Jammu & Kashmir High Court - Srinagar Bench
Mohammad Iqbal Vakil vs Registrar Principal District Judge ... on 11 June, 2015
IN THE HIGH COURT OF JAMMU AND KASHMIR AT SRINAGAR OWP No. 700 of 2015 OWP No. 702 of 2015 Mohammad Iqbal Vakil Petitioners Registrar Principal District Judge Baramulla Respondents !Mr. M. A. Qayoom, Advocate ^Mr. B. A. Dar, AAG. Honble Mr. Justice Muzaffar Hussain Attar, Judge Date: 11/06/2015 : J U D G M E N T :
(Oral) At request of learned counsel for the parties both the writ petitions are taken up together for final disposal.
OWP No.700/2015A General power of attorney is executed by one Mohammad Iqbal Vakil S/o Abdul Ahad Vakil R/o Sopore, presently residing at House No.32, Lal Ded Colony, Gouripora Srinagar in favour of Ghulam Hassan Rather S/o Late Gh. Rasool Rather R/o Watergam, Tehsil Kreeri, District Baramulla. In terms of the general power of attorney Mohammad Iqbal Vakil appointed, authorized and nominated Ghulam Hassan Rather to deal with land measuring 4 kanals situated at Estate Sangrama, Sopore, Baramulla in the manner prescribed in the power of attorney.
Mohammad Iqbal Vakil, exucutant of power of attorney, claimed to be owner in possession of land measuring 4 kanals falling under Survey No. 332 (?) min 11 marlas; under Survey No.332 (?) 2 kanals and 4 marlas; under survey No.332(?) min 1 kanal 5 marlas situated at Estate Sangrama, Sopore District Baramulla.
Gh. Hassan Rather was authorized to execute all deeds such as sale, mortgage, lease, license and other documents with regard to the aforesaid land. The said person was also authorized to sign all the aforementioned deeds and documents and present the same before the registering authority. He was also authorized to represent the principal before such authority and was further permitted to execute document, deed, instrument for ensuring transfer and sale of the said land. The market rate as per Government order was fixed at Rs. 9,60,000/- per kanal and the prescribed stamp duty was also appended with the general power of attorney in respect of 4 kanals of land. This general power of attorney was executed on 27.05.2014 and registered by the Sub Registrar (CJM) Sopore.
On the strength of aforesaid general power of attorney, Ghulam Hassan Rather on behalf of Mohammad Iqbal Vakil executed sale deed in respect of the land mentioned therein in favour of Rayees Ahmad Ganai for land measuring 2 kanals falling under Survey No.332(?) min (4 marlas), Khata No.570 and Khewat No.215 and 332(?) min (01 kanal and 16 marlas), Khewat No.192 and Khata No.496 situated at Moza Sangrama Tehsil Sopore. The land was sold against the sale consideration of Rs.19,20,000/-(Rupees nineteen lac and twenty thousand) which sale amount has been paid to the vendor through his attorney. The sale deed has been executed on behalf of vendor through his attorney, Ghulam Hassan Rather. In the sale deed it has been mentioned that stamp duty has already been paid at the time of execution of power of attorney. Copy of attorney was also enclosed with the sale deed.
OWP No.702/2015A General power of attorney was executed by one Mohammad Iqbal Vakil S/o Abdul Ahad Vakil R/o Sopore, presently residing at House No.32, Lal Ded Colony, Gouripora Srinagar in favour of Nassir Ahmad Rather S/o Habibullah Rather R/o Watergam Tehsil Kreeri District Baramulla. In terms of the general power of attorney Mohammad Iqbal Vakil appointed, authorized and nominated Nassir Ahmad Rather to deal with land measuring 3 kanals 18 marlas situated at Estate Sangrama, Sopore, Baramulla, in the manner prescribed in the power of attorney.
