMENT DATED: 12/12/2022 "13. This leads us to the other question, whether the instrument executed by the respondent on 29th April, 1970 in favour of his wife is a deed of release or a conveyance. For considering this question, the language of the document has to be examined as to its real tenor. The deed is described as a Deed of Release (Relin-quishment). It is executed by the respondent Manjunatha Rai in favour of his wife Lalitha Rai. The instrument recites that on 14th March, 1947 the respondent had purchased three items of vacant land, covered by door No. 110, Mount Road, Vellala Teynampet, Madras for Rs. 1,22,500. The instrument further recites that since the respondent was unable to pay the entire purchase consideration he borrowed a sum of Rs. 90,000 from the Vijaya Bank. The borrowing was a joint borrowing by himself and his wife. The mulki properties of the wife consisting of agricultural lands were offered as security to the Vijaya Bank.
Besides, the Bank was given other personal securities both of the respondent and his wife. The instrument proceeds to recite that subsequent to the purchase of the property in No. 110, Mount Road, the respondent's wife borrowed a sum of Rs. 3o,ooo from her sister on 3oth July, 1949 and utilized the same for discharging a portion of the debt due by both of them to Vijaya Bank. The balance of Rs. 60,000 owed to the Bank jointly by (he respondent and his wife was subsequently discharged out of the proceeds, again, of a joint borrowing by the respondent and his wife from the Indian Bank. Apart from the property bearing door No. 110, Mount Road, purchased in the manner aforesaid, certain adjacent lands were acquired by the respondent and his wife by way of assignment from the Government of Madras in the year 1954. The instrument of release clearly recites that even at the time of the original purchase of the property in 1947, it was agreed between the husband and wife that out of the total area of 27 grounds, a block of the extent of 10 grounds should be taken by the wife for her own Page 15 of 50 Downloaded on : Sat Dec 24 02:51:22 IST 2022 C/SCA/387/2021 CAV JUDGMENT DATED: 12/12/2022 exclusive benefit. It would further appear from the recitals made in the instrument that this agreement between them was also actually implemented, when the wife took possession of a portion of the land, had it subdivided as No. 110/1, Mount Road and put up a building thereon in 1954-55 at her own cost. The wife had ever since been in possession and enjoyment of door No. 110/1 paying assessment and taxes herself and leasing the property and enjoying the rents and profits therefrom. The occasion for the execution of the release deed by the respondent in favour of his wife was stated to be that the latter wished to regularize her title to her portion of the property which she has been enjoying for several years in her own right. The respondent was equally desirous of acceding to his wife's request in view of the fact that the nominal title under the sale deed stood solely in his name. Upon these recitals the deed of release declared that the releasor had no claim or interest in the site specified in the schedule attached to the deed. The schedule carried a description, in detail of the sub-division of the property bearing door No. 110/1, Mount Road, Madras.
14. A "release", as defined in Article 55 of Schedule I to the Stamp Act, is "any instrument - whereby a person renounces a claim upon another person or against any specified property." A plain reading of the document in question in this case does not admit of any doubt as to the nature of the transaction. We are satisfied that it is a release, pure and simple. This conclusion must fairly stem from the recitals contained in the deed. It is true that the original purchase of the property of the extent of 27 grounds under the deed, dated 14th March, 1947 was not in the joint names of the parties; nor stated to by for the joint benefit of both the husband and the wife. But we cannot brush aside the clear recital in the release deed that even at the time of the original purchase it was agreed between the husband and wife that 10 out of the 27 grounds were for the la tier's benefit. That this could have been the intention is Page 16 of 50 Downloaded on : Sat Dec 24 02:51:22 IST 2022 C/SCA/387/2021 CAV JUDGMENT DATED: 12/12/2022 shown by the fact that a better part of the purchase consideration of the property was borrowed on the joint credit of both the respondent and his wife, first from the Vijaya Bank and later from the Indian Bank. Besides, the wife and. repaid Rs. 30,000 from resources found, by her alone. In these circumstances, there could be no doubt that even from the start the respondent and his wife were co-owners of the property, and it was only as such co-owner that the wife subsequently proceeded to raise superstructures on a portion of the property at her own cost; thereafter enjoying the income from the property and paying the taxes herself. The District Registrar as well as the Board of Revenue regarded the document as a conveyance from the respondent to his wife, and spelt out the - consideration therefor to be Rs. 30,000. The inference as to consideration was apparently drawn from the recital that the respondent's wife had partially discharged the Vijaya Bank loan to the extent of Rs. 30,000. The instrument of release also carried a statement, written underneath the schedule to the effect that the respondent had obtained consideration for the release in the sum of Rs. 30,OOO from his wife in 1947. In our view, however, this statement in the release deed does not have the effect of rendering the transaction as a conveyance. For a release, in law, may be effected either for consideration or for no consideration. In either case, if the transaction operates as a relinquishment or a renunciation of a claim by one person against another or against a specified property, it will be a release. The stamp duty on a release, under the Stamp Act, does not depend upon the question of consideration or absence of consideration for the release. On the contrary it is made to depend on the value of the claim which is renounced by the releasor.
15. For holding that the document in question is a conveyance the Board of Revenue did not rely so much on the recitals which that document contained. The Board embarked, instead, on an examination of the Page 17 of 50 Downloaded on : Sat Dec 24 02:51:22 IST 2022 C/SCA/387/2021 CAV JUDGMENT DATED: 12/12/2022 original sale deed, dated 14th March, 1947 under which the respondent purchased the whole extent of 27 grounds in Mount Road. According to the Board, this document, dated 14th March, 1947 did not say that the consideration for the purchase of the property was, in part, provided by the wife. The Board expected that such a recital ought to have been put in the purchase document, if the intention had been that the purchase was to be for the joint benefit of both husband and wife. From this the Board purported to draw the inference that the respondent alone was the sole purchaser of the entire extent of the property of 27 grounds. From this it was but a short hop for the Board's conclusion that what the respondent did under the document, dated 29th April, 1970 was only to part with, or transfer, a portion of his own property in favour of his wife. We do not subscribe to the method of adjudication of stamp duty which the Board had followed in this case. It is true that what name the parties choose to give to an instrument cannot be decisive, or even indicative of the true nature of the instrument for purposes of stamp duty. But this rule does not mean that the revenue is empowered to go behind the recitals and terms of the document before it and hold that the object of the transaction was something different from what the document discloses and therefore the document should be deemed to be that which it is not. We do not think that the revenue authorities can ignore the terms of the document which is before them for adjudication and base their decision on the terms of some other collateral instrument. At all events, even according to the Board, the purchase document, dated 14th March, 1947 was silent as to how and where the purchaser farmed the consideration which he passed to the vendor. In this situation, the release deed dated 29th April, 1970 was the only instrument to which the Board should have riveted its attention. It was not open to the Board to question the recitals in the release deed in the absence of any materials to the contrary. The same remark must apply to the Board's observation that the assignment by the Government of the adjacent property Page 18 of 50 Downloaded on : Sat Dec 24 02:51:22 IST 2022 C/SCA/387/2021 CAV JUDGMENT DATED: 12/12/2022 in favour of the respondent did not show that it was obtained for the benefit of the respondent and his wife jointly. We do not also subscribe to the view that the respondent's wife was merely in the position of a lender of moneys with reference to a portion of the consideration that went in for purchase of the property. We hold that the respondent's wife had acquired a joint interest along with him in the property, and the appropriate method by which the respondent could renounce his claim over the interest of his wife was by execution in her favour of a release, as had been done under the document, dated 29th April, 1970.
