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2024 Supreme(Online)(MAD) 1397
HIGH COURT OF MADRAS
N. SATHISH KUMAR, J
P.Kamalakannan – Appellant
Versus
The Chief Controlling Revenue authority – Respondent
['Writ Petition Nos.28854, 28856 & 28857 of 2022', 'W.M.P.Nos.28145, 28147 & 28148 of 2022']
Mr.C.S.K.Sathish for petitioner in all Writ Petitions, Mr.B.Vijay, Addl. Government Pleader for RR1 to 3
The stamp duty payable on release deeds executed by partners of a partnership firm in favor of another partner should be determined based on the market value of the properties, following the due procedure under Section 47-A of the Indian Stamp Act, 1899.
Headnote:
Stamp Duty - Release Deed - Act Sections 55-A, 55-D(i) - The court held that the release deeds executed by partners of a partnership firm in favor of another partner should be stamped under Article 55-D(i) of the Indian Stamp Act, 1899 as per the Tamil Nadu Amendment, and not under Article 55-A. However, the authorities failed to properly determine the market value of the properties before demanding the deficit stamp duty and penalty, and were directed to follow the due procedure under Section 47-A of the Act.
Fact of the Case:
The petitioners, who are partners of a partnership firm, executed release deeds in favor of another partner, releasing their respective 1/3rd share in certain immovable properties. The registering authorities valued the properties at a higher market value and demanded payment of deficit stamp duty and penalty under Article 55-D(i) of the Indian Stamp Act, 1899, instead of Article 55-A.
Finding of the Court:
The court held that the release deeds should be stamped under Article 55-D(i) as per the Tamil Nadu Amendment, as the partners were family members. However, the authorities failed to properly determine the market value of the properties before demanding the deficit stamp duty and penalty, and were directed to follow the due procedure under Section 47-A of the Act.
Issues: 1. Whether the stamp duty required to be paid on the release deeds should be under Article 55-A or Article 55-D(i) of the Indian Stamp Act, 1899? 2. Whether the market value determined by the authorities for computing the stamp duty was in accordance with law?
Ratio Decidendi: 1. The release deeds executed by partners of a partnership firm in favor of another partner should be stamped under Article 55-D(i) of the Indian Stamp Act, 1899 as per the Tamil Nadu Amendment, and not under Article 55-A. 2. The authorities failed to properly determine the market value of the properties before demanding the deficit stamp duty and penalty, and were directed to follow the due procedure under Section 47-A of the Act.
Final Decision: The court allowed the writ petitions, set aside the impugned orders, and directed the authorities to register the release deeds and refer the matter to the Collector for determination of the market value and proper stamp duty payable under Section 47-A of the Indian Stamp Act, 1899.
Challenge in all these writ petitions is to the impugned orders dated 13.12.2019 passed by the 1st respondent / revisional authority confirming the orders dated 08.07.2016 passed by the 2nd respondent-District Registrar demanding (i) payment of deficit stamp duty and penalty of (i) Rs.2,52,950/- and Rs.50/- from the petitioner in W.P.No.28854 of 2022; (ii) payment of deficit stamp duty and penalty Rs.3,31,703/- and Rs.50/- from the petitioner in W.P.No.28856 of 2022; and (iii) payment of deficit stamp duty and penalty of Rs.2,43,685/- and Rs.50/- from the petitioner in W.P.No.28857 of 2022 and for a consequential direction to the 3rd respondent to register the pending documents in P.No.129, 131 & 130 of 2015 respectively based on the stamp duty and registration charges already paid by the petitioner under Article 55-A of the Indian Stamp Act, 1899.
2. The brief facts leading to the filing of these writ petitions in common are as under:-
- (a) The petitioners are full-blood brothers and partners of M/s. Hotel Prince Palace having its registered office presently at No.153-A, Ganesh Hall, Walsham Road, Udagamandalam 643 001. The said hotel is a partnership firm registered under the Indian Partnership Act, 1932 with Registrar of Firms vide Registration No.517 of 1989 on the file of the Registrar of Firms, Coimbatore. 4 of 37 The partnership firm through its partners owns and exclusively possess the following immovable properties:-
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- Writ Petition Number Name of the Petitioner Survey Number Extent in Cents Patta No. W.P.No.2885 4 of 2022 P.Kamalakannan R.S.No.1 680/2 at Ootakam und Village
7.50 GR-1143- R.S.No.D -3/30 W.P.No.2885 6 of 2022 P.Sridhar R.S.No.1 680/2 at Ottakam und Village
9.625 GR- 1729- R.S.No.D -3/29 W.P.No.2885 7 of 2022 P.Loganathan R.S.No.1
7.25 GR- 1729- R.S.No.D -3/29 (b) In order to effectively manage the property, two of the partners have decided to release their respective 1/3rd share in the properties described above in favour of the other partner. Accordingly, the two partners of the firm executed the deeds individually in favour of the other partner releasing their respective 1/3rd share in the property. When those release deeds were presented for registration before the 3rd respondent with a stamp duty of Rs.25,000/- in respect of Pending Document No.P.129/2015; Rs.25,000/- in respect of Pending 5 of 37 Document No.P.130 of 2015; and Rs.25,000/- in respect of Pending Document No.P.131 of 2015 under Article 55-A of the Stamp Act, valuing the properties covered under the deed at Rs.6,00,000/-, Rs.6,00,000/- and Rs.6,00,000/- respectively, the 3rd respondent registering authority valuing the market value of the property covered under the deeds at Rs.92,65,000/- ; Rs.89,56,170/-; and Rs.44,58,781/- (c) The 3rd respondent has valued the documents under Article 55-D (ii) of the Indian Stamp Act, 1899 and as a result of the same, he has kept the document presented by the respective petitioners as pending in P.No.129, 131 & 130 of 2015 respectively and forwarded the same to the 2nd respondent for further action in this regard. The 2nd respondent in his proceedings dated 08.07.2016 in Nos.2426/2016, 2427/2016 & 2428/2016 passed orders reiterating the stand of the 3rd respondent classifying the deeds which are sought to be registered are required to be stamped under 55-D(i) and directing the parties to pay deficit stamp duty and penalty as mentioned under first paragraph of this order.
(d) Challenging the orders passed by the 2nd respondent, the respective petitioners filed revision petitions before the 1st respondent and the 1st respondent / revisional authority in turn passed an order confirming the order passed by the 2nd respondent holding that deeds are required to be stamped as 6 of 37 per Article 55-A(i) of the Indian Stamp Act and thereby dismissed the revision petitions.
(e) The releasors and the releasee(s) are partners of the partnership firm M/s.Hotel Prince Palace and that they are members of the one
