Ashok Kumar Marwaha vs Gurupal Singh and Others

Dipak Misra, J.

In this intra-court appeal preferred under section, 2(1) of the Madhya Pradesh Uchcha Nyayalaya (Khand Nyaypeeth Ko Appeal. Adhiniyam, 2005 the challenge is to the order dated 08-08-2006 passed by the learned Single Judge in W.P. No. 10447/2006.

The facts which are requisite to be exposited are that the Appellant-Petitioner (hereinafter referred to as the Appellant) filed a Civil Suit No. 4-A/2005 for specific performance of contract It was pleaded the plaint that on 10-07-2002 he had entered into an agreement with the Respondent No. 1 for sale of land bearing Khasra No. 72/2,73/2,74/2 and 75/2 measuring 95/75 sq.ft. situated in Gupteshwar, District Jabalpur. He has paid Rs. 50,000/- as a part of sale consideration and the balance amount was to be paid by him by 31-12-2002.

It is appropriate to mention here that the Plaintiff, as put forth, had filed a Civil Suit No. 96-A/2004 and the Court below passed an order of injunction on 09-07-2004 restraining the Defendants therein from alienating the suit property. On coming to know of order of injunction the respondeat No. 1 executed the sale deed. As the Respondents No. 2 and 3 claimed right, title and interest over the suit land, as a consequence of which the Plaintiff thought it apposite to initiate the civil action.

In the present suit the Respondent No. 1 filed a written statement stating, inter alia, that the Respondents 2 & 3 have been exercising ownership over the suit property. The Respondents No. 2 and 3 also filed their written statements denying the possession of the Plaintiff.

During the pendency of the suit the Respondents No. 2 and 3 filed an application u/s 35 of the Stamp Act highlighting that the agreement is a conveyance within the meaning of Article 23 of Schedule 1-A of the Indian Stamp Act, 1899 as per me State amendment and as such it cannot be admitted in evidence unless it is impounded and proper stamp duty is paid.

The learned Additonal District Judge allowed the application by order dated 18-04-2006. The learned Single Judge referred to Article 23 of Schedule 1-A and took note of the fact that as per the instrument, the sale agreement dated 10-07-2002, there is mention of delivery of possession of. the suit land to the Plaintiff and thereafter placing reliance on Veena Hasmukh Jain and Another Vs. State of Maharashtra and Others, came to hold that the instrument in question satisfies the requirement of explanation engrafted in Article 23 of the Act and, therefore, the order passed by the learned trial Judge was absolutely presentable.

Questioning the correctness of the order it is contended by Mr. Vivek Rusia, learned Counsel for the Appellant that the learned Single Judge has fallen into error by not taking note of the fact that the Plaintiff had categorically asseverated that the possession had hot been delivered to him and further the Respondents had also controverted the factum of possession of the Plaintiff over the suit land and in the absence of the possession having been delivered the document in question could not have been treated to have been insufficiently stamped. The learned Counsel further submitted that even if such a document is not registered the same can be tendered in evidence of a contract in a suit for specific performance under Chapter 11 of the Specific Relief Act, 1877 (3 of 1877), or an evidence of any collateral transaction not required to be effected by registered instrument under proviso to Section 49 of the Registration Act, 1908.

Mr. G.C. Bhatia, learned Counsel for the Respondents No. 2 and 3 sounding a contra note, contended that the pleadings of the parties is absolutely inconsequential for the purpose of payment of stamp duty and, therefore, the order passed by the learned Single Judge is absolutely flawless. It is urged by him that the reliance placed on the provisions of the Registration Act by the learned Counsel for the Appellant is absolutely misconceived inasmuch as the instrument has to be treated on its Own and on a reading of construction of the instrument there can be no iota of doubt that it is a conveyance under Article 23 of the Stamp Act and, therefore, the stamp duty is required to be paid. To bolster his submissions he has commended us to the decisions rendered in the cases of Vimla Devi (Smt.) v. Dhanraj Singh, 2000 (1) MPWN (82) 130, Shiv Kumar Saxena and Ors. v. Manishchand Sinha and Anr. 2004 (4) MPHT 475 (DB) and M/s. Kapoor Construction v. Leela Nagaraj and another, AIR 2005 Kar 302.

The gravamen and the cardinal issue that is required to be delineated is whether the document is a conveyance or not and whether the pleadings of the parties with regard to possession would determine the stamp duty. Article 23 of Schedule 1-A of the Indian Stamp Act, 1899 as amended in Madhya Pradesh reads as under:

Conveyance not being a transfer charged or exempted under (No. 62) irrespective of the marked value of. the property of which is the subject matter of conveyance.