16. In view of these observations we hold that the instrument was rightly charged to duty as a release under Article 55(b) of Schedule I to the Stamp Act. We answer the reference accordingly. There will be no order as to costs."
7.2 In the case of Hari Kapoor vs. South Delhi Municipal Corporation [W.P. (C) 3370/2018], a Division Bench of the Delhi High Court was considering a dispute whether a release deed is liable to levy a duty as provided under the Stamp Act of Delhi. After referring to the judgements of the Madras High Court, the Division Bench of the Delhi High Court, after considering the issue at hand, held that release or relinquishment on a non judicial stamp paper of Rs.10/- is permitted when title to the property had been inherited by a common ancestor.
Page 19 of 50 Downloaded on : Sat Dec 24 02:51:22 IST 2022C/SCA/387/2021 CAV JUDGMENT DATED: 12/12/2022 Even relying on the Division Bench decision of the Delhi High Court, the Division Bench held that a deed can be called a deed of release by using words of sufficient amplitude which transfers title to one having no title and it cannot be titled to be a conveyance which attracts a stamp fee. Paras 9 to 25 read as under:
"9. To understand the nature of instrument that falls within the term release deed reference may be had to the three judgments relied upon by the learned counsel for the petitioner. In The Chief Controlling Revenue Authority, Board of Revenue, Madras vs. Dr. K. Manjunatha Rai (supra), the Full Bench of the Madras High Court was dealing with an instrument which purported to release the property in favour of the wife which stood in the name of the releaser. The Sub- Registrar termed the documents as W.P.(C)3370/2018 Page 5 insufficiently stamped on the ground that it was not a release deed but a conveyance. The court held as follows:-
―14. A ‗release' as defined is Article 65 of the Schedule I to the Stamp Act is ‗any instrument ......whereby a person renounces a claim upon another person or against any specified property.' A plain reading of the document in question in this case does not admit of any doubt as to the nature of the transaction. We are satisfied that it is a release, pure and simple. This conclusion must flow from the recitals contained in the deed. It is true that the original purchase of the property of the extent of 27 grounds under the deed dated 14-03-1947 was not in the joint names of the parties; not stated by for the joint benefit of both the husband and the wife. But we cannot brush aside the clear recital in the release deed that even at Page 20 of 50 Downloaded on : Sat Dec 24 02:51:22 IST 2022 C/SCA/387/2021 CAV JUDGMENT DATED: 12/12/2022 the time of the original purchase (it was agreed between the husband and the wife that ten out of the 27 grounds were for the latter's benefit. That this could have been the intention is shown by the fact that a better part of the purchase consideration of the property was a borrowal on the joint credit of both the respondent and his wife, first from the Vijaya Bank and later from the Indian Bank. Besides, the wife had repaid Rs. 30,000, from resources found by her alone. In these circumstances there could be no doubt that even from the start the respondent and his wife were co-owners of the property and it was only as such co-owner that the wife subsequently proceeded to raise superstructures on a portion of the property at her own costs; thereafter enjoying the income from the property and paying the taxes herself. The District Registrar as well as the Board of Revenue regarded the document as a conveyance from the respondent to his wife, and spelt out the consideration therefore to be Rs. 30,000. The inference as to consideration was apparently drawn from, the recital that the respondent's wife had partially discharged the Vijaya Bank loan to the extent of Rs.30,000. The instrument of release also carried a statement written underneath the schedule to the effect that the respondent had obtained consideration for the release in the sum of Rs. 30,000 from his wife in 1947.
In our view, however, this statement in the release deed does not have the effect of rendering the transaction W.P.(C)3370/2018 Page 6 as a conveyance. For a release, in law, may be effected either for consideration or for no consideration. In either case, if the transaction operates as a relinquishment or a renunciation of a claim by one person against another or against a specified property, it will be a release. The stamp duty on a release, under the Stamp Act, does not depend upon the question of consideration or absence of consideration for the release. On the contrary it is made to depend on the value of the claim which is renounced by the releasor.‖ Page 21 of 50 Downloaded on : Sat Dec 24 02:51:22 IST 2022 C/SCA/387/2021 CAV JUDGMENT DATED: 12/12/2022
10. Reference may also be had to the judgment of the High Court of Hyderabad in the case Pasagadugula Narayana Rao vs. Pasagadugula Rama Murty and Ors. (supra) where the court held as follows:-
―22. In Kuppuswami Chettiar v. A.S.P.A. Arumugam Chettiar, the Supreme Court, while drawing distinction between release deed and gift, held as follows:
―A release deed can only feed title but cannot transfer title.
Renunciation must be in favour of a person, who had already title to the estate, the effect of which is only to enlarge the right. Renunciation does not vest in person a title where it did not exist. Now, it cannot be disputed that a release can be usefully employed as a form of conveyance by a person having some right or interest to another having a limited estate, e.g., by a remainderman to a tenant for life, and the release then operates as an enlargement of the limited estate.‖ From the principle laid down in the above judgment, releasing right means a person, who had interest in property along with others, giving up his right in the property which enlarges the right of others who had same right in the property. If release in favour of a third person having no right in property, it cannot be said to be release and, at best, it may amount to gift as defined under the Transfer of Property Act, 1882 (for short, ‗the Act of 1882').
