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Andhra Pradesh High Court
Judges : A.RAMANUJULU NAIDU, P.CHENNAKESAVA REDDY, PUNNAIAH
T.G.Thimmaiah Chetty - Appellant
Versus
District Registrar, Kurnool - Respondent
R.C. No. 113/1979
Decided On : 07-05-85
Advocates Appeared :
Mr. N. Rdmamohana Rao
Held : In this case, there was a division in severality in as much as the original common ownership of five had ceased and a different ownership has been created. The property was divided into three parts, one each to two members of the same branch and the other to three persons jointly. The award of the arbitrators is undoubtedly an instrument of partition within the meaning of Sec. 2(15) of the Indian stamp Act The document clearly states that the property was divided into three shares out of which two were given to the individual a and the residue left joint. When once it is held that the award is an instrument of partition, Art 40 in Schedule 1-A is directly attracted and as per the said Article, the largest share must be eliminated and the stamp duty is chargeable on the separated shares. The intention seems to be to tax the share or shares divided off, and not the residue.
R.C. Answered Accordingly.
Based on the legal document provided, the key points are as follows:
The case involves a dispute over the stamp duty payable on a partition of immovable property among members of a joint Hindu family, where an award by arbitrators was involved (!) .
The arbitration award divided the property into three parts: two individual shares allocated to specific members and a third larger share allocated jointly to three members, with the award recognized as an instrument of partition (!) .
The central legal question concerns whether the award constitutes a partition in severalty, which affects the stamp duty liability, and if so, how the duty should be calculated (!) (!) .
The relevant legal provisions define an instrument of partition as any instrument that divides property in severalty, including awards by arbitrators directing such a partition (!) .
The applicable stamp duty is governed by a specific article that states the duty is on the value of the separated shares, with an emphasis on the largest remaining share after partition being eliminated from taxation (!) (!) .
The court held that the award clearly resulted in a division into separate shares, with the residue remaining jointly owned, thus qualifying as an instrument of partition (!) (!) .
The largest share, which was the residue, was to be excluded from stamp duty calculation, and duty was only payable on the separated shares, i.e., the smaller individual shares allocated to specific members (!) .
The court rejected the contention that the entire property should be deemed divided into five shares with only the largest excluded, emphasizing that the actual division described in the award must be the basis for the duty calculation (!) .
Ultimately, the stamp duty was to be calculated only on the value of the separated shares, not on the residue, aligning with the legal interpretation of the relevant statute and article (!) .
The court ordered the reference to be answered accordingly, with no costs awarded but with a specified advocate's fee (!) .
These points summarize the legal principles and the court's reasoning regarding the nature of the partition, the application of stamp duty, and the interpretation of relevant statutory provisions.
( 1 ) THIS is a reference under S. 57 (1) of the Stamp Act.
( 2 ) PETITIONERS 1 to 3, the father of the 4th Petitioner late T. G. Viswanatha Chetty and the father of the 5th petitioner late T. G. Padmanabha Chetty are brothers. All the five members are the sons of late T. G. Pompaiah. They are members of undivided Hindu family. After the death of T. G. Padmanabha Chetty, the major sons, the 4th and 5th petitioners herein were participating in the family business and other affairs as representatives of their respective branches. To distribute and divide the immoveable properties, the assets and liabilities they have appointed five arbitrators, who passed an award on 2-1-1976. The arbitrators effected a division and allotted the A Sch. properties of the value of Rs. 46,700. 00 to the 1st petitioner, and B Sch. properties of the value of Rs. 1,20,000. 00 to the 3rd petitioner. The residue contained in C Sch. Of the value of Rs. 6,15,900/- was kept towards the joint share of petitioners 2, 4 and 5. When the award engrossed on a stamp paper of Rs. 5,710. 00 was submitted for registration, it was impounded by the Sub Registrar on the ground that the stamp duty payable was Rs. 20,550. 00 and sent the same to the District Registrar, Kurnool. By proceedings dt. 17-7-1978, the District Registrar, Kurnool affirmed the decision of the Sub Registrar after hearing all parties concerned. The petitioners went up in revision before the Commissioner of Survey, Settlements and Land Records (Chief Controlling and Revenue Authority ). Before the Commissioner, it was mainly contended that the stamp duty payable was only on the total value of A and B Sch. properties at the rate mentioned in Art. 40 of Sch. I-A of the Stamp Act and that the value of C Sch. i. e. , Rs. 6,15,900. 00 which represented the largest share remaining after the property is partitioned should be eliminated and A and B Sch. properties must be deemed to be the properties separated from the C Sch. properties. The Commission opined that stamp duty was payable only on the value of A and B Sch. and not on C Sch. and referred the following question for our opinion. "though division is one, among five brothers one share is given to one brother, one share to another brother, but the third share is given to three brothers, would this be called division in severalty or not. "
( 3 ) WE are afraid that the question is not happily framed. The point for consideration is whether the award is an instrument of partition involving division is severalty and if so, what the stamp duty payable ?
( 4 ) THE learned Counsel for the petitioner Mr. Rammohana Rao, submitted that there was division in severalty and as such the value of the largest share should be eliminated for the purpose of stamp duty.
( 5 ) ON the other hand, the learned Government Pleader supported the view taken by the District Registrar that the entire property must be deemed to have been divided into five shares and only the value of largest share is to be excluded and stamp duty should be paid on the value of the remaining four shares.
( 6 ) TO appreciate the rival contentions and to decide the principal question, it is necessary to refer to the definition of Instrument of partition contained in S. 2 (15) of the Stamp Act. It is as follows :-"2 (15) :- Instrument of partition means any instrument whereby co-owners of any property divide to agree to divide such property in severalty and includes also a final order for effecting a partition passed by any revenue authority or any Civil Court and an award by an arbitrator directing a partition. "the definition contemplates that there should be a division of property in severalty. When does a division in severalty occur ? This point came up for consideration before a Special Bench of the Madras High Court consisting of three Judges, in Board of Revenue v. Alagappa, AIR 1937 Mad 308 (SB) Varadachariar, J. , speaking for the Court observed that where the original common owne
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