A partnership deed is not liable to duty as a conveyance if it does not contain any words of a dispositive character that would amount to a transfer of interest between the partners.

M. ANANTANARAYANAN, C. J.:- The reference before us arises from the following situation and facts. There was a trading joint Hindu family, the assets of which were involved in certain protracted partition proceedings in A. S. No. 223 of 1959 in this Court from O. S. No. 97 of 1952 of the Court of the Subordinate Judge of Devakottai. By virtue of a decree of Court, Chidambaram Chettiar, one of the parties to that litigation and a member of the family, agreed to take certain mill properties and machinery relating thereto, for Rs. 3,30,000. An instrument was executed on 6-6-1962 as between the ten parties who are respondents, including this Chidambaram Chettiar, styled a partnership deed, under Cl. (8) of which the aforesaid sugar mills, distilleries, rice mill and accretions, dealt with by the decree in A. S. 223 of 1959, were declared as properties of the partnership firm, including Chidambaram Chettiar as a member thereof. The partnership was created under this document Cl. (4) purporting to set forth the respective shares or interests of partners, and Cl. (21) et seq admittedly providing for dissolution, for accounting etc. The Chief Revenue Authority has raised the point that this document is liable to be charged as a conveyance under Art. 23 of Sch. I of the Indian Stamp (Madras Amendment) Act, 19 of 1958, or that, even if it is construed as a document of partnership under Article 46 of the said Schedule, it is liable to be considered as a composite document, and liable to be charged with the higher duty, under Section 5 or Section 6 of the Indian Stamp Act. This is only the issue which is involved in the reference.

2. We have already referred, very briefly, to the situation in which the document came into existence. It may be here necessary to clarify the matter a little further. We find from the record that these persons earlier agreed to form such a partnership, and that, even when Chidambaram Chettiar made a deposit in accordance with orders of Court and took possession from the receiver of the Sugar Mills, Distilleries etc, viz. the deposit of Rs. 3,30,000, the other persons had already contributed their respective shares, so that the acquisition of the properties by Chidambaram Chettiar by virtue of the decree of Court must be held to be essentially, a joint acquisition by these persons, with Chidambaram Chettiar (the 5th defendant) as the ostensible acquiring party in the partition suit. Nevertheless the argument of the learned Additional Government Pleader (Sri Ramaswami) is that the document before us, fairly considered, would also amount to a conveyance by the aforesaid Chidambaram Chettiar, of his interest in the properties, to the partnership firm of himself and the other nine persons, retaining for himself the value or interest of five shares as set forth in Cl. (4).

3. The learned Additional Government Pleader contends that, even where such document has expressly created a partnership, and even though the partnership firm is acquiring partnership assets, thereunder including the vendor as one of the partners, the document is liable to duty as a

conveyance, on the principle of the decision of the Full Bench in Sahaya Nidhi (Virudhunagar) Ltd. v. Subramania Nadar 1950-2 Mad LJ 216 : (AIR 1951 Mad 209) (FB). Delivering the judgment on behalf of the Bench Viswanatha Sastri, J., observed (at page 219 of Mad LJ) :(at pp. 211 and 212 of AIR) that the question was not whether the relevant arrangement could not be effected otherwise than by the execution of a document like the one concerned in that case, but, whether, when such a document was duly executed as a formal conveyance, it was not liable to stamp duty, though the properties could otherwise have been pooled by the partners or a partner as assets of the partnership, without any conveyance, on the principle of S. 14 of the Partnership Act. The short point therefore, is whether the document will bear the construction that it is a conveyance, and whether th