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1991 Supreme(Mad) 498
High Court of Judicature at Madras
THE HONOURABLE MR. JUSTICE BAKTHAVATSALAM
S.P. Padmavathi
Versus
State of Tamil Nadu, rep. by its Secretary to Government Commercial Taxes and Religious Endowments Department, Fort St. George, Madras & Others
W.P. No. 2214 of 1991
Decided On :Decided On : 24-07-1991
For the Petitioner:V.P. Venkataraman, Advocate.
For the Respondent:P. Arivudainambi, Government Advocate.
The stamp duty is a duty on an instrument, and its quantum depends on its description and the measure indicated in the First Schedule to the Stamp Act. The charge is on the instrument, not on the amount or consideration indicated in the document.
Headnote:
STAMP DUTY - REGISTRATION OF DOCUMENT - VALUATION - MARKET VALUE AS ON DATE OF REGISTRATION - STAMP ACT, 1899 - SECTIONS 2(6), 17, 47A - INTERPRETATION - SCOPE OF SUIT FOR SPECIFIC PERFORMANCE.
Fact of the Case:
The petitioner challenged the proceedings of the second respondent negativing the contention of the petitioner with regard to the payment of stamp duty for registering a document. The petitioner entered into an agreement to purchase a property in 1985. Due to a breach of the agreement, the petitioner initiated proceedings against the vendor and obtained a decree for specific performance in 1989. The petitioner faced objections from the third respondent, the registering authority, regarding the stamp duty payable on the sale deed. The petitioner contended that the stamp duty should be paid as per the agreement of sale, which was the subject matter of the decree, and not as per the Collector's guidelines prevailing at the time of registration.
Finding of the Court:
The court held that the stamp duty is a duty on an instrument and its quantum depends on its description and the measure indicated in the First Schedule to the Stamp Act. The charge is on the instrument, not on the amount or consideration indicated in the document. The court further held that the scope of a suit for specific performance is to enforce the defendant's duty to do what was agreed upon in the contract. Obtaining a decree for specific performance does not mean that it is binding on the authorities under the Registration Act and the Stamp Act. The registering authorities are bound by the provisions of the Act and are required to arrive at the duty based on the market value on the date of registration of the document.
Issues: 1. Whether the stamp duty should be paid as per the agreement of sale or as per the Collector's guidelines prevailing at the time of registration? 2. Whether a decree for specific performance is binding on the authorities under the Registration Act and the Stamp Act?
Ratio Decidendi: 1. The stamp duty is a duty on an instrument, and its quantum depends on its description and the measure indicated in the First Schedule to the Stamp Act. The charge is on the instrument, not on the amount or consideration indicated in the document. 2. The scope of a suit for specific performance is to enforce the defendant's duty to do what was agreed upon in the contract. Obtaining a decree for specific performance does not mean that it is binding on the authorities under the Registration Act and the Stamp Act. The registering authorities are bound by the provisions of the Act and are required to arrive at the duty based on the market value on the date of registration of the document.
Final Decision: The court dismissed the writ petition, holding that the petitioner had to pay duty on the market value as fixed by the respondents.
1. The petitioner challenges the proceedings of the second respondent dated 18-10-1990 negativing the contention of the petitioner with regard to the payment of stamp duty for registering a document. The facts leading to the filing of the writ petition may be briefly stated as follows:
The petitioner entered into an agreement on 11-2-1985 to purchase the property bearing door No. 3, New Tank Street, Nungambakkam, Madras-34 for a sum of Rs. 2,75,000 with one Balakrishnan who was residing at Choolaimedu, Madras-94. Since the vendor of the petitioner committed breach of the agreement of sale, the petitioner had to initiate proceedings against her vendor to enforce the specific performance of the agreement of sale dated 11-2-1985, and third party one T. Padmavathi also claimed rights to the said property on the basis of an alleged earlier agreement of sale executed in her favour, in C.S. No. 245 of 1986 on the file of the Original side of this Court. Peuding disposal of the Suit, it seems, the vendor Balakrishnan expired and his legal representatives were brought on record and after contest, the suit was decreed in favour of the petitioner on 13-6-1989, Against the said judgment and decree, the second defendant in the suit unsuccessfully preferred an appeal in O.S.A. No. 227 of 1989 and the same was confirmed in a compromise judgment and decree passed by the Division Bench on 28-8-1989. When the judgment debtors, the petitioners vendors evaded the compliance of the decree for specific performance, the petitioner initiated proceedings in E.P. No. 16 of 1990 for execution and registration of sale deed. At this stage the vendors of the petitioner came forward to execute the sale deed in favour of the petitioner in accordance with the terms of the decree passed and the conveyance was valued at Rs. 2,75,000 instead of the alleged guideline value prevailing in the year 1990. All the facts were incorporated in the sale deed which was duly executed and presented by the vendors of the petitioner for registration on 26-4-1990 to the third respondent. Though the said conveyance was registered as Document No. 477 of 1990, yet, the third respondent refused to deliver the said registered document to the petitioner by raising objections with regard to the stamp duty and the third respondent raised the objection stating that the stamp duty should be paid as per the Collectors guidelines and not at the rate disclosed in the sale agreement which was the subject matter of the decree in C.S. No. 245 of 1986 on the file of Original Side of this Court. However, a sum of Rs. 56,077 was demanded by the third respondent stating it to be the deficit stamp duty and registration charges and representing the difference of the rate between 1985 and 1990. No written memo was given by the third respondent to the petitioner in this regard. The petitioner sent a notice through her counsel on 7-5-1990 to the third respondent and during the personal hearing on 14-5-1990, the petitioner explained the factual and legal position to the third respondent. Since there was no communication of the result of the enquiry, the petitioner sent a notice dated 23-5-1990 to the third respondents immediate superior, the Assistant Inspector General of Registration. As there was no response, an elaborate and comprehensive reminder dated 29-8-1990 was addressed to the second respondent who sent the impugned order dated 18-10-1990 holding that the stamp duty and registration charges as claimed as per the guidelines obtaining at the time of the registration should be paid. The petitioner sent a communication dated 7-11-1990 addressed to the second respondent and it was not replied, and that is why the writ petition has been filed by the petitioner for the relief as stated supra.
2. The petitioner alleges in the affidavit filed in support of her writ petition that the interpretation given by the second respondent to Ss. 2(6), 17 and 47A of the Stamp Act are not correct and state
