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2014 Supreme(Mad) 4492
In the High Court of Judicature at Madras
V. RAMASUBRAMANIAN, J.
Pratishta Associates rep.by its Partner Smt. B.V. Manjula and others - Petitioner
Vs
State of Tamilnadu, rep.by Chief, Revenue Controlling Authority and others - Respondents
Writ Petition Nos.13355 of 2012 and 31274 of 2014 & M.P.Nos.1 to 4 of 2014
Decided On : 04-12-2014
Advocate Appeared:
For Petitioners: Mr.P.Subba Reddy
For Respondents: Mr.A.Kumar, SGP
Headnote:
Indian Stamp Act, 1899 - Section 40 - Appropriate undivided shares - Cancellation of an agreement - Challenging a circular - Sole petitioner in first writ petition is a builder - They entered into an agreement with a company by name Aqua Farms Private Limited which is fifth petitioner in the second writ petition - said company was owner of a property at old door new Cross Road New, Chennai-8 - Agreement was for sale of the properties to the petitioner in the first writ petition. The builder namely the petitioner in the first writ petition also got a deed of power of attorney executed in favor of its nominee by owner company - Pursuant to said agreement petitioner in the first writ petition constructed flats in the property and nominated the petitioners 1 to 4 in the second writ petition for purchasing specific flats. After construction, the owner namely the fifth petitioner company in the second writ petition was to execute a sale deed in favor of the nominees, with respect to appropriate undivided shares – Held, Section 5 deals with instruments relating to several distinct matters - If one instrument comprises or relates to several distinct matters, it shall be chargeable with the aggregate amount of the duties, with which, separate instruments each comprising or relating to one of such matters, would be chargeable under the Act. The instrument where the prior agreement holder merely joined as a confirming party in order to acquiesce himself to the subsequent agreement and the sale in the subsequent agreement, cannot be construed as an instrument relating to several distinct matters. At the most, such instruments can be construed as cancellation of the prior agreement of sale; and (ii) the conveyance by the vendor to the subsequent agreement holder - If it is so construed these two transactions namely that of cancellation of the prior agreement and the conveyance in pursuance of the second agreement, would fall under Section 6. Section 6 covers instruments that come within two or more of the descriptions in Schedule - In such an event, if the duties chargeable are different, the instruments should be charged only with the highest of the duties - Even if it is assumed for a minute that an instrument of sale, to which, the prior agreement holder joins as a confirming party comprises of two transactions, the conclusion, to which, the Inspector General of Registration has come, is not possible. An agreement or memorandum of agreement is covered by Article 5 of Schedule I to the same Act. The cancellation of an agreement falls under Article 17 - Conveyance comes under Article 23 - Suppose a person has entered into an agreement with another for the sale of an immovable property, such an instrument will come within the purview of Article 5. A sale deed will come within the purview of Article 23 - If in a sale deed which comes under Article 23, a prior agreement holder is included as a confirming party it would at most amount to a transaction canceling the first agreement - In other words instrument in respect of which, the impugned circular has been issued, may at the most cover two transactions one falling under Article 17 and another falling under Article 23 - Even in such an event Section 6 would go to the rescue of the parties making them liable to pay the highest of the two duties – Therefore impugned circular issued wholly without any relevance or reference to any of the provisions of the Indian Stamp Act or the Schedule contained therein, is unlawful and liable to be set aside - Petitions are allowed
The petitioners have come up with the above writ petitions challenging a circular issued by the Inspector General of Registration, demanding an additional stamp duty, whenever a prior agreement holder is made a party to a sale deed as a confirming party.
2. Heard Mr. P. Subba Reddy, learned counsel for the petitioners and Mr. A. Kumar, learned Special Government Pleader for the respondents.
3. The sole petitioner in the first writ petition is a builder. They entered into an agreement on 12.1.2006 with a company by name Thems Aqua Farms Private Limited, which is the fifth petitioner in the second writ petition. The said company was the owner of a property at old door No.15, new door No.67, Cross Road, New Washermenpet, Chennai-81. The agreement was for the sale of the properties to the petitioner in the first writ petition. The builder namely the petitioner in the first writ petition also got a deed of power of attorney executed in favour of its nominee, by the owner company.
4. Pursuant to the said agreement, the petitioner in the first writ petition constructed flats in the property and nominated the petitioners 1 to 4 in the second writ petition for purchasing specific flats. After construction, the owner namely the fifth petitioner company in the second writ petition was to execute a sale deed in favour of the nominees, with respect to appropriate undivided shares. When the sale deeds were executed, the builder namely Prathista Associates the petitioner in the first writ petition also joined as a confirming party, in view of the fact that they developed the property in pursuance of the agreement of sale dated 12.1.2006 entered into with the original owner.
5. When the sale deeds so executed, describing the fifth petitioner in the second writ petition as the seller, the petitioner in the first writ petition as the confirming party and the petitioners 1 to 4 in the second writ petition as the purchasers of the flats, the Sub- Registrar refused to register and returned the documents on the ground that by virtue of a circular issued by the Inspector General of Registration, twice the amount of stamp duty had to be paid. The circular issued by the Inspector General of Registration was to the effect that whenever a prior agreement holder was made a party to a sale deed, there are two conveyances and that therefore, the instrument of sale has to be construed as two sales. Hence, aggrieved by the said circular, the petitioners have come up with the above writ petitions.
6. Before proceeding further, it should be pointed out that in the sale deeds, which have become the subject matter of dispute, the company Thems Aqua Farms Private Limited, which is the fifth petitioner in the second writ petition, is described as the vendor, the builder namely Prathista Associates, which is the petitioner in the first writ petition, is described as the confirming party and the buyers of the flats, who are the petitioners 1 to 4 in the second writ petition, are described as the purchasers.
7. The circular issued by the Inspector General of Registration, which is under challenge in these two writ petitions, requires to be extracted. Hence, it is extracted as follows :
In the sale deeds, inclusion of the agreement holders as executants, while the earlier sale agreement is subsisting, is made only to release his right over the property in favour of the nominee/purchaser.
Further, when nominee has no relationship with agreement holder, the recital to include such agreement holder in the sale deed is being done with the intention/motive to extinguish his right to obtain a sale deed in respect of the property, which is the subject matter of the sale deed, even though the same may not be explicitly stated in the sale deed. Otherwise, there would be no necessity to include agreement holder as an executant even as a matter of abundant caution or as a confirming party, when he has no title.
Actually, if the vendor wants to execute sale deed in favour of t
