High Court
Legal Reasoning
1 wp 13782.2019IN THE HIGH COURT OF JUDICATURE AT BOMBAYBENCH AT AURANGABAD WRIT PETITION NO. 13782 OF 20191.Dr. Shri Basavraj kashinath Natikar,Age: 39 years, Occu.: Medical Practitioner,R/o. Kabra Nagar, Nanded,Taluka and District Nanded2.Dr. Sow. Rupali D/o. Pralhadrao Sangamwar,Age: 38 years, Occu: Medical Practitioner,As above .. Petitioners(Orig. Plaintiffs)Versus.Balaji S/o. Vithalrao Kasetwar,Age: 53 years, Occu: Business,R/o.: Jaibhavani Nagar, Toarda Kd.,Nanded, Taluka and Dist Nanded .. Respondent (Orig. Defendant)...Advocate for the Petitioners : Mr. Pavankumar S. AgrawalAdvocate for Respondent : Mr. Amit A. Mukhedkar...CORAM:ARUN R. PEDNEKER, J.Reserved on:05.04.2024Pronounced on:29.04.2024JUDGMENT:1.Rule. Rule returnable forthwith. With consent of the parties,the petition is heard finally.
Legal Reasoning
2 wp 13782.20192.Heard Mr. Pavankumar S. Agrawal, learned counsel forthe petitioners and Mr. Amit A. Mukhedkar, learned counsel for therespondent.3.By the present petition, the petitioners are challenging theorder dated 07.09.2019, passed by the Civil Judge Senior Division,Nanded, allowing the application below Exhibit-69, in Special Civil SuitNo.63 of 2013, whereby the civil court directed impounding ofdocuments for non payment of stamp duty and to undertake furtherprocess under the Maharashtra Stamp Act for payment of stamp duty.4.The facts giving rise to the petition can be summarised asunder:-A.The petitioners are the original plaintiffs who filed the suitno.63 of 2013 before the Civil Judge Senior Division, Nanded seekingrelief of specific performance of contract against the defendant /respondent. It is contended that, on 05.03.2010, the petitioners enteredinto an agreement of sale with the respondent for plot bearing no.37, GutNo.133, situtated at Jaybhavani Nagar, Taroda (kd.), Nnadedadmeasuring in length East West towards Southern side 70 feets. 6 inch(21.49 mts) and towards northern side 20 feets (6.10 mtrs) and in widthSouth North 50 feets (15.24 mtrs) for total consideration of about 3 wp 13782.2019Rs.28,00,000/- The petitionerspaid the earnest money of Rs.3,00,000/-by cheque no.062265 to the respondent at the time of agreement. Thepetitioners had paid earnest money of Rs.2,00,000/- by chequeno.062566. The petitioners had paid total earnest amount ofRs.5,00,000/- to the respondent.B.As there was loan on the said property, the respondent couldnot clear the loan and, therefore, agreement was executed on12.07.2010. The petitioners paid further amount of Rs.9,00,000/- bycheque no.306092 and the total amount of Rs.14,00,000/- was paid bythe petitioners of which the respondent has acknowledged the receipt. Itwas further agreed that, in the event, the amount is not repaid, on orbefore 14.09.2010, the petitioners would be put in possession of the firstfloor on 15.09.2010. On 15.09.2010, the petitioners and the respondententered into an agreement and the respondent agreed to refund theearnest money of Rs.12,00,000/- by few post dated cheques.C.The prayer in the suit is as under:-“a)Decree of specific performance of contract to executeregistered sale-deed in favour of plaintiff No.1 & 2 on thebasis of agreement of sale dt. 05.03.2010 of the immovableproperty bearing plot No.37, out of land Gut No.133 situatedat Jaibhawani Nagar, Taroda (Kd), Nanded admeasuring inlength east-west towards southern side 70 Ft. 6 inch (21.49meter) and towards northern side 20 ft. (6.10 meter) and inwidth south-north 50 ft. (15.24 meter) which bounded by 4 wp 13782.2019towards