advocatemmmohan

My photo

ADVOCATEMMMOHAN -  Practicing both IN CIVIL, CRIMINAL AND FAMILY LAWS,Etc.,

WELCOME TO LEGAL WORLD

WELCOME TO MY LEGAL WORLD - FOR KNOWLEDGE IN LAW & FOR LEGAL OPINIONS - SHARE THIS

Monday, July 29, 2013

Stamp duty and penalty = Whether the sale deed executed by Aditya Mills Ltd. in favour of respondent No.1 could be treated as lease deed for the purpose of stamp duty is the question = unable to do so because neither party has placed on record copy of deed dated 29.9.1978 and without examining that document, it is not possible for us to record a firm finding about the nature and character of deed dated 3.5.1995. In this scenario, the only appropriate course is to remit the case to the Collector for fresh determination of the issue relating to valuation of the building and the land purchased by respondent No.1. Ordered accordingly.= The appeal is disposed of with a direction that the Collector shall call upon respondent No.1 to produce deed dated 29.9.1978, to which reference has been made in the deed executed in its favour by Aditya Mills Ltd. and then decide whether it is a lease deed simpliciter or a sale deed for the purpose of stamp duty. While disposing of the appeal, we consider it necessary to make it clear that if the Collector comes to the conclusion that the deed executed by Aditya Mills Ltd. in favour of respondent No.1 is a lease deed then the latter shall have to surrender the land to the Government of India on 9.3.2021, i.e., the date on which term of the lease would expire.

                                       published in     http://judis.nic.in/supremecourt/imgst.aspx?filename=40595 
                  NON-REPORTABLE
                        IN THE SUPREME COURT OF INDIA
                        CIVIL APPELLATE JURISDICTION
                        CIVIL APPEAL NO.6086 OF 2013.
                  (Arising out of SLP(C) No. 3749 of 2012)


      State of U.P. now Uttarakhand
      and another                                  ...Appellants
                                   Versus


      Vinit Traders and Investment Ltd.
      and another                                        ...Respondents




                                  O R D E R

            Leave granted.

            Whether the sale deed executed by Aditya Mills Ltd. in favour of respondent No.1 could be treated as lease  deed  for  the  purpose  of stamp duty is the question, 
which arises  for  consideration  in  this
      appeal filed against order dated 4.7.2011 passed by the learned Single
      Judge of the Uttarakhand High Court in Writ Petition No.1987/2001.

            For the sake of reference, the relevant  portions  of  the  sale
      deed are reproduced below:

           “This Indenture made this 3rd  day  of  May  One  Thousand  Nine
           hundred Ninety Five  between  Aditya  Mills  limited  a  Company
           incorporated under the Companies Act, 1956 having its Registered
           Office at Madanganj Kishangarh (Rajasthan)  through  their  duly
           constituted attorney Sri Kishan Singh Kothari S/o  Sri  Tej  Raj
           Kothari,  R/o  Old  Kotwali  Road,  Kishangarh,   Distt.   Ajmer
           (Rajasthan) hereinafter  called  the  VENDOR  (which  expression
           shall unless excluded by or repugnant to the context, be  deemed
           to    include    his    heirs,    executors,     administrators,
           representatives, etc.) of the  ONE  PART  AND  Vinit  Traders  &
           Investment Ltd. a Company incorporated under the Companies  Act,
           1956, having its registered office at 135, Canning Street, Clive
           Row Entrance, Calcutta, hereinafter  called  the  VENDEE  (which
           expression shall unless excluded by or repugnant to the  context
           be deemed to  include  their  heir,  executors,  administrators,
           representative, liquidators and assigns) of the OTHER PART.


           WHEREAS the VENDOR has represented that he is the absolute owner
           of law premises known as "MANAK" (Adhikari Lodge) being  Bunglow
           No.60 (Sixty), situated at  Nehru  Road  within  the  limits  of
           Ranikhet  Cantonment,  Distt.  Almora,   Uttar   Pradesh,   more
           particularly described in Schedule I hereto.


           AND WHEREAS the  VENDOR  has  also  represented  that  the  said
           premises is  built  on  land  (more  particularly  described  in
           Schedule II hereto) held on  lease  for  99  years  expiring  on
           9.3.2021 by the VENDOR under the President of India by virtue of
           a lease deed in Form "D" of the Cantonment Code, 1912.


