Possession taken under an Agreement to Sell constitutes part performance under Section 53A, necessitating compliance with Article 23A of the Indian Stamp Act for validity.

JUDGEMENT

 1. Respondent 2 owns a property situated at F-20, Geetanjali Enclave, New Delhi1.Respondent 2 entered into a Collaboration Agreement dated 24 October 2010 with Respondent 1, for demolition and reconstruction of the disputed property. The reconstructed portion was to have basement, ground floor, first floor, second floor and third floor with terrace. The Collaboration Agreement gave Respondent 1 the rights to sell the second floor of the disputed property.

1 “the disputed property”, hereinafter The following covenants of the ATS are relevant:

“1.That in consideration of a sum of Rs 2,85,00,00/- (Rupees Two Crores Eighty Five Lakhs only), the First Party do hereby agree to grant, convey, sell, transfer and assign all their rights, title and interests, in the said portion of the said property, fully described above to the Second Party, on the terms and conditions herein contained provided that nothing herein stated shall confer or deemed to have conferred upon the Second Party exclusively any right or title to the common driveway, staircase, lift, overhead, sewers. Water meters and other common facilities to the exclusion of the ‘Owner’ or other occupants of the other units of the Said Property.

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4.That there will be no balance amount that shall be payable when the Sale Deed is executed and registered and possession of the said portion of the said property is handed over to the Second Party as per the terms and conditions of this Agreement and in accordance with the said Collaboration Agreement. Time being the essence of this Agreement for the payment of the consideration.

5.That it is agreed between the parties that in case any Service Tax, Sales Tax or any other tax by whatsoever name called in lieu of these taxes becomes payable in addition of these taxes, then the same shall be borne and payable by the Second Party in addition to the consideration so settled above.”

3. In terms of the ATS, the appellants paid, to Respondent 1, ₹ 2,10,00,000/- on 14 November 2011, ₹ 25 Lakhs on 26 November 2011 and ₹ 50 Lakhs on 27 December 2011. The entire sale consideration was, therefore, paid by the appellants to Respondent 1 within the time envisaged in the ATS.Consequent thereon, possession of the disputed property was given, to the appellants, on 25 July 2012.

2 “ATS”, hereinafter

5. During the course of arbitral proceedings, Respondent 2 filed an application, before the learned Arbitrator, under Section 16 read with Section 23 of the 1996 Act, for impounding the ATS as having been insufficiently stamped. The learned Arbitrator has, by the impugned order dated 7 June 2023, accepted the plea of Respondent 2 and has held that the ATS was not sufficiently stamped, as required by Article 23 A3 of Schedule I-A to the Indian Stamp Act, 1899, as applicable to Delhi read with Section 53A4 of the Transfer of Property Act, 18825.

3 Article 23A is titled “CONVEYANCE IN THE NATURE OF PART PERFORMANCE” and covers 4 53-A.

6. Aggrieved by the finding that the ATS was insufficiently stamped, the appellants, as the claimants before the learned Arbitral Tribunal, have preferred the present appeal under Section 37(2)(a) of the 1996 Act.

7. I have heard Mr. Anshuman Sahni, learned Counsel for the appellants and Mr. Pranshu Paul, learned Counsel for Respondent 2, at length. Rival Submissions Submissions of Mr. Anshuman Sahni for the petitioner 8. Mr. Sahni submits that Article 23A of Schedule I-A to the Stamp Act, in terms, does not apply to the ATS in dispute.Article 23 A, according to him, would apply only to documents which convey person claiming under him shall be debarred from enforcing against the transferee and persons claiming under him any right in respect of the property of which the transferee has taken or continued in possession, other than a right expressly provided by the terms of the contract:

Provided that nothing in this section shall affect the rights of a transferee for consideration who has no notice of the contract or of the part per