Allowed

Alpana Appasaheb Pawar v. Vijay Yallappa Shinde and Anr.

Bombay HC29 Apr 2010WP/3318/2009

Case brief

AI extract

What is this about?

In a writ petition challenging a Trial Court order that refused to impound an unstamped agreement for sale, the High Court held that Explanation (I) to Article 25 of the Bombay Stamp Act, 1958 applies because possession was to be handed over before conveyance execution. The Court quashed the impugned order and directed the Trial Court to impound the document.

What did the court decide?

The impugned order quashed; agreement held inadequately stamped; Trial Court directed to impound document under Section 33.

Alpana Appasaheb Pawar Vs Vijay Yallappa Shinde and Anr. — Cheque Dishonour | Bombay HC (2010)

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IN THE HIGH COURT OF JUDICATURE AT BOMBAY CIVIL APPELLATE JURISDICTION

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WRIT PETITION NO. 3318 OF 2009

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Sou. Alpana Appasaheb Pawar.

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.. Petitioner

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Shri Vijay Yallappa Shinde & Anr. .. Respondents

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Shri Ashutosh M. Kulkarni for the Petitioner. Shri Umesh R. Mankapure for the Respondents.

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CORAM : A.S.OKA, J. DATE : 29TH APRIL 2010

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P.C:

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. Heard learned counsel appearing for the Petitioner and the learned counsel appearing for the Respondents.

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The Petition was taken up for final disposal at the admission stage. The Petitioner in this Petition is the 1^st Defendant and the 1^st Respondent is the original Plaintiff. The suit has been filed by the 1^st Respondent for specific performance of an agreement for sale dated 26^th November, 1996. The 1^st Respondent has also relied upon an Agreement dated 28^th March, 2000 executed by the parties. Application was made on behalf of the Petitioner purporting to be an application under Section 33 and Section 34 of the Bombay Stamp Act, 1958 ( hereinafter referred to as the said Act ).

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It was contended in the said application that the agreement

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for sale dated 28^th March, 2000 at Exhibit – 51 will attract the stamp duty as per the Article 25 of the Schedule to the said Act and as the document is not duly stamped, the same be impounded.

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The said application has been disposed of by the Trial Court by the impugned order dated 13^th February, 2009. The Trial Court observed that the document is on a stamp paper of Rs.20/ and the possession of the suit premises has not been handed over to the 1^st Respondent. In short, conclusion of the Trial Court is that the document was duly stamped.

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The learned counsel appearing for the Petitioner has placed on record a xerox copy of the agreement. He relied upon the clause (4) of the Agreement and submitted that the possession was agreed to be handed over before the conveyance is executed. He, therefore, submitted that Explanation – (I) to Article 25 of the said Act was squarely applicable and the stamp duty payable will be in accordance with Article 25. He relied upon the decision of the Apex Court in the case of Veena Hasmukh Jain & Anr. v. State of Maharashtra & Ors., [AIR 1999 SC 807 ].

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The learned counsel appearing for the 1^st Respondent has placed reliance on a decision of this Court in the case of Sanjay Shrikishanji Somani & Anr. v. Vishnupant Shankarrao Shahane, [ 2007(6)Mh.L.J. 550]. He submitted that at this stage, the Trial Court need not go into the aspect of adequacy of stamp duty. He submitted that the document clearly shows

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that the possession was to be handed over on execution of the conveyance. He, therefore, submitted that Explanation – (I) to Article 25 will not apply in view of the law laid down by this Court in the case of Balawantgir Ganpatgir Giri through his LRs Nanibai wd/o Balwant Giri and Others [ 2006(5) Mh.L.J. 306 ].

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I have given careful consideration to the submissions. The document purports to be an agreement for sale. It is typed on stamp paper of the denomination of Rs.20/. Article 25 of Schedule –(I) provides for stamp duty payable on a conveyance. Explanation (I) provides that where in the case of an agreement to sell an immovable property, the possession of any immovable property is transferred or agreed to be transferred to the purchaser before the execution, or at the time of execution or after the execution of such agreement then such agreement to sell shall be deemed to be a conveyance and stamp duty thereon shall be leviable accordingly. The said explanation has been dealt with by a Division Bench of this Court in the case of Balawantgir Ganpatgir Giri (supra). This Court held that the agreement which provides for the delivery of possession on execution of the Sale Deed will not be covered by the Explanation (I). In the present case, perusal of the Clause (4) of the said Agreement shows that what is agreed is that the possession was to be handed over by the Petitioner or the original owner by agreement/sale receipt/possession receipt. It is further provided that at the time of completion of sale, the possession will be converted into the possession as the owner. There is no clause in the

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agreement providing that the possession will handed over at the time of execution of conveyance or thereafter. In fact, the clause (4) clearly contemplates that the possession will be handed over prior to the execution of conveyance and the possession will be converted into the possession as the owner on execution of the conveyance. In case of an agreement for sale which provides for delivery of possession before execution of conveyance, the Explanation (I) to Article 25 will be squarely applicable and the stamp duty will be payable as per Article 25 of the said Act. In such a case, the law takes care by providing that when the conveyance is executed subsequently, the stamp duty paid on the agreement will be treated as stamp duty payable on the conveyance.

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Therefore, on plain reading of Clause (4) of the agreement, Explanation (I) to Article 25 was squarely applicable. The document has not been stamped as a conveyance in accordance with the Article 25 of the said Act.

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The document was sought to be tendered in evidence by the 1^st Respondent. In view of subsection (1) of Section 33 of the said Act, it was the duty of the Court to impound the same. After the document is impounded, the same can be admitted in evidence provided the procedure laid down in the Proviso to Section 34 of the said Act is followed. A copy of the document will have to be sent to the Collector for adjudication in accordance with Section 32A(3) of the said Act.

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The Full Bench of this Court in the case of Hemendra Rasiklal Ghia v. Subodh Mody [2008(6) Mh.L.J. 886 ] has held that when the objection on the ground of deficiency of stamp duty is raised, the same has to be dealt with before the document is marked as an Exhibit. In any case, under Section 33 of the said Act, it is the duty of the Court to impound the said document once it is found that it is not duly stamped.

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