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2020 Supreme(Del) 1320
IN THE HIGH COURT OF DELHI AT NEW DELHI
Navin Chawla, J.
Tripta Kaushik - Appellant
Versus
Sub Registrar Vi-a, Delhi & Anr. - Respondent
Writ Petition (Civil) No. 9193 of 2019, 3560 of 2018
Decided On : 20-05-2020
Setu Niket, Advocate, Ramesh Singh, Advocate, Chirayu Jain, Advocate, Attin S Rastogi, Advocate, Archit Chauhan, Advocate, Prateek Yadav, Advocate, Shivkant Arora, Advocate
The main legal point established in the judgment is the determination of the nature of Relinquishment Deeds as either releases or gifts under the Indian Stamp Act, 1899, based on the actual character of the transaction and the precise nature of the rights created by the instrument.
Headnote:
Stamp Duty - Relinquishment Deed - Indian Stamp Act, 1899 - Article 33, Article 55 - The court considered two petitions challenging the impounding and stamp duty assessment of Relinquishment Deeds executed in favor of the petitioners. The court analyzed the nature of the deeds, their treatment as gifts or releases, and the legal principles governing such transactions under the Indian Stamp Act, 1899.
Fact of the Case:
The petitioner challenged the impounding and stamp duty assessment of Relinquishment Deeds executed in favor of the petitioner with respect to two properties. The court considered the nature of the deeds, their treatment as gifts or releases, and the legal principles governing such transactions under the Indian Stamp Act, 1899.
Finding of the Court:
The court found that the Relinquishment Deed dated 01.03.2019 was a Release Deed falling within the ambit of Article 55 of the Act and set aside the impugned order. However, the court upheld the impugned order demanding deficient Stamp Duty of Rs. 6,60,257/- for the Relinquishment Deeds executed by the sisters of the petitioner, holding them to be Gift Deeds and not Release Deeds.
Issues: The issues involved the nature of the Relinquishment Deeds, their treatment as gifts or releases, and the applicability of stamp duty under the Indian Stamp Act, 1899.
Ratio Decidendi: The court applied legal principles from various judgments to determine the nature of the Relinquishment Deeds, emphasizing that the actual character of the transaction and the precise nature of the rights created by the instrument are decisive factors. The court also considered the enlargement of the share of the other co-owners as a result of the release.
Final Decision: The court partly allowed the petition, setting aside the impugned order for the Relinquishment Deed dated 01.03.2019 and upholding the impugned order demanding deficient Stamp Duty for the Relinquishment Deeds executed by the sisters of the petitioner. The court also set aside the penalty imposed on the petitioner and ordered the refund of the penalty amount with interest.
Certainly. Based on the provided legal document, here are the key points:
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The core issue in the case involves determining whether Relinquishment Deeds are to be classified as releases or gifts under the Indian Stamp Act, 1899, by examining the actual character of the transaction and the rights created by the instrument (!) .
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The court clarified that the nomenclature or language used in the document is not decisive; instead, the actual nature of the transaction and the rights involved are critical in classifying the deed (!) (!) .
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A Relinquishment Deed executed by a co-owner in favor of another co-owner, where the rights are relinquished in favor of a co-owner, is considered a release and falls under Article 55 of the Indian Stamp Act. Such deeds are not treated as gifts or conveyances (!) (!) .
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If a co-owner relinquishes their interest in favor of one of the remaining co-owners, the transaction is regarded as a release, which results in the enlargement of the interest of the other co-owner(s). The transaction does not involve a transfer of title but a relinquishment of rights (!) (!) .
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When the relinquishment is only in favor of one co-owner and not all, the document is classified as a gift or conveyance, not a release. This distinction is important for stamp duty purposes (!) (!) .
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The actual intent and purpose of the transaction, as evidenced by the recitals and covenants within the deed, are vital in determining whether the document is a release or a gift. Deeds that contain warranties, covenants of ownership, or recitals indicating transfer of interest are likely to be classified as conveyances or gifts (!) (!) .
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The execution of separate deeds by individual co-owners relinquishing their shares does not automatically qualify as a release if the transaction is not in favor of all co-owners collectively. Such deeds may be considered conveyances or gifts depending on the context and intent (!) (!) .
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The court emphasized that the actual character of the transaction, as reflected in the deed’s content and purpose, is the decisive factor, rather than the label or description given to the document (!) (!) .
