Allowed

K. Sudhaker Reddy v. M/s. Sudha Constructions

Telangana HC19 Dec 2011CRP/3352/2011

Case brief

AI extract

What is this about?

In a civil revision under Article 227, this court set aside an order holding a flat sale agreement insufficiently stamped under Article 6(B) of Schedule 1-A of the Indian Stamp Act, 1899, directing the lower court to admit the document in evidence.

What did the court decide?

Order dated 14.12.2010 setting aside the admissibility of the agreement due to insufficient stamp duty under Article 6(B) is set aside and the agreement is to be received in evidence.

K. Sudhaker Reddy Vs M/s. Sudha Constructions — Specific Performance | Telangana HC (2011)

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*** THE HON’BLE Ms. JUSTICE G. ROHINI**

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+ CIVIL REVISION PETITION No. 3352 OF 2011

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%Date: 19.12.2011

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# K.Sudhakar Reddy … Petitioner And $ 1. M/s. Sudha Constructions, rep. by its Managing Partner Sri V. Srinivasa Rao And 2 others. .. Respondents ! Counsel for the petitioner : Sri D.V. Srinivasa Rao ^ Counsel for the respondents : Sri V. Madhusudhana Rao Sri Prabhu Nath Vasireddy <GIST: >HEAD NOTE: ? Cases cited - NIL -

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THE HON’BLE Ms. JUSTICE G. ROHINI CIVIL REVISION PETITION No. 3352 OF 2011

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Date: 19.12.2011

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Between:

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K.Sudhakar Reddy … Petitioner And 1. M/s. Sudha Constructions, rep. by its Managing Partner Sri V. Srinivasa Rao And 2 others. .. Respondents

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THE HON’BLE Ms. JUSTICE G. ROHINI CIVIL REVISION PETITION No. 3352 OF 2011

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O R D E R :

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The revision petitioner is the plaintiff in O.S.No.2875 of 2006 on the file of the Court of the VII-Addl. Senior Civil Judge, Rangareddy District at L.B. Nagar. This Civil Revision Petition is preferred under Article 227 of the Constitution of India aggrieved by the order dated

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14.12.2010 passed by the Court below holding that the document dated 16.12.2004 produced by the plaintiff in evidence is insufficiently stamped and requires payment of proper stamp duty and penalty under Article 6(B) of Schedule 1-A of the Indian Stamp Act, 1899.

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The facts, in brief, are as under:

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The revision petitioner/plaintiff filed O.S.No.2875 of 2006 against the respondents herein/defendants for specific performance of the “agreement of sale and construction” dated 16.12.2004. When the said agreement was sought to be marked as Ex.P-1 through P.W.1, an objection was raised by the counsel for the defendants as to the admissibility of the said document on the ground that it was insufficiently stamped. The said objection was upheld by the court below by order dated 14.10.2010 and the plaintiff/ revision petitioner was directed to take steps for payment of proper stamp duty and penalty as required under Article 6(B) of Schedule 1-A of the Indian Stamp Act, 1899. The said order is under challenge in this present Revision petition filed by the plaintiff.

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I have heard the learned counsel for both the parties and perused the material available on record, including the document in question dated 16.12.2004.

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Admittedly the document in question was executed on stamp papers worth Rs.100/-. The document was titled as “agreement of sale and construction”. Under the said document, the defendant No.1 / 1^st respondent herein who was described as ‘builders/developers’ proposed to construct a building in and over the plots bearing Nos.33 & 34 of the approved layout situated in Sy.No.9/1 of Saroornagar Village in the name and style as ‘The Majesty Towers’ and agreed to sell Flat No.405 admeasuring 900 sq. feet. to the plaintiff/revision petitioner for a sale consideration of Rs.8,50,000/-. The recitals of the document further show that the 1^st defendant has already entered into an agreement for development dated 8.3.2002 with the defendants 2 and 3 who are the owners of the land upon which the building is

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proposed to be constructed. In Clause-1 of the suit agreement, dated 16.12.2004, it was mentioned that out of the total sale consideration a sum of Rs.1,00,000/- shall be paid at the time of the sale agreement and the balance Rs.7,50,000/- shall be paid at the time of registration. As per Clause-3 of the said agreement, the 1^st defendant has to complete the construction of the flat within 12 months from the date of the agreement and as per Clause-18 the 1^st defendant shall hand over the possession of the flat to the plaintiff after receiving the final installment of the sale consideration. The specific case of the plaintiff is that he paid Rs.1,00,000/- on the date of the agreement dated 16.12.2004 itself. It is alleged that in spite of the repeated requests, the defendant No.1 failed to complete the construction of the flat within the time agreed upon and went on postponing the registration of the sale deed. Hence the suit for specific performance of the contract.

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On a careful reading of the recitals of the suit agreement, dated 16.12.2004, it is clear that it is nothing but a simple agreement for sale of Flat No.405 in The Majesty Towers proposed to be constructed by the defendant No.1. It is also not in dispute that the possession of the said flat has not yet been delivered to the plaintiff/revision petitioner.

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Article 6(B) of Schedule 1-A of the Indian Stamp Act, 1899 provides for stamp duty to be paid on an agreement relating to construction of a house or building including a multi-unit house or building or unit of apartment / flat / portion of a multi-storeyed building or for development / sale of any other immovable property. In respect of such an agreement, stamp duty payable has been prescribed as 5% on the market value or the estimated cost of the proposed construction / development of such property 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.

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It is apparent that Article 6(B) is applicable only to the

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agreements for development / sale in relation to construction of a house or building, including a multi-unit house or building.

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The suit agreement dated 16.12.2004 sought to be marked as Ex.P-1 is not an agreement for any of the purposes mentioned under Article 6(B). As noticed above, it is a simple agreement to sell one of the flats proposed to be constructed by the defendant No.1 in terms of the development agreement dated 8.3.2002 that was executed between the defendant No.1 on one part and the defendants 2 & 3 on the other part.

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Hence, the Court below committed an error in holding that the document in question was insufficiently stamped. Accordingly, the order under Revision is herby set aside and the Civil Revision Petition is allowed with a direction to the Court below to receive the agreement dated 16.12.2004 in evidence without insisting on payment of additional stamp duty, if it is otherwise admissible under law. No costs.

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______________ G. ROHINI, J

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Date: 19.12.2011 Note:- LR copy to be marked. (B/O) GBS

K. Sudhaker Reddy v. M/s. Sudha Constructions

Case brief

What is this about?

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K. Sudhaker Reddy v. M/s. Sudha Constructions

Case brief

What is this about?

What did the court decide?

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