IN THE HIGH COURT OF ANDHRA PRADESH AT AMARAVATI
RAVI CHEEMALAPATI, J.
Mogali Satyanarayana Reddy – Appellant
Versus
M/s. Srinilayam, Rep. by its Managing Partner A. Raghavendra And two others – Respondent
Civil Revision Petition No.209 of 2023
Decided on : 04-07-2023
LEASE - Civil Procedure - Order-39, Rules 1 and 2 - Section 2(7) of the Registration Act - Article 21 of the Schedule 1A of the Indian Stamp Act, 1899
Fact of the Case:
The respondents filed a suit against the petitioner for permanent injunction. The respondents sought to mark a lease/rent agreement, objected by the petitioner. The trial Court overruled the objection and held the document admissible. The petitioner filed a Civil Revision Petition invoking the jurisdiction of the Court under Article 227 of the Constitution of India.
Finding of the Court:
The Court found that the subject document was only an executory agreement and not an executed agreement, and thus admissible in evidence. However, subsequent events transformed the document into an executed agreement, making it a lease deed. The Court also held that the document required registration and sufficient stamp duty, and the trial Court failed to collect deficit stamp duty and penalty as required by law.
Issues: The issues revolved around the nature of the subject document, whether it was an executory or executed agreement, and the requirement for registration and stamp duty.
Ratio Decidendi: The Court's decision was influenced by the interpretation of the terms and conditions of the document, subsequent events, and the legal provisions of the Transfer of Property Act, Registration Act, and Indian Stamp Act.
Final Decision: The Civil Revision Petition was allowed, the impugned order was set aside, and the trial Judge was directed to impound the document and collect deficit stamp duty and penalty. The subject document could be marked as an exhibit subject to the collection of deficit stamp duty and penalty as required by law.
ORDER :
This Civil Revision Petition is filed aggrieved by the docket orders dated 28.12.2022 passed in I.A.No.621 of 2022 in O.S.No.124 of 2022 by the learned Principal Senior Civil Judge, Ananthapuram.
2. The petitioner is the defendant and the respondents are the plaintiffs in O.S.No.124 of 2022 filed for permanent injunction.
3. The respondents filed I.A.No.621 of 2022 under Order-39, Rules 1 and 2 of the Code of Civil Procedure for grant of ad interim injunction pending disposal of the injunction suit filed by them. In the said application, when the respondents sought to mark the lease/rent agreement dated 10.07.2019, the petitioner objected the same on the ground that since the said document purports lease of the property for a period of 10 years, the same cannot be marked as an exhibit, being unregistered and insufficiently stamped. Consequently, the trial Court, upon hearing both the parties and upon considering the decisions relied on by them in support of their respective contentions, overruled the objection raised by the petitioner holding that the document sought to be marked is only an executory agreement but not a lease or agreement for lease and thus the same is admissible in evidence and the same can be marked.
4. Aggrieved thereby, the petitioner filed this Civil Revision Petition invoking the jurisdiction of this Court under Article 227 of the Constitution of India.
5. Heard Sri Virupaksha Dattathreya Gouda, learned counsel, for Sri Vivekananda Virupaksha, learned counsel for the petitioner, and Sri Medapati Santosh Reddy, learned counsel for the respondents.
6. Sri Virupaksha Dattathreya Gouda, learned cousnel, in elaboration would submit that the subject document since stipulates all the terms and conditions a valid lease deed ought to contain, such as-tenure of lease and its extension after completion of the initial tenure of lease of 10 years, quantum of rent and its periodical enhancement and all the other rights and liabilities of the parties thereto, thus the said document is a Lease Deed. Even if the said document is treated as an agreement to lease, it comes within the sweep of ‘lease’ as per section 2(7) of the Registration Act and thus the document requires registration and the same is to be sufficiently stamped as per Section 29(c) and Article 21 of the Schedule 1A of the Indian Stamp Act, 1899.
The learned counsel would further submit that, nomenclature of the document is immaterial, but its terms and conditions would determine the nature and character of the document and the Court must gather the intention of the parties from embodiment of the document. The subject document clearly spells out the intention of the parties thereto is to treat the document as a lease deed but not as a proposed agreement to lease. However, the lower court swayed away by the nomenclature of the document and also upon misconception of the facts of the case as well as the pronouncements relied on by the respective parties committed a grave error in coming to the fallible conclusion that the subject document is only an executory agreement but not lease/agreement to lease and thus admissible in evidence. The learned counsel would further submit that, the Court below has shirked away the duty cast upon it to ensure collection of deficit stamp duty as envisaged in section 33 of the Stamp Act. The order impugned is unsustainable, irrational, suffers from patent irregularity and perverse. Hence, sought interference of this Court and prayed to allow the Civil Revision Petition.
7. Per contra, Sri Medapati Santosh Reddy, learned counsel for the respondents, would submit that, the duties of the first part to fourth part (lessors) to the subject document clarifies that they are not even owners of the building property and that construction of the tenanted building was not completed in all aspects as on the date of the execution of the document. This, coupled with the nomenclature of the document, speaks volumes of the intention of the p
The main legal point established in the judgment is the interpretation of the nature of the document, the requirement for registration and stamp duty, and the duty of the Court to ensure compliance w....
An agreement for a future lease contingent on construction does not constitute a lease and cannot be impounded for stamp duty until the property exists.
The main legal point established in the judgment is the admissibility of unregistered and insufficiently stamped documents for collateral purpose, the application of the provisions of the Stamp Act, ....
Documents marked as exhibits can be subsequently objected to for admissibility if not duly stamped, requiring judicial determination on the issue of admissibility.
Unregistered lease deeds are inadmissible in evidence, and a party must approach the court with clean hands, eschewing fraudulent claims.
An unregistered document can be admissible in a suit for specific performance, and a plaint cannot be rejected solely on the grounds of non-registration or insufficient stamp duty without trial evide....
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