Collector of Stamps Vs. Hem Lata & Anr.
EmailAppeal: Civil Appeal No. 3078 of 1997
Petitioner: Collector of Stamps
Respondent: Hem Lata & Anr.
Apeal: Civil Appeal No. 3078 of 1997
Judges: Ruma Pal & B. N. Srikrishna, JJ.
Date of Judgment: Apr 23, 2003
Head Note:
STAMP DUTY
Indian Stamp Act, 1899
Sections 28(3) and 31, Schedule 1A, Article 23 – Stamp duty – Adjudication of proper stamp in respect of deed of conveyance – Flats built by cooperative housing society on the land leased by DDA – Member of the co-operative housing society transferring his flat on power of attorney basis for a consideration of Rs.5.51 Lacs – Power of attorney holder applying to DDA for conversion of the lease hold tenure of the land into freehold – DDA requiring the applicant to get an unsigned and unexecuted conveyance deed valued and stamped by the Collector of Stamps – Draft conveyance deed for conveying the reversionary rights of the DDA to the transferee of the flat declaring the consideration as Rs. 10,000 – Collector of Stamps requiring the deed to be stamped for a consideration of Rs. 5.51 Lacs being consideration for the transfer of the flat – On writ Single Judge directing the Collector to reassess the stamp duty on the basis of the consideration shown in the draft conveyance deed and not the sale consideration – Division Bench also upholding the decision of the Single Bench – Validity. Dismissing the appeal held since the only thing conveyed by the deed was the reversionary rights of the DDA for a declared consideration of Rs. 10,000 the Collector ought to have adjudicated the stamp only on the consideration set forth in the deed and not on anything else. Section 28(3) not attracted to the facts of the case. (Paras 3,6 and 7)
Cases Reffered:
1. Himalaya House Co. Ltd. v. The Chief Controlling Revenue Authority and Anr. (1972 (3) SCR 332) (Para 4)
2. Raman Chetty v. Mohammed Ghouse (ILR 16 Calcutta 432) (Para 4)
3. Sakharam Shankar v. Ramchandra Babu Mohire ((1903) ILR Bombay 27) (Para 4)
4. Mohammed Muzaffar Ali (ILR 44 Allahabad 339) (Para 4)
5. Sitaram Kamalia v. State of Bihar (ILR 39 228) (Para 4)
2. Raman Chetty v. Mohammed Ghouse (ILR 16 Calcutta 432) (Para 4)
3. Sakharam Shankar v. Ramchandra Babu Mohire ((1903) ILR Bombay 27) (Para 4)
4. Mohammed Muzaffar Ali (ILR 44 Allahabad 339) (Para 4)
5. Sitaram Kamalia v. State of Bihar (ILR 39 228) (Para 4)
JUDGEMENT:
ORDER
1. The Delhi Development Authority (DDA) by a deed dated April 16, 1990 leased a piece of land measuring about 3,650 acres to the second respondent Parwana co-operative Group Housing Society. The society constructed flats for its members with the funds contributed by the members. Flat No. A-37 was allotted by the society to a member by name, Prashant Kumar Roy to be jointly held with Pranab Roy (hereinafter referred to as the allottees’). On February 1995 the allottees entered into an agreement with the first respondent by which the allottees agreed to sell their rights in the flat to the first respondent for a consideration of Rs. 5,51, 000/- which was paid by the first respondent to the allottees. Possession of the flat was given to the first respondent. The allottees appointed and constituted Mr. Ramesh Chandra husband of the first respondent as their lawful general power of attorney holder authorising him to execute on their behalf a conveyance deed in favour of the first respondent. On February 20 1995 the said person acting as attorney, applied to the DDA for converting the leasehold tenure of the land under the flat into freehold. By the letter dated September 11, 1995 the DDA informed the said attorney that his request was accepted and that he was required to get an unsigned and unexecuted conveyance deed valued and stamped from the office of the collector of stamps. When the attorney acting on behalf of the first respondent submitted an application under section 31 of Indian stamp act 1899 for adjudication of the proper stamp, the collector by the communication dated January 29 1996 informed the first respondent that sum of Rs. 44. 884/- would have to be paid towards the stamp duty, transferred duty and copy charges. Although the draft conveyance deed recited that the consideration payable for conversion of the leased hold rights into free hold rights was Rs. 10.000/- the collector took the view that sub-section(3) of section 28 of the Indian stamp act read with article 23 of schedule 1A would apply and that the amount of Rs. 5.51,000/- which was the total consideration paid by the first respondent to the allottees, must be taken to be the true consideration of the conveyance notwithstanding the amount of Rs. 10,000/- set forth therein as the consideration.
