The Board of Revenue, Madras vs M. Swaminatha Chettiar

Ramaprasada Rao, C.J.—Is a reference by the Board of Revenue u/s 57 of the Indian Stamp Act. The facts leading to the reference are as

follows:- The respondent is the son of one Gurumani alias Mulliah Chettiar through his first wife. The said Gurumani got Rs. 50,000 in cash in a

family partition between him and his brother Swaminatha Chettiar amount was entrusted to the respondent''s uncle N. S. M. S. Swaminatha

Chettiar to be divided at the time of partition between the respondent, his brothers to and his father. Ponraj alias M. Kanagasabapathi Chettiar and

Duralswaminathan Chettiar are also the sons of the said Gurumani through his second wife. Disputes arose between the members of the family

regarding the division of the family properties. A panchayat was constituted for the purpose of amicable adjustment between the ''contesting

Plaintiff. At the Panchayat; it was decided that a sum of Rs. 40,000 out of the amounts left in the custody of the said Swaminathan Chettiar and

certain Immovable properties should be given to the respondent and the balance amount of Rs. 10,000 with other properties should be given to the

respondent''s father and his step brothers. This arrangement was recorded by the Panchayatdars and all the contesting parties, namely, the

respondent, his father and his step brothers accepted the arrangement made by the Panchayatdars. After the decision of the Panchayatdars, it

appears that the respondent''s father and his step brothers did not abide by the decision of. the Panchayatdars and therefore it became necessary,

for the respondent to file a suit in O. S. No. 9 of 1971 on the file of the Sub Court, Sivaganga, against N. S. M. S, Swaminatha Chettiar for

recovery Rs. 40,000, as decided by the Panchayatdars. Even this suit is said to have being compromised. But what happened was that the

decision of the Panchayatdars which was reduced to writing and which was accepted by all the concerned parties was filed in court. This

document dated 20-8-1967, was impounded by the learned Subordinate Judge not with standing the adjustment of the main subject matter

between the parties and it was sent to the Sub-Collector of Sivaganga for necessary adjudication regarding the stamp duty payable thereon. The

sub Collector levied a Stamp duty including surcharge on Stamp duty of Rs. ''1614-40 and penalty of Rs. 5 under, This Section 40(l)(b) of the Act

treating the document, as an instrument of partition. Consequent '' upon such adjudication, the Tahsildar was requested to collect the stamp duty.

As against the memo demanding such collection of stamp duty, the respondent''s field''s revision to the Board of Revenue. The Board by its order

dated 2-2-1976 was of the view that this document in question effected division of the properties between the contesting claimants and expressed

the view that the document is an agreement Partition Properties belonging to co-owners and therefore it fell within the cope of Section 2(15) of the

Indian Stamp Act. That respondent filed a writ petition in W. P. No. 737 of 1976, on the file of this court challenging the order of the Board of

Revenue as above, This court while dismissing the writ petition directed the respondents to move the petitioner to make a reference u/s 57 of the

Act. On a request made thereafter by the respondent, the petitioner has made the present reference u/s 57(1) apparently treating the earlier order

made as its opinion on the subject The question referred to us is-

Whether the document in question in on agreement to partition the properties and falls within the scope of Section 2(15) of the Indian Stamp Act"".

It is common ground that whether an instrument is an instrument of partition or an agreement to that effect, it would nevertheless attract the same

stamp duty as provided in Section 2(15) of the ACL Therefore it is necessary for us to look into the recitals of the document to find out whether

the document in question in an instrument of partition or an agreement to divide property in severalty between co-owners. In the order of the

Board of Revenue, the document in question has been looked into and its salient and necessary recitals set out. It refers to an arrangement

suggested by the Panchayatdars, which by itself was on a reference made to them by persons who are setting up competing claims over

Properties, which were owned in common by them. The Panchayatdars made a suggestion regarding the divisibility of such properties. In effect,

therefore, the mode of division of the properties in order to set at rest the controversy between the rival claimants was suggested by the

Panchayatdars in the award. The contesting claimants accepted the said arrangement, but made the important addition at the end of the said

document by stating that they have accepted the arrangement made by the Panchayatdars and that suitable documents will be executed in due

course.

The question therefore is whether such an instrument vests or divests in presentation any title in property, Immovable or moveable, as between

the contesting claimants. We have already expressed the view that the panchayatdars merely suggested a mode of division of the common

properties and the parties themselves have voluntarily agreed to abide by the award of the Panchayatdars and they have also made it clear that

suitable documents will be executed in due counsel"". This makes it clear that the intention of the parties at or about the time when they accepted

the arrangement suggested by the , panchayatdars was that they were accepting the mode of division, but postponed the date of actual division to a

future date when the necessary instrument or document would be executed so as to vest or divest title on the contesting claimants of properties

which were by then held in commensality as between them. This specific expression of intention to act in future makes this document not an

instrument by way of an agreement to partition but only a document whereby the mode of division of the properties has been accepted by the

contesting claimants leaving to themselves the right to execute necessary documents in future so as to acquire, absolute title in those properties

which they had to take as per the arrangement. In fact, in a similar case in Devasikamani Goundar v. Andamuthu Goundar (1955)1 Mad LJ457

Dr. Rajamannar,C. J. expressed the view that in such circumstances the document in question, not being one which purports to divide the

properties, nor an agreement to divide the, properties, cannot fall within Section 2(15) of the Indian Stamp Act, and it was a case where the

Panchayatdari'' pursuant to a varthamanam letter executed by the contesting claimants suggested a mode of division, The claimant in that case

therefore have stated thus-

As mentioned in the Varthamanam letter executed by us on 6-7-1946 excluding the. properties set apart for temple, management by the first party

of us, the rest of the properties mentioned in schedules A B C D hereunder which are our self acquired and ancestral family properties have been

allotted by the Panchayatdars to the first, second, third and fourth of us'', respectively and we have accepted the same"".

After noticing such a recital which is in pari materia with that found in the agreement under consideration, the learned Chief Justice was of the view

that the instrument cannot be, deemed or considered to be an agreement to divide or an instrument of partition. The learned Chief Justice observed

as follows-

Now it is clear that by this instrument the co-owners do not purport to divide their joint property in severalty, nor do they agree to divide the

property. There is mention of the fact that the Panchayatdars had allotted properties to each of the co-owners and there is the term that the parties

will have a regular deed of partition executed and registered"" in the case under review before us also the expression ""we accept the above

arrangements"" does occur and the parties take it clear that they would abide by the verdict of the Panchayatdars. This cannot make any difference

because in presentation there is no division of the properties by metes and bounds by the parties. But they have agreed that in the course a future

joint activity, they would so divide the property as between themselves in accordance with the mode of division suggested by the Panchayatdars

and that suitable documents would be executed for that purpose. It is therefore clear that the document in question is neither an instrument of

partition nor an agreement to divide the properties as between the co-owners; but it is merely a record of an arrangement with the avowed

intention of executing documents in the future''s as to secure individual title over the properties in question by the contesting claimants. We therefore

answer the question as follows .-

The document in question does not fall within the scope of Section 2(15) of the Indian Stamp Act.

The reference is answered accordingly and there will be no order as to costs in this reference.

Answer accordingly.