east – 20 ft. road, west – plot No.36, south – plotNo.2 and north – 20 ft. road with constructed building ofRCC structure on the first floor having 07 rooms out ofwhich 3 rooms are uncompleted and on the ground floorwith all construction having 07 rooms with possession ofwhole property by accepting remaining considerationamount of Rs.14,28,000/- from plaintiff No.1 & 2.”D.In the suit filed by the petitioners, the application is filed atExhibit-23, wherein the defendant contended that the plaintiffs haveproduced 3 agreements dated 05.03.2010, 12.07.2010 and 15.09.2010,before the court. The plaintiffs have referred the 3 documents inevidence. All the 3 documents are written on stamp paper of Rs.100/-and the agreements are not registered before the Sub-Registrar Office.The documents required compulsory registration. Since, the documentsare not registered and not sufficiently stamped, as such, a prayer is madeas under:-“2.The plaintiff may kindly be directed to impound thedocuments i.e. agreements of dated 5-3-2010, 12-7-2010and 15-9-2010 produced and referred by plaintiff asinadmissible in evidence and oblige.” E.The trial court on consideration of the nature of documentsdirected impounding of documents dated 12.07.2010 and 15.09.2010 byholding that the documents are insufficiently stamped and the same beforwarded for stamping of the documents under the Maharashtra StampAct. Against the order passed by the trial court below the Exhibit 69, thepresent writ petition is filed. 5 wp 13782.20195.It is contended by the petitioners that the documents dated12.07.2010 and 15.09.2010 are not exigible to the stamp duty underArticle 25, Explanation 1, of the Maharashtra Stamp Act, 1958 and reliedupon the judgment of this court in the case of Balwantgir Ganpatgir Giriand Ors. Vs. Manasi Construction and Developers and Ors., 2007 (1)Bom. C. R. 2012.6.Per contra, the learned counsel for the respondent hadsubmitted that the documents are liable to stamp duty under Article 25,Explanation 1 of the Maharashtra Stamp Act.7.The learned counsel for the respondent relied upon thejudgment of the Hon’ble Apex Court in the case of Avinash KumarChauhan Vs. Vijay Krishna Mishra, 2009 (2) SCC 532, so also, in the caseof SMS Tea Estate Private Limited Vs. Chandmari Tea Company PrivateLimited, 2011 (14) SCC 66, to contend that if the document is notsufficiently stamped or insufficiently stamped, it cannot be taken inevidence.8.The learned counsel for the respondent has also relied uponthe judgment of the Nagpur Bench of this court in the case of SheshraoBhikaji Kale Vs. Damodhar Kukaji Pandhare, 2004 (2) ALL MR 880, tocontend that in the event the possession is agreed to be transferred the 6 wp 13782.2019agreement of sale is deemed to be a conveyance and, as such, stamp dutytherein is leviable in terms of Explanation-I to Article 25, Schedule-I readwith Sections 34 and 32A of the Maharashtra Stamp Act.9.On considered the rival submission, the issue that arises forconsideration in the present petition is, whether document dated12.07.2010 and 15.09.2010 are liable to the stamp duty under Article25, Explanation 1, of the Maharashtra Stamp Act. The Article 25,Explanation 1, of the Maharashtra Stamp Act, reads as under:-“Explanation I.