The main legal point established in the judgment is the application of stamp duty to a document directing a partition of partnership property and the concept of co-ownership of partnership assets.

Varadachariar, J.

1. The nature of the document with reference to which this reference under Section 57 of the Stamp Act has been, made is briefly described as follows in paragraph 2 of the Boards reference. It is "an award by arbitrators and purports to direct a partition of two firms (A.L. Rm. of Nattanjan and A.L. Rm. of Kayan in Burma) between the five parties to the deed named therein. Of these five parties, Nos. 1 to 3 are undivided members of a family, No. 4 is their distant and separated coparcener and No. 5 is a stranger. The arbitrators after examining the parties orally and looking into the accounts have assigned by casting lots the A.L. Rm. firm at Nattanjan with all its assets and liabilities to the first group of parties Nos. 1 to 3 and the other firm at Kayan to the parties Nos. 4 and 5". The document was executed in Burma on a stamp paper of Rs. 5 as a deed of dissolution of partnership. The Collector of Ramnad was of opinion that the document should be stamped as an instrument of partition.

2. The Boards reference indicates the difficulty which the Board felt in agreeing with the Collectors view. In Section 2, Clause (15) of the Stamp Act, an instrument of partition is defined as "any instrument whereby co-owners of any property divide or agree to divide such property in severalty", and it includes also "an award by an arbitrator directing a partition". Having regard to the meaning of the word "severalty" as given in the Concise Oxford Dictionary the Board thought that the division could be said to be one in severalty only if the allotments had been to each individual sharer and not when the allotments were made as between several sub-groups of sharers all of whom together originally owned the properties in common. We do not think there is any force in this distinction. The true antithesis is between the original common ownership and the subsequent cessation of that common ownership. Whether the substituted ownership is created by way of allotments to each individual amongst the original common owners or to groups of individuals is not really the point for consideration but whether the original common ownership has ceased to exist or not.

3. Before us, however, the objection has been stated in a different form by Mr. K. Rajah Aiyar who appears for the party. He contended that there being a special article, namely, Article No. 46 providing for an instrument of dissolution of partnership there is no reason why the document in the present case should be held to fall by a strained construction under the definition of an instrument of partition. This argument ignores the provision in Section 6 of the Stamp Act which enacts that wherever an instrument is so framed as to come within two or more of the descriptions in Schedule I and the duties chargeable thereunder are different, that document will be chargeable only with the higher of such duties. It is therefore no argument to say that the instrument in question is one relating to the dissolution of a partnership if according to its terms it also falls under the definition of an instrument of partition. The decisions in Christie v. Commissioners of Inland Revenue and Phillips v. Commissioners of Inland Revenue (1866 and 1867) L.R. 2 E C 46 indicate that even according to the English practice where a dissolution of partnership is carried out by a document which in form effects an assignment of a partners share to another partner, the document is charged to stamp duty as a conveyance. This shows that the fact of its being part of a scheme for the dissolution of a partnership does not prevent its being chargeable to stamp duty under other heads as well, if the terms of the document fall under some other head.

4. Mr. Rajah Ayyar next contended that the document is not an instrument of "partition" because it would not be proper to regard partners as co-owners of the partnership property. The alternative views on this question have been stated in Venkataratnam v. Subb