Seven and half percent of such market value: Provided that if the total amount of the duty payable is not a multiple of fifty paise it shall be rounded off to the nearest rupee, half of a rupee or over being counted as one rupee and less than half of a rupee being disregarded

Explanation: For the purpose of this article, where in the case of agreement to sell immovable property, the possession of any immovable property is transferred to the purchaser before execution or after execution of such agreement without executing the conveyance in respect thereof then such agreement to sell shall be deemed to be a conveyance and stamp duty thereon shall be livable accordingly.

Provided that, the provision of Section 47-A shall apply mutatis mutandis to such agreement which is deemed to a conveyance as aforesaid, as they apply to a conveyance under that section: Provided further that where subsequently a conveyance is effected in pursuance of such agreement of sale, the stamp duty, if any, already paid and recovered on the agreement of sale which is deemed to be a conveyance shall be adjusted towards the total duty leviable on the conveyance, subject to a minimum of Rs. 10.

If the explanation to the aforesaid Article is property understood the instrument in question satisfies the requirement of the said explanation and thereby assumes the character of a conveyance. Submission of Mr. Vivek Rusia, learned Counsel is that when there is immense cavil with regard to the possession of the Respondents No. 2 & 3 and they claimed to be in possession, the explanation is not attracted and thereby it cannot be regarded as a conveyance.

In Vimla Devi (supra) a learned Single Judge of this Court after referring to Article 23 of Schedule 1 -A of the Indian Stamp Act has held that while determining the factum of stamp duty the Court should consider the purport of the document and should not act by any collateral effect which are the part of the document for judging whether the inetrument is taxable under particular Article of Schedule 1-A of the Indian Stamp Act The learned Single Judge has expressed the opinion that the taxable event is a creation of instrument within the meaning of the Act and it is an instrument that is chargeable to stamp duty and, therefore, the question whether the possession was delivered pursuant to the agreement of sale is neither here nor there.

In Shiv Kumar Saxena (supra), a Division Bench of this Court expressed the opinion that the stamp duty is leviable on the instrument and not on the transaction and in order to determine the nature of document and whether it is sufficiently stamped or not the Court shall only look to the contents of the document and not to any collateral circumstances which may be placed by way of any evidence. The division Bench further clarified that for the purpose of stamp duty the intention of the parties to be gathered only from the contents of the instrument and not from any outside material.

In this context, we refer with profit to the decision rendered in the case of Veena Hashmukh Jain (supra) wherein the Apex Court was considering the provision in pari materia, (Explanation 1 to Article 25 of Schedule 1 to Bombay Stampt Act, 1958) and clarified its effect thus -

The duty in respect of an agreement covered by the Explanation is leviable as if it is a conveyance. The conditions to be fulfilled are that if there is an agreement to sell immovable property and possession of such property is transferred to the purchaser before the execution or at the time of execution or subsequently without executing any conveyance in respect thereof, such an agreement to sell is deemed to be an "conveyance".... It is open to the Legislature to levy duty on different kinds of agreements at different rates. If the Legislature thought that it would be appropriate to collect duty at the stage of the agreement itself if it fulfils certain conditions instead of postponing the collection of such duty till the completion of transaction by execution of a conveyance deed....it would be necessary to collect duty at agreement stage itself....

In M/s Kapoor Construction (supra) the learned Single Judge of Karnataka High Court took stock of the fact that the document in question showed that Plaintiff was put in possession of the land and, therefore, it was inadequately stamped.

The obtaining factual matrix is to be tested on the anvil and touchstone of the aforesaid pronouncement of law. On a perusal of the agreement, that has been brought on record, it is clear as crystal that there is mention that the possession was given to the Plaintiff. What is urged by Mr. Rusia, learned Counsel, that he has prayed for recovery of possession and the Respondents No. 2 and 3 have disputed his possession. In our considered opinion the aforesaid submission is ill founded and bound to founder being totally meritless, for it is an instrument alone which has to be construed for considering the amount of stamp duty payable on it. The instrument, in the case at hand, clearly postulates that the possession was handedover to the Plaintiff-Appellant. In such an obtaining factual matrix the explanation to Article 23 of Schedule 1-A as amended in the State of Madhya Pradesh gets attracted for making it a conveyance. The spacious submission that it can be admitted in evidence under proviso to Section 49 of the Registration Act has nothing to do with regard to the stamp duty payable on the instrument. Therefore, we perceive no error in the order of the learned Single Judge by which he has given the stamp of approval to the order passed by the learned trial Judge.

In the ultimate eventuate we perceive no merit in this appeal and accordingly, the same stands dismissed. However, in the facts and circumstances of the case there shall be no order as to costs.