1. Heard learned counsel for the petitioner, learned Standing Counsel who represents respondent nos.1, 2 & 3 on the admission of writ petition and perused the record.
2. Despite direction, till date no counter diffident has been filed. On 04.08.2021 this matter was adjourn on a request made on behalf of State to enable the brief holder to further prepare the case. In view of the peculiar facts and circumstances of case, where in only nature of the document in question is required to be interpreted for the purpose of stamp duty, this court proceed to finally decide this matter at the admission stage with the consent of the counsel for the parties.
3. Instant writ petition has been filed by petitioner challenging the order dated 17.12.2002, passed by Chief Controlling Revenue Authority/ Commissioner, Kanpur Division, Kanpur (Respondent No.1) and order dated 19.04.2002, passed by the Additional District Magistrate (Finance/Revenue), Kanpur Nagar (Respondent No.2).
4. Present writ petition is arising out of proceeding under section 47A/33 of Indian Stamp Act, 1899 (as amended by the State of U.P.) (in brevity 'Stamp Act'), in pursuance of the report dated 21.12.1994 submitted by Sub Registrar, Kanpur Nagar (respondent no.3) to initiate a proceeding of stamp evasion, considering the deficiency of stamp duty in execution of power of attorney dated 15.12.1994, which was executed on the stamp of Rs.56 by Sri Samar Mukherjee, Sri Santosh Kumar Mukharjee and Sri R.P.Yadav in favour of the present petitioner namely Smt. Kiran Gupta. Sub-Registrar has treated the aforesaid power of attorney as irrevocable authority give to the attorney (petitioner) to cell immovable property, accordingly, he has proposed imposition of stamp as enshrined under Article 48(ee) of Schedule 1-B of Stamp Act.
5. Facts giving rise to the present petition is that Sri Samar Mukherjee, Sri Santosh Kumar Mukharjee, sons of S. K. Mukherjee, Residence of House No.113/249, Swaroop Nagar, Kanpur and Sri R.P.Yadav son of M.L. Yadav, Residence of House No.307 faithfulganj, Kanpur Nagar, had executed a power of attorney dated 15.12.1994(Annexure No.1), in favour of the present petitioner namely Smt. Kiran Gupta wife of Ram Kishan Gupta, Residence of House No.33/107, Gaya Prasad Lane, Kanpur Nagar. Through aforesaid deed executant/donor has appointed the petitioner as an agent/donee, to take care of his property, namely Flat No.5, situated at third floor of House No.112/351, Swaroop Nagar, Kanpur Nagar and to take all the relevant steps for its maintenance, alteration, giving the property on rent and alienate the same on behalf of the donor. She has also been authorized to pursue the matter, in case of any legal complication or dispute, before the authority and court concerned. Under Clause-8 of the aforesaid deed donors have reserved their right to revoke the power of attorney in question.
6. Chief Controlling Revenue Authority, vide its order dated 18.06.2001(Annexure No.3), had quashed the previous order dated 01.10.1997, passed by Assistant Collector for want of jurisdiction and remitted the matter before the authority concerned to decide it afresh. In pursuance of the order dated 18.06.2001, matter of stamp evation has been re-examined by the Additional District Magistrate (Finance/Revenue), Kanpur Nagar(Respondent No.2), imposing deficiency of the stamp duty to the tune of Rs.72,444/- and penalty of Rs.2,556/-, total Rs.75,000/-, vide its order dated 19.04.2002(Annexure No.4). Feeling aggrieved, petitioner has preferred revision (Annexuure No.5) under section 56 of Stamp Act, against the order dated 19.04.2002, before Chief Controlling Revenue Authority/Commissioner, Kanpur, Division Kanpur who has dismissed the revision, vide impugned order dated 17.12.2002 (Annexure-6), confirming the order dated 19.04.2002 passed by Additional District Magistrate (Finance/Revenue), Kanpur Nagar, which are under challenge in the present writ petition.
