Point of law: Supreme Court held that an agreement to sell is a conveyance within the meaning of Act and if such a document is not duly stamped it is inadmissible in evidence.

JUDGMENT :

(Ujjal Bhuyan, J.)

1. This order will dispose of both writ appeal Nos.96 and 148 of 2013.

2. Writ appeal No.96 of 2013 arises out of W.P.No.33182 of 2010 whereas writ appeal No.148 of 2013 arises out of W.P.No.28639 of 2010. Both the writ petitions were filed by the respondents herein. Appellants are the State and its officials who were respondents in the writ petitions.

3. We have heard Mr. Parsa Ananth Nageswara Rao, learned Government Pleader for Revenue (Assignment) for the appellants and Mr. Deepak Bhattacharjee, learned Senior Counsel for the respondents.

4. Both the appeals have been preferred by the appellants assailing the legality and validity of the order dated 05.03.2012 passed by the learned Single Judge allowing the related two writ petitions filed by the respondents.

5. Relevant facts may be briefly noted. First respondent is a construction company incorporated under the Companies Act, 1956. It entered into a Development Agreement cum General Power of Attorney on 30.07.2007 with the second respondent, a partnership firm and two other firms i.e., respondent Nos.3 and 4. The Development Agreement cum General Power of Attorney (referred to hereinafter as ‘the development agreement’) was for development of property admeasuring 28,396 square yards in survey No.194/10, Ward No.1, Block No.8 at Begumpet, Balanagar Mandal, Ranga Reddy District (referred to hereinafter as ‘the subject property’). The development agreement was registered as document No.1789 of 2007.

6. District Registrar, Hyderabad i.e., appellant No.2 initiated proceedings under Section 41A of the Indian Stamp Act, 1899 (for short, ‘the Act’ hereinafter) alleging that the development agreement had the effect of conveying title in favour of some of the parties and therefore, the stamp duty which is payable on a transaction of sale ought to have been paid. In this connection, a show cause notice was issued by appellant No.2 on 13.08.2010. A joint representation was submitted by the respondents to the said show cause notice on 31.08.2010. However, appellant No.2 passed an order dated 18.09.2010 holding that the development agreement conveys title and therefore it is basically a sale cum development agreement. He worked out that total stamp duty required to be paid was Rs.4,87,26,390.00 but only Rs.3,00,000.00 was paid as stamp duty. The duty required to make up the deficit was determined at Rs.4,84,26,390.00. Respondents were therefore called upon to pay the aforesaid deficit stamp duty.

7. Aggrieved by the aforesaid order dated 18.09.2010, first respondent preferred an appeal before the third appellant under Section 56 of the Act. By the order dated 09.11.2010, the appellate authority noticed that by virtue of the development agreement, there is conveyance of property between parties of the first part and parties of the second part. Therefore, the development agreement had to be treated as a document showing sale cum development agreement cum general power of attorney. Accordingly, the order of the second appellant was confirmed and the appeal was dismissed.

8. At this stage first respondent filed W.P.No.28639 of 2010 assailing the legality and validity of the order dated 18.09.2010 as affirmed by the order dated 09.11.2010.

9. Respondents wanted to withdraw from the development agreement on account of certain reasons. Therefore, the parties thereto executed a document titled ‘surrender of development rights agreement’ on 20.09.2010. When the document was presented for registration before the Sub Registrar, Secunderabad on 28.09.2010, the Sub Registrar informed the respondents that since an order under Section 41A of the Act was passed for collection of stamp duty and registration charges, a charge had been created against the subject property. Consequently, the document could not be registered. This order dated 28.09.2010 came to be challenged in W.P.No.33182 of 2010.

10. Learned Single Judge after hearing the matter held that there was nothing