W.P.(C)3370/2018 Page 7
23. A Special Bench of this Court in Kothuri Venkata Subba Rao v. District Registrar of Assurances, Guntur, held as follows:
―The word ‗release' is not defined, but in view of Article 46 of Schedule 1-A (A.P.), a deed of Page 22 of 50 Downloaded on : Sat Dec 24 02:51:22 IST 2022 C/SCA/387/2021 CAV JUDGMENT DATED: 12/12/2022 release is an instrument by which one of the co- owners releases or renounces his interest in the specified property and the result of such release would the enlargement of the share of the other co-owner. Thus, there is a clear and marked distinction between a deed of conveyance and a deed of release. A deed of release need not be gratuitous only. Even if it is supported by consideration, still it can be treated as a deed of release if the intendment of the parties and the purpose of the transaction satisfy the requirements of a deed of release in a case of the property owned by the co-owners. The release to the effective and operative must be in favour of all the persons interested in the property. The well settled principle of relinquishment is the enlargement of the share or shares of the co- owners and that principle will be defeated if the relinquishment is made in favour of one or a few named co- owners from out of the several co- owners.‖ In view of the principle laid down in the decision referred supra, a deed of release means an instrument by which one of the co-owners releases or renounces his interest in the specified property which would enlarge the share of the other co-owners. In the present case, the plaintiff executed Ex.B4 renouncing or giving up his right in the property of Hindu undivided coparcenary agreeing to receive Rs. 15,000/- as consideration.‖
11. Reference may also be had to the judgment of the Division Bench of this court in Mahip Singh Thakur vs. Hema Thakur (supra) where the court held as under:-
―8. We have given our careful consideration to the arguments advanced by learned counsel for the parties. The law is well settled with regard to the documents of release of property or release of a W.P.(C)3370/2018 Page 8 share from the Page 23 of 50 Downloaded on : Sat Dec 24 02:51:22 IST 2022 C/SCA/387/2021 CAV JUDGMENT DATED: 12/12/2022 property owned by two co-owners and one of them effacing himself in favour of the other. The essential ingredients of release are that there should be already a legal right in the property vested in the releasee and the release should operate to enlarge that right into an absolute title for the entire property as far as the parties are concerned. There cannot be any release by one person in favour of another, who is not entitled to the property as co- owner. In Chief Controlling Revenue Authority v. Rustorn Nusserwanji Patel (supra), Full Bench of the Madras High Court took the similar view:
―(11) On the contrary, we may emphasise that the essential ingredients of release are here present. There is already a legal right in the property vested in the releasee, and the release operates to enlarge that right into an absolute title for the entire property, as far as the parties are concerned.
(12) The next argument of the learned counsel that this kind of release does not fall within the ambit of Article 55 of Schedule I appears to be devoid of substance. Article 55 refers to release, that is to say ―any instrument...........whereby a person renounces a claim upon any other person, or against any specified property‖. We do not think that this means that a releasor cannot validly state, in the instrument, that he is effacing his rights in the property, in favour of another named individual. There is an entity known to law as a document of release, and we have no reason to think that, by this Article that entity was no indicated but only one particular kind of sub-
species release, wherein the person in whose favour the release is declared or intimated, is not designated by identity or name.
Page 24 of 50 Downloaded on : Sat Dec 24 02:51:22 IST 2022C/SCA/387/2021 CAV JUDGMENT DATED: 12/12/2022 (13) We would, therefore, unhesitatingly answer the question in the form that the document was rightly interpreted as a release under Art. 55 of Schedule I of the Indian Stamp Act and is liable to duty as such.‖ W.P.(C)3370/2018 Page 9
12. It would follow that a deed of release is an instrument by which one co-owner releases his interest in a specified property as a result of which there would be enlargement of the share of the other co-owners. The releasee should also have a legal right in the property and the release deed would operate to enlarge that right. The share cannot be released in favour of one who has no rights in the property as co-owner.
13. Reference may also be had to few other judgments relied upon by learned counsel for the petitioner. Jatinder Nath vs. DDA (supra) was a case where after the demise of the father, the property devolved upon his two sons. On account of the oral settlement the brother executed a relinquishment deed in favour of the petitioner. The respondent refused to transfer/mutate the property stating that unless a gift deed is registered the name of the petitioner cannot be mutated as the full owner. In those facts a Coordinate Bench of this court held as follows:-
―6. At the outset, I must say as to how these guidelines can come in the way of the respondent in deleting the name of Narender Nath. According to the guidelines relied upon by respondent the word occurring in sub-clause (i) of clause 2 is a regular conveyance/gift deed. A Release Deed or Relinquishment Deed can not be said to be a Conveyance Deed. The insistence on the part of the respondent is totally untenable in law. I would not dwell much on this controversy because what has been filed by the respondent in this Court and has been heavily relied upon by counsel for the respondent is some guidelines which pertain to the substitution/addition/deletion of names in industrial/commercial plots.Page 25 of 50 Downloaded on : Sat Dec 24 02:51:22 IST 2022
C/SCA/387/2021 CAV JUDGMENT DATED: 12/12/2022 Unmindful of the fact that guidelines under which the respondent wants to take shelter pertains to industrial and commercial plots yet the respondent has been insisting to produce a Gift Deed pursuant to these guidelines which do not apply in case of residential plots.
W.P.(C)3370/2018 Page 10 Nothing has been filed to show that there is any guideline by the respondent in relation to any residential plot which specifically, as a matter of principle and policy, requires for deletion of a name a gift deed. In the circumstances, I quash the impugned letter whereby the respondent is insisting upon execution of Gift Deed by Narender Nath in favour of his brother i.e. the petitioner.‖
14. Similarly, reference may also be had to the judgment of a co-ordinate Bench of this court in Srichand Badlani vs. Govt. of NCT of Delhi & Ors., (supra). The facts are somewhat identical, namely, the co-owners inherited the property. One of the co-owners relinquished his share by the relinquishment deed. However, the same was impounded and was treated as a gift deed by the Director of Stamps. Director of Stamp took the view that the document was not a Relinquishment Deed but a Gift Deed. The court held as follows:-
―5. It is a settled legal proposition that one of the co-owners can relinquish his share in a co-owned property in favour of one or more of the co- owners. The document executed by him in this regard would continue to be a Relinquishment Deed irrespective of whether the relinquishment is in favour of one or all the remaining co-owners of the property. There is no basis in law for the proposition that if the Relinquishment Deed is executed in favour of one of the co-owners, it would be treated as a Gift Deed. The law of stamp duty as applicable in Delhi treats Relinquishment Deed and Gift Deed as separate documents, Page 26 of 50 Downloaded on : Sat Dec 24 02:51:22 IST 2022 C/SCA/387/2021 CAV JUDGMENT DATED: 12/12/2022 chargeable with different stamp duties. It is not necessary that in order to qualify as a Relinquishment Deed the document must purport to relinquish the share of the relinquisher in favour of all the remaining co-owners of the property. Even if the relinquishment is in favour of one of the co-owners it would qualify as a Relinquishment Deed.‖ W.P.(C)3370/2018 Page 11
15. Hence, both the above judgments of co-ordinate Benches of this court have clearly held that a Gift Deed is not necessary where a release deed has been executed in favour of one of the co-owners of the property.
16. I may now deal with the contentions of learned counsel for the respondent. It has been pleaded relying upon section 45 of the Transfer of Property Act that a release deed only operates where the co-owners have inherited the property. It would not operate where the property has been bought jointly by the co-owners themselves. Section 45 of The Transfer of Property Act, 1882 reads as follows:-
―45. Joint transfer for consideration.--Where immoveable property is transferred for consideration to two or more persons and such consideration is paid out of a fund belonging to them in common, they are, in the absence of a contract to the contrary, respectively entitled to interests in such property identical, as nearly as may be, with the interests to which they were respectively entitled in the fund; and, where such consideration is paid out of separate funds belonging to them respectively, they are, in the absence of a contract to the contrary, respectively entitled to interests in such property in proportion to the shares of the consideration which they respectively advanced. In the absence of evidence as to the interests in the fund to Page 27 of 50 Downloaded on : Sat Dec 24 02:51:22 IST 2022 C/SCA/387/2021 CAV JUDGMENT DATED: 12/12/2022 which they were respectively entitled, or as to the shares which they respectively advanced, such persons shall be presumed to be equally interested in the property.‖
17. A perusal of the above statutory provisions does not show that it supports the plea of the learned counsel for the respondent, namely, that a deed which operates to release the property of the co-owners who have inherited the property can be termed as release deed and not a deed which is W.P.(C)3370/2018 Page 12 executed between the co-owners who bought the property jointly for valuable consideration.