7. Counsel for petitioner submits that stamp authorities have illegally determined the market value of the subject matter (house) of the power of attorney dated 15.12.1994 treating it as conveyance and imposed stamp duty under article 48(ee) of schedule 1-B of Stamp Act, whereas it is a revocable power of attorney. He has drawn attention of the Court towards the clause-8 of the power of attorney dated 15.12.1994 wherein right to revoke the power of attorney has been reserved by the executant. It is further submitted that through the deed in question neither the consideration has been received nor right, title and possession of the property in question has been transferred to the attorney/agent, who has been authorized to take care of the property, which is a flat measuring area 1106 square feet, and also complete all the legal formalities, if required, and to transfer the same in the nature of sale, lease etc. on behalf of the executant. It is further submitted that the stamp authorities have misread and misinterpreted the recital as made in the power of attorney and illegally treated it as a conveyance for the purpose of imposing the stamp duty. In support of his case, learned counsel for petitioner has cited Full Bench decision dated 11.10.2011 of Hon'ble Supreme Court, in the case of 'Suraj Lamp & Industries Private Limited Vs. State of Hariyana', reported in 2011 Law Suit (SC) 1007.
8. Per contra, learned Standing Counsel representing the State has contended that the stamp authorities have rightly considered the deficiency of stamp in execution of the deed in question, which comes in the clutches of the Stamp Act. By way of power of attorney donee has been authorized to alienate the property, in favour of the third person, treating him as owner of the property, therefore, deed in question will be considered as conveyance, as defined under section-2(10) of the Act, and the petitioner is under obligation to furnish stamp duty in accordance with law as provided under Article 23(a), of schedule 1-B of Stamp Act. He has also emphasized the authority of the donee, who has been authorized to execute the lease deed, received the rent, deliver the possession of the property etc. It is further contended that recital made in clause-8 of the deed in question do not make it revocable. In fact, entire right of the owner/donor has been transfer in favour of the donee, who has been authorized to enjoy all the rights of the property being owner. There is no illegality or error in the order passed by the stamp authorities. Petitioner cannot escape from his legal duty to pay the required stamp in execution of power of attorney.
9. Considered the submissions advanced by learned counsel for the parties and perused the record on board.
10. Questions for consideration in the present matter is as to whether deed in question (power of attorney dated 15.12.1994) is irrevocable and can be treated as an conveyance for the purposes of imposing the stamp duty under Article 48(ee) of schedule 1-B of the Stamp Act. Power of attorney dated 15.12.1994 (Annexure No.1) succient the authority of the attorney who has been authorized not only to take care of the property in question but also to execute the lease deed and sale deed in favour of third person on behalf of principal. Subject matter of power of attorney is flat no.5 measuring area 1106 sq. feet consists of two bedroom, one drawing/dining room, two latrine bathroom, one kitchen & store, and verandah / balcony. Aforesaid flat is situated at the third floor of house no.112/351. Stamp authorities have assessed the market value of the aforesaid flat to be Rs.5 lakhs and, accordingly, imposed the deficiency of stamp to the tune of Rs.72,444/- along with penalty amounting Rs.2,556/-, total amount of Rs.75,000/-. They have treated the aforesaid deed as an irrevocable deed by which donee has been authorized to transfer the immovable property, accordingly stamp duty has been imposed under the provisions of the Stamp Act.
11. As per submission made by counsel for the petitioner, by virtue of clause-8 and 9 of the power of Attorney dated 15/12/1994 donee has been authorized to act on behalf of donar and deed has been made revocable and right to revoke is reserved with the donor. Submissions as made by learned counsel for the petitioner has been contradicted by the learned Standing Counsel and contended that recital made in clause-8 will not frustrate the applicability of Stamp Act and the whole reading of the deed in question suggest that it is irrevocable authority given to the attorney to enjoy and transfer the subject matter of the deed in question. For the purpose to draw the intention of donors in the execution of power of attorney, recital made in clause-8 and 9 of the deed should be examined in the light of the provisions as enshrined under the Stamp Act. For the ready reference, averments made in clause-8 and 9 of the power of attorney dated 15/12/1994 is reproduced hereinunder;- (8) ^^(8) ;g fd eq[rkjvke ds fdlh dk;Z ls vlarq"V gksus ij ge eqfdjku ;g eq[rkj ukek vke fujLr djus ds vf/kdkj lqjf{kr j[krs gS^^ (9) ;g fd eq[rkj vke }kjk fd;s x;s dqy dk;Z tks fd mDr Q~ySV dh ckor fd;s x;s gksaxs os leLr dk;Z ge eqfdjku }kjk fd;s x;s ekus o le>s tkosaxs vkSj tks fd ge eqfdjku dks Lohdkj o ekU; gksaxsA
12. Clause 8 and 9 of the power of attorney succincts that in case of dissatisfaction with any work of attorney, executents (donors) have posses the right to revoke the general power of attorney and all the acts done by attorney with respect to the flat will be understood and done on behalf of donors and will be accepted and admitted by them.
