M. Rajanna vs Smt. R. Susheela Bai

Aravind Kumar, J.—Heard learned Counsel appearing for the petitioner.

Perused the records.

Petitioner is the plaintiff in O.S. No. 5396 of 1999 and has been directed under the impugned order dated 16-9-2015 - Annexure-E to pay duty and penalty as per the provisions of the Karnataka Stamp Act, 1957 (for short the ''Act'') on the agreement of sale dated 15-7-1996 which came to be relied upon and it has been impounded by the Court below in exercise of its powers under Sections 33 and 34 of the Act.

It is the contention of the learned Counsel appearing for plaintiff/petitioner that under Article 5(e)(i) of the Schedule, mere delivery of possession of the property under the agreement per se will not attract duty as a conveyance (No. 20) to be paid on the market value of the property and contends that said Article mandates that when recital in the deed it is found, that possession of the property is delivered and also agreed to between the parties that no deed of conveyance would be executed, then only it would attract stamp duty and in the instant case, recitals in the agreement of sale dated 15-7-1996 would indicate there is no such specific recital to the effect that conveyance or a registered sale deed would not be executed but, on the contrary there is a specific recital in the agreement that sale deed would be registered by the vendor in favour of the purchaser. In that view of the matter, he contends that Article 5(e)(i) is not attracted and stamp duty of Rs. 200/- paid is sufficient and it is in accordance with the provisions of the Karnataka Stamp Act, particularly, Article 5(e).

He would further elaborate his submission by contending that for Article 5(e)(i) of the Act being attracted indicated ingredients in the said Article should be found in the recitals of the; agreement and the expression �part performance of the contract'' indicated therein is referable to Section 53-A of the Transfer of Property Act, 1882 and it mandates 5 contingencies should occur for attracting part performance as contemplated under Section 53-A of the Transfer of Property Act, 1882 and mere delivery of possession perse would not be sufficient and contends that in the instant case, these five (5) ingredients apart from delivery of possession not being found in the recitals of the agreement of sale, the transaction in question should not be construed as ''part performance''. Hence, he seeks for quashing of the impugned order and allowing the writ petition.

In support of his contentions, he has relied upon the following judgments:

(1) N. Srinivasa v. Murulesh and Others, ILR 2014 Kar. 4350.

(2) Writ Petition No. 5738 of 2012, disposed of on 22-8-2014, Mahabala Gowda v. Smt. Nagalakshmi and Another.

(3) Writ Petition No. 108314 of 2014, disposed of on 19-12-2014.

A perusal of the records would indicate that petitioner i.e., the plaintiff in O.S. No. 5396 of 1999 has filed the subject ''suit'' seeking for a judgment and decree of the specific performance of agreement of sale dated 15-7-1996 and for directing the defendants to execute the sale deed and register the same in his favour contending inter alia that defendants had agreed to sell the suit schedule property in his favour and while executing said agreement of sale on 15-7-1996 total consideration which had been agreed to be paid was Rs. 90,000/- and plaintiff had paid a sum of Rs. 40,000/- at the time of entering into the agreement. It has been further contended by plaintiff that on account of defendant refusing to execute the sale deed in his favour on one pretext or the other, suit in question has been filed. As such, the plaintiff has sought for a decree.

Defendants on service of suit summons, have appeared and filed their written statement as per Annexure-B. Issues having been framed, matter came to be set-down for trial, plaintiff filed an affidavit under Order 18, Rule 4 of Civil Procedure Code, 1908 in lieu of his examination-in-chief and during the course of his evidence, he sought to produce the subject ''agreement'' dated 15-7-1996 which was objected to by the defendants on the ground that it is inadmissible and their deficit stamp duty and as such, Trial Court impounded said agreement and has directed the plaintiff to pay duty and has imposed penalty of ten limes of the duty.

After considering the rival contentions. Trial Court by relying upon the Division Bench judgment in the case of Miss Sandra Lesley Anna Bartels v. Miss P. Gunavathy, 2013(2) AKR 5., held that in view of the specific recitals found in the agreement at paragraph 2 of page 2 of the agreement that defendants had delivered possession of suit schedule property to the plaintiff in part performance of the contract and hence, stamp duty would be payable as a conveyance (No. 20). On account of document in question not being duly stamped, it was impounded.

In order to examine tire contention raised by the learned Counsel appearing for the petitioner, it would be necessary to extract Article 5(e)(1) of Stamp Act. It reads as under:

"5. (e) if relating to sale of immovable property wherein part performance of the contract.-

(i) Possession of he property is delivered or is agreed to be delivered without executing the conveyance. Same duty as a conveyance (No. 20) on the market value of the property. Provided that, where a deed of cancellation of earlier agreement is executed by and between the same parties in respect of the same property and if proper stamp duty has been paid on such agreement, then the duty on such "deed of cancellation" shall not exceed rupees five hundred."

