REPORTABLE
IN THE SUPREME COURT OF INDIA
CIVIL APPELLATE JURISDICTION
1
2 CIVIL APPEAL Nos. 8803-8805 OF 2012
3 (Arising out of SLP (C) Nos. 14177-14179 of 2010)
The State of Karnataka & Ors. .... Appellant (s)
Versus
Vivekananda M. Hallur & Ors. .... Respondent(s)
J U D G M E N T
P. Sathasivam, J.
1) Leave granted.
2) These appeals are directed against the final judgment and order dated
19.06.2009 passed by the High Court of Karnataka at Bangalore in Writ
Appeal Nos. 1023, 1324 and 1325 of 2009 whereby the Division Bench of the
High Court dismissed the appeals on the ground of delay as well as on
merits.
3) Brief facts :
(a) Respondents herein are the members of Kendriya Upadhyayara Sangha (R)
(in short ‘the Sangha’), Bangalore South Taluk, registered under the
Karnataka Societies Registration Act, 1960.
The Sangha was granted certain
land at Jakkasandra Village, South Taluk by the State of Karnataka in order
to provide house sites to its members.
The sole object of the Sangha is
charitable and to protect the interest of its members and not to form the
sites and allot to its members with a profit motive.
(b) According to the appellant-State, the Sangha has allotted residential
sites to its members including the respondents herein by executing Lease-
cum-Sale Agreements in their favour after receiving the full sale
consideration. The said agreements were registered in the office of sub-
Registrar, Bangalore South after paying the required stamp duty.
(c) Under the above said Lease-cum-Sale Agreements, the lease was for a
period of 10 years and after completion of the said period, respondents
herein approached the Sangha and requested them to execute the Absolute
Sale Deeds in their favour in respect of their sites.
The Sangha agreed
to execute the same and the Absolute Sale Deeds were presented for
registration before the sub-Registrar, Bommanahalli.
The sub-Registrar,
while registering the sale deeds, has collected the stamp duty on the
market value prevailing on that day of execution of the same after
adjusting the stamp duty paid on Lease-cum-Sale Agreements.
After
registration of the documents of sale, the respondents herein approached
the High Court by filing writ petitions seeking refund of stamp duty paid
on the absolute Sale Deeds.
(d) Pursuant to the writ petitions filed by the respondents, the State
Government filed a detailed statement of objections and contended that the
Sangha is registered under the Registration Act, hence, the Sangha has no
right to form the sites and allot the same to its members and, there is no
exemption under the Karnataka Stamp Act, 1957 (hereinafter referred to as
“the Act”) for any Lease-cum-Sale Agreement executed by the Sangha.
Under
the Act, only a site allotted by a House Building Co-operative Society can
claim exemption. It is the claim of the State that the authorities have
rightly collected the stamp duty on the sale deed treating it as a
principal document.
(e) Learned single Judge, by order dated 11.12.2007, in the writ
petitions being Nos. 16777, 19358 and 19359 of 2005 filed by respondent
Nos.1-3 herein held that the stamp duty collected by the authorities on
Lease-cum-Sale Agreement falls under Article 5(e)(i) of the Schedule to the
Act, therefore, it is a sale agreement with possession, hence, the stamp
duty paid is as per the provisions of the Act. Therefore, when the
documents are placed for registration as a sale deed, they have to pay the
stamp duty of the property on the market value as on that day of execution
of the sale deed but they are entitled to claim deduction of the amount
which they have already paid on the Lease-cum-Sale Agreement.
However, the
learned single Judge further held that, (a) the petitioners therein are not
liable to pay stamp duty on the amount shown as consideration in the
absolute sale deeds; and (b) they are entitled to refund of the amount
imposed and collected as stamp duty on the absolute sale deeds.
(f) Aggrieved by the said directions, the State filed appeals being W.A.
Nos. 1023, 1324 & 1325 of 2009 before the Division Bench of the High Court.
