The main legal point established in the judgment is the interpretation of the provisions of Explanation 1 to Article 25 of the Maharashtra Stamp Act and its applicability to the MOU in question.

1. Heard learned counsel for the petitioner and learned counsel for respondent No.2.

2. Rule.

3. By consent of learned counsel for both the parties, rule made returnable forthwith.

4. By this writ petition filed under Articles 226 and 227 of the Constitution of India, the petitioners are challenging the order dated 27th February 2015, passed by the 6th Joint Civil Judge Senior Division, Nashik, in Special Civil Suit No. 360 of 2013, thereby allowing application filed at Exh.53 by respondent No. 2 and directing the petitioners-plaintiffs to pay deficit Stamp on the Memorandum of Understanding executed on 24th January, 2011, on the basis of which the suit for specific performance of the said agreement is filed.

5. The submission of learned counsel for the petitioners is that perusal of the said Memorandum of Understanding (for short referred to as, “MOU”) makes it clear that, on the basis of the same or in pursuance of the same neither the entire consideration amount was paid nor the possession of the suit property was delivered. Conversely, the averments in the said MOU are clear that the agreement to sale was to be executed subsequently and thereafter sale deed was to be executed. The possession of the suit property was also agreed to be given at the time of agreement to sale. In such situation according to learned counsel for petitioners, the trial Court has committed an error in impounding the said document and directing the petitioners to pay deficit stamp holding that it is an agreement to sale and the possession was agreed to be given thereunder.

6. Per contra, learned counsel for respondent No.2 submits that the Explanation 1 to Article 25 of the Maharashtra Stamp Act, 1958 makes it clear that even when the possession is agreed to be given by virtue of execution of any document, then such document is required to be construed as “Deemed Conveyance” and the stamp duty thereon will be payable accordingly. Here in the case, according to learned counsel for the respondent No.2, the recitals in the MOU are clear to the effect that the possession was agreed to be given at the time of execution of agreement to sale and therefore the recitals in the MOU satisfy necessary condition as laid down in Explanation-I to Article 25 of the Maharashtra Stamp Act. Hence according to him, the trial Court has rightly directed the petitioners to pay the deficit Stamp thereon. In his opinion, therefore, the impugned order passed by the trial Court being just, legal and correct, no interference is warranted therein.

7. In order to substantiate their respective contentions, learned counsel for both parties have relied upon judgments of Division Bench of this Court. However, before adverting to those judgments, it would be useful and advantageous to refer the provisions of Explanation 1 to Article 25 of the Maharashtra Stamp Act and those provisions can be reproduced as follows :-

“[Explanation-I] – For the purpose of this article, where in the case of agreement to sell an immovable property, the possession of any immovable property is transferred or agreed to be transferred to the purchaser before the execution, or at the time of execution, or after the execution of, such agreement, then such agreement to sell shall be deemed to be a conveyance and stamp duty thereon shall be leviable accordingly.

Provided that, the provisions of section 32A shall apply mutatis mutandis to such agreement which is deemed to be a conveyance as aforesaid, as they apply to a conveyance under that section:

Provided further that, where subsequently a conveyance is executed in pursuance of such agreement of sale, the stamp duty, if any, already paid and recovered on the agreement of sale which is deemed to be a conveyance, shall be adjusted towards the total duty leviable on the conveyance.

Provided also that where proper stamp duty is paid on a registered agreement to sell an immovable property, treating it as a deemed conveyance and subsequently a conveyance deed is e