18. In this context, reference may be had to the observations of the learned Author Sh.
K.K.Krishnamurthy in the Indian Stamp Act, 9 th Ed. where Release Deed has been described as follows:-
―5. Release or conveyance. - In the case of co- owners each co- owner is in theory entitled to enjoy the entire property in part or in whole. It is not therefore necessary for one of the co-owner to convey his interest to the other co-owner. It is sufficient if he released his interest. The result of such a release should be the enlargement of the share of the other co-owner. There can be no release by one person in favour of another who is not already entitled to the property as co-owner. A release can be usefully employed as a form of conveyance by a person having some right or interest to another having a limited estate and the release then operates as an enlargement of the limited right. A release can only feed title and cannot transfer title and as such, a release should necessarily be in favour of some one who had already some title to the estate and the effect of the release is only to enlarge that right...‖ Page 28 of 50 Downloaded on : Sat Dec 24 02:51:22 IST 2022 C/SCA/387/2021 CAV JUDGMENT DATED: 12/12/2022
19. Reliance was placed by learned counsel for the respondent in support of his plea on the judgment of a co-ordinate Bench of this court in the case of Satya Pal Gupta vs. Sudhir Kumar Gupta (supra). In that case the court held as follows:-
―20. Release/relinquishment on non-judicial stamp paper of Rs. 10/- is permitted and registered when title to the property had been inherited from a common ancestor. In such situation, since acquisition of title by inheritance is not owing to any voluntary act of the person on which the title devolves, the law permitted such person, if did not desire to hold such title, to convey the same by way of a release/relinquishment on a non-judicial stamp paper of Rs. 10/- in favour of some other heir of the common ancestor. However if the W.P. (C)3370/2018 Page 13 conveyance is intended to be from owner to another, ad valorem stamp duty is required to be paid. In the present case as aforesaid SPG and SKG acquired different floors of the property under different Sale Deeds with SPG being the owner of the ground floor and SKG being the owner of the upper floors and release/relinquishment on a stamp paper of Rs.
10/- in any case was not permissible. The title held exclusively by SKG of the upper floors of the property could have been conveyed to SPG even if under nomenclature of Release/Relinquishment Deed, only by paying ad valorem stamp duty thereon. To the same effect are the judgements of the Division Bench of Karnataka High Court in Ranganayakamma v. K.S. Prakash AIR 2005 Kant 426 and of the Andhra Pradesh High Court in Goli Ramaswami v. Narla JagannadhaRao AIR 1962 AP 94. The reliance by the counsel for SKG in this regard on Kuppuswamy Chettiar and Ramdas Chimna(supra) is also apposite.‖ Page 29 of 50 Downloaded on : Sat Dec 24 02:51:22 IST 2022 C/SCA/387/2021 CAV JUDGMENT DATED: 12/12/2022
20. There is nothing in this judgment to support the contention of the respondent. The facts of the case show that the court was not dealing with a case of co- owners. Further, the judgment does not state that a Release deed can only be executed in the eventuality that title to a property is inherited from a common ancestor. This plea is without merits.
21. The Division Bench of this court in Mahip Singh Thakur vs Hema Thakur (supra) have clearly held that the essential ingredients of release are that there should already be a legal right in the property vested in the releasee and the release should operate notwithstanding that right into an absolute title. In view of the said legal position stated by the Division bench, in my opinion, the document in question which is subject matter of the present petition has to be treated as a release deed.
W.P.(C)3370/2018 Page 14
22. I may note that while interpreting a taxing statute, the court has to look only at the words of the statute and interpret them. The court cannot imply anything which is not expressed. Reference in this context may be had to the judgment of the Supreme Court in the case of A.V. Fernandez vs. The State of Kerala, AIR 1957 SC 657 where the court held as follows:-
―29. It is no doubt, true that in construing fiscal statutes and in determining the liability of a subject to tax one must have regard to the strict letter of the law and not merely to the spirit of the statute or the substance of the law. If the Revenue satisfies the Court that the case falls strictly within the provisions of the law, the subject can be taxed. If, on the other hand, the case is not covered within the four corners of the provisions of the taxing statute, no tax can be Page 30 of 50 Downloaded on : Sat Dec 24 02:51:22 IST 2022 C/SCA/387/2021 CAV JUDGMENT DATED: 12/12/2022 imposed by inference or by analogy or by trying to probe into the intentions of the legislature and by considering what was the substance of the matter. We must of necessity, therefore, have regard to the actual provisions of the Act and the rules made thereunder before we can come to the conclusion that the appellant was liable to assessment as contended by the Sales Tax Authorities.‖
23. Reference may also be had to the judgment of the Constitution Bench in the case of Commissioner of Sales Tax, U.P. vs. Modi Sugar Mills Ltd., AIR 1961 SC 1047 where the Supreme Court held as follows:-
―10. ..... In interpreting a taxing statute, equitable considerations are entirely out of place. Nor can taxing statutes be interpreted on any presumptions or assumptions. The court must look squarely at the words of the statute and interpret them. It must interpret a taxing statute in the light of what is clearly expressed: it cannot imply anything which is not expressed; it cannot import provisions in the statutes so as to supply any assumed deficiency."
W.P.(C)3370/2018 Page 15
24. As already noted above under Section 147 of the DMC Act the documents on which transfer duty can be levied are documents relating to sale of immovable property, exchange of immovable property, gift of immovable property, mortgage of immovable property, lease in perpetuity of immovable property and contract for transfer of immovable property. On a strict interpretation of the said statutory provisions, it is clear that a release deed is not mentioned in the said provisions. Hence, the stand of the respondent treating a release deed as a gift deed and holding that transfer duty has to be charged on the release deed/relinquishment deed is misplaced.
Page 31 of 50 Downloaded on : Sat Dec 24 02:51:22 IST 2022C/SCA/387/2021 CAV JUDGMENT DATED: 12/12/2022 A gift deed is distinct and cannot be confused with a release deed.
25. I may note that the distinction between a release deed and gift deed was noted by the Supreme Court in the case of Kuppuswami Chettiar vs. S.P.A. Arumugam Chettiar & Anr., AIR 1967 SC 1395 where the court held as follows:-
―4. The question is whether Ex. B-1 on its true construction conveyed properties to the respondents. In T. Mammo v. K. Ramunni [AIR 1966 SC 337] , this Court held:
―a registered instrument styled a release deed releasing the right, title and interest of the executant in any property in favour of the releasee for valuable consideration may operate as a conveyance, if the document clearly discloses an intention to effect a transfer‖.
In the present case, the release was without any consideration.