2. The first respondent challenged this decision of the collector by writ petition before the High Court. The learned single judge allowed the writ petition by taking the view that the jurisdiction of the authority under section 31 of the Act was to adjudicate the proper stamp fee leviable only on the basis of the consideration declared in the deed. The learned single judge also emphasised that under article 31 of schedule 1A with reference to conveyance the stamp duty payable is on the amount of value of consideration as set forth therein. He also took notice of the statement made by the learned counsel for the first respondent that the first respondent would pay the duty chargeable on the sale deed as and when the sale deed was executed by the original allottees conveying all their subsisting rights to the first respondent. In this view of the matter, the learned single judge allowed the writ petition and directed the collector to reassess the duty only on the basis of the consideration set forth in the draft conveyance deed.
3. Aggrieved by the said order the appellant appealed by a letters patent appeal . The Division bench agreed with the learned single judge that a perusal of the conveyance deed indicates that what was conveyed thereunder was only the reversionary interest in the land held by DDA to the first respondent for the declared consideration of Rs. 10.000/- Whatever might have been the terms of the agreement between the allottees and the first respondent they were not incorporated in the draft conveyance deed. Hence the stamp duty chargeable could only be calculated on the basis of the consideration set forth in the conveyance deed. In this view of the matter, the appeal was dismissed as being without merit. The appellant is before us by special leave.
4. In our judgment, the views taken by the learned single judge and the Division bench of the High Court are perfectly justified and unexceptionable. This court in Himalaya House Co. Ltd. v. The Chief Controlling Revenue Authority and Anr.1 had occasion to consider almost a similar situation. This court noticed that Article 23 of Schedule 1A to the Indian Stamp Act 1899 had come up for consideration before various High Courts on a number of occasions. Approving the view taken in Raman Chetty v. Mohammed Ghouse2, Sakharam Shankar v. Ramchandra Babu Mohire3, Mohammed Muzaffar Ali4 and Sitaram Kamalia v. State of Bihar5, it was held by this Court that the question which arose for decision was settled by a series of judgments that stamp duty was chargeable only on the basis of the consideration set forth in the instrument to be stamped. It was also held that the collector under the Indian Stamp Act had no jurisdiction to embark upon an enquiry with regard to the market value of the property assigned by the document nor did he have the power to adjudicate further stamp duty on the basis of his own evaluation. This court expressed its agreement with the view taken in the aforesaid decisions. In view of the long line of decisions it was observed that the legislature may have had good reasons not to empower the revenue to make an independent enquiry as regards the valuation of the right sought to be assigned.
5. The learned counsel for the appellant contended that what was conveyed by the conveyance deed was not only that reversionary rights of the DDA to the first respondent but also all the rights of the allottees in the property to the first respondent . In support of his contention, he invited our attention to the preambulatory recitals in the conveyance deed. We are afraid that his argument cannot be accepted. The preambulatory recitals in the conveyance deed do not amount to the habendum et tenendum of the conveyance deed. What is conveyed under the deed is indicated by the four clauses contained therein. A perusal thereof shows that the only thing conveyed by the deed is the reversionary rights of the DDA to the first respondent and no more, the consideration for which is declared to be Rs. 10,000/-. We are thus of the view that the collector of stamps could not have adjudicated under section 31(1) on the basis of anything other than the set forth consideration of Rs.10,000/-.