Relevant provisions of Article 48 of schedule 1-B of the Stamp Act, with U.P. amendment, is reproduced here under:-
48. Power-of-attorney [as defined by section 2(21)], not being a Proxy (No. 52)--
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(a) ----------------
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(b) ----------------
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(c) ----------------
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(d) ----------------
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(e) when given for consideration and authorizing the attorney to sell any immovable property.
The same duty as a Conveyance [No.23 clause (a)] for the amount of the consideration.
(ee) when irrevocable authority is given to the attorney to sell immovable property.
The same duty as a Conveyance [No.23 clause (a) on the market value of the property forming subject of such authority].
(f) ----------------
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13. Before discussing the merits of the case, the nature and scope of the power of attorney is required to be discussed first. Section 1-A and section 2 of The Power Of Attorney Act 1982 evince the scope and nature of the power of attorney which enunciates that power of attorney includes an instruments authorizing a particular person to act for and in the name of a person who has executed it. A power of attorney holder may, however, execute a deed of convenience in exercise of power granted under the power of attorney and convey title on behalf of granter and every such instrument and thing so executed and done, shall be as effectual in law as if it had been executed or done by the donee with the signature and seal of the donor. Thus it is clear, as held by Hon'ble Apex Court in the case of Suraj Lamp (Supra), that power of attorney is not an instrument of transfer qua any right, title or interest in an immovable property. It is a deed creating an agency whereby donor authorizes donee to do the act specified therein, on behalf of the donor, which when executed will be binding on the donor as if done by him. Generally, power of attorney are revocable or terminable at any time, unless it is made irrevocable in a manner known to law. Even an irrevocable attorney does not have the effect of transferring title to the donee. As such, power of attorney creates agency to do or not to do something on the authorization given by the principal on his behalf, which will be binding against him. It does not confer any right, title and possession in favour of the donee. In the case of State of Rajasthan vs, Basant Nehata 2005 12 SCC 77, Apex Court has expounded the nature and scope of power of attorney. Relevant para 13 and 52 of the aforesaid judgment are quoted here in under:-
''13. A grant of power of attorney is essentially governed by Chapter X of the contract Act. By reason of a deed of power of attorney, an agent is formally appointed to act for the principal in one transaction or a series of transactions or to manage the affairs of the principal generally conferring necessary authority upon another person. A deed of power of attorney is executed by the principal in favour of the agent. The agent derives a right to use his name and all acts. deeds and things done by him and subject to the limitations contained in the said deed, the same shall be read as if done by the donor. A power of attorney is , as is well known, a document of convenience.
52. Execution of a power of attorney in terms of the provisions of the Contract Act as also the power-of-Attorney Act is valid. A power of attorney, we have noticed hereinbefore, is executed by the donor so as to enable the donee to act on his behalf. Except in case where power of attorney is coupled with interest, it is revocable. The donee in exercise of his power under such power of attorney only acts in place of the donor subject of course to the powers granted to him by reason thereof. He cannot use the power of attorney for his own benefit. He acts in a fiduciary capacity. Any act of infidelity or breach of trust is a matter between the donor and the donee."
14. In case of Suraj Lamp (Supra) Apex Court has held that the power of attorney is not conveyance for valid transfer. Relevant paragraph 16 of the said judgment is quoted hereinunder:-
"16. We therefore reiterate that immovable property can be legally and lawfully transferred/conveyed only by a registered deed of conveyance. Transactions of the nature of `GPA sales' or `SA/GPA/WILL transfers' do not convey title and do not amount to transfer, nor can they be recognized or valid mode of transfer of immovable property. The courts will not treat such transactions as completed or concluded transfers or as conveyances as they neither convey title nor create any interest in an immovable property. They cannot be recognized as deeds of title, except to the limited extent of section 53A of the TP Act. Such transactions cannot be relied upon or made the basis for mutations in Municipal or Revenue Records. What is stated above will apply not only to deeds of conveyance in regard to freehold property but also to transfer of leasehold property. A lease can be validly transferred only under a registered Assignment of Lease. It is time that an end is put to the pernicious practice of SA/GPA/WILL transactions known as GPA sales."