But property may be transferred without consideration. Such a transfer is a gift. Under Section 123 of the Transfer of Property Act, 1882, a gift may be effected by a registered instrument signed by or on behalf of the donor and attested by at least two witnesses. Consequently, a registered instrument releasing the right, title and interest of the releasor without consideration may W.P.(C)3370/2018 Page 16 operate as a transfer by way of a gift, if the document clearly shows an intention to effect the transfer and is signed by or on behalf of the releasor and attested by at least two witnesses. Exhibit B-1 stated that the releasor was the owner of the properties. It showed an intention to transfer his title and its operative words sufficiently conveyed the title. The instrument, on its true construction, took effect as a gift. The gift was effectively made by a registered instrument signed by the donor and attested by more than two witnesses.Page 32 of 50 Downloaded on : Sat Dec 24 02:51:22 IST 2022
C/SCA/387/2021 CAV JUDGMENT DATED: 12/12/2022 xxx
6. Counsel next submitted that a release can only enlarge an existing title of the releasee, and there can be no release in favour of a release who has no interest in the property. He relied on the following observation in Hutchi Gowder v. Bheema Gowder [(1959) 2 MLJ 324, 337] ―A release deed can only feed title but cannot transfer title‖ and another observation in S.P. Chinnathambiar v. V.R.P. Chinnathambiar [(1953) 2 MLJ 387, 391] ―Renunciation must be in favour of a person, who had already title to the estate, the effect of which is only to enlarge the right. Renunciation does not vest in a person a title where it did not exist...‖.
Now, it cannot be disputed that a release can be usefully employed as a form of conveyance by a person having some right or interest to another having a limited estate, e.g., by a remainderman to a tenant for life, and the release then operates as an enlargement of the limited estate. But in this case, we are not concerned with a release in favour of the holder of a limited estate. Here, the deed was in favour of a person having no interest in the property, and it could not take effect as an enlargement of an existing estate. It was intended to be and was a transfer of ownership. A deed called a deed of release can, by using words of sufficient amplitude, transfer title to one having no title before the transfer. The cases relied upon by counsel are not authorities for the proposition that the operative words of a release deed must be ignored. In S.P. Chinnathambiar's case [(1953) 2 MLJ 387] , the document could not operate as a transfer, because a transfer was hit by Section 34 of the Court of Wards Act, and viewed as a renunciation of a claim, it could not W.P.(C)3370/2018 Page 17 vest title in the release. In Hutchi Gowder v. Bheema Gowder[(1959) 2 MLJ 3247] the question was whether a covenant of further assurance should be enforced by directing the defendant to execute a release deed or a deed of conveyance, and the Court held that the defendant should execute a deed of conveyance. These decisions Page 33 of 50 Downloaded on : Sat Dec 24 02:51:22 IST 2022 C/SCA/387/2021 CAV JUDGMENT DATED: 12/12/2022 do not lay down that a deed styled a deed of release cannot, in law, transfer title to one who before the transfer had no interest in the property.‖ There is clearly no merit in the plea of the learned counsel for the respondent."
7.3 In the case of Tripta Kaushik vs. Sub Registrar Vi-A, Delhi & Another [W.P. (C) 3370/2018], the Delhi High court again considered the issue and held that in light of the decision in the case of The Board of Revenue, the Chief Controlling Revenue Authority vs. V.M. Murugesa Mudaliar of Gudiyatham, 1955 SCC OnLine Mad 83, the Court held that a deed of release cannot fall within the definition of conveyance. It is only a release by which one of the co-owners relinquishes the share in favour of the other. It is only a release of interest and therefore such a document cannot be said to be susceptible to be charged as a conveyance. The Delhi High Court too relied on several decisions and the relevant portion of the judgement reads as under:
"16. As observed hereinabove, in both the petitions the Relinquishment Deed(s) executed in favour of the petitioner(s) have been treated as an instrument of Gift.Page 34 of 50 Downloaded on : Sat Dec 24 02:51:22 IST 2022
C/SCA/387/2021 CAV JUDGMENT DATED: 12/12/2022
17. In Ranganayakamma and Anr. v. K.S.Prakash (Dead) by Lrs. And Ors., (2008) 15 SCC 673, the Supreme Court observed that renunciation in the Indian context may be for consideration or may not be for consideration. Whether the instrument amounts to a release document or not is not a pure question of law.
18. In The Board of Revenue, the Chief Controlling Revenue Authority v. V.M.Murugesa Mudaliar of Gudiyatham, 1955 SCC OnLine Mad 83, the Full Bench of the Madras High Court was considering a document whereby three persons renounced all their interest in the property of the partnership firm in favour of the two remaining partners for some consideration. The Full Bench has held as under:
"It only remains to consider whether the instrument falls within the definition of conveyance under Art. 19 of W.P.(C) 9193/2019 & 3560/2018 Page 5 Schedule I-A of the Stamp Act. We are of opinion that it does not. The document proceeds on the footing that the five persons, namely, the three executants and the two persons in whose favour the instrument was executed, who were carrying on business of that firm owned the property as co-owners, the executants being entitled to a three-fifths share and the other two being entitled to the remaining two-fifths share. It is not the case of any one that there was a division of the property by metes and bounds and in accordance with the said shares. In such circumstances the document in and by which the co- owner purports to abandon or relinquish his claim to the share to which he would be entitled would be in the nature of a release within Article 44.
In such a case there need be no conveyance as such by one of the co-owners in favour of the other co-owners. Each co-owner in theory is entitled to enjoy the entire property in part and in whole. It is not therefore necessary for one of the co-owners to convey his Page 35 of 50 Downloaded on : Sat Dec 24 02:51:22 IST 2022 C/SCA/387/2021 CAV JUDGMENT DATED: 12/12/2022 interest to the other co-owner. It is sufficient if he releases his interest. The result of such release would be the enlargement of the share of the other co-owner. There can be no release by one person in favour of another, who is not already entitled to the property as a co- owner.
xxx The learned Government Pleader was prepared to concede that a document under which, one Hindu coparcener purported to give up his rights to the family property in favour of the remaining coparceners would not be a deed of conveyance, but a deed of release. He did this apparently because of a decision of a Full Bench of this court in 'Reference under Stamp Act, Section 46(2). In that case the document was one under which a Hindu son executed in favour of his father, as representing the interest of the other members of the W.P.(C) 9193/2019 & 3560/2018 Page 6 family an instrument by which he relinquished his rights over the general property of the family in consideration of certain lands being allotted to him for life, and certain debts incurred by him being paid. It was held that the instrument was a release, which should be stamped, as such. The learned Judges observed that it was a deed by which one co-owner renounced his claim for partition against the family property in consideration of a certain income to be enjoyed by him for his life out of certain lands over which he has no power of alienation. We can see no difference in principle between such a document as between members of a coparcenary and the document in question, which is a document between co-owners. With respect, we follow the principle of this Full Bench decision and apply it to the present case. We hold that the document in question is only a release within the meaning of Article 44 of Schedule I-A of the Stamp Act and was properly stamped as such. It was not liable to be charged either as a deed of dissolution of partnership or as a conveyance."Page 36 of 50 Downloaded on : Sat Dec 24 02:51:22 IST 2022
C/SCA/387/2021 CAV JUDGMENT DATED: 12/12/2022
19. In Chief Controlling Revenue Authority, Referring Officer v. Rustorn Nusserwanji Patel, MANU/TN/0223/1968, the Full Bench of the Madras High Court held that the nomenclature given to the instrument is not decisive nor is the language which the parties may choose to employ in framing the document. What is decisive is the actual character of the transaction and the precise nature of the rights created by means of the instrument. It further held that where two parties are co- owners, with a title which cannot be demarcated or fixed and there is joint possession and commonality of title, the documents transferring/releasing the title by one of the co-owners to the other would be a document of release. It further rejected the argument that a releaser W.P.(C) 9193/2019 & 3560/2018 Page 7 cannot validly state in the instrument that he is effacing his rights in the property in favour of another named individual.