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In cases where the deed is executed in favor of all co-owners or in a manner that results in the enlargement of the interest of remaining co-owners, it qualifies as a release and is chargeable under Article 55. Conversely, deeds executed in favor of specific individuals, especially without the intention of relinquishing rights in favor of all, are treated as gifts or conveyances (!) (!) .
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The court also noted that the imposition of penalties without clear reasons or basis, especially when the intent of the deed is not to evade stamp duty, is unjustified. The order demanding deficient stamp duty was upheld, but the penalty was set aside (!) (!) .
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Overall, the court ruled that the classification of the deed depends on the transaction’s nature and purpose, not merely on the language or title used. Proper assessment of the deed’s content and the parties’ intentions is essential for correct stamp duty application (!) (!) .
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The court directed that the Relinquishment Deed in the first case be registered in favor of the petitioner and ordered the respondent to pay costs. In the second case, the order demanding stamp duty was upheld, but the penalty was canceled, and the petitioner was entitled to a refund with interest (!) (!) (!) .
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JUDGMENT
Navin Chawla, J. - Wp (C) 9193/2019 has been filed by the petitioner challenging the order dated 05.03.2019 passed by the respondent no. 1 impounding the Relinquishment Deed dated 01.03.2019 executed by the son of the petitioner, Mr. Kapil Kaushik, in favour of the petitioner, with respect to the property bearing No. B-123, Ashok Vihar, Phase-I, Delhi.
2. The said property was acquired by late Shri. Brijesh Kumar Kaushik, and upon his death, the Delhi Development Authority executed a Conveyance Deed dated 07.04.2000 with respect to the said property in favour of the petitioner and her son.
3. By the Relinquishment Deed dated 01.03.2019, son of the petitioner sought to release/relinquish his rights in the said property in favour of the petitioner.
4. By the Impugned Order dated 05.03.2019, the respondent no. 1, however, impounded the said document treating the same to be as a Gift under Article 33 of Schedule IA of the Indian Stamp Act, 1899 as applicable to the Union Territory of Delhi (hereinafter referred to as "Act") and thereafter held the Release Deed to be deficiently stamped and impounded the same. Aggrieved of the said order the present petition has been filed.
5. Wp (C) 3560/2018 has been filed by the petitioner challenging the order dated 01.03.2013 passed by the respondent no. 3 impounding the Relinquishment Deed(s) executed by the sisters of the petitioner in favour of the petitioner with respect to their share in the property bearing No. E-67, Greater Kailash, Part-II, New Delhi, holding that the said Relinquishment Deeds (five in number; three dated 06.07.2012 and two dated 17.07.2012) are liable to be stamped under Article 33 of the Act.
6. The petition further challenges the order dated 15.05.2013 passed by the respondent no. 2 assessing the Stamp Duty payable on the said Relinquishment Deeds at Rs. 6,60,257/- and further imposing a penalty of Rs. 1,00,000/- on the petitioner.
7. The property was purchased by the parents of the petitioner, late Shri Jagdish Prashad Sharma and Smt Shanti Devi, vide a registered Sale Deed dated 10.07.1972.
8. The petitioner claims that late Shri Jagdish Prashad Sharma bequeathed his half share in the property in favour of the petitioner by way of a Will registered on 24.09.2001.
9. Late Shri Jagdish Prashad Sharma expired on 31.10.2003, leaving behind his wife, the petitioner and his five daughters as the only Class I heirs.
10. The three sisters of the petitioner executed three separate Relinquishment Deeds in favour of the petitioner on 03.07.2012 relinquishing their share in the property in favour of the petitioner. The remaining two sisters relinquished their share in the property in favour of the petitioner by way of two separate Relinquishment Deeds both dated 17.07.2012. It is claimed that these two sisters could not execute the Relinquishment Deeds on 03.07.2012 as they were not in Delhi at that time.
11. As noted hereinabove, on presentation of the Deeds for registration, they were first impounded by the respondent no. 3 vide order dated 01.03.2013 and later the respondent no. 2, vide the Impugned Order dated 15.05.2013, assessed deficient Stamp Duty as Rs. 6,60,257/- and levied a penalty of Rs. 1 lakh.
12. The petitioner feeling aggrieved of the above orders, has filed the present petition.
13. As common question of law arises in the above two petitions, they are being taken up for consideration together.
14. Article 55 of the Act is reproduced hereinunder:-
| Description of Instrument | Proper Stamp-duty |
| "55. RELEASE , that is to say, any instrument [not being such a release as is provided for by section 23(a)] whereby a person renounces a claim upon another person or against any specified property- (a) if the amount or value of the claim does not exceed Rs. 1,000; (b) in any other case. |
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