It was contended before the Division Bench that the finding given by the
learned single Judge in the impugned order that
in view of the provisions
of Article 5(e)(i) of the Schedule to the Act, when the stamp duty and the
registration fee had been collected on the Lease-cum-Sale instrument
treating it as the possession of the property which has been handed over at
the time of executing Lease-cum-Sale Deed, the question of collecting the
stamp duty and registration charges on the absolute deeds after the expiry
of the Lease-cum-Sale Agreement is only a supplement and could not arise.
(g) The Division Bench, by impugned order dated 19.06.2009, dismissed the
writ appeals filed by the State both on the ground of delay as well as on
merits.
(h) Against the said order, the State has filed the present appeals by
way of special leave petitions.
4) This Court, after issuance of notice on the applications for
impleadment (I.A.Nos. 4-6), by order dated 18.02.2011 impleaded respondent
Nos. 4-32.
5) Heard Mr. Basava Prabhu S. Patil, learned senior counsel for the
appellant-State, Mr. Chandra Sekhar, learned counsel for respondent Nos. 1
& 3 and Mr. P.P. Rao, learned senior counsel for newly impleaded respondent
Nos. 4-32.
6) The following questions which arise for consideration in these
appeals are:
(i) Whether the State has shown sufficient cause for condoning the delay
of 449 days in filing writ appeals against the order of the learned single
Judge, who allowed the writ petitions?
(ii) Whether the Division Bench was justified in simply affirming the
order of the learned single Judge in directing the State to repay the
amount collected as stamp duty when Article 5(e) Explanation (ii) has held
that the amount collected on the sale or Lease-cum-Sale Deed shall be
adjusted towards the total duty leviable on the conveyance? And
(iii) Whether the order of the High Court is contrary to the provisions of
Article 5(e)(i) and Explanation (ii) of the Karnataka Stamp Act, 1957?
7) First of all, we were taken through the reasons stated for the delay
of 449 days in filing the appeals before the Division Bench against the
order of the learned single Judge. The application for condonation of
delay in filing appeals was supported by an affidavit of sub-Registrar,
Peenya, Bangalore North Taluk. A perusal of the application and the
reasons stated therein show that how the delay has occurred. But after
going through the reasons stated therein and in the light of the issues to
be considered by the Division Bench as well as the financial implication on
the State Exchequer, we are of the view that the reasons stated for the
delay cannot be rejected as unacceptable.
8) Considering the issues raised and the positive direction given by the
learned single Judge, we are of the view that the Division Bench of the
High Court ought to have condoned the delay and gone into the merits of the
matter in the light of the provisions of the Karnataka Stamp Act, 1957.
Though the High Court concentrated only on narrating the pleadings of the
parties, reasoning of the learned single Judge and cause shown for
condoning the delay, but has not considered the substantial grounds urged
by the State. As rightly pointed out by learned senior counsel for the
State that though in the last paragraph there is some reference about the
reasoning of the learned single Judge, not much attention was given on the
merits of the claim made by the State.
9) On these grounds, without expressing anything on merits of the claim
of either party, we condone the delay in filing the writ appeals and in the
light of our conclusion that the Division Bench has not adverted to any
substantial grounds urged by the State, particularly with reference to the
provisions of Article 5(e)(i) and Explanation (ii) of the Karnataka Stamp
Act, 1957, we set aside the order of the Division Bench impugned in these
appeals and remit the same to the High Court for fresh consideration. We
request the High Court to restore W.A. Nos. 1023, 1324 and 1325 on its file
and dispose of the same on merits in accordance with law, after affording
opportunity to all the parties including the newly impleaded respondent
Nos. 4-32 herein as well as the connected writ petitions pending before the
High Court, preferably within a period of six months from the date of
receipt of copy of this judgment. Once again, we make it clear that except
adverting to the stand of the State, we have not expressed our views on any
of the claims and it is for the Division Bench of the High Court to
consider their respective claims in accordance with law as observed supra.
10) The appeals are allowed. There shall be no order as to costs.
...…………….…………………………J.
(P. SATHASIVAM)
.…....…………………………………J.
(RANJAN GOGOI)
NEW DELHI;
DECEMBER 07, 2012.
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