JUDGMENT :

B. Veerappa, J.

These two writ petitions are filed by the owner and builder against the order dated 02.09.2014 made in Appeal Nos.20/2011 and 21/2011 by the Karnataka Appellate Tribunal, Bangalore, confirming the order dated 11.10.2010 made in No.SJR/HLS/46-A/01/2010-2011/234 passed by the District Registrar and Deputy Commissioner for Detection of Under Valuation of Stamps, Shivajinagar Registration District, Bangalore, directing the petitioners to pay the stamp duty and registration fee on Rs.1,69,40,000/-, within ninety days.

2. It is the case of the petitioners in both the writ petitions that the petitioner in W.P.No.48939/2014 is the owner of the land and petitioner in W.P.No.48938/2014 is the builder. Both have entered into a Joint Development Agreement on 13.02.1995 and modified the Joint Development Agreement, which also came to be executed on 22.03.2007. According to the Joint Development Agreements, the petitioners - owner and developer jointly executed a mortgage deed in favour of the New India Co-operative Bank Limited. The mortgage deed created charge on building and provided for the transfer of title to the building upon a separate conveyance to be executed on demand. It was noted that there was no conveyance of document executed by the petitioners. The mortgage deed was registered and duly stamped. When the things stood thus, based on the misconception of the terms of the mortgage deed, a notice dated 15.4.2010 came to be issued by the District Registrar & Deputy Commissioner of Stamps under Section 46A of the Karnataka Stamp Act, 1957 that the possession has already been transferred and thereby alleging payment of deficit stamp duty on the mortgage deed.

3. Both the petitioners filed objections on 28.04.2010 and referred to the detailed objections to the letter issued by the authority dated 8.3.2010 wherein it is clearly stated that the observation made by the Indian Audit and Accounts Department is not tenable. Article 34(a) of the Stamp Act is applicable only to a case when possession of property comprised in such deed is given by the mortgagor or agreed to be given. In other words, the instrument which is registered should be a usufructuary mortgage where either possession is given or agreed to be given.

4. In the instant case, the mortgage deed registered is not a usufructuary mortgage. Where the mortgagor delivers possession or expressly or by implication binds himself to deliver possession of the mortgaged property to the mortgagee, and authorizes him to retain such possession until payment of the mortgage-money, and to receive the rents and profits accruing from the property or any part of such rents and profits and to appropriate the same in lieu of interest or in payment of the mortgage-money, or partly in lieu of interest or partly in payment of the mortgage-money, the transaction is called an usufructuary mortgage and the mortgagee a usufructuary mortgagee.

5. At para-9 of the mortgage deed, it was specifically contended that mortgagors hereby on demand undertake to assign, convey, transfer and handover vacant possession of premises two floors admeasuring 28,600 sq.ft. area situated in the said building to the Bank until entire dues of the Long Term and Short Term Loan amounts together with interest and other costs, charges and expenses are repaid completely to the Bank by the Mortgagor Builder and No Due Certificate issued by the Bank to that effect. The same would clearly indicate that there is neither giving of possession in presentii nor there is an agreement to give possession simplicitor in future. Giving of possession is a precedent upon the condition that there is a transfer of the building area by assignment/conveyance. The expressions 'assign, convey, transfer' preceding the words and handover possession of premises makes it abundantly clear that there is no agreement to give pos