IMPORTANT POINT
Whenever agreement holder is not in possession of property under agreement of sale even though there is a recital in agreement as to delivery of possession he need not pay proper stamp duty as required.

C.V. Ramulu, J.—This civil revision petition, under Article 227 of the Constitution of India, is directed against an order made in O.S. No. 10 of 2002 on the file of learned Senior Civil Judge, Kovvur, Nellore District dated 21.6.2007, whereunder, the objection taken by the learned counsel for the defendants that the agreement of sale sought to be marked requires to be impounded and unless and until it is impounded it cannot be marked and admitted in evidence, was upheld.

2. Petitioner is the plaintiff Respondents are the defendants. Plaintiff laid suit in O.S. No.10 of 2002 on the file of learned Senior Civil Judge, Kovvur for specific performance of agreement of sale and delivery of possession. When the agreement of sale dated 4.5.1998 was sought to be marked, learned counsel for the defendants objected for the same stating that the said document is admissible in evidence and stamp duty and penalty are required to be paid. After hearing both the parties, Court below passed the following order on 21.6.2007:

“The suit is coming for marking an agreement of sale and when the document was sought to be marked the counsel for the defendant objected stating that the said document is inadmissible in evidence and the stamp duty and penalty are to be paid. The learned counsel for the defendant relied upon a decision in Rathnamala v. G. Rudramma, 1999 (6) ALD (DB). It was held in Para No.13:

“Thus, it was a specific case wherein so many words the explanation takes in all the situations i.e. delivery of possession before the execution or at the time of execution or after the execution of an agreement and such agreements are deemed to be conveyance for the purpose of imposing stamp duty”.

Further in a decision of Marthala Pedda Subbamma @ Venkatasubbamma and another, 2006 (2) ALD (NOC) 41 it was held:

“As can be seen from the recitals of the document in question, the entire sale consideration was paid and possession also was delivered and the property can be enjoyed with absolute rights and it was specified that the seller or the heirs will have no manner of right in the property, but, however, it was also specified in the document that the first respondent/plaintiff herein agreed to execute a registered sale deed as and when required. There cannot be any doubt or controversy that the document in question can be looked into for collateral purpose. In construing an instrument in order to decide whether it is an agreement to sell or a sale the cumulative effect of all the recitals contained therein and the relevant facts have to be taken into account. Their mere offer to execute and register a sale deed at a later date does not take away the effect of a clear recital transferring the title and interest of the vendor to the vendee or change the character of a document from a sale to an agreement to sell. The mere use of the word ‘agreement’ is not conclusive also.

The rigor of payment of stamp duty and penalty cannot be escaped even if it is for collateral purpose. On a reading of the recitals of the document in question, it is clear that the vesting and divesting of absolute rights were in fact completed, but, however, the execution of a regular registered sale deed, on demand, alone had been left over between the parties. It may be that on the strength of such document, for the purpose of obtaining a regular registered sale deed, a suit for specific performance may be maintained, but, the same test cannot be extended for the purpose of determining whether the document in question is liable for stamp duty and penalty”.

The learned counsel for the plaintiff relied upon a decision Penkey Surya Kantham v. Shaik Silar, 2003 (2) Law Summary 162. It was held at Para 8:

“It is manifest from the explanation to Article 47-A of Stamp Act that where delivery of possession of the property is effected under the agreement of sale or evidencing delivery of possession of the property agreed to be sold is chargeable as a sale under this article. In