IN THE HIGH COURT OF JUDICATURE AT HYDERABAD FOR THE STATE OF TELANGANA AND STATE OF ANDHRA PRADESH WEDNESDAY, THE TWENTY-THIRD DAY OF JULY TWO THOUSAND AND FOURTEEN PRESENT THE HONOURABLE SRI JUSTICE M.S. RAMACHANDRA RAO
CRP.No.5299 of 2012
Between :
Bathala Adinarayana, S/o.Ganganna, Aged : 42 years, R/o.D.No.3-176, Rayachoti Road, Kummara Vandlapalle, Kadiri Mandal, Anantapur District and others.
…Petitioners Vs.
Jampala Vengamma, W/o.J. Narayana Swamy, Aged : 66 years, Sydapuram Village, Kadiri, Anantapur District and others.
…Respondents Counsel for Petitioners : Sri Manjunatha Allur Counsel for Respondents : C. Sumon The Court ordered the following : [order follows] THE HONOURABLE SRI JUSTICE M.S.RAMACHANDRA RAO
CRP.No.5299 of 2012
ORDER :
This Revision is filed challenging the order dt.06.08.2012 in OS.No.33 of 2007 of the Judge, Family Court – cum – Additional District Judge, Anantapur.
2. The petitioners herein are defendant nos.8 to 10 in the above suit.
3. Respondent nos.1 to 8 filed the above suit for a declaration of tile and for a perpetual injunction restraining petitioners and respondent nos.9 to 27 from interfering with their possession and enjoyment of their plaint schedule property.
4. A written statement was filed by defendants, issues were framed and trial commenced.
5. On 24.07.2012, the suit was posted to hear with regard to admissibility of a registered agreement of sale with possession – cum – General Power of Attorney dt.23.08.2007, registered as document No.8048 of 2007 in the office of Sub- Registrar, Kadiri. The said document was executed by defendant nos.1, 2, 4 and 5 in favour of defendant nos.8 to 10 in respect of part of the property which is subject matter of the suit. This document had been filed by defendant nos.1 to 8 as evidence in the suit.
6. The plaintiffs objected for receipt of this document on the ground that it is in substance a conveyance and necessary stamp duty and penalty had to be collected from defendant nos.1 to 8 to admit the same into evidence.
7. The defendants contended that it is a registered deed under the Registration Act, 1908, that the authorities have collected necessary stamp duty and so there is no need for an enquiry into the issue of payment of stamp duty and penalty. It was further submitted that it was only a General Power of Attorney and cannot be treated as a conveyance.
8. By order dt.06.08.2012, the court below held that recitals in the document indicate that it is a conveyance under art.42(e) and art.47A of Schedule IA of the Act; it was not registered as a sale; unless stamp duty and registration charges are collected as if it is a sale, it cannot be admitted into evidence It held that even if the Sub-Registrar had registered the document without collecting the stamp duty as prescribed under Article 47-A, it would not take away the power of the court to enquire if the document is duly stamped or not; and that the stamp duty has to be paid treating it as a conveyance under Article 47-A of the Indian Stamp Act, 1899.
9. Challenging the same, this Revision is filed.
10. Heard Sri Manjunatha Alluri, counsel for petitioners and Sri C. Sumon, counsel for respondent nos.1 to 8.
11. The counsel for petitioners submitted that the order of the trial court in directing petitioners to pay deficit stamp duty and penalty on the above document treating it as a deed of conveyance attracting Article 47-A of Schedule I-A of Indian Stamp Act, 1899 is erroneous and in fact, Article 6-B of Schedule I-A alone is attracted. Alternatively he contended that since the document had already been registered, it is not open to the trial court to say that it is inadmissible for want of proper stamp duty; and relied on the decisions of this Court in
[1]
Cheryala Srinivas v. Moola Sujatha and others and Telangana Spinning and Weaving Mills Ltd., Hyderabad v.
District Registrar and Collector, R.R. District and others
[2]
.
12. On the other hand, the counsel for respondents supported the order passed by the trial court and contended that the terms of the document indicate that it is an agreement of sale coupled with delivery of possession; therefore, the Explanation to Article 47-A of Schedule I-A of the Act is attracted; and since only stamp duty of Rs.10,000/- was paid, the document is insufficiently stamped and is inadmissible in evidence. He also submitted that the registration of the document would not come in the way of the power of the court to decide whether the document is duly stamped or not.
13. I have noted the submissions of both sides.
14. Article 47-A of Schedule I-A to the Indian Stamp Act, 1899 deals with the amount of stamp duty to be paid in respect of a sale as defined in Section 54 of the Transfer of Property Act, 1882.
15. Explanation – I to the said Article states :
Explanation – I An agreement to sell followed by or evidencing delivery of possession of the property agreed to be sold shall be chargeable as a “Sale” under this Article :
Provided that, where subsequently a sale deed is executed in pursuance of an agreement of sale as aforesaid or in pursuance of an agreement referred to in Clause (b) of Article 6, the stamp duty, if any, already paid or recovered on the agreement of sale be adjusted towards the total duty leviable on the sale deed.