20. The Full Bench of the Allahabad High Court in Balwant Kaur and Ors. v. State of U.P., MANU/UP/0168/1984, was considering a document whereby two daughters of the deceased owner of the property sought to release their share in the property in favour of the wife and son of the deceased, who were the only other legal heirs of the deceased. Relying upon the judgment of the Madras High Court in V.M.Murugesa Mudaliar of Gudiyatham (supra), the Court rejected the argument that under the law it was not open to a co-owner to renounce his right in favour of another co-owner. The Court further held as under:
"16. It is thus clear that under the law it is open to a person holding property as a tenant-in- common to execute a release deed in favour of the other co-owner renouncing his claim to interest in the unpartitioned property and for this purpose it is not necessary for him to execute a deed of conveyance. Accordingly, where in fact such a deed is executed whereby the person in whose favour the property has been released is Page 37 of 50 Downloaded on : Sat Dec 24 02:51:22 IST 2022 C/SCA/387/2021 CAV JUDGMENT DATED: 12/12/2022 given a right to enjoy the property without any let or hindrance or claim to be made by the persons so releasing the property, there will be no justification in reading or construing the said document as a deed of conveyance.
17. So far as the instant case is concerned, the recitals made by the two sisters in the document dated 9th March, 1970, clearly amount to renunciation of their interest in the properties left by their deceased father. They do not contain any stipulation where-under they seek to convey their title to their mother and brother.
The two sisters were fully competent to release their W.P.(C) 9193/2019 & 3560/2018 Page 8 undivided interest in the property in favour of their mother and brother. When their objective could be achieved merely by executing a release deed, there is no reason to think that they in fact were executing a deed of conveyance misdescribing it as a release deed. Question No. 2, therefore, has to be answered by saying that on plain interpretation, the document dated 9th March, 1970 was a deed of release and not a conveyance deed within the meaning of the Indian Stamp Act."
21. In Raghvendra Jeet Singh v. Board of Revenue And Ors, 2015 SCC OnLine All 5678, a learned Single Judge of the Allahabad High Court reiterated as under:
"21. Formal renunciation of a claim which the party relinquishing is entitled to put forward is a release chargeable under Article 55, whether the claim is legally correct or not is not relevant. Where by a document a person voluntarily renounces for consideration coparcenary rights of succession to impartible estate it is a release. There can be no release by one person in favour of another, who is not already entitled to the property as co-owner. Thus, by release, there is no transfer of interest or title to another person, Page 38 of 50 Downloaded on : Sat Dec 24 02:51:22 IST 2022 C/SCA/387/2021 CAV JUDGMENT DATED: 12/12/2022 who has no preexisting right to such property. A release can, therefore, be made in favour of a person who has a pre-existing right and interest in the property. It would make no difference even where the release is without consideration.
22. Where the property is owned by two co-owners each having undivided equal share therein and one of them by a deed claims title while the other possession, the document would be a release and not a conveyance. Even where one of the co-sharers of the joint agricultural land had simply renounced his claim in favour of another co-sharer in respect of the same agricultural land, the document in W.P.(C) 9193/2019 & 3560/2018 Page 9 question would be release deed and not a gift deed. (Vide State of Rajasthan Versus Alokik Jain).
23. To distinguish between a release deed, or a gift deed or a sale deed, the decisive factor is the actual character of the transaction and precise nature of the rights created by the instrument. In the case of co-
owners each co-owner is in theory entitled to enjoy the entire property in part or in whole. It is not therefore necessary for one of the co-owners to convey his interest to the other co-owner. It is sufficient if he released his interest. The result of such a release would be the enlargement of the share of the other co-owner. The result of such a release should be the enlargement of the share of the other co-owner. A release can only feed title and cannot transfer title. (Vide Kuppuswami Versus Arumugam, and Kuppuswami Chettiar v. S.P.A. Arumugam Chettiar).
24. A document under which a Hindu coparcener purports to give up his right to the family property in favour of the remaining coparcener would not be a deed of conveyance but a deed of release. There is no Page 39 of 50 Downloaded on : Sat Dec 24 02:51:22 IST 2022 C/SCA/387/2021 CAV JUDGMENT DATED: 12/12/2022 difference in principle between such a document as between members of a coparcenary and as between co- owners. In order to class as a release, the executant of the instrument having common or joint interest along with other should relinquish his interest which automatically results in the enlargement of the interest and others. But where he executes the document in respect of his share in favour of a particular co-owner, it cannot be treated as a release and must come within the definition of conveyance. (Vide Kothuri Venkata Subba Rao Versus Deputy Registrar Gudur).
25. A transaction to assume a character of conveyance, what is necessary is, transfer of interest from one co- owner to another co-owner. As against this, the provision of Article 55 of Schedule 1B of the Act stipulates that the release is that whereby a person renounces a claim upon another person or against any specified property."
W.P.(C) 9193/2019 & 3560/2018 Page 10
22. The Full Bench of the Andhra Pradesh High Court in The Board of Revenue, Hyderabad v. Validity Ram Krishnaiah, MANU/AP/0082/1973, was considering the case where one of the co- owner executed a Release Deed in favour of the others. The Court held as under:
"The word ' release ' is not defined in the Stamp Act. There is already a legal right in the property in Ramakrishnayya who is a co-owner. The incidents of the co-ownership are well established. Each co-owner in theory is entitled to enjoy the joint property either in part or in its entirety and when one co-owner releases his interest or walks out, it cannot be said that there is any conveyance of his interest to the other co- owner. No doubt in the document, the language is employed which if not properly understood in the Page 40 of 50 Downloaded on : Sat Dec 24 02:51:22 IST 2022 C/SCA/387/2021 CAV JUDGMENT DATED: 12/12/2022 context of the document and the character of the ownership of the property, may lead to an argument that the transaction evidenced by the document was a conveyance. In fact stress was laid by the Government Pleader on the sentence in the document. " Hence I agree to transfer to you my joint right in the Schedule Property receiving Rs. 9,475 /-................. I received the entire consideration of Rs. 9,475 /-. I hereby transfer to you my joint interest. .............. Hence you shall from now onwards enjoy the schedule property with absolute rights. " The word ' transfer ' employed in the document cannot be understood to mean a conveyance or sale. There is no warrant for the view that it is only in a case where the release deed is gratuitous it operates as a valid release deed. A document of release may be validly executed even if it recites some benefit to the executant simultaneously with the act of release. In our view, the fact that the document contained words like ' consideration ' and ' transfer ' do not affect the substantial or true character of the transaction.