15. In the case of Kasthuri Radhakrishnan & Otheres Vs. M. Chinniyan & Anothers, (2016) 3 SCC 296, the Apex Court has reiterated the verdict of Suraj Lamp (Supre) and stated in para 36 as follows:-
""36. The Law relating to power of attorney is governed by the provisions of the Powers of Attorney Act, 1982. It is well settled therein that an agent acting under a power of attorney always acts, as a general rule, in the name of his principal. Any document executed or thing done by an agent on the strength of power of attorney is as effective as if executed or done in the name of principal i.e. by the principal himself. An agent, therefore, always acts on behalf of the principal and exercises only those powers, which are given to him in the power of attorney by the principal. Any act or thing done by the agent on the strength of power of attorney, is therefore, never construed or /and treated to have been done by the agent in his personal capacity so as to create any right in his favour but is always construed as having done by the principal himself. An agent, therefore, never gets any personal benefit of any nature..."
16. To ascertain the authenticity of the power of attorney its registration is must under the relevant provisions of law, otherwise any act or omission done by agent on behalf of his principal will not be binding on him. Registration provides safety and security to transactions relating to the immovable property, even if the document is lost or destroyed. In absence of registration of document it creates illegal consequences which has to be faced by the person concerned for the purposes to ascertain its legal sanctity.
17. Stamp Act provides procedure for payment of stamp fee in the nature of tax with the government. Execution of power of attorney are already regulated by law and subject to specific stamp duty. Section 2(21) of the Stamp Act defines the power of attorney which is quoted below:-
"(21) "Power-of-attorney". "Power-of-attorney" includes any instrument (not chargeable with a fee under the law relating to court-fees for the time being in force) empowering a specified person to act for and in the name of the person executing it;
18. For the purpose of determining the applicable entry of the schedule to the Stamp Act to the document for the purpose of assessing stamp duty payable, reference may be had to a Division Bench Judgment of the M.P. High Court in 'Shiv Kumar Saxena & Ors., v. Manishchand Sinha & Ors.', 2004(2) MPJR 269/(MANU/MP/0321/2004). Relevant portion of the said judgment reads as follows:
"..............The following cardinal principles laid down by Courts should always be kept in view, before considering any question relating to stamp duty:--
(i) Stamp duty is leviable on the instrument and not the transaction.
(ii) The substance of the transaction embodied in the instrument determines the stamp duty and not the form or title of the instrument.
(iii) In order to determine the nature of document and whether it is sufficiently stamped, the Court shall only look to the contents of the document as it stands and not any collateral circumstances which may be placed by way of evidence. In other words, for purposes of stamp duty, the intention of the parties is to be gathered only from the contents of the instrument and not any outside material. (But where the stamp duty depends on the market value, outside material can be considered in the manner provided in the relevant stamp law).
(iv) To find out the true character of an instrument for purpose of stamp duty, the document should be read as a whole and the dominant purpose of the instrument should be identified.
(v) The instrument must be stamped according to its tenor though it cannot be given effect for some independent cause.
(vi) The Revenue cannot contend that the object of the transaction was to achieve a purpose not disclosed in the document and, therefore, the document should be stamped as per such deemed, but undisclosed purpose. Similarly, the party liable to pay stamp duty cannot contend that the purpose disclosed in the instrument is not the actual purpose and therefore, he is not liable to pay stamp duty on the apparent tenor of the instrument.
(vii) Once a document containing effective words of disposition is executed, it attracts stamp duty. The taxable event cannot be postponed by contending that it was intended to come into effect on a future date, on the happening of a particular contingency."
19. Power of Attorney, at the time of registration, is charged with the stamp duty. Article 48, schedule 1-B of Stamp Act enunciates several categories of power of attorney which are required to be stamped as per the nature of the document by which agency has been authorized to do the work. Article 48 of schedule 1-B of Stamp Act deals with the power of attorney basically of two kind namely specific power of attorney and general power of attorney. Needless to say that person who has been authorized by his principal to execute a particular deed or to sign a particular contract or to purchase a particular parcel or to any particular act, is considered as an special agent. On the other hand a person who is authorized by his principal to execute all deeds, sign all contracts, or to purchase all goods and do all things as required in particular business, trade or employment is treated as a general agent.