Mohammad Iqbal Vakil, exucutant of power of attorney, claimed to be owner in possession of land measuring 3 kanals and 18 marlas falling under khasra Nos. 332 (?) min 14 marlas; under Survey No.332 (?) 3 kanals and 4 marlas situated at Estate Sangrama, Sopore, District Baramulla.
Nassir Ahmad Rather was authorized to execute all deeds such as sale, mortgage, lease, license and other documents with regard to the aforesaid land. The said person was also authorized to sign all aforementioned deeds and documents and present the same before the registering authority. He was also authorized to represent the principal before such authority and was further permitted to execute document, deed, instrument for ensuring transfer and sale of the said land. The market rate as per Government order was fixed at Rs. 9,60,000/- per kanal and the prescribed stamp duty was also appended with the general power of attorney in respect of 3 kanals and 18 marlas of land. This general power of attorney was executed on 27.05.2014 and registered by the Sub Registrar (CJM) Sopore.
On the strength of aforesaid general power of attorney, Nassir Ahmad Rather on behalf of Mohammad Iqbal Vakil executed sale deed in respect of the land mentioned in the general power of attorney in favour of Tanveer Ahmad Najar for land measuring 4 kanals falling under Survey No.332(?) min (01 kanal 5 marlas), Khata No.570 and Khewat No.215 and 332(?) min (02 marlas), Khewat No.192 and Khata No.496, 332(?) min(2 kanals 13 marlas), Khata No.702; Khewat No.305 situated at Moza Sangrama Tehsil Sopore. The land is sold against the sale consideration of Rs.38,40,000/-(Rupees thirty eight lac forty thousand) which sale amount has been paid to the vendor through his attorney. The sale deed has been executed on behalf of vendor through his attorney, Nasssir Ahmad Rather. In the sale deed it has been mentioned that stamp duty has already been paid at the time of execution of power of attorney. Copy of attorney was also enclosed with the sale deed.
Both the sale deeds were presented for registration before the Sub Registrar (CJM) Sopore. Learned Sub Registrar vide order dated 18.11.2014 refused the registration of the documents. Appeals filed against the aforesaid orders of Sub Registrar (CJM) Sopore also stand dismissed by the Registrar (Principal District Judge) Baramulla vide order dated 04.04.2015.
The learned Sub Registrar refused to register the sale documents on the principle ground that the stamp duty required to be paid on the consideration amount has not been paid by the vendees. The same view has been reiterated by learned Registrar (Principal District Judge) Baramulla.
The learned Sub Registrar has refused registration by placing reliance upon Section 29(H) of Stamp Act as also Article 18 (c).
In order to appreciate the issue raised in these petitions, Section 2 clause (6), (14), (16-a), (21), Section 3, Section 4, Section 10(1)(a) and (b), Section 29(h), Article 15 of Schedule-I, Article 18(b), (c) and Article 42(c)(d) of the schedule I of Stampt Act, 1977 (for short Act of 1977) are taken note of:-
, Section 2 clause (6):
Chargeable- chargeable means, as applied to an instrument executed or first executed after the commencement of this Act, chargeable under this Act, and, as applied to any other instrument, chargeable under the law in force in the State when such instrument was executed or, where several persons executed the instrument at different times first executed;
Section 2 clause (14):
Instrument- includes every document and every electronic record as defined under clause(t) of section 2 of the Information Technology Act, 2000 (Central Act 21 of 2000) by which any right or liability is or is purported to be created, transferred, limited, extended, extinguished or recorded and any other document mentioned in the Schedule-I. Section 2 clause (16-a):
Marketable value in relation to any property which is the subject matter of an instrument, means the price which such property would fetch or would have fetched if sold in open market on the date of execution of such instrument as determined in such manner and by such authority as specified in this Act, or the rules made thereunder or the considerations stated in the instrument, whichever is higher.