— For the purposes of this article, where inthe case of agreement to sell an immovable property, thepossession of any immovable property is transferred oragreed to be transferred to the purchaser before theexecution, or at the time of execution, or after the executionof, such agreement then such agreement to sell shall bedeemed to be a conveyance and stamp duty thereon shall beleviable accordingly :Provided that, the provisions of section 32A shall applymutatis mutandis to such agreement which is deemed to bea conveyance as aforesaid, as they apply to a conveyanceunder that section :Provided further that, where subsequently a conveyance isexecuted in pursuance of such agreement of sale, the stampduty, if any already paid and recovered on the agreement ofsale which is deemed to be a conveyance, shall be adjustedtowards the total duty leviable on the conveyance :Provided also that, where proper stamp duty is paid on aregistered agreement to sell an immovable property, treatingit as a deemed conveyance and subsequently a conveyance 7 wp 13782.2019deed is executed without any modification then such aconveyance shall be treated as other instrument undersection 4 and the duty of one hundred rupees shall becharged.”10.The relevant portion of document dated 12.07.2010, readsas under:-“आज रोजी आम्हा दोघांमध्ये असे ठरले आहे कि(cid:22), किद. १२.०९.२०१०पय(cid:28)त लिलहून देणार हे लिलहून घेणार याना सदरील इमारतीची घेतलेली बायानारक्कम रुपये १४,००,००० /- (चौदा लक्ष) परत (cid:22)रतील व सदर रक्कमलिलहून घेणार यांना लिलहून देणार यांचे(cid:22)डून प्राप्त झालेनंतर सदर किदनां(cid:22)०५.०३.२०१० रोजी (cid:22)ेलेली सौडचिचट्ठी रद्दबातल होईल. जर किद.१४.०९.२०१० पय(cid:28)त लिलहून देणार हे वरील बायाना रक्कम परत (cid:22)रू श(cid:22)लेनाहीत तर किद. १५.०९.२०१० रोजी सदरील इमारतीच्या पकिहल्यामजल्याचा पूण9 ताबा हे लिलहून घेणार यांचे हक्कात (cid:22)रून देतील व त्यानंतरलिलहून घेणार हे सदर इमारतीवर असलेले महाराष्ट्र राज्य किवत्त मंडळाचेसंपूणण9 (cid:22)ज9 बेबा(cid:22) (cid:22)रतील. सदर (cid:22)ज9 बेबा(cid:22) झाल्यानंतर लिलहून देणार हेलिलहून घेणार यांचे हक्कात नोंदणी(cid:22)ृत किवक्रीखत (cid:22)रून देतील व सदार किवक्रीझाले त्यानंतर वीस किदवसापय(cid:28)त लिलहून घेणार हे लिलहून देणार याना उव9रिरतरक्कम देऊन लिलहून देणार यांचे(cid:22)डे असलेला तळमजल्याला ताबा घेतीललिलहून देणार हे पैसे प्राप्त झाल्यानंतर ताबा देण्यास (cid:22)ोणताही अडथळाआणणार नाहीत.”11.The relevant portion of agreement dated 15.09.2010, readsas under:-“हे कि(cid:22), आज रोजी खालील पंचासमक्ष शेवटी असे ठरले कि(cid:22), लिलहून देणार हेलिलहून घेणार यांचे ए(cid:22)ूण रक्कम १२,०००००/- ( बारा लाख रुपये फक्त)युकिनयन बँ(cid:22) ऑफ इंचिडया, शाखा अशो(cid:22) नगरच्या बँ(cid:22)ेच्या चे(cid:22)द्वारे देण्याचेठरले असून ते पुढील प्रमाणे आहे. १) चे(cid:22) क्र. ०००३७५ किद.२८/१०/२०१०, ४,००००० /- ( चार लाख रुपये फक्त) २) चे(cid:22) क्र.००६७६ किद.२९.१०.२०१० ४,०००००/- ( चार लाख रुपये फक्त) ३)चे(cid:22) क्र. ०००६७७ किद. ३०.१०.२०१० ४,०००००/- ( चार लाख रुपये 8 wp 13782.2019फक्त) नमूद चितन्ही चे(cid:22) आज रोजी खालील पंचासमक्ष लिलहून घेणार यानाकिदले आहे व ते चे(cid:22) मध्ये नमूद (cid:22)ेलेल्या तारखेप्रमाणे बँ(cid:22)ेत जाऊन पैसेवटवतील.हे कि(cid:22), वरील ठरल्याप्रमाणे किद. ३०.१०.२०१० पय(cid:28)त लिलहून घेणार यानारक्कम प्राप्त झाल्यानंतर यापूवX लिलहून घेणार यांच्यासोबत झालेले सव9 व्यवहारसंपुष्टात येतील.हे कि(cid:22), किद. ३०.१०.२०१० पय(cid:28)त वरील नमूद चितन्ही चे(cid:22)ची रक्कम लिलहूनघेणार याना प्राप्त न झाल्यास उव9रिरत रक्कम रु. १८,२८,०००/- ( अठरालाख अठ्ठावीस हजार फक्त) लिलहून घेणार हे लिलहून देणार याना देतील व किद.०१ नोव्हे. २०१० रोजी लिलहून घेणार हे प्रत्यक्ष जाय मोक्यावर जाऊन वरीलनमूद मालमत्तेचे (cid:22)बीजदार होतील. त्याबद्ल आज रोजी मी हमी देत असूनत्यास ताबा पावती किदली असे ग्राह्य धरण्यात यावे.हे कि(cid:22) वरील नमूद मालमत्तेवर (cid:22)ोणत्याही प्र(cid:22)ारचा शास(cid:22)ीय, किनमशास(cid:22)ीयअथवा खाजगी (cid:22)ज9 बोजा असेल तर बेबा(cid:22)ी (cid:22)रून देतील. तसेच इतरव्यवहार असेल तर ते सुद्धा किद. १/११/२०१० पय(cid:28)त दूर (cid:22)रण्याची सव9जबाबदारी लिलहून देणार यांच्यावर राहील.