JUDGMENT

VENKATARAMIAH J.:— The appellant in Civil Appeal No. 988 of 1972 is Somaiya Organics (India) Ltd. (hereinafter referred to as Somaiya Organics) and the appellant in Civil Appeal No. 989 of 1972 is Godavari Sugar Mills Ltd., (hereinafter referred to as the Godavari Sugar Mills). These two appeals are filed under Art. 136 of the Constitution against the judgment of the High Court of Allahabad in Miscellaneous Reference No. 466 of 1969 (reported in AIR 1972 All 252) which was a reference made by the Chief Controlling Revenue Authority, Board of Revenue, Uttar Pradesh under S. 57 of the Indian Stamp Act, 1899 (hereinafter referred to as the Act) as in force in the State of Uttar Pradesh involving the question relating to the proper stamp duty chargeable in respect of a transaction under which certain lands and buildings belonging to Godavari Sugar Mills were sold in favour of Somaiya Organics. The facts of the case are these.

2. Godavari Sugar Mills was the owner of a distillery plant consisting of the lands, buildings, machinery etc. situated in the village called Basahia alias Captainganj in the district of Deoria, State of Uttar Pradesh. It had entered into a technical collaboration agreement with M/s. Melle Bezons and in that connection pursuant to the resolution of its Board of Directors passed on October 23, 1964 it had obtained a deferred payment guarantee up to the limit of Rs. 65 lakhs from the Punjab National Bank Ltd., in favour of M/s. Speichim, Paris under an equitable mortgage by deposit of title deeds of its property including the lands and buildings referred to above. That on March 2, 1962 Godavari Sugar Mills had resolved to sell the lands, buildings and machinery to Somaiya Organics for a consideration of Rs. 36,64,678/- and pursuant to the said resolution a sale deed was executed on May 20, 1968. The sale deed recited that out of Rs. 36,64,678/-, referred to above, Rs. 28,88,678/- represented. the price payable for the machinery, vehicles, stores, finished goods etc. being all moveable items, the sale and transfer of which had been completed by the parties to the document by manual delivery and the balance of Rs. 7,76,000/-, represented the price payable in respect of the lands and buildings of the sugar factory as described in Schedule A attached to the said document and that the said document was being executed for the purpose of conveying title in respect of the lands and buildings free of all encumbrances. The above Rs. 7,76,000/- was to be paid not in cash but in the form of allotment of 7760 fully paid-up equity shares of the face value of Rs. 100/- each. The document further stated that in case the vendee was to pay any amount on account of any charge or incumbrances created by the vendor on the properties sold, the vendee would be entitled to get back the entire sale consideration with interest at 1 per cent per month from the vendor. That on October 28, 1968 a declaration was signed for and on behalf of the Godavari Sugar Mills by the two Directors of the Godavari Sugar Mills who had been. authorised to do so which had the effect of modifying or correcting certain error which had crept into the document dated May 20, 1968. It stated inter alia:

"3. On the 15th day of December, 1964 the company deposited with the Punjab National Bank Ltd., (hereinafter referred to as "the Bank") the title deeds of the Company aforementioned immoveable property with intent to create a security in favour of the Bank by way of equitable mortgage. The creation of such security by way of equitable mortgage was authorised by a resolution of the Board of Directors of the Company passed on the 23rd day of October, 1964. A list of title deeds so deposited with the Bank is set out. in the Second Schedule hereto.

4. By a Deed of Sale dated the 20th day of May, 1968 and made between the Company of the one part and Messrs. Somaiya Organics (India) Limited (hereinafter for the sake of brevity called "the S. 0. I. L.") of the oth