Section 2 clause (21):
Power-of-attorney includes any instrument (not chargeable with a fee under the law relating to court-fees for the time being in force) empowering a specified person to act for, and in the name of, the person executing it and includes an instrument by which a person, not being a person who is a legal practioner, is authorized to appear on behalf of any party in any proceeding before any court, tribunal or authority;
Section 3 Instruments chargeable with duty Subject to the provisions of this Act and the exemptions contained in Schedule I, the following instruments shall be chargeable with duty of the amount indicated in that Schedule as the proper duty therefor respectively, that is to say-
(a) every instrument mentioned in that schedule which, not having been previously executed by any person, is executed in the State on or after the date on which this Act comes into force;
b) every bill of exchange [payable otherwise than on demand] or promissory note drawn or made out of the State on or after that day and accepted or paid, or presented for acceptance or payment, or endorsed, transferred or otherwise negotiated, in the Stat; and
c) every instrument (other than a bill of exchange, or promissory note) mentioned in that Schedule, which, not having been previously executed by any person, is executed out of the State on or after that day, relates to any property situate, or to any matter or thing done or to be done, in the State and is received in the State:
[Provided that wherever no proper duty has been paid on the original of an instrument which is chargeable to duty with an amount indicated in the Schedule-I as the proper duty threfor, a copy of such instrument or record relating to, or in respect of, the transaction shall be chargeable with duty of an amount which is indicated in Schedule-I as the proper duty for the original of such instrument:
[Provided further that] nod duty shall be chargeable in respect of-
1) any instrument executed by, or on behalf of, or in favour of, the Government in cases where, but for this exception, the Government would be liable to pay the duty chargeable in respect of such instrument; (2) Omitted.
Section 4. Several Instruments used in single transaction of sale, mortgage or settlements (1)Where in the case of any transactions, several instruments are employed for completing the transaction, only the principal instrument shall be chargeable with a duty prescribed for it in Schedule-I and thereafter, each of the other instruments shall be chargeable with a duty of one hundred rupees.
(2) The parties may determine for themselves which of the instruments so employed shall, for the purposes of sub- section (1), be deemed to be the principal instrument:
Provided that the duty chargeable on the instrument so determined shall be the highest duty which would be chargeable in respect of any of the said instruments employed.
Section 10 Duties how to be paid (1) Except as otherwise expressly provided in this Act, all duties with which the instruments are chargeable shall be paid, and such payment shall be indicated on such instrument, by means of stamps_
(a) in accordance with the provisions herein contained; or
(b) when no such provision is applicable thereto, as the Section 29(h) Duties by whom payable-
In absence of an agreement to the contrary, the expense of providing the proper stamp shall be borne-
h) in the case of a certificate of sale, by the purchaser of the property to which such certificate relates;
Article 15 Certificate of sale, (in respect of each property put up as a separate lot and sold), granted to the purchaser of any property sold by public auction by a Civil or Revenue Court or Collector or other Revenue Officer or any officer authorized to do so under any law for the time being in force.
The same duty as conveyance (No.18) for a market value equal to amount of purchase money only.
Article 18: CONVEYANCE, not being a transfer charged or exempted under No.54:
(a) Where the land or estate is within any urban area. 7% of the market value of such land or estate.
(b) Where the land or estate is within rural area.
5% of the market value of such land or estate.
(c) Where a power of attorney authorizing the agent to sell immovable property is stamped with ad valorem duty required for a conveyance and a sale deed is executed in pursuance of power of attorney between the executants of attorney and the person in whose favour it is executed, the duty on the sale deed shall be the duty payable under the article less the duty already paid, subject to a minimum of Rs.100;
Article 42(c): Power of attorney, [as defined by Section 2(21)], not being a proxy (No.45)-
(c)When given for consideration and authorizing the agent to sell any immovable property;
The same duty as a conveyance (No.18) on the market value of the property.