20. Article 48(e) of Scheduled 1-B of Stamp Act deals with the matter where power of attorney has been executed for consideration, authorizing the attorney to sale any immovable property. Article 48(ee) of Scheduled 1-B of Stamp Act enunciates levy of stamp on such power of attorney which are irrevocable in nature, intending to stop such transaction through power of attorney which are made for the purposes of evading stamp duty. U.P. Legislation has inserted 48(ee) of Scheduled 1-B of Stamp Act by virtue of U.P. Act No.11 of 1992. Nature of documents as to whether it is a revocable or irrevocable is depends on the construction of the documents and after going through the whole contents one can infer the nature of documents.
21. In the case of Joginder Kumar Goyal Vs. Government of NCT of Delhi & others, decided on 17.05.2016 in W.P.(C) 3012/2016, Division Bench of Delhi High Court expressed its view in para 12, which is as follows:-
"12. Clearly, the character/nature of the document for the purpose of stamp duty would vary on the facts of each case depending on the substance of the transactions as stated in the instrument itself. There can be no sweeping conclusion as sought to be argued by the petitioner, that every power of attorney executed in favour of a person other than a relative by a grantor to deal with immovable property is per se a conveyance deed and not a power of attorney. Merely because some clauses are introduced in some power of attorney holding it to be irrevocable or authorizing the attorney holder to effect sale of the immovable property on behalf of the grantor would ipso facto not change the character of the document transforming it into a conveyance deed."
22. Full Bench judgment of the Madras High Court in the case of Board of Revenue, Madras, Vs. Annamalai And Co. (Pvt.) Ltd., AIR 1968 Mad 50, succints the definition of irrevocable agency. Para 5 of the judgment is reproduced hereinunder:-
"..................... It is represented by the learned Government pleader appearing for the Government that the principles set out in Article 48(e) are derived from the notion of irrevocable agency in the law of contracts, where the authority granted by the principal to the power agent is coupled with an interest held by the agent. Well-known commentaries have explained this principle thus:--
1. "If a borrower, in consideration of a loan, authorises the lender to receive the rents of Blackacres by way of security, the authority remains irrevocable until repayment of the loan in full has been effected... This doctrine applies only where the authority is created in order to protect the interest of the agent; it does not extend to a case where the authority has been given for some other reason and the interest of the agent arises later". (Cheshire on the Law of Contracts, 6th Edn. page 421.)
2. Where the authority of an agent is given by deed, or for valuable consideration, for the purpose of effectuating any security, or of protecting or securing any interest of the agent, it is irrevocable during the subsistence of such security or interest" (Bowstead on Agency, 12th Edn. p. 301).
3. Adopting the classical statement of the rule given by Wilde C. J. in Smart v. Sanders, (1848) 5 CB 895 at p. 917 (Sic), on the Law of Agency, 2nd Edn. page 302 states:
"In such cases the authority is given for valuable consideration as a security, or as part of a security, in respect of a liability of the principal to the agent. The agent has, as it were, bought his authority in order to ensure the payment of a debt due from the principal".
(6) The principles thus set out above have been embodied in Section 202 of the Indian Contract Act, and in particular illustration (a) therefor, which is in the following terms--
"A gives authority to B to sell A's land, and to pay himself, out of the proceeds, the debts due to him from A. A cannot revoke this authority, nor can it be terminated by his insanity or death". "
23. Perusal of the power of attorney in question as whole indicates that it is a general power of attorney executed in favour of the petitioner to take care and manage the subject matter of the deed including its rental and alienable right. In clause (1) and (2) of the deed in question attorney (petitioner) has been authorized to manage the subject matter of deed as if it is done by donor and given restricted power of alteration with caution not to cause harm to the walls, roof and floor of flat. Clause (8) and (9) of the deed further clarifies the intention of the donor. So far as the applicability of the provisions as enunciated under Article 48(ee) of schedule 1-B of the Stamp Act is concerned, in my opinion it is not attracted in the present matter. The recital made in clause-1, 2, 8 and 9 of power of attorney dated 15/12/1994, succincts the restricted authority granted to the attorney to renovate or reinvigorate the flat in question with caution and the principal has reserved all rights to revoke the power of attorney in case of dissatisfaction with the work of attorney appointed. Meaning thereby deed in question dated 15/12/1994 cannot be treated to be irrevocable. Language of general power of the attorney in question is immaculately clear that intention of the executant is to confer the approved power of agency under the condition of revocation of deed, in case, donor is not satisfied with the work of donee. In case, it is treated to be an irrevocable authority, petitioner will be liable to pay the stamp duty as per the provisions of Article 23(a) of Schedule 1-B of Stamp Act, which is applicable for the conveyance.
