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2019 Supreme(Del) 2331
IN THE HIGH COURT OF DELHI AT NEW DELHI
Jayant Nath, J.
Hari Kapoor - Petitioner
Versus
South Delhi Municipal Corporation - Respondent
W.P.(C) 3370 of 2018
Decided On : 15-11-2019
For the Petitioner: Mr.Manish Sharma, Ms.Jigyasa Sharma, Mr. Dinesh Monga and Mr. Arjun Malik, Advs
For the Respondent: Mr. Nikhil Goel, Mr. Piyo Harold and Mr. Dushyant Sarna, Advs. for SDMC
The main legal point established in the judgment is that a release deed is not subject to duty under Section 147 of the DMC Act, 1957, as it operates to enlarge the share of co-owners and is distinct from a gift deed.
Headnote:
Stamp Duty - Release Deed - DMC Act, 1957, Section 147 - Summary of Acts and Sections: Section 147 of the DMC Act, 1957 provides for levy of duty on transfers of immovable property, specifying the method of imposing duty for different instruments. The judgment discusses the nature of release deeds and distinguishes them from gift deeds, emphasizing the essential ingredients of a release deed and its operation to enlarge the share of co-owners. The court interprets the statutory provisions and case law to conclude that a release deed is not subject to duty under Section 147 of the DMC Act, 1957.
Fact of the Case:
The petitioner sought to quash an order for collection of duty on a Deed of Release, contending that it is not chargeable under section 147 of the DMC Act, 1957. The respondent relied on legal department's opinion and argued that a release deed between co-owners should be treated as a Gift Deed.
Finding of the Court:
The court analyzed the essential ingredients of release deeds and their distinction from gift deeds, emphasizing the operation of release deeds to enlarge the share of co-owners. It interpreted the statutory provisions and case law to conclude that a release deed is not subject to duty under Section 147 of the DMC Act, 1957.
Issues: The main issue was whether a release deed is liable to levy of duty as provided under section 147 of the DMC Act, 1957.
Ratio Decidendi: The court's decision was based on the interpretation of the nature of release deeds, their essential ingredients, and their operation to enlarge the share of co-owners, as well as the statutory provisions and case law.
Final Decision: A writ of mandamus was issued to the respondent to carry out the mutation in favor of the petitioner for the property in question without payment of any transfer duty under Section 147 of the DMC Act, 1957.
JUDGMENT :
Jayant Nath, J.
1. This Writ Petition is filed by the petitioner seeking an appropriate Writ for quashing the order dated 8.12.2015 passed by the Additional Commissioner of the respondent for collection of duty and directing that there is no chargeability of stamp duty on the instrument of Deed of release.
2. The case of the petitioner is that on 2.11.1989 the petitioner along with the brother Shri Ramesh Chander Kapoor purchased the property bearing No. N-26, situated at Panchsheel Park, New Delhi vide registered sale deed. On 25.7.2016, the brother of the petitioner Shri Ramesh Chander Kapoor executed a Deed of Release and Relinquishment in respect of his half undivided share of the said property in favour of the petitioner. The petitioner approached the respondent with a letter of request for transfer/mutation of the property in his favour on 25.10.2016. As there was no proper response from the respondent, the petitioner on 14.08.2017 filed an application under RTI Act. Along with the reply sent by the respondent dated 11.09.2017 a circular/order issued dated 8.12.2015 was attached. As per the said circular a direction has been issued to the Sub Registrar to collect transfer duty on each and every document of Transfer of immovable property including Release Deeds/Relinquishment Deeds. This circular was issued based on the opinion of the legal department of the respondent stating that in view of section 147 of the Delhi Municipal Corporation Act, 1957, transfer duty has to be charged on release deeds/relinquishment deeds.
3. The narrow dispute in the present petition is as to whether a release deed is liable to levy of duty as provided under section 147 of the DMC Act, 1957.
4. I have heard learned counsel for the parties. Learned counsel for the petitioner relies upon judgment of the Full Bench of the Madras High Court in The Chief Controlling Revenue Authority , Board of Revenue, Madras vs. Dr. K. Manjunatha Rai, AIR 1977 Madras 10. Learned counsel for the petitioner has also relied upon the judgments in the case of Pasagadugula Narayana Rao vs. Pasagadugula Rama Murty and Ors., 2015 SCC OnLine Hyd 346 and judgment of the Division Bench of this court in Mahip Singh Thakur vs. Hema Thakur & Ors., 2005 (82) DRJ 311 (DB) to contend that the essential ingredients of release are that there should already be a legal right in the property vested in the releasee and the release should operate to enlarge that right into an absolute title for the entire property as far as the parties are concerned. It manifests that in such a transfer there is no transfer involved and section 147 of the DMC Act, 1957 will not apply. Reliance is also placed on judgments of this court in the case of Srichand Badlani vs. Govt. of NCT of Delhi & Ors., AIR 2014 (NOC 539) 192 and Jatinder Nath vs. DDA, AIR 2001 Delhi 89 to plead that in similar circumstances documents have been construed as release deed.
5. Learned counsel for the respondent states that there can be no dispute that section 147 of the Act does not apply to a release deed. He, however, states that where two co-owners purchase the property jointly and thereafter one co-owner issues a release deed in favour of the other co-owner a document of this nature would be termed as a Gift Deed and not a release deed. He relies on section 45 of the Transfer of Property Act to support his plea. He further states that a release deed can only be executed where the co-owners have inherited the property. He also relies upon judgment of a co-ordinate Bench of this Court in Satya Pal Gupta vs. Sudhir Kumar Gupta 2013 SCC OnLine Del 2304.
He further states that the provisions of the Stamp Act have no application to the levy of a duty under section 147 of the DMC Act, 1957. Reliance is also placed on judgment of the Full Bench of this court in Dayal Singh vs. Collector of Stamps, AIR 1972 Delhi 131.
6. S