The designation given to the document is that it is a release deed, though by itself is not decisive of the character of the transaction. The contents of the document, the intendment of W.P.(C) 9193/2019 & 3560/2018 Page 11 the parties as can be seen from the document and the joint nature of acquisition by both the parties and the mode of enjoyment are all decisive of the fact that the document in question evidences a transaction by way of release of the interest of the executant in favour of the release, the parties to the transaction being co-owners."
23. The Full Bench of the Andhra Pradesh High Court in Kothuri Venkata Subba Rao and Ors. v. District Registrar of Assurances, Guntur, AIR 1986 Andhra Pradesh 42, while considering the case whereby four of Page 41 of 50 Downloaded on : Sat Dec 24 02:51:22 IST 2022 C/SCA/387/2021 CAV JUDGMENT DATED: 12/12/2022 the ten persons who had jointly purchased two plots of land for constructing a cinema theatre, executed four separate Relinquishment Deeds in favour of the remaining six members, reiterated that the description given to the instrument is not decisive in determining the nature of the document and it is, therefore, of no consequence. A Deed of Release need not be gratuitous only. Even if it is supported by consideration, still it can be treated as a Deed of Release if the intendment of the parties and the purpose of the transaction satisfies the requirements of a Deed of Release in a case of the property owned by the co-owners. The Court further held as under:
"27. We do not think that the rulings in Chief Controlling Revenue Authority v.
Patel and Balwant Kaur v. State are in conflict with the proposition of law pronounced by Rajamannar, C.J., in Board of Revenue v. Murugesa. The reasons are obvious. If there are two co-owners as in the case of Chief Controlling Revenue Authority v. Patel and one of the co- owners relinquishes his share in the property owned by them in favour of the other the result of the relinquishment is the enlargement of the share of the other co-owner (releasee). If one of the co-owners who is the releasor W.P.(C) 9193/2019 & 3560/2018 Page 12 merely mentions in the document that he relinquishes his right of or interest in the property owned by them as co- owners instead of using the expression "in favour of the other co-owner", the result is the same, namely, the enlargement of the share of the other co-owner. Rajamannar, C.J., never intended to prohibit such a conveyance in favour of the other co-owner, the effect of which is the enlargement of the share of the releasee.
What his Lordship really meant by stating that it is sufficient if one of the co-owners releases his Page 42 of 50 Downloaded on : Sat Dec 24 02:51:22 IST 2022 C/SCA/387/2021 CAV JUDGMENT DATED: 12/12/2022 interest and it is not necessary for one of the co- owners to convey his interest to the other co- owners and in such a case there need be no conveyance as such by one of the co-owners in favour of the other co-owner, is that a co- owner cannot and should not convey his share or interest in the property (owned by the co-owners) in favour of one or a few named co-owners/out of the several co-owners, as such a conveyance would defeat the principle that the relinquishment would result in the enlargement of the share of the remaining co-owner or co- owners. In other words, the well settled principle of relinquishment is the enlargement of the share or shares of the co-owners and that principle will be defeated if the relinquishment is made in favour of one or a few named co-owners from out of the several co- owners.
28. Judged from this view, the rulings in Chief Controlling Revenue Authority v. Patel for the ruling in Balwant Kaur v. State are not in conflict with the decision of Rajamanar, C.J., in Board of Revenue v. Murugesa, as in both the cases, there is enlargement of the shares of the co-owners and a particular co-owner from out of the several co- owners is not preferred, while making relinquishments.
29. Even the Full Bench of this Court in R.C. No. 83/70 dt. 18-1-1974 also took the view that inasmuch as the W.P.(C) 9193/2019 & 3560/2018 Page 13 release was only in favour of the son of the deceased but not in favour of all the co- owners having rights and interests in the property, the deed was not found to be a deed of release but it is only a deed of conveyance as it was supported by consideration also. That ruling of this Court is again consistent with the proposition laid down by Rajamanner, C.J., in Board of Revenue v. Murugesa (FB) that it is Page 43 of 50 Downloaded on : Sat Dec 24 02:51:22 IST 2022 C/SCA/387/2021 CAV JUDGMENT DATED: 12/12/2022 sufficient if one of the co- owners releases his interest and it is not necessary for one of the co- owners to convey his interest to the other co- owner since the result of such release would be the enlargement of share and in such a case there need be no conveyance as such by one of the co- owners in favour of the other co-owner.
30. In the case on hand, from out of ten co- owners, four co-owners executed separate four deeds each relinquishing his 1/10th share in the property in favour of the remaining six co-owners. If the four co-owners out of the ten co-owners would have executed one relinquishment deed, relinquishing their rights and interests in the property owned by all of them as in the case of Board of Revenue v. Murugesa such a document could have been construed to be a deed of release. In the case of Balwant Kaur v. State, two daughters, who are co-owners, relinquished their rights and interest in favour of the remaining co-owners, namely, mother and brother. But in the case on hand, each has executed separate deed though of course in favour of the remaining co-owners. The execution of separate relinquishment deed by individual co- owner relinquishing his share is not contemplated by the decision of the Full Bench of the Madras High Court in Board of Revenue v. Murugesa.
31. The ruling in Board of Revenue v. Murugesa requires the release by one co-owner or by two or few co-owners in favour of all the co-owners. If each co-owner's document in the case on hand is taken W.P.(C) 9193/2019 & 3560/2018 Page 14 into consideration, it reveals that the release is not in favour of all the co-owners. Thus the relinquishment is not in accordance with the law propounded by the Full Bench in Board of Page 44 of 50 Downloaded on : Sat Dec 24 02:51:22 IST 2022 C/SCA/387/2021 CAV JUDGMENT DATED: 12/12/2022 Revenue v. Murugesa. The document, therefore, cannot be construed to be deeds of release.
32. Sri Ramarao, of course, argues that, by executing such a deed, the result is the enlargement of the shares of the remaining co- owners. We cannot accept this contention, as the execution of such a deed by each individual out of several co-owners in favour of the few co-owners is not contemplated by law of release under Art.
46. The law relating to releasee permits one co- owner or a few co-owners jointly, where there are more number of co-owners, to execute a deed of release relinquishing his interest or their interests in the property in favour of the remaining co-owners as in the case of the decisions of the Madras High Court cited above or in the case of the decision of the Allahabad High Court cited above.
xxx
34. These recitals besides the fact that each of the co- owners executed separate deed conveying 1/10th share in favour of a few but not in favour of all will clearly establish that the instruments are not the deeds of release but they are deeds of conveyance."