24. It would not be out of contest to quote the definition of conveyance and instrument as enshrined under section 2(10) and 2(14), respectively, of the Indian Stamp Act as follows:-
"2(10) "Conveyance". "Conveyance" includes a conveyance on sale and every instrument by which property, whether movable or immovable, is transferred inter vivos and which is not otherwise specifically provided for by Schedule I, Schedule 1-A or Schedule 1-B], as the case may be [Explanation.- An instrument whereby a co-owner of a property having defined share therein, transfers such share or part thereof to another co-owner of the property, is for the purposes of this clause an instrument by which property is transferred';"
"2(14) "Instrument".- "Instrument" includes every document and record created or maintained in or by an electronic storage and retrieval device or media by which any right or liability is, or purports to be, created, transferred, limited, extended, extinguished or recorded];"
25. After going through the recital in the deed in question dated 15/12/1994, I am of the view that it is a revocable authority given to the petitioner to do any transaction, whether it is sale or rent or taking care and manage the property etc. There is nothing in the deed in question to demonstrate that authority has been given to the donee for some consideration or, due to non irrevocable status of the deed, the property in question vested in the donee and he became full owner of the said property. Apart from that authority granted by the principal to the donee can not be said to be coupled with an interest held by the agent.
26. Stamp Authorities have misread and misinterpreted the recital in the deed and illegally dragged it into the clutches of the provisions as enshrined under Article 48(ee) of schedule 1-B of Stamp Act.
27. As such mere execution of general power of attorney by a person would not ipso facto imply that any transfer of property as defined in the Transfer of Property Act that in general power of attorney, even if it is provides for power of attorney holder to convey title on behalf of the guarantor or deemed to be irrevocable cannot be recognized as deed title. From the perusal of the power of attorney in question it would not be inferred that it is irrevocable in the hands of donee.
28. Case of Suraj Lamp (Supra) cited by counsel for the petitioner is not applicable in the present matter. Full Bench dictum of Hon'ble Supreme Court is with respect to the validity of sale agreement/ general power of attorney/will, which are executed for the purpose of Transfer of the Property. After considering the provisions of Transfer of Property Act, Registration Act and Power of Attorney Act, Hon'ble Supreme court has concluded that aforesaid documents/transactions neither convey any title nor create any interest in an immovable property. In the aforesaid cited case, Hon'ble Supreme Court has reversed the judgment of Delhi High Court in the case of Asha M. Jain Vs. Canara Bank, reported in 2001(94) DLT 841, whereby concept of power of attorney sales have been recognized as a mode of transactions. Matter in hand relates to the limited scope, qua imposition of Stamp, as to what stamp fee leviable in registration of the document in question.
29. In this conspectus, as above, in my opinion general power of attorney in question dated 15.12.1994 cannot be considered as irrevocable, therefore, it cannot be considered as a conveyance for the purposes of leaving stamp as enshrined under Article 48(ee) of Schedule 1-B of Stamp Act. It would be appropriate to consider the deed in question and impose stamp fee in accordance with the provisions as enshrined under Article 48(c) of Schedule 1-B of the Stamp Act. Accordingly, Stamp Authorities are directed to consider levy of the Stamp Fee in the light of the aforesaid provision. Impugned orders under challenge passed by the respondent nos. 1 and 2 dated 17.12.2020 and 19.04.2020, respectively , are illegal, erroneous and against the very intention as recited in the power of attorney dated 15/12/1994. As such, present writ petition is succeeded and allowed.
30. It is made clear that any amount, in case, deposited by the petitioner in pursuance of the impugned orders passed by the authorities concerned shall be reimbursed to the petitioner with the simple interest as applicable presently.
Order Date :- 13.8.2021/VKG