The defendant who lost before the court below and whose counter claim was also dismissed is the appellant.
2. Most of the facts are not in dispute. By Ext.A1 agreement the appellant undertook to construct an apartment for the respondent herein who is the plaintiff in the suit. The apartment was put up and when the sale deed was not being handed over to the plaintiff, after issuing notice, he instituted the suit.
3. The suit was resisted on several grounds. One of the grounds being that the purchaser under the agreement Ext.A1 who is the plaintiff in the suit was liable to pay the stamp duty for the apartment put up, which was newly introduced as per the amendment to Stamp Act and it was not liable to be paid by the builder.
4. In the suit the defendant raised a counter claim to that effect.
5. As per the orders of the court below, it seems that later the sale deed was executed and apartment was handed over to the plaintiff and on that basis it was held that the suit has become infructuous and the Court dismissed the suit. It may be remembered here that as per the orders of the court, the respondent herein had deposited a sum of Rs.69,300/- equivalent to the stamp value in court. The counter claim was dismissed on the ground that the documentation charges made mention of in Clause 1 of Ext.A1 takes in stamp duty also and therefore the stamp duty has to be borne by the builder.
6. Aggrieved by the decree, the defendant went up in appeal. The appellate court confirmed the decree of the trial court as regards the counter claim. At the time of admission of this appeal, the following questions of law were formulated:
“1. Whether the learned appellate court was right in rejecting the counter claim of the appellant, by interpreting the terms of the contract without taking into account the intention of the parties while entering into Ext.A1 agreement?
2. Is the learned appellate court below right in law in holding that the appellant has agreed to suffer the stamp duty and registration charges without appreciating the change in law subsequent to the execution of the agreement?
3. Whether appellant can be mulcted with liability to pay the stamp duty in view of the fact that at the time of entering into Ext.A1 agreement on 19/02/2007 as per the provisions of the Stamp Act one had to suffer only the stamp duty for the undivided interest alone, but subsequent to the execution of the agreement the State Government has brought an amendment to the Kerala Stamp Act and a provision is made therein by including the value of the apartment also for suffering stamp duty?
4. Whether appellant can be made to suffer the stamp duty payable by the respondent in view of Section 30 of the Kerala Stamp Act 1959 when there is no contract to the contrary?
5. Is not the lower appellate court wrong in law by not appreciating the terms and conditions of Ext.A1 agreement in its entirety?”
7. Shri. S.P. Chaly, learned counsel appearing for the appellant, raised two contentions. They are;
i. The term documentation charge does not take in stamp duty.
ii. Even if it contemplates stamp duty, it was stamp duty payable at the time of Ext.A1 agreement, when in fact stamp duty was leviable only for the transfer of undivided share and stamp duty payable for apartment was brought in by way of amending Stamp Act.
8. Elaborating on the point, learned counsel went on to point out that as per clause 1 the builder has to bear the registration charges as well as the documentation charges. Learned counsel went on to point out that documentation charge does not take in stamp duty also and stamp duty stands on a separate footing. Even assuming for argument sake that it takes in stamp duty also, at the relevant time stamp duty was payable only for the transfer of undivided share in the land and not for the super structure. According to the learned counsel, it could not have been in the contemplation of the parties that subsequent amendment brought in introducing stamp duty to the super structure was also taken in by Ext.A1. According to the learned counsel, necessarily that burden will have to be borne by the purchaser since payment of such a duty was not in the contemplation of the parties at the time of entering into Ext.A1 agreement and also going by the wording of Clause 9 it is evident that any future taxation or levy is to be borne by the purchaser. Of course, the learned counsel was fair enough to admit that with regard to the transfer of 3.2 undivided share, stamp duty may have to be borne by the builder, but he cannot be mulcted with the liability to pay stamp duty for the super structure. Therefore, the learned counsel contended that the judgments and decrees of the courts below cannot stand.