           AND WHREAS  the  VENDOR  has  also  represented  that  the  said
           premises and the said lease hold rights were  purchased/acquired
           by the VENDOR from Shri Sita Ram Mehra son of  Shri  Bhagat  Ram
           Mehra, resident of B-317, New Friends Colony,  New  Delhi-110014
           vide sale deed, dated 29.9.1978 registered at  Book  No.I  (One)
           Volume 333, on pages 147 (One hundred forty seven) to  170  (One
           hundred  seventy)  at  Serial  No.768  in  the  office  of  Sub-
           Registrar,  Ranikhet,  District   Almora,   Uttar   Pradesh   on
           29.9.1978.


           AND WHEREAS the  VENDOR  has  also  represented  that  the  said
           purchase/acquisition has been duly entered in the records of the
           Cantonment authority by mutating the said land in  the  name  of
           the VENDOR who has been and is paying the ground rent and  house
           tax to the authorities concerned.


           AND WHEREAS the VENDOR has agreed to sell and the VENDEE, acting
           on the aforesaid representations, have agreed  to  purchase  the
           said property and the lease-hold rights in the said land  as  an
           absolute estate at or for the price of Rs.2,85,000/- (Rupees Two
           Lacs eighty five thousand) only.”



            At the time of registration, the value of the land and  building
      was shown as Rs.2,85,000/- and stamp duty of Rs.35,625/- was paid. Sub-
      Registrar, Almora did not agree with the valuation  of  the  property,
      i.e., the land and building by respondent No.1 and its vendor and made
      a reference to the Collector under Section 47A(2) of the Indian  Stamp
      Act, 1899, as applicable to the State of Uttarakhand, (for short, ‘the
      Act’). The latter got conducted an inquiry through the Tahsildar,  who
      submitted valuation report dated 23.5.1995 with the finding that value
      of the property was Rs.47,25,200/-.

            After considering the report of  the  Tahsildar,  the  Collector
      issued show cause notice  to  respondent  No.1  for  recovery  of  the
      deficit stamp duty. Respondent No.1 contested the notice by  asserting
      that its vendor was a lessee  of  the  Government  of  India  and  the
      property was rightly valued at Rs.2,85,000/- for the purpose of  stamp
      duty. The Collector did not accept the plea  of  respondent  No.1  and
      passed order dated 16.1.1997,  the  relevant  portions  of  which  are
      extracted below:


           “The statement of the vendee that he purchased only building  is
           not correct because according to provisions of  the  Stamp  Act,
           the stamp duty is payable on the basis of contents mentioned  in
           the deed. In  the  deed  the  vendor  sold  66  nalis  land  and
           building. The value of the building was assessed  Tehsildar  was
           Rs.4,00,000/-. Annual rent  of  the  building  was  assessed  as
           Rs.2,214/-. According to the multiplier given in Rule 341  (111)
           of Stamp Rules the value come to Rs.55,350/-. On the other  hand
           the Sub-Registrar, Ranikhet said the rent of building taken  for
           office of the City Municipal Officer, Ranikhet as  Rs.l125/-  as
           decided  by  Naib-Tehsildar,  Ranikhet.  The  meaning  of   this
           incident is that in Ranikhet  value  of  old  building  is  also
           increasing and annual income of buildings is also increasing. In
           deciding value of buildings their usefulness cannot be  ignored.
           On this basis if monthly rent of the entire banglow be taken  as
           Rs.2000/- and rent of each other  room  (four  rooms)  be  taken
           Rs.l00/- per month then also the  value  of  property  comes  to
           Rs.2400/- x 12 x 25 = Rs.7,20,000/-. Therefore, the valuation of
           the property seems to  be  appropriate  on  the  basis  of  this
           incident.  Accordingly  the  value  of  building  is  decide  as
           Rs.7,20,000/-.