6. The learned counsel pressed section 28(3) of the act into service and contended that the High Court had not properly appreciated the contention based on section 28(3) of the act. After hearing learned counsel we are satisfied that the High Court was justified in giving short shift to the contention. What sub-section(3) of section 28 of the act contemplates is that the interest in the property conveyed by a purchaser to a sub purchaser, without obtaining the conveyance deed from the original seller must be identical with that which was agreed to be conveyed by the original seller to the purchaser. In the present case, the DDA was their original seller (assuming that it was really a case of sale) and the society was the original purchaser.
7. The allottees were the member of the society under an agreement which entitled them to get a sub lease executed in their favour. They in turn without getting the lease/sub lease executed in their favour transferred their interest to the first respondent upon consideration of Rs. 5,51, 000/- under an agreement of sale. The conveyance deed which was sought to be adjudicated under section 31(1) conveyed a totally different interest in the property, namely, the DDA’s reversionary interest in the land to the sub-purchaser (first respondent). In our view in these circumstances sub section (3) of section 28 does not stand attracted and the high court was justified in rejecting the contention.
8. We see no merits in the appeal. The appeal is dismissed. The appellant shall, within a period of three months from today, comply with the directions given by the learned single judge.
1. The Delhi Development Authority (DDA) by a deed dated April 16, 1990 leased a piece of land measuring about 3,650 acres to the second respondent Parwana co-operative Group Housing Society. The society constructed flats for its members with the funds contributed by the members. Flat No. A-37 was allotted by the society to a member by name, Prashant Kumar Roy to be jointly held with Pranab Roy (hereinafter referred to as the allottees’). On February 1995 the allottees entered into an agreement with the first respondent by which the allottees agreed to sell their rights in the flat to the first respondent for a consideration of Rs. 5,51, 000/- which was paid by the first respondent to the allottees. Possession of the flat was given to the first respondent. The allottees appointed and constituted Mr. Ramesh Chandra husband of the first respondent as their lawful general power of attorney holder authorising him to execute on their behalf a conveyance deed in favour of the first respondent. On February 20 1995 the said person acting as attorney, applied to the DDA for converting the leasehold tenure of the land under the flat into freehold. By the letter dated September 11, 1995 the DDA informed the said attorney that his request was accepted and that he was required to get an unsigned and unexecuted conveyance deed valued and stamped from the office of the collector of stamps. When the attorney acting on behalf of the first respondent submitted an application under section 31 of Indian stamp act 1899 for adjudication of the proper stamp, the collector by the communication dated January 29 1996 informed the first respondent that sum of Rs. 44. 884/- would have to be paid towards the stamp duty, transferred duty and copy charges. Although the draft conveyance deed recited that the consideration payable for conversion of the leased hold rights into free hold rights was Rs. 10.000/- the collector took the view that sub-section(3) of section 28 of the Indian stamp act read with article 23 of schedule 1A would apply and that the amount of Rs. 5.51,000/- which was the total consideration paid by the first respondent to the allottees, must be taken to be the true consideration of the conveyance notwithstanding the amount of Rs. 10,000/- set forth therein as the consideration.
2. The first respondent challenged this decision of the collector by writ petition before the High Court. The learned single judge allowed the writ petition by taking the view that the jurisdiction of the authority under section 31 of the Act was to adjudicate the proper stamp fee leviable only on the basis of the consideration declared in the deed. The learned single judge also emphasised that under article 31 of schedule 1A with reference to conveyance the stamp duty payable is on the amount of value of consideration as set forth therein. He also took notice of the statement made by the learned counsel for the first respondent that the first respondent would pay the duty chargeable on the sale deed as and when the sale deed was executed by the original allottees conveying all their subsisting rights to the first respondent. In this view of the matter, the learned single judge allowed the writ petition and directed the collector to reassess the duty only on the basis of the consideration set forth in the draft conveyance deed.