9. Learned counsel appearing for the respondent on the other hand contended that the term documentation charges contemplates stamp duty also. It was further contended that the amendment came into force by Finance Act 15 of 2007 with effect from 1.4.2007. The contention is that at the time when the title deed of the property and building was executed in favour of the plaintiff, the defendant was aware that the stamp duty was leviable from him and no demand was made at that point of time which means that the builder was fully aware that it will have to be borne by him. It amounts to waiving of the right which the builder might have had and he is estopped from demanding the same now.
10. After having heard learned counsel on both sides and having perused the records, one fact becomes very clear that the parties entered into a contract on the basis of the law as it then stood and there is no dispute regarding the fact that as on the date of entering into Ext.A1 agreement, super structure was not amenable to stamp duty as per the Kerala Stamp Act. Of course, the builder in his reply notice has stated that as regards the mention of registration charges and all documentation expenses, it was an inadvertent mistake, but the builder is amenable to bear that stamp duty in the light of the terms of Ext.A1.
11. Clause 9 of Ext.A1 may be of some relevance in this regard. It reads as follows:
“9. That in particular the Purchaser hereby undertake to bear all local taxes, Sales Tax, Service Tax, One-time Building Tax, Construction Workers Welfare cess etc. leviable on that value of construction deemed to be carried out by the Builders or their nominees in terms of the covenants contained herein and if any further tax is liable to be paid in respect of anything done or deemed to be done under this agreement through any prevailing or future statute/Law such taxes shall be paid by the purchaser to the builders on their demand without any demur whatsoever.”
It is difficult to accept the contention of the learned counsel for the respondent that the parties had in contemplation a contingency in future regarding the levy of stamp duty brought in thereafter as a result of an amendment when entering into the contract evidenced by Ext.A1. At the time when Ext.A1 was entered into, it is not in dispute that no stamp duty was leviable in respect of the super structure put up by the builder and passed on to the purchaser. The levy of stamp duty for the super structure is by way of amendment already referred to. The liability to pay stamp duty will arise only from the date of amendment and it could not have been in the contemplation of the parties that the builder should also bear such future taxes and duties. That would be clear from a reading of Clause 9 which is referred to above.
12. Section 30 of the Kerala Stamp Act imposes obligation on the grantee to pay stamp duty unless there is a contract to the contrary.
13. Learned counsel for the respondent contended that the fact that the title deed was executed and it was handed over to the purchaser without any objection shows that even if there was an obligation on the part of the grantee to pay the stamp duty and a right on the part of the builder to collect the same, that has been waived.
14. As per terms of the agreement, on payment of the full amount, the builder was bound to execute the document. One must notice here that levy of stamp duty for the super structure was subsequently introduced and that was not the subject matter of the agreement at all. If in terms of the agreement, after receipt of the full amount under Ext.A1 the sale deed was not executed, that cannot lead to the conclusion that the claim of stamp duty which the purchaser was liable to pay as a result of the subsequent amendment was waived by the builder. There is nothing in the agreement Ext.A1 to show that the builder was bound to bear the future levy of duty also or taxation as the case may be. It is well settled that when a contract is entered into, it is on the basis of the law as it then stands.
15. Even assuming that the courts below were justified in their conclusion that documentation charges would take in stamp duty also, the lower courts omitted to note that on the date of execution of Ext.A1 contract there was no stamp duty leviable on super structure. It can only be on that basis the undertaking could have been made by the builder. It is imprudent to assume that he would have anticipated or speculated a future amendment to the Stamp Act and accepted his liability to bear that also.
16. This court is unable to accept the finding of the courts below that the term documentation charges would take in stamp duty which was imposed by the subsequent amendment to Ext.A1 contract. Going by the tenor and tone of the agreement and conduct of the parties, it is very evident that subsequent tax or duty will have to be paid by the purchaser. Therefore, stamp duty leviable on the structure will have to be paid by the purchaser. Stamp duty leviable has been quantified as Rs.69,300/- and has been deposited before the court below.
For the above reasons, this appeal is allowed and the judgments and decrees are set aside and it is held that the purchaser is liable to pay stamp duty quantified at Rs.69,300/- and the builder is entitled to receive the same. The counter claim stands allowed and the appellant is allowed to withdraw the amount deposited in court on proper application.
P. BHAVADASAN, JUDGE sb.