हे कि(cid:22), किद. १/११/२०१० पय(cid:28)त (cid:22)ज9 बोजा वगैरे किनल (cid:22)रून वरीलमालमत्तेचे लिलहून देणार यांच्या हक्कात रेजिजट्री (cid:22)रून देण्यात येईल.” 12.The perusal of the above said agreement dated 12.07.2010,it is clear that the agreement is of loan transaction and, in the event, by14.09.2010, the owner of the property does not return the amount takenby him of Rs.14,00,000/-, he would hand over the first floor of the suitproperty to the petitioner and, in the event, the further amount is notpaid then the other part of the suit property would be handed over to thepetitioners and registered sale deed would be executed of the property. 9 wp 13782.201913.In terms of Article 25, Explanation 1, of the MaharashtraStamp Act, if an agreement is entered into for sale of immovable propertyand in pursuance of the said agreement if possession of the property isparted with or is agreed to be parted with and the transaction apparentlyis in the nature of the sale then ad velorem stamp duty is payable on suchdocument. The stamp duty becomes payable on the document beingexecuted.14. Thus, the question that arises is whether in pursuance of theaforesaid documents the petitioners are either put in or agreed to put inpossession of the suit property and the agreement is in the nature of“agreement to sale immovable property”. The agreement has to be readas a whole and on reading the agreement, if it appears that thepetitioners are put in possession or agreed to be put in possession of theproperty under the agreement to sell then the document would beexigible to the stamp duty. Perusal of the document dated 12.07.2010would indicate that it is a loan transaction and, in the event, there is afailure of payment of money, the respondent would have become liable topart possession of the top floor of the suit property and the sale deedwould be executed of that part of the suit property. Thus, thedocument dated 12.07.2010, is not an agreement of sale to the suitproperty, so also, neither the petitioners are put in possession or agreed 10 wp 13782.2019to be put in possession of the property in pursuance of the agreement tosale and, thus, Article 25, Explanation 1, of the Maharashtra Stamp Actis not applicable to the agreement dated 12.07.2010.15.Coming to the agreement dated 15.09.2010, the same is alsoa monetary transaction i.e. failure to return the money would mean thatthe possession of the property would be handed over to the petitionersand on the same day the registered sale deed would be executed infavour of the petitioner. The possession of the suit property is not partednor it agreed to be parted with in pursuance of the agreement dated15.09.2010, whereas it is a document of loan transaction wherein failureto return the amount would entail liability of handing over the suitproperty to the petitioners by a registered document. As such, it cannotbe said that the agreement dated 15.09.2010 is in the nature ofagreement to sale.16.Reference can be to the case of Balwantgir Ganpatgir Giriand Ors. Vs. Manasi Construction and Developers and Ors., 2007 (1)Bom. C. R. 2012 of this court at para 6, 7 and 12 has held as under:-“6. The relevant clause of the agreement of sale dated03/3/2000 reads thus: Plain reading of the above quotedclause would reveal that the parties had agreed that it wouldbe the obligation of party No. 2 to obtain income taxclearance certificate at the time of completion of the sale. Itwas