16. The document in question is styled as agreement of sale – cum – General Power of Attorney. Clause (1) of the said document states that it is an agreement between defendant nos.1, 2, 4 and 5 (the vendors) and defendant nos.8 to 10 (the purchasers); that the vendors agreed to sell and the purchasers agreed to purchase the property mentioned in the schedule thereto for a sum of Rs.10 lakhs, that the vendors had received the said sum from purchasers and agreed to deliver possession to “intending purchasers” through their General Power of Attorney holders (defendant nos.8 to 10); Clause (2) of the said document states that the vendors had delivered vacant and peaceful physical possession of the schedule property to purchasers. In view of the recitals in clauses (1) and (2) it is clear that the document in question clearly attracts Explanation 1 to Article 47-A of Schedule 1-A of the Indian Stamp Act, 1899.
17. It is true that clause (11) of the said document authorises the purchasers to also act as attorneys of the vendors and sub-clause (i) thereof authorises the purchasers/attorneys to execute sale deed or deeds in favour of themselves or their nominees or enter into agreement of sale in favour of third parties in respect of the said property, either wholly or in parts and sub clause (ii) authorises the purchasers to execute sale deed or deeds in favour of third parties and receive sale considerations from such third parties. Sub-clause (iv) of clause – 11 also permits the purchasers to complete the sale, development and construction over the said property and handover possession of the said property to purchasers, sub- purchasers, etc. But in my opinion, notwithstanding these clauses, the document is substantially an agreement of sale with delivery of possession rather than an agreement for development agreement.
18. Article – 6 of Schedule 1-A deals with the amount of stamp duty payable in respect of agreement or memorandum of agreement. Sub-clause (B) of Article 6 states :
… … … (B) If relating to construction of a … … … Five Rupees for every one house or building including a multi-
unit house or building or unit of apartment/flat/portion of a multistoried building or for development/sale of any other immoveable property hundred rupees or part thereof on the market value or the estimated cost of the proposed construction/development of such property as the case may be, as mentioned in the agreement or the value arrived at in accordance with the schedule of rates prescribed by the Public Works Department authorities whichever is higher.
19. In my opinion, Article 6 (B) is not attracted merely because there is a reference in the document to sell, develop and construct in Sub-clause (iv) of Clause 11 in view of the recitals in clauses (1) and (2) referred to supra.
20. Admittedly, the stamp duty collected for the document in question was only Rs.10,000/- and the said stamp duty was collected and the document appears to have been registered without noticing its dominant purpose, i.e., that it an agreement to sell the plaint schedule property coupled with delivery of possession. Any such error by the Registrar in registering the document erroneously would not be binding on the court.
21. In Ma Pwa May and another v. S.R.M.M.A. Chettiar Firm
[3]
, the Privy Council held that if a Registrar having jurisdiction had made a mistake in the exercise of it, Section 87 of the Registration Act, 1908 would apply. It held that if a document not duly stamped is admitted for registration, the mistake is an error in procedure and is cured by Section 87. Therefore, upon payment of proper duty and penalty the document would be admissible in evidence. Similar view was taken by a Division Bench of the Hyderabad Court in Rashid Chenoy v. Yannabathula Venkanna
[4]
.
22. Therefore, in my opinion, the document having been registered without payment of adequate stamp duty, it is admissible in evidence after proper duty and penalty is paid.
23. In Telangana Spinning and Weaving Mills Ltd. (2 supra), a levy of Rs.63,53,750/- towards stamp duty and Rs.1,00,000/- penalty were imposed by the District Registrar on a person who had presented it for registration ignoring the plea of the party that as per G.O.Ms.No.1475 Revenue dt.30.7.2005, only Rs.50,000/- was payable as stamp duty. This Court held that the document in question being a development agreement- cum-GPA, Article 6-B would apply and the amount paid by the party towards stamp duty was adequate and the District Registrar cannot decide the issue relying on certain instructions issued by Inspector General of Stamps much prior to the issuance of the G.O. saying that the G.O. should have been followed. It set aside an order passed by the District Registrar levying penalty on the ground that the question of levy of penalty would arise only if an insufficiently stamped document is presented before an authority as evidence, that too, after it is impounded or where the document which is already registered is found to be inadequately stamped.
24. Thus, this court has also accepted the principle that if a document which is already registered is found to have been inadequately stamped, by receiving the deficit stamp and levying the appropriate penalty, the document can be received in evidence.
25. In Cheryala Srinivas (1 supra), an agreement of sale was executed by a person who was not himself the absolute owner of the property sought to be conveyed under the agreement. In fact, no specific boundaries were also mentioned therein. In view of this factual position, a learned single judge of this court held that unless the party under the agreement has the benefit of the possession of the property, without dispute or challenge to the party to the agreement, he cannot be made liable to pay stamp duty as though it is a sale deed. The said decision has no application to the facts of the present case since it is not the case of the petitioners that defendant nos.1, 2, 4 and 5 are not the owners of the property.
26. In view of the above referred case law binding on this court, I hold that the court below did not commit any error in treating the document as a “sale” covered by Explanation I to Art.47-A. Therefore, the Civil Revision Petition is dismissed but in the circumstances without costs.
27. Miscellaneous petitions, if any, pending in this Revision shall stand closed.
JUSTICE M.S.RAMACHANDRA RAO Date : 23-07-2014 Ndr/*
[1] 2010 (1) ALT 448
[2] 2007 (5) ALD 618
[3] AIR 1929 PC 279
[4] AIR 1953 HYD 168.