24. In Maddula Girish Kumar and Anr. v. The Commissioner of Survey, Settlements and Land Records and Anr., 1993 (1) APLJ 79, another Full Bench of the Andhra Pradesh High Court, while considering a case where two identical documents were executed by the mother on behalf of two minor sons relinquishing the share in the property in favour of the father, held as under:
W.P.(C) 9193/2019 & 3560/2018 Page 15 "12. In the case on hand, the question is whether the two Page 45 of 50 Downloaded on : Sat Dec 24 02:51:22 IST 2022 C/SCA/387/2021 CAV JUDGMENT DATED: 12/12/2022 documents executed by the two coparceners in favour of the remaining coparcener are release deeds or deeds of conveyance. The preponderance of judicial opinion, which we have referred to above, is that it only comes under release, but not a conveyance. Therefore, we agree with the contention of the learned counsel for the petitioners that the documents dated 12th October, 1974 executed by the petitioners in favour of their father are only documents of release."
25. In G.Subbalakshmi Visweswara Rao v. Secretary to Government, Revenue Department & Ors., 2011 SCC OnLine AP 1093, a learned Single Judge of Andhra Pradesh High Court has reiterated as under:
"10. Therefore, the principle that emerges is that by executing a release deed, one of the coparceners is merely separating himself from the joint family, while the others continue as members of the same undivided family. The estate of the coparceners, in law, is liable to be treated as held in entirety without recognition of identifiable shares. By executing a release deed, one or more coparceners are merely renouncing or extinguishing his or their interests in the estate without, in any manner, affecting the status of the remaining members of the joint family. Therefore, a release deed is not required to be executed by all the coparceners joining the same deed or the release deed is required to be executed in favour of the remaining coparceners either. The principle is, to the extent the coparceners have relinquished their respective rights, the release of the document derives a corresponding benefit of increased proportion in the estate. Therefore, I have no hesitation to hold that the view taken by the Collector as well as the Chief Controlling Revenue Authority in the instant case, is unsustainable in law and the two Page 46 of 50 Downloaded on : Sat Dec 24 02:51:22 IST 2022 C/SCA/387/2021 CAV JUDGMENT DATED: 12/12/2022 documents bearing Nos. 80/2002 and 713/2002, are rightly treated by the Sub Registrar concerned as release deeds and they have not suffered any deficit stamp duty."
W.P.(C) 9193/2019 & 3560/2018 Page 16
26. This Court in Narinder Kaur v. Amarjeet Singh Sethi, 2000 (54) DRJ 53, held that a Relinquishment perforce, cannot be in favour of any particular co- sharer; if it is to operate in favour of a particular party, it amounts to a transfer and must be effected either by a Sale Deed or by a Gift Deed, depending entirely on whether there was any consideration for such a transfer.
27. In Srichand Badlani v. Govt. of NCT of Delhi and Ors., MANU/DE/4731/2013, the Court while considering a Relinquishment Deed by which the legal heirs of one of the co-owner had sought to relinquish their share in the property in favour of one of the co- owner has held as under:
"4. It is a settled legal proposition that one of the co- owners can relinquish his share in a co-owned property in favour of one or more of the co- owners. The document executed by him in this regard would continue to be a Relinquishment Deed irrespective of whether the relinquishment is in favour of one or all the remaining co-owners of the property. There is no basis in law for the proposition that if the Relinquishment Deed is executed in favour of one of the co-owners, it would be treated as a Gift Deed. The law of stamp duty as applicable in Delhi treats Relinquishment Deed and Gift Deed as separate documents, chargeable with different stamp duties. It is not necessary that in order to qualify as a Relinquishment Deed the document must purport to relinquish the share of the relinquisher in Page 47 of 50 Downloaded on : Sat Dec 24 02:51:22 IST 2022 C/SCA/387/2021 CAV JUDGMENT DATED: 12/12/2022 favour of all the remaining coowners of the property. Even if the relinquishment is in favour of one of the co-owners it would qualify as a Relinquishment Deed."
W.P.(C) 9193/2019 & 3560/2018 Page 17
28. It is important to note that in the said judgment, this Court did not consider the earlier judgments, including the ones referred hereinabove, in reaching the above conclusion.
29. In Hari Kapoor v. South Delhi Municipal Corporation, MANU/DE/3800/2019, the Court was considering a Deed of Release executed by one of the co-owner in favour of the other. This Court reiterated that the Deed of Release is an instrument by which one co- owner releases his interest in a specified property as a result of which there would be an enlargement of the share of the other co-owners. The releasee should also have a legal right in the property and the release deed would operate to enlarge that right. This Court held that the share cannot be released in favour of one who has no rights in the property as a co-owner. It rejected the submission that a Deed which operates to release the property of the co-owner who have inherited the property, can be termed as a Release Deed, and not a Deed which is executed between the co-owners who bought the property jointly for valuable consideration.
30. From a reading of the above judgments, the test to determine whether an instrument can be considered as a Release/Relinquishment Deed can be summarized as under:-
a. In determining whether the document is a release or Gift/Conveyance, the nomenclature used to describe the document or the language which the party may choose to employ in framing the document, is not a decisive factor. What is Page 48 of 50 Downloaded on : Sat Dec 24 02:51:22 IST 2022 C/SCA/387/2021 CAV JUDGMENT DATED: 12/12/2022 decisive is the actual character of the transaction intended by the executants;
W.P.(C) 9193/2019 & 3560/2018 Page 18 b. Determination of the nature of the document is not a pure question of law;
c. Where a co-owner renounced his right in a property in favour of the other co-owner, mere use of word like „consideration‟ and „transfer‟ would not affect the true character of the transaction;
d. What is intended by a Release Deed is the relinquishment of the right of the co-owner;
e. Co-ownership need not be only through inheritance, but can also be through purchase;
f. Where the relinquishment of the right by the co-owner is only in favour of one of the co-owner and not against all, the document would be one of Gift/Conveyance and not of "release".
WP(C) 9193/2019
31. Applying the above test to the facts of the present petitions, as far as WP(C) 9193/2019 is concerned, the Relinquishment Deed dated 01.03.2019 has been executed by a co-owner in favour of the only other co- owner. This would truly be a Release Deed and falls within the ambit of Article 55 of the Act. The Impugned Order dated 05.03.2019, therefore, cannot be sustained and is accordingly set aside. The petition succeeds."
8. In light of the aforesaid question of law which has been set out and settled by the decisions of various high courts, the impugned orders dated 02.07.2019 and Page 49 of 50 Downloaded on : Sat Dec 24 02:51:22 IST 2022 C/SCA/387/2021 CAV JUDGMENT DATED: 12/12/2022 03.06.2020 are quashed and set aside and the respondents are directed to refund the entire amount recovered from the petitioner in pursuance of the impugned orders within a period of eight weeks from the date of receipt of the writ of the order of this court.
Petition is accordingly allowed. Rule is made absolute.
Direct service is permitted.
(BIREN VAISHNAV, J) DIVYA Page 50 of 50 Downloaded on : Sat Dec 24 02:51:22 IST 2022