After examining in extenso the definition of the word ''conveyance'' as defined under Section 2(1)(d) of the Stamp Act, a Division Bench of this Court in Digambar Warty and Others v. District Registrar, Bangalore Urban District, Bangalore and Another, ILR 2013 Kar. 2099 has held that a combined reading of Section 2(1)(d) and 2(1)(j) of the Act, the amended provision of conveyance, the definition of immovable property, transfer of property makes it clear that every instrument by which whether movable or immovable property is transferred which does not amount to ''conveyance of sale'' and which is not otherwise specifically provided for by the schedule, constitutes a conveyance''. In view of the definition of immovable property prior to amendment included land, benefits to arise out of land and things attached to the earth or permanently fastened to anything attached to the earth, which necessarily means immovable property, it cannot be narrowly construed as a land or a building. Even the benefits arising out of land tails within the definition of immovable property, which definition is inclusive in nature and in the context of the Stamp Act and the chargeability of an instrument under the Act, it cannot be held that where an instrument under which a person claims a right and such right can be construed as conferring right in the immovable property would amount to conveyance. Having regard to the definition of the words ''immovable property'' as found in the General Clauses Act and Stamp Act which is an inclusive one, it not only includes the land and buildings, but also includes the benefits that arise out of land and things attached to the earth. The words ''immovable property'' found in the Karnataka Stamp Act includes buildings, right to ways, air rights, development rights, whether transferable or not. On facts, it was noticed by the Division Bench that if the members had no right to ''immovable property'' and if they are conveying that right to third parties and if the said transaction does not constitute ''conveyance'', there was no need to pay stamp duty and get it registered. It is only because the right, which they were conveying is the right arising out of an immovable property and the benefits arising out of the land and the building, it constitutes ''immovable property'' and at best, transfer of such rights constitutes conveyance'' and the stamp duty and registration fees was payable.

In this background, when the words used in Article 5(e)(i) are perused, it would reads: "if a sale relating to immovable property, possession of the property is delivered in part performance of the contract or is agreed to be delivered without executing the conveyance, it would attract stamp duty as Conveyance No. 20 of the market value of the property". The words used in sub-clause (i) are: ''possession of the property is delivered in part performance of the contract and immovable property is agreed to be delivered without executing the conveyance''. In each of these two contingencies, such an instrument would attract the stamp duty as conveyance. It would be necessary to state by way of illustrations as to the mechanism how said article would be workable. -

"Illustration 1.-In respect of sale of immovable property where possession of the property is delivered in part performance of the contract, it would attract the stamp duty as conveyance.

Illustration 2.-If possession is agreed to be delivered without executing the conveyance and in part performance of the contract, even in such circumstances also, it would attract the stamp duty as conveyance."

As such, the contention oi the learned Counsel for the petitioner that Article 5(e)(i) is attracted only in the event of the possession of the property is delivered and if the agreement indicating that no conveyance deed would be executed being found, cannot be accepted. As such, the contention raised by the learned Counsel for the petitioner stands rejected.

in the light of the above discussion, let me examine as to whether the judgments relied upon by the learned Counsel appearing for the petitioner would in any manner is attracted to the facts and circumstances of the instant case.

A perusal of these three judgments would clearly indicate that facts obtained in this case are entirely different from the facts of those cases.

(i) In N. Srinivasa''s case, it has been found that recital in the agreement was to the effect that: "possession is being delivered after five months" and ''on payment of the consideration, the seller would execute the registered sale deed''. It is in this background, Co-ordinate Bench held what is to be construed or examined while asserting as to whether Article 5(e)(1) is attracted as to find out as to whether the instrument itself indicates about parties having agreed to take possession or deliver possession under the subject ''agreement''. To put it differently, it has been held that in the event of Act of possession is referable to something anterior to the instrument or posterior to the instrument in such circumstances, Article 5(e)(i) is not attracted was the dicta of this Court.

In the instant case, it has been clearly stated in the agreement itself at page 2 paragraph 2 as extracted in paragraph 6 of the impugned order that possession is delivered under the subject ''agreement'' i.e., possession in present''.

Regarding judgment in W.P. No. 5738 of 2012, disposed off on 22-8-2014, learned judge at para 3 has observed to the following effect:

"3. The learned Counsel .............. Conveyance. In the instant case there is a specific recital that possession was agreed to be delivered before executing the sale deed and therefore, as possession is not delivered as per the terms, the case falls under Section 5(e)(ii) and not under Section 5(c)(1) of the Act."

(Section is to be read as Article) (emphasis supplied by me)

In that view of the matter, the said judgment would be not attracted to the facts and circumstances of the present case.

Even in the judgment referred to in W.P. No. 108314 of 2014, the learned Judge has observed that parties had agreed that the possession will be handed over by the vendor to the vendee in case if the entire sale consideration is paid by the proposed vendee. As such, in that background, it came to be held that Article 5(e)(i) is not attracted.

In that view of the matter, this Court is of the considered view that contentions raised by the learned Counsel appearing for the petitioner cannot be accepted and judgments relied upon by him is not applicable to the facts on hand.

Insofar as the contention regarding Section 53-A of the Transfer of Property Act is concerned, a bare reading of the said provision would indicate that said provision is attracted where the transferee in part performance of the contract, takes possession of the property would be sufficient to construe part performance. As such, the contention raised by the learned Counsel for the petitioner requires to be rejected.

It also requires to be noticed at this juncture itself, that in the instant case the facts would clearly indicate that parties were at ad idem with regard to not executing the sale deed at the time when they entered into agreement of sale on 15-7-1996. This I say so because, the averments made in paragraph 2 of the plaint would clearly indicate that one more document had also come into existence on the same day. It is a registered general power of attorney. It is a contemporaneous document which has come into existence side-by-side the agreement of sale i.e., on same day. Thus, the defendants have created a non-extinguishable right in favour of the principal i.e., plaintiffs. As such, Article 5(e)(1) would be clearly attracted inasmuch as in part performance of the agreement of sale dated 15-7-1996 and under the said agreement, possession is delivered and such sale is also confirmed by execution of a contemporaneous document i.e., General Power of Attorney which was duly registered.

In that view of the matter, all contentions raised by the learned Counsel for the petitioner is liable to be rejected. Consequently, writ petition requires to be rejected.

At this juncture, learned Counsel for the petitioner submits that he may be granted four weeks time to pay duty and penalty as levied.

In the event of petitioner filing an affidavit before the Trial Court within three days from today, undertaking to pay the stamp duty and penalty within an outer limit of 4 weeks from today, then Trial Court shall grant four weeks to pay stamp duty and penalty as otherwise, it is at liberty to proceed in accordance with law.