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High Court of Judicature at Bombay
R.M. SAVANT, J.
Ashok Ganagsahai Singhal & Others
Versus
Ramdhar Nankulal Yadav & Others
Writ Petition No. 9210 of 2012
Decided On : 25-04-2013
Since document is a conveyance, covered by Explanation I to Article 25 of Act hence stamp duty on conveyance is payable. - A conjoint reading of the covenants of the said Memorandum of Understanding coupled with the averments in the plaint lead to a conclusion that the land in question has been handed over to the plaintiffs for development. Unless the possession is handed over, the various obligations which have been adverted to hereinabove cannot be fulfilled by the plaintiffs. It is in the said context that the submissions of the counsel appearing for the petitioners would have to be considered. Though the counsel for the petitioners was at pains to point out that the said agreement postulates a Joint Venture Agreement to be executed, the said covenant would not take the case of the plaintiffs any further. Merely because a Joint Venture Agreement was to be entered into, the same would not mean that the document in question would not be covered by Explanation-1 to Article 25 of the said Act. The facility of having a joint venture was to see to it that the development of the property takes place and was not in the nature of a clause which postulates a further agreement to be executed, on the execution of which, possession was to be handed over. The Joint Venture Agreement was to be entered into merely to facilitate the development of the land in question and has nothing to do with handing over possession of the land. The covenant No. 16 as can be seen contemplates the development to be carried out within three years. The said covenant is a defining covenant in so far as the aspect of possession is concerned There was no question of fixing a time frame if the possession was to be postponed to a future date as was sought to be contended by the counsel appearing for the petitioners, though not with any great deal of conviction. Implicit in the said aspect of development being completed in three years is the acceptance of the fact that the possession in fact was handed over for the purposes of carrying out the intent and objects of the said Development Agreement.
The trial Court was right in recording that the exact nature of the transaction is not sought to be revealed by the plaintiffs. Curiously the aspect of possession has not been covered in the Memorandum of Understanding and this can only be attributed to the fact that by clever drafting, the aspect of possession has been purposely kept away. It is to cover such eventualities where possession is handed over and the execution of the sale deed is avoided so as to avoid the payment of stamp duty that Explanation-1 to Article 25 was introduced in the said Act. Therefore a reading of the covenants and the averments made in the plaint lead to an irresistible conclusion that the document is a conveyance and was therefore chargeable to stamp duty in terms of Article 25 of the said Act. The impugned order of the trial Court impounding the document and sending it to the Collector of Stamps therefore cannot be taken exception to.
1. Rule, with the consent of the learned counsel for the parties made returnable forthwith and heard.
2. The writ jurisdiction of this Court is invoked against the order dated 6.02.2012 passed by the learned Joint Civil Judge, Senior Division Pune by which order the application in question being exhibit 54 filed by the Defendant No.1 came to be partly allowed and the document in question i.e. the Deed dated 25.08.2005 was directed to be impounded and be sent to the Collector of Stamps for further action as per Section 35 of the Bombay Stamp Act, 1950.
3. Shorn of unnecessary details a few facts can be stated thus:
The Petitioner is the original Plaintiff who has filed Special Civil Suit No.2096/2008 for specific performance of the agreement dated 25.08.2005. The subject matter of the said agreement is the suit property bearing Survey No.119, Hissa No.2B, situated at village Pimple Saudagar, Taluka Haveli, District Pune. The suit property admeasures 1 H. 50.5 Ares. The suit property is more particularly described in paragraph 1 of the Plaint. The Respondent No.1 and the Petitioner entered into the said agreement styled as a Memorandum of Understanding. The said agreement is inter-alia a Development Agreement and the total consideration mentioned therein is an amount of Rs.9,71,62,800/-. The schedule of payment is mentioned in the said agreement in Clause 'E'. The cause for filing of the Suit was the apprehension of the Plaintiffs that the Respondent No.1 had entered into agreement with the other Defendants in the Suit. It is, therefore, that the Suit in question came to be filed for specific performance of the said agreement dated 25.08.2005. It is the case of the Petitioner that it has paid an amount of Rs.50,00,000/-. However, inspite of the said payment, the Defendants to the Suit showed their reluctance to proceed with the said Development Agreement and in fact tried to enter into agreement with the other Defendants that the Suit in question came to be filed. In the said Suit, an application for temporary injunction came to be filed by the Plaintiffs which was opposed to on behalf of the Defendants. The said application for temporary injunction came to be rejected. It seems that contemporaneously the Defendant No.1 had filed an application seeking dismissal of the Suit on the ground that the Memorandum of Understanding on which the Suit is based is not registered and is also not sufficiently stamped. The said application was contested by the Plaintiffs. The Trial Court considered the said application and as indicated above, by the impugned order directed its impoundment and directed that it be sent to the Collector of Stamps for adjudication of the stamp duty payable as per the Bombay Stamp Act, 1950 (for short ‘the said Act). The Trial Court in arriving at the said conclusion held that the said document is covered by Article 25 of the said Act and was a conveyance deed. For arriving at the said conclusion, the Trial Court referred to paragraphs 3 and 4 of the Plaint. The Trial Court observed that the document itself reveals that it is a Development Agreement for the total consideration of Rs.9,71,62,800/- to be paid by the Plaintiffs to the Defendants. The Trial Court was of the view that the Plaintiffs were making an attempt to conceal the exact nature of the document as at times they were contending that it was a Memorandum of Understanding and at other times they were contending that it was a Development Agreement. As indicated above, it is the said order which is impugned in the present Petition.
4. Heard the learned counsel for the parties. The learned counsel Mr.Godbole appearing on behalf of the Petitioners would contend that since there is no covenant in respect of handing over possession of the Suit Property to the Plaintiffs, the said document could not be termed as a conveyance within the meaning of Article 25 of the said Act. The learned counsel would contend that the fact that the document is not a
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