           The value of 66 nali land  transferred  in  the  deed  comes  to
           Rs.39,60,000/- at the present rate of Rs.60,000/- per nali.  The
           same value was also assessed by the  Tehsildar.  Therefore,  the
           value  of  the  66  nalis  transferred  land   is   decided   as
           Rs.39,60,000/-. The Tehsildar Ranikhet also told 48 fruit giving
           piece and 131 building trees in  the  land  and  assessed  their
           value as Rs.45,200/-. Therefore, the value  of  property  entire
           comes  to  Rs.7,20,000/-  +   39,60,000/-   +   45,200/-   total
           Rs.47,25,200/-.  On  which  stamp  duty  of  Rs.5,90,687.50   is
           payable. The vendee paid Rs.35,625/- and the  deficiency  is  of
           Rs.5.55,062.50.   Therefore,  recovery  of  stamp   deficit   of
           Rs.5,55,062.50 be assured from the vendee within one month.”



            The revision filed by respondent No.1 was dismissed by the Chief
      Controlling Authority vide order dated 7.3.2000.

            Respondent No.1 challenged the orders of the Collector  and  the
      Chief Controlling Authority in Writ Petition No.1987/2001. The learned
      Single Judge accepted the  contention  of  respondent  No.1  that  the
      provisions of Article 63 of Schedule IB of the Act  are  attracted  in
      the case and the Collector committed an error by ordering recovery  of
      Rs.5,55,062.50 as deficient stamp duty.

            We have heard learned counsel  for  the  parties  and  carefully
      perused the record.  A reading of sale deed dated 3.5.1995  leaves  no
      room for doubt that the vendor had transferred its ownership over  the
      property constructed on the land specified in Schedule-II to the deed,
      which was held by the vendor on 99 years lease.  The sale deed further
      shows that the vendor had  purchased/acquired  the  premises  and  the
      leasehold rights from Shri Sita Ram Mehra,  son  of  Shri  Bhagat  Ram
      Mehra, resident of B-317, New Friends  Colony,  New  Delhi  vide  deed
      dated 29.9.1978.  Unfortunately, neither the Collector and  the  Chief
      Controlling  Authority  nor  the  learned  Single  Judge  called  upon
      respondent No.1 to produce deed dated 29.9.1978 and decided the  issue
      relating to the stamp duty without having the benefit of going through
      the contents of deed dated 29.9.1978, which would have helped them  to
      determine true nature of the transaction between Aditya Mills Ltd. and
      respondent No.1.

            In our considered view, the Collector could have decided whether
      deed dated 3.5.1995 was a lease deed simpliciter or sale deed for  the
      purpose of stamp duty only after going through the  contents  of  deed
      dated 29.9.1978 but he did not bother to undertake that exercise.  The
      learned Single Judge also committed the same mistake and  straightaway
      recorded a finding that it was a lease  deed.  He  should  have  first
      examined  the  terms  and  conditions  incorporated  in   deed   dated
      29.9.1978, referred to the judgments in Byramjee Jeejeebhoy  (P)  Ltd.
      v. State  of  Maharashtra  AIR  1965  SC  590  and  Residents  Welfare
      Association, Noida v. State of Uttar Pradesh (2009)  14  SCC  716  and
      then decided whether the Collector was right in  demanding  additional
      stamp duty from respondent No.1.

            We may have finally decided the controversy but are
  unable to do
      so because neither party has placed  on  record  copy  of  deed  dated
      29.9.1978 and without examining that document, it is not possible  for
      us to record a firm finding about the nature  and  character  of  deed
      dated 3.5.1995.  
In this scenario, the only appropriate course  is  to
      remit the case to the Collector for fresh determination of  the  issue
      relating to valuation of  the  building  and  the  land  purchased  by
      respondent No.1. Ordered accordingly.

            The appeal is disposed of 
with a direction  that  the  Collector
      shall call upon respondent No.1 to produce deed  dated  29.9.1978,  to which reference has been made in the deed executed in  its  favour  by Aditya Mills  Ltd.  and  then  decide  
whether  it  is  a  lease  deed
 simpliciter or a sale deed for the purpose of stamp duty.

   While disposing of the appeal, 
we consider it necessary to  make it clear that 
if the Collector comes to the conclusion that  the  deed executed by Aditya Mills Ltd. in favour of respondent No.1 is a  lease deed then  the  latter  shall  have  to  surrender  the  land  to  the Government of India on 9.3.2021, i.e., the date on which term  of  the lease would expire.


                                              .........................J.
                                              (G.S. SINGHVI)






                                              .........................J.
                                              (V. GOPALA GOWDA)
      New Delhi;
      July 26, 2013.






      -----------------------
7


No comments:

Post a Comment

Note: Only a member of this blog may post a comment.