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THE HON'BLE SRI JUSTICE BANDARU SYAMSUNDER
CIVIL REVISION PETITION No.207 of 2016
O R D E R:
This Civil Revision Petition is filed by the petitioner/defendant under Article 227 of the Constitution of India against the orders passed by learned Senior Civil Judge, Proddatur, in O.S.No.215 of 2009, dated 15.10.2015 wherein Court below held that document dated 19.07.2009 though named as agreement of sale but it is a release deed admissible in evidence and the plaintiff shall take steps to get impound the same as per Registration Act and Stamp Act.
2. The respondent/plaintiff filed suit against the revision petitioner herein for specific performance of a contract in pursuance of document dated 19.07.2009 stating that himself and the revision petitioners have purchased plaint schedule house property under registered sale deed dated 19.10.1989 for valid consideration from rightful owners and ever since both have been enjoying property by running a kirana shop and thereafter revision petitioner herein agreed to sell his share of plaint schedule property and executed an agreement of sale dated 19.07.2009 in his favour and handed over the shop and delivered possession of plaint schedule property with a stipulation to receive sale consideration of Rs.4,00,000/- within three months and execute 2 registered sale deed which he failed due to that he filed suit for specific performance. The respondent has claimed that ever since the revision petitioner executed document dated 19.07.2009, he has got exclusive possession and enjoyment of plaint schedule property. The said suit is resisted by revision petitioner by filing written statement and during the trial, the respondent, who was examined as PW.1 intended to mark document dated 19.07.2009, which objected by revision petitioner and then Court below held that it is a release deed can be admitted in evidence after paying stamp duty by relying on ratio laid down by this Court