further agreed that party No. 1 would be delivered with 11 wp 13782.2019the possession of the property on the day of the sale thereofby personally remaining present in loco. It is this later partof the agreement which has led to the dispute in question. Asfar as the term of the agreement which discloses that thedelivery of possession was intended to be given on the day ofthe sale of the property, there is no dispute between theparties. It is also not in dispute that the expression: “the dayof the sale” means the day on which the deed of sale was tobe executed.7. Explanation-I to article 25 of schedule-I of the said Actreads thus:“For the purposes of this article, where in the case ofagreement to sell an immovable property, the possession ofany immovable property, is transferred or agreed to betransferred to the purchaser before the execution, or at thetime of execution, or after the execution of such agreementthen such agreement to sell shall be deemed to be aconveyance and stamp duty thereon shall be leviableaccordingly”.12. One more factor which is to be noted in the matter inhand is that the agreement for sale dated 03/3/2000discloses that the conveyance of the property was agreed forthe total consideration of Rs. 12,30,000/ and out of the saidamount, sum of Rs. 1,00,000/ was paid on execution of theagreement, the sum of Rs. 2,00,000/ was agreed to be paidon or before 25/3/2000 and the balance of Rs. 9,30,000/ by25/01/2001. The sale deed was agreed to be executed onlyafter payment of the entire amount. And only thereafterpossession was agreed to be delivered. These facts clearlydisclose that the document was clearly an agreement for salewhereby even the entire consideration which is agreed to bepaid was not paid on the date of the execution of theagreement. Though mere non payment of consideration byitself may not relieve the parties from their obligation to paystamp duty, in terms of explanation-I to Article 25 when thedelivery of possession of the property is made or agreed to 12 wp 13782.2019be in terms of the agreement, yet when these facts disclosethe intention of the parties as well as the conduct of theparties, both factors being relevant to ascertain the realnature of the transaction between the parties, and that thepossession was to be delivered after conclusion of sale deed,the agreement cannot be said to be conveyance within themeaning of the said expression under the explanation-I toArticle 25 of Schedule-I of the said Act.”17.From the perusal of the above documents dated 12.07.2010and 15.09.2010 it would reveal that the the documents are merely loantransactions and in the event if it is found that the petitioners fail tomake repayment of the money then the petitioners will have to part withpossession of the certain property, so also, will have to execute the saledeed qua the said properties. On the face of it, the document cannot betermed as an agreement to sell property and in any event no possession isparted under the agreement nor is agreed to be parted under theagreement. The possession would be parted in pursuance of the sale deedthat would be executed in the event of non returning of the loan amount.18.Thus, the documents mentioned dated 12.07.2010 and15.09.2010 are not amenable to the stamp duty under Article 25,Explanation 1 of the Maharashtra Stamp Act, 1958 and the documentsare wrongly directed to be impounded.19.Rule is made absolute in above terms.
Decision
13 wp 13782.201920.The writ petition is allowed and disposed of accordingly. [ARUN R. PEDNEKER, J.]marathe