Section 2(6) defines Chargeable to mean, an instrument executed or first executed after the commencement of this Act, chargeable under the Act of 1977 and chargeable under the said Act and further means any other instrument chargeable under the law in force in the State when such instrument was executed etc. Section 2(14) defines Instrument which includes every document and every electronic record as defined under clause (t) of section 2of the Information Technology Act, 2000, by which any right or liability is or is purported to be created, transferred, limited, extended, extinguished or recorded any other document mentioned in Schedule- I. Section 2(16-a) defines market value in relation to any property which is the subject matter of an instrument, means the price which such property would have fetched if sold in open market on the date of execution of such instrument as determined in such manner and by such authority as specified by the Act.
Section 3 of the Act of 1977 deals with the instrument chargeable with duty and mentions those of the instruments which are to be charged with the duty.
First proviso to Section 3 provides that wherever no proper duty has been paid on the original of an instrument which is chargeable to duty with an amount indicated in the Schedule-1 as the proper duty thereof, a copy of such instrument or record relating to, or in respect of, the transaction shall be chargeable with duty of an amount which is indicated in Schedule-I as the proper duty of original in such instrument.
Section 4 of the Act of 1977 relates to several instruments used in single transaction of sale, mortgage or settlements.
Sub Section (1) of Section 4 provides that where in the case of any transaction several instruments are employed for completing the transaction, only the principal instrument shall be chargeable with a duty prescribed for it in Schedule-I and thereafter, each of the other instruments shall be chargeable with a duty of one hundred rupees.
Sub Section (2) of Section 4 prescribes that the parties may determine for themselves which of the instruments so employed shall, for the purposes of sub section (1), be deemed to be the instrument.
Proviso appended to the section provides that duty chargeable on the instrument so determined shall be the highest duty which should be chargeable to any of the instruments employed.
Section 10 prescribes how duties are to be paid. Sub section (1) of Section 10 provides that except as otherwise expressly provided in the Act of 1977, all duties with which the instruments are chargeable shall be paid and such payment shall be indicated on such instruments, by means of stamps, in accordance with provisions contained in the Act of 1977 and where no such provision is applicable then as the Government may by rules prescribe.
Section 29 prescribes who is the person by whom stamps are to be borne in respect of different instruments.
Section 29(h) prescribes that in case of a certificate of sale, duty is to be paid by the purchaser of the property to which such certificate relates. Section 29 also provides that duty will be payable in accordance with different clauses of the said section but if there is an agreement contrary thereto then it has to be borne by the person in accordance with the agreement.
Article 15 of Schedule-I refers to certificate of sale in respect of each property put up as a separate lot and sold, granted to the purchaser of the property sold by public auction by a civil or revenue Court or collector or other revenue officer or an officer authorized to do so under any law for the time being in force. On the basis of certificate of sale the duty as prescribed under (Article 18 of Schedule I) conveyance is to be paid by the purchaser of the property.
In the case on hand, the sale and purchase of immovable property has not taken place on the basis of a certificate of sale. Section 29(h) is not, thus, attracted for payment of duty in this case.
Section 10 of the Act of 1977, as already stated, provides how the duties are to be paid.
Section 2(21) defines the power of attorney to mean any instrument empowering the specified person to act for, and in the name of, the person executing it etc. Article 42 clause (c) prescribes that when power of attorney is given for consideration and authorizing the agent to sell any immovable property, then duty is to be paid as provided under Article 18 on the conveyance on the market value of the property. Clause (d) of Article 42 prescribes that when power of attorney is given without consideration to a person other than the father, mother, wife or husband, so or daughter, brother or sister in relation to the executants and authorizing such person to sell immovable property in Jammu and Kashmir it has to be charged for payment of duty as a conveyance under Article 18 on the market value of the property which is the subject matter of power of attorney.
Article 18(a) provides that duty is to paid when the land or estate is within any urban area at the rate of 7% of the market value of such land or estate and at the rate of 5% of the market value of such land or estate when the land or estate is within the rural area.
