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2010 Supreme(Kar) 794
High Court of Karnataka
THE HONOURABLE MR. JUSTICE ARAVIND KUMAR
G. Raghavendra & Another
Versus
C. Harish & Others
Writ Petition Nos.31201 of 2009 & 33130-131 of 2009 etc.,
Decided on : 16-08-2010
For the Petitioner:B.V. Shankaranarayana Rao, Advocate.
For the Respondent:N.R. Naik, Advocate.
Headnote:INDIAN REGISTRATION ACT, 1882 - Section 49 & Karnataka Stamp Act,1957, Section 34: [Aravind Kumar,J] Relative scope of the provisions as to admissibility of a Document - The admissibility of the document when examined with reference to Section 49 of the Registration Act, the difference between Section 34 of the Karnataka Stamp Act and Section 49 of the Registration Act would also have to be borne in mind. Section 34 of the Stamp Act mandates that no instrument chargeable with duty should be admitted in evidence for "any purpose" by any person having by law or by consent of parties authority to receive evidence if instrument is not duly stamped. Thus, bar under Section 34 is absolute which in effect would mean that a document which is not duly stamped cannot be admitted at all in evidence for any purpose if not duly stamped. Thus, under Section 34 of the Stamp Act there is absolute bar for the document being received in evidence itself. Section 49 of the Registration Act deals with the effect of non-Registration of a document and provides that if a document which requires to be Registered under laws not registered then such document shall not affect any immovable property comprised there in nor can it confirm any power to adopt or be received as evidence of any transaction affecting such property or conferring such power. However, Proviso to Section 49 provides for an unregistered instrument being received as an evidence of a contract in a suit for specific performance or as evidence as part performance, of a contract for which the purpose of Section 53-A of the Transfer of Property Act or as evidence of any collateral transaction not required to be effected by registered instrument.
CODE OF CIVIL PROCEDURE, 1908 - Order 13, Rules 4 & 6: [Aravind Kumar,J] Proper stamp duty - Agreement to sell immovable property wherein as part performance of agreement possession property is delivered or agreed to be delivered even without executing conveyance - Held, Vendor has agreed to hand over vacant possession of the property agreed to be sold therein even before the execution of the sale deed in favour of the purchasers. Thus, when the parties have agreed to deliver possession prior to execution of the sale deed the transaction in question cannot escape from the rigour or ambit of Article 5(e)(i) of the Act. Defendant would not be entitled to mark the agreement to sell without payment of proper stamp duty. Stamp duty payable is same as duty payable under Article 20, on conveyance, i.e., market value of property. When such instrument insufficiently stamped is produced in evidence, Court has to determine deficit stamp duty and penalty payable, and direct party to pay same before admitting instrument in evidence. Hence, order of the Trial Court holding agreement to sell is admissible in evidence cannot to sustained and it requires to be quashed.
KARNATAKA STAMP ACT, 1957 - Articles 5(e)(i) & 20: [Aravind Kumar,J] Proper stamp duty - Agreement to sell immovable property wherein as part performance of agreement possession property is delivered or agreed to be delivered even without executing conveyance - Held, Vendor has agreed to hand over vacant possession of the property agreed to be sold therein even before the execution of the sale deed in favour of the purchasers. Thus, when the parties have agreed to deliver possession prior to execution of the sale deed the transaction in question cannot escape from the rigour or ambit of Article 5(e)(i) of the Act. Defendant would not be entitled to mark the agreement to sell without payment of proper stamp duty. Stamp duty payable is same as duty payable under Article 20, on conveyance, i.e., market value of property. When such instrument insufficiently stamped is produced in evidence, Court has to determine deficit stamp duty and penalty payable, and direct party to pay same before admitting instrument in evidence. Hence, order of the Trial Court holding agreement to sell is admissible in evidence cannot to sustained and it requires to be quashed.
KARNATAKA STAMP ACT, 1957 - Schedule, Article 41(ea): [Aravind Kumar,J] General Power of Attorney - Physical possession has said to have been delivered to Power of Attorney - Under Article 41 (ea) if a Power of Attorney is given to promoter or developer or whatever name called for purpose of construction, development, sale or transfer in any manner whatsoever) any immovable property the Stamp duty that is payable on the instrument would be same as conveyance payable under Article 20. This clause (ea) to Article 41 been amended with effect from 1-4-1995 and the document in question has been executed on 30-8-1995 and as held by the Trial Court and analysed in paragraph 12 of its order that there is specific mention in the document that it shall not be deemed to limit the authority of power of attorney to do any act, as may be found necessary and admittedly on such authority the Power of Attorney holders have acted as if they are the owners of the said property and have also conveyed the same by executing the sale deeds. Thus, Stamp duty is payable as a conveyance under Article 20 of the Stamp Act under Article 41(ea). In view of the fact that General Power of Attorney has been executed along with agreement to sell and these two documents are to be construed as contemporaneous documents and transaction is to be taken as one transaction. Further these two documents namely agreement to sell and General Power of Attorney are complementary and supplementary to each other. The order passed by the Trial Court does not suffer from any infirmity and same merits acceptance and is upheld.
KARNATAKA STAMP ACT, 1957 - Schedule, Article 5(e)(i): [Aravind Kumar,J] Agreement of sale - Possession agreed to be delivered -Held, Stamp duty is to be paid under Article 5(e)(i) of the Act.