3. Aggrieved by the said order the appellant appealed by a letters patent appeal . The Division bench agreed with the learned single judge that a perusal of the conveyance deed indicates that what was conveyed thereunder was only the reversionary interest in the land held by DDA to the first respondent for the declared consideration of Rs. 10.000/- Whatever might have been the terms of the agreement between the allottees and the first respondent they were not incorporated in the draft conveyance deed. Hence the stamp duty chargeable could only be calculated on the basis of the consideration set forth in the conveyance deed. In this view of the matter, the appeal was dismissed as being without merit. The appellant is before us by special leave.
4. In our judgment, the views taken by the learned single judge and the Division bench of the High Court are perfectly justified and unexceptionable. This court in Himalaya House Co. Ltd. v. The Chief Controlling Revenue Authority and Anr.1 had occasion to consider almost a similar situation. This court noticed that Article 23 of Schedule 1A to the Indian Stamp Act 1899 had come up for consideration before various High Courts on a number of occasions. Approving the view taken in Raman Chetty v. Mohammed Ghouse2, Sakharam Shankar v. Ramchandra Babu Mohire3, Mohammed Muzaffar Ali4 and Sitaram Kamalia v. State of Bihar5, it was held by this Court that the question which arose for decision was settled by a series of judgments that stamp duty was chargeable only on the basis of the consideration set forth in the instrument to be stamped. It was also held that the collector under the Indian Stamp Act had no jurisdiction to embark upon an enquiry with regard to the market value of the property assigned by the document nor did he have the power to adjudicate further stamp duty on the basis of his own evaluation. This court expressed its agreement with the view taken in the aforesaid decisions. In view of the long line of decisions it was observed that the legislature may have had good reasons not to empower the revenue to make an independent enquiry as regards the valuation of the right sought to be assigned.
5. The learned counsel for the appellant contended that what was conveyed by the conveyance deed was not only that reversionary rights of the DDA to the first respondent but also all the rights of the allottees in the property to the first respondent . In support of his contention, he invited our attention to the preambulatory recitals in the conveyance deed. We are afraid that his argument cannot be accepted. The preambulatory recitals in the conveyance deed do not amount to the habendum et tenendum of the conveyance deed. What is conveyed under the deed is indicated by the four clauses contained therein. A perusal thereof shows that the only thing conveyed by the deed is the reversionary rights of the DDA to the first respondent and no more, the consideration for which is declared to be Rs. 10,000/-. We are thus of the view that the collector of stamps could not have adjudicated under section 31(1) on the basis of anything other than the set forth consideration of Rs.10,000/-.
6. The learned counsel pressed section 28(3) of the act into service and contended that the High Court had not properly appreciated the contention based on section 28(3) of the act. After hearing learned counsel we are satisfied that the High Court was justified in giving short shift to the contention. What sub-section(3) of section 28 of the act contemplates is that the interest in the property conveyed by a purchaser to a sub purchaser, without obtaining the conveyance deed from the original seller must be identical with that which was agreed to be conveyed by the original seller to the purchaser. In the present case, the DDA was their original seller (assuming that it was really a case of sale) and the society was the original purchaser.
7. The allottees were the member of the society under an agreement which entitled them to get a sub lease executed in their favour. They in turn without getting the lease/sub lease executed in their favour transferred their interest to the first respondent upon consideration of Rs. 5,51, 000/- under an agreement of sale. The conveyance deed which was sought to be adjudicated under section 31(1) conveyed a totally different interest in the property, namely, the DDA’s reversionary interest in the land to the sub-purchaser (first respondent). In our view in these circumstances sub section (3) of section 28 does not stand attracted and the high court was justified in rejecting the contention.
8. We see no merits in the appeal. The appeal is dismissed. The appellant shall, within a period of three months from today, comply with the directions given by the learned single judge.
