IMPORTANT POINT
Agreement to sell with possession is conveyance.

Judgment :-

Chandramauli Kr. Prasad, J.

Plaintiffs filed a suit for specific performance of contract, possession and permanent injunction in respect of un-irrigated land having an area of 0.506 hectares bearing Survey No. 16012 in Village Arniapitha situated within Tahsil Jaora in District Ratlam in the State of Madhya Pradesh. It is founded on an agreement to sell dated 27th December, 2000. It is the case of the plaintiffs that the properties in question were delivered to them on payment of the part consideration money in pursuance of the agreement to sell and such a recital finds place in the said agreement. Paragraph 1 of the agreement to sell reads as under:

“1.That while selling the aforesaid land I the seller, have received Rs. 1,15,000/- (Rupees one lac fifteen thousand) cash as a token amount before the witnesses and, by remaining present at the spot, actual physical possession has been handed over to the purchaser, and after receiving remaining sale consideration amount Rs. 25,000/- (Rupees twenty five thousand) from the purchaser within a year I, the purchaser, will get the sale deed of the said land registered in the name of the purchaser.”

The defendants in the written statement, however, denied the assertion of the plaintiffs and stated that no agreement to sell was ever executed and possession given. On the basis of the pleading and the written statement, the trial court framed several issues. During the course of the trial the agreement to sell was sought to be proved and admitted in evidence by the plaintiffs’ witness Shankarlal. This was objected to by defendant no. 1. Its admissibility was questioned on the ground that the agreement to sell in question contains a recital that possession has been handed over to the purchaser and, therefore, it is a conveyance over which the stamp duty as indicated in Schedule 1A of the Indian Stamp Act, 1899 as substituted by M.P. Act 22 of 1990 is required to be affixed. It is pointed out that the agreement to sell in question is on a stamp paper of Rs. 50 only. The submission made by defendant no. 1 found favour with the trial court and it held the agreement to sell to be inadmissible in evidence as it has not been sufficiently stamped. It further observed that if the plaintiffs want to produce the said document in evidence then they can make proper application as envisaged under Section 35 of the Indian Stamp Act, hereinafter referred to as ‘the Act’. While doing so, the trial court observed as follows:

“………Therefore, it is found that sale agreement dated 27.12.2000 due to mention of possession being handed over, should be stamped like a conveyance. In the sale agreement the cost of the land is mentioned as Rs.1,40,000 and its 7 ½ per cent comes to Rs. 10,500/-. Therefore, it is concluded that the sale agreement can be admissible in evidence only on being on stamp of Rs. 10,500/-. Therefore, it is concluded that the sale agreement is not properly stamped, therefore, not admissible in evidence. Thus, objection of defendant No. 1 is allowed sale agreement dated 27.12.2000 is refused to be admitted in evidence. If the plaintiff wants to produce the said documents in evidence then he may make proper application under Section 35 of the Stamp Act on the next date.”

Plaintiffs challenged the aforesaid order before the High Court in a writ petition filed under Article 227 of the Constitution of India, inter alia, contending that when defendants themselves have asserted that possession of the property was not delivered, the recital in agreement is of no consequence. It was also pointed out that plaintiffs themselves have claimed relief of possession, which obviously means that they are not in possession and when this fact is taken into consideration, the view taken by the trial court appears to be erroneous. The High Court by its order dated 27th February, 2008 passed in Writ Petition No. 7237 of 2007 accepted this contention and held the agreement to sell to be admissible in evidence. Th