KARNATAKA STAMP ACT, 1957 - Section 39 & Indian Registration Act, Section 49: [Aravind Kumar,J] Relative scope of the provisions as to admissibility of a Document - The admissibility of the document when examined with reference to Section 49 of the Registration Act, the difference between Section 34 of the Karnataka Stamp Act and Section 49 of the Registration Act would also have to be borne in mind. Section 34 of the Stamp Act mandates that no instrument chargeable with duty should be admitted in evidence for "any purpose" by any person having by law or by consent of parties authority to receive evidence if instrument is not duly stamped. Thus, bar under Section 34 is absolute which in effect would mean that a document which is not duly stamped cannot be admitted at all in evidence for any purpose if not duly stamped. Thus, under Section 34 of the Stamp Act there is absolute bar for the document being received in evidence itself. Section 49 of the Registration Act deals with the effect of non-Registration of a document and provides that if a document which requires to be Registered under law s not registered then such document shall not affect any immovable property comprised there in nor can it confirm any power to adopt or be received as evidence of any transaction affecting such property or conferring such power. However, Proviso to Section 49 provides for an unregistered instrument being received as an evidence of a contract in a suit for specific performance or as evidence as part performance, of a contract for which the purpose of Section 53-A of the Transfer of Property Act or as evidence of any collateral transaction not required to be effected by registered instrument.
Aravind Kumar, J:
Order dated 5-10-2009 Passed by the XLIII Additional City Civil Judge, Bangalore in O.S.No.7545/2006 holding that agreement to sell produced by the defendant as admissible in evidence and the power of attorney dated 25-5-1995 ordered for being impounded are impugned in these writ petitions.
2. The facts in nutshell are as follows:
2.1. A suit in O.S.No.7545/2006 was filed by one Sri. Raghavendra against Sri. C. Harish and three others for permanent injunction in respect of two items of the property which had been described in the plaint schedule as item No.1 and item No.2. Respondents 1 to 3 (in W.P.No.33130/2009) and 1 and 2 (in W.P.No.33131/2009) filed two suits in O.S.No.8242/2006 and 8243/2006 against the petitioners herein and respondents 10 and 11 alleging that sites formed in the lands (suit schedule properties in O.S.No.7545/2006) had been purchased by them and on account of alleged interference they sought for permanent injunction. These three suits were clubbed together by order dated 1-4-2008 and after framing of the issues trial had commenced.
2.2. During the course of defendants’ evidence the first respondent herein who had been examined as D.W.1 sought to produce an agreement to sell dated 26-5-1995 and General Power of attorney dated 30-5-1995 alleged to have been executed by one Sri. Chikkapillappa in favour of Siryuths V. Govindaraju and D. Ganesh (defendants 3 and 4 in O.S.No.7545/2006 and respondents 4 and 3 herein). An objection was raised by the plaintiff to the marking of these documents on the ground that they were not duly stamped. After hearing the learned Advocates, Trial Court by its order dated 5-10-2009 held that there was no possession of the immovable property delivered under the agreement to sell dated 26-5-1995 and as such it was admissible in evidence and it was also held stamp duty paid on Agreement to sell was proper and sufficient. It further held that power of attorney dated 30-5-1995 is to be impounded with a direction to pay proper stamp duty and penalty as required under Article 41 (e a) of the Karnataka Stamp Act, 1957.
3. W.P.No.31201/2009 and 33130 & 33131/2009 are filed by the plaintiffs in OS No.7545/2006 whereunder order dated 5-10-2009 is impugned on the ground that Trial Court ought to have held that agreement to sell dated 26-5-1995 was inadmissible in evidence.
4. W.P.No.32113/2009 has been filed by the first defendant in O.S.No.7545/2006 contending that order of impounding the General Power of Attorney dated 26-5-1995 is erroneous and it ought to be marked in the evidence without payment of Stamp duty.
5. Heard Sri. B.V. Shankaranarayana Rao, learned Counsel appearing for the petitioner in W.P.No.31201 and 33130-31/2009 and first respondent in W.P.32113/2009 and Sri.N.R. Naik, learned Counsel appearing for the petitioner in W.P.32113/2009 and first respondent in W.P.No.31201 and 33130-31/2009.
6. It is the contention of Sri.Shankarnarayana Rao that under Agreement to sell dated 26-5-1995 (Annexure-J) as per clause (6) possession is agreed to be delivered and hence he would contend that Article 5 (e)(i) of the Karnataka Stamp Act, 1957 is attracted and stamp duty as payable under Article 20 i.e., stamp duty paid on a deed of conveyance is payable inasmuch as even when possession is agreed to be delivered before conveyance Article 5 (e)(i) gets attracted and Trial Court committed a grave error in holding that Stamp duty is not required to be paid on the ground possession of the suit schedule property had not been delivered though under the agreement to sell in question possession is agreed to be delivered. As such he contends that order of the Trial Court requires to be set aside and prays for allowing of the writ petitions.
7. He would also submit that under clause (6) of Agreement possession is “agreed to be delivered” and the transaction is to be read as a whole i.e., both the agreement as well as General Power of Attorney is to be considered as co
