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1972 Supreme(AP) 52
Andhra Pradesh High Court
Judges : A.V.KRISHNA RAO
K.R.Mallesha - Appellant
Versus
Ramnath Gajanand - Respondent
Decided On : 03-20-72
An agreement between partners for the dissolution of partnership and retirement of one partner is not a conveyance requiring registration under Section 17(1)(d) of the Registration Act.
Headnote:
STAMP ACT - AGREEMENT AND RECEIPT - CONSTRUCTION - AGREEMENT BETWEEN PARTNERS FOR DISSOLUTION OF PARTNERSHIP AND RETIREMENT OF ONE PARTNER - WHETHER A CONVEYANCE - RECEIPT FOR MONEY PAID TO RETIRING PARTNER - WHETHER REQUIRES STAMP DUTY - INTERPRETATION OF STAMP ACT PROVISIONS.
Fact of the Case:
A partnership between the plaintiff and the defendant was dissolved on 5-6-1968, with the plaintiff retiring from the partnership and receiving Rs. 10,000 from the defendant. An agreement and a receipt were executed on the same day, evidencing the dissolution and the payment, respectively. The defendant sought to introduce these documents in evidence during a subsequent lawsuit, but the court held that the agreement required registration under Section 17(1)(d) of the Registration Act and that the receipt required additional stamp duty.
Finding of the Court:
The court held that the agreement was not a conveyance requiring registration under Section 17(1)(d) of the Registration Act but was merely a deed of dissolution of partnership. The court also held that the 10 np stamp paid on the receipt was sufficient and that its admissibility should not be linked to the deed of agreement.
Issues: 1. Whether the agreement between the partners amounted to a conveyance requiring registration under Section 17(1)(d) of the Registration Act. 2. Whether the receipt for the money paid to the retiring partner required additional stamp duty.
Ratio Decidendi: 1. The court interpreted the agreement as a deed of dissolution of partnership, noting that it did not transfer any interest in the partnership assets from the retiring partner to the continuing partner but merely recorded the terms and conditions of the dissolution. 2. The court held that the 10 np stamp paid on the receipt was sufficient, as the receipt did not require additional stamp duty under the Stamp Act.
Final Decision: The court allowed the revision petition, setting aside the lower court's order and holding that the agreement should be stamped only as a deed of dissolution of partnership and that the 10 np stamp paid on the receipt was sufficient.
( 1 ) THE petitioner is the defendant. The Civil Revision Petition raises a question of construction regarding a certain agreement and also a receipt and the admissibility of those documents and the stamp duty payable in respect of those documents.
( 2 ) THE relevant facts are that the plaintiff and the defendant ran a tea stall business under the name and style of "ramnath Tea stall". There is a deed of partnership dated 6-4-1967. This partnership was shortlived and on 5-6-1968 the plaintiff took a sum off Rs. 10,000. 00 from the defendant and had retired from the partnership on that day : there was what is called an agreement executed by the plaintiff in favour of the defendant. On the same day there was a receipt for Rs. 10,000. 00 also passed by the plaintiff in favour of the defendant acknowledging the receipt for Rs. 10,000. 00. The plaitiff has filed the present suit for dissolution of partnership.
( 3 ) AFTER the trial commenced, the defendant had sought to put in evidence both the agreement and the receipt. It was objected to by the respondent on the ground that the agreement dated 5-4-1968 was a conveyance in the eye of law and that it was not a mere deed of dissolution and that it also required registration under Section 17 (1) (d) of the Registration Act. So far as the receipt was concerned, its admissibility also was questioned on the ground that the stamp duty of 10 np. paid on the document was not sufficient. The court below pronounced an order on 18-11-1972 holding that neither the agreement nor the receipt was compulsorily registrable under Section 17 (1) (d) of the Registration Act. But it was held by that Court that the agreement amounted to a conveyance and has to be stamped as such, under Section 2 (10) of the stamp Act. It was contended by the petitioner that it was merely a deed of dissolution of partnership and he need only pay a penalty on the deficit stamp duty. It may be noticed that the agreement was only on four stamps of the value of Rs. 2-50. So far as the receipt was concerned, it was found by the Court that the revenue stamp of 10 np. affixed was sufficient and that it did not require any further stamp only in case the agreement is stamped as a conveyance under Art. 23 of Schedule I of the Indian Stamp Act.
( 4 ) IN this revision petition by the defendant, the correctness of the conclusions of the Court below both regarding the agreement and the receipt are sought to be challenged. The agreement between the parties is to the following effect :-- AGREEMENT This Agreement executed by : 1. Ramanath Gajanand, son of Gajanand, aged years, Hindu, Ranjgunj, Secunderabad, herein after called the First Party : In favour of2. K. R. Mallesha son of Ramabharosa, aged 37, Hindu resident of 9/b, Gandhinagar, Secunderabad, hereinafter called the Second party. Whereas the parties herein have been running a tea stall under the name and style of "ramanath Tea Stall" from 3-4-1967 under a partnership deed dated 6-4-1967: Whereas the first party desired to retire from the partnership and entrust the entire business of the second party only by making him sole proprietor by taking his share of assets. NOW THIS AGREEMENT WITNESSETH:1. That the First Party hereby declares and assets that he has today received a total sum of Rs. 10,000. 00 (Rupees ten thousand) only as and towards his share or profit, adda, bardan and tenancy rights etc. and hereby retires from the partnership and the second party herein has become the "sole proprietor" of the said tea stall opposite to mulgi No. 8552, Ranigunji, Jinwala Compound, Ranigunj, Secunderabad. 2. The first party hereby declares that he shall have no right, title, interest or claim of whatsoever nature either in the said tea stall or in the assets or liabilities of the said tea stall on and from today and that the Second Party had become the sole proprietor of the same from today. 3. The first party shall not be responsible of liable for any debts, assets