In the case on hand, duty has been paid on the market value of the land which is subject matter of power of attorney and for which the agent has been authorized by the principal to execute a sale deed, present the same for registration and admit its execution before the competent authority. The learned Sub Registrar has refused the registration on the ground that on the sale deed, the duty as prescribed under Article 18, has to be paid. Same view is taken by the Registrar in the appeals filed by the petitioner.
Article 18(c) on which reliance has been placed by the Sub Registrar and the Registrar prescribes that when the power of attorney authorizing the agent to sell immovable property is stamped with ad valorem duty required for a conveyance and the sale deed is executed in pursuance of the power of attorney between the executants of attorney and the person in whose favour it is executed, the duty on the sale deed shall be duty payable under this article less the duty already paid, subject to a minimum of Rs.100.
Chapter 10 of the Contract Act of 1977 (for short the Contract Act) deals with the agency, appointment and authority of agents.
Section 2(21) of the Act of 1977 defines power of attorney to include any instrument (not chargeable with a fee under the law relating to court fees for the time being in force) empowering a specified person to act for and in the name of person executing it and includes an instrument by which a person, not being a person who is a legal practioner, is authorized to appear on behalf of any party in any proceedings before any court, tribunal or authority.
Article 42(c) of the Act of 1977 provides that when Power of attorney is given for consideration and authorises the agent to sell any immovable property then the stamp duty as conveyance(No.18) on the market value of the property has to be paid.
Article 18(c) is charging provision in respect of the sale deed which is executed on the basis of power of attorney, wherein agent is authorized by the principal to sell the immovable property.
The power of attorney which is executed in this case is clear and specific in its tune and tenor. Principal has specifically authorized the agent to sell the immovable property which is subject matter of power of attorney and he has been further auhorised to execute sale deed, present the same before the competent authority and admit its execution. The power of attorney executed by the principal in favour of another person called agent in terms of the Contract Act, only is executed for doing a particular act for and on behalf of the principal. All the acts which are done by the agent in accordance with mandate contained in the power of attorney are in fact and in law done by the principal himself. Any document executed by the agent in terms of power given to him by the power of attorney is infact an act done by the principal himself. The power of attorney, as already stated, authorized execution of sale deed, its presentation before the registering authority and admission of its execution. The subsequent execution of sale deed, its presentation and admission thereof before the registering authority relates to only one transactions in respect of one and same immovable property. The transaction of sale of the immovable property becomes complete in such type of cases by execution of more than one instrument viz. by execution of power of attorney and subsequent sale deed.
The intendment and purpose underlying the provisions of Stamp Act is to levy and charge duty on particular sale of immovable property. The power of attorney, when it is executed in favour of another person, and authorizes him to sell the immovable property, then it has to be charged with duty in terms of article 42(c). It appears that the legislators in their wisdom have directed for levying and paying of duty on immovable property by ad valorem payment of duty which is required for a conveyance to ensure that the same is not evaded by transferring immovable property by a mode other than by execution of sale deed.
An illustration is cited to clarify the position. A executes power of attorney in favour of B and inter alia authorizes him to sell his immovable property; to institute a suit before any court of law; file written statement in any proceedings filed against the principal in any court of law; and authorize him to admit claim filed against the principal in any court of law; and authorize him to enter into the compromise in respect of the immovable property subject matter of the power of attorney. The agent B sells the property. In order to evade duty which is required to be paid on the sale deed, suit will be instituted on behalf of vendee and then his claim would be admitted or suit compromised in respect of the same immovable property which is subject matter of power of attorney and the decree of the civil court would be reflected in revenue records. The State would in such circumstances loose the revenue which, otherwise, if the parties would have followed the provisions of law while executing the sale deed, was to be paid by them. It is for this reason it appears that in terms of Article 42(c) it has been ordained to pay the duty in respect of immovable property which is subject matter of power of attorney, as is being charged on the conveyance.
The expression ad valorem duty appearing in article 18(c) would mean the duty which is to be paid according to the value of the property. The expression ad valorem is a latin word and means duty according to the value of the property. It is how the ad valorem duty as required for conveyance is to be paid on the power of attorney which authorizes the agent to sell the property.
The power of attorney does not transfer any interest in immovable property from principal to agent. All the interests in the immovable property continue to vest with the principal. The power of attorney, when it does not transfer interest in the immovable property from principal to agent, it in law, would not mean and constitute a conveyance .As provided in Section 182, 186 and 187 of the Contract Act, the person in whose favour power of attorney is executed by the owner of the property is a person who is employed to do any act for the principal or to represent any dealings with third person and is called an agent. Consequently when the agent executes a sale deed in favour of a third person it is in fact and in law principal who is transferring his interests and rights in respect of immovable property in favour of third person who is vendee in the sale deed. It is at this stage that in terms of the Act of 1977 a duty is required to be paid. As already stated, in order to ensure evading of the duty by employing different tacts and machinations, the payment of duty has been prescribed on the power of attorney which authorizes the agent to sell the immovable property. It will be against the basic cannons of reason and law and would ultimately be unjust to charge duty twice on one single sale transaction of an immovable property. It would be discriminatory and arbitrary as well. It would be against the principles of legal ethos, equity and justice.
In the course of normal human behavior and conduct, a vendor will execute sale deed of immovable property in favour of vendee, and will not execute power of attorney in his favour when duty is paid on it also by treating it conveyance.
Section 182, 186, 187 and 188 of the Contract Act are taken note of:-
182. Agent and Principal defined An agent is a person employed to do any act for another or to represent another in dealings with third persons.
The person for whom such act is done, or who is so represented, is called the principal.
186. Agents authority may be expressed or implied.
The authority of an agent may be expressed or implied.
187. Definitions of express and implied authority An authority is said to be express, when it is given by words spoken or written. An authority is said to be implied when it is to be inferred from the circumstances of the case; and things spoken or written, or the ordinary course of dealing, may be accounted circumstances of the case.
188.Extent of agents authority An agent having an authority to do an act has authority to do every lawful thing which is necessary in order to do such act.
An agent having an authority to carry on a business has authority to do every lawful thing necessary for the purpose, or usually done in the course of conducting such business.
The clause (c) of article 18 of the Act of 1977 is not happily and properly worded and framed. The crease of this provision is to be ironed out so that it does not fall foul of article 14 of the Constitution of India. Article 18 (c) has to be interpreted in a manner which saves it from being declared to be arbitrary and illegal.
The clause (c) of article 18 would mean that when ad valorem duty as required for a conveyance is paid on the power of attorney which authorizes the agent to sell the immovable property then in subsequent sale of the said property the duty to be paid on the sale deed has to be duty payable under article less the duty already paid, subject to a minimum of Rs.100.
Section 4 of the Act of 1977 also prescribes that when in the case of any transaction several instruments are employed for completing the transaction, only the principal instrument is chargeable with a duty prescribed for it in schedule-I and thereafter each of the other instruments have to be charged with a duty of Rs.100.
In this case also there is only one transaction but two documents viz. power of attorney and sale deed, have been executed for completing the one single transaction. The ad valorem duty as required to be paid on conveyance , on the sale deed, only that much amount is to be paid which may have been paid less on the power of attorney and in case entire duty; stands paid then duty of Rs.100 is to be paid on the sale deed.
For the above stated reasons the view taken by the sub Registrar and the Registrar is held to be untenable in law. The sale deeds have to be admitted for execution in the manner which has been prescribed in this decision.
For the above stated reasons these petitions are allowed. The impugned orders are set aside and the Sub Registrar is directed to admit the sale deeds for execution in accordance with law.
(Muzaffar Hussain Attar) Judge Srinagar 11.06.2015 Sarveeda