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High Court Of Delhi
DAYAL SINGH - Appellant
Versus
COLLECTOR OF STAMPS - Respondent
Stamp Duty Reference 2 of 1970
Decided On : 12/20/1971
STAMP DUTY - Transfer of Property - Consideration - Whether the amount to be paid by the vendee to the Delhi Development Authority is a part of the consideration for the transfer deed - Whether the transfer duty leviable under the Delhi Municipal Corporation Act, 1957 is further subject to the provisions of sections 33 and 40 of the Stamp Act which authorises the impounding of the transfer deed and the levy of a penalty on the same.
Fact of the Case:
The case involved a transfer of leasehold rights from Satya Pal Behal to Dayal Singh, with the Delhi Development Authority imposing a condition that a certain amount be deposited as unearned increase and non-construction penalty. The question arose whether this amount was part of the consideration for the transfer deed and whether the transfer duty leviable under the Delhi Municipal Corporation Act was subject to the provisions of the Stamp Act, including impounding and penalty.
Finding of the Court:
The court held that the amount to be paid to the Delhi Development Authority was indeed a part of the consideration for the transfer deed, as it was a condition imposed by the authority for granting consent to the transfer. The court also held that the transfer duty leviable under the Delhi Municipal Corporation Act was not subject to the provisions of sections 33 and 40 of the Stamp Act, as the transfer duty was an independent duty levied under the Corporation Act and not a part of the stamp duty.
Issues: 1. Whether the amount to be paid by the vendee to the Delhi Development Authority is a part of the consideration for the transfer deed? 2. Whether the transfer duty leviable under the Delhi Municipal Corporation Act, 1957 is further subject to the provisions of sections 33 and 40 of the Stamp Act which authorises the impounding of the transfer deed and the levy of a penalty on the same?
Ratio Decidendi: 1. The court interpreted section 24 of the Stamp Act and the definition of "consideration" in section 2(d) of the Indian Contract Act to conclude that the amount to be paid to the Delhi Development Authority was a part of the consideration for the transfer deed, as it was a condition imposed for granting consent to the transfer. 2. The court analyzed sections 147 and 148 of the Delhi Municipal Corporation Act and sections 27, 33, 40, and 64 of the Stamp Act to determine that the transfer duty was an independent duty levied under the Corporation Act and not a part of the stamp duty. Therefore, the provisions of the Stamp Act, including impounding and penalty, did not apply to the transfer duty.
Final Decision: The court answered the referred questions by holding that the amount to be paid to the Delhi Development Authority was a part of the consideration for the transfer deed and that the transfer duty leviable under the Delhi Municipal Corporation Act was not subject to the provisions of sections 33 and 40 of the Stamp Act.
( 1 ) SHRI Satya Pal Behal held certain land on perpetual lease from the Delhi Development Authority. The lessee could not transfer the lease except with the previous consent in writing of the lessor. In granting such consent, the lessor could impose terms and conditions and was to be entitled to claim and recover 75 per cent of the "unearned increase in the value", i. e. , the difference between the premium paid and the market value, of the land at the time of the transfer from the existing lessee to the new lessee. This amount was to be a first charge on the land. Satya Pal Behal transferred the lease to Dayal Singh on 23-8-1969. The Delhi Development Authority granted permission to the transfer "subject to a deposit of Rs. 52,401. 95 as non-earned increase and further Rs. 271. 85 as non-construction penalty which the vendee has agreed to pay after the completion of the lease deed". The transfer deed further says that "the vendor hereby sells, transfers, conveys all his lease-hold rights" in consideration of a sum of Rs. 29,700 paid to the vendor on 29-7-1961 by the vendee.
( 2 ) THE question referred to us for opinion under section 57 (2) of the Indian Stamp Act, 1899 are:-
(1) Whether under section 24 of the Act Rs. 52,401. 95 and Rs. 271. 85 agreed to be paid by the vendee to the vendor can be treated as a part of the consideration for the transfer deed dated 23-8-1969 ? and (2) Whether the transfer duty leviable under section 147 of the Delhi Municipal Corporation Act, 1957 on the above mentioned transaction in the form of a surcharge on the duty imposed by the Indian Stamp Act, 1899 is further subject to the provisions of sections 33 and 40 of the Stamp Act which authorises the impounding of the transfer deed and the levy of a penalty on the same ?
( 3 ) QUESTION No. 1 There is no dispute that the amount of Rs. 29,700. 00 paid by the vendee to the vendor was a consideration for the sale deed dated 23-8-1969. It is, however, disputed by the vendee that the other two sums of Rs. 52,401. 95 and Rs. 271. 85 to be deposited by the vendee for payment to the Delhi Development Authority are a part of the consideration for the sale deed. The consideration for a transfer on which stamp duty is chargeable has to be found out in accordance with section 24 of the Stamp Act which runs as follows:-
"24. Where any property is transferred to any person in consideration, wholly or in part, of any debt due to him, or subject either certainly or contingently to the payment or transfer of any money or stock, whether being or constituting a charge or incumbrance upon the property or not, such debt, money or stock is to be deemed the whole or part, as the case may be, of the consideration in respect whereof the transfer is chargeable with ad valorem duty. Provided that nothing in this section shall apply to any such certificate of sale as is mentioned in Article No 18 of schedule 1. EXPLANATION.-In the case of a sale of property subject to a mortgage or other imcumbrance, any unpaid mortgage money or money charged, together with the interest (if any) due on the same, shall be deemed to be part of the consideration for the sale: Provided that, where property subject to a mortgage is transferred to the mortgagee, he shall be entitled to deduct from the duty payable on the transfer the amount of any duty already paid in respect of the mortgage. ILLUSTRATIONS (1) A owes B Rs. 1000. 00. A sells a property to B, the consideration being Rs. 500. 00 and the release of the previous debt of Rs. 1000. Stamp-duty is payable on Rs. 1500. 00. (2) A sells a property to B for Rs. 500. 00 which is subject to a mortgage to C for Rs. 1000. 00 and unpaid interest Rs. 200. 00. Stamp-duty is payable on Rs. 1700. 00. (3) A mortgages a house of the value of Rs. 10,000. 00 to B for Rs. 5,000. B afterwards buys the house from A. Stampduty is payable on Rs. 10,000. 00 less the amount of stampduty already paid for the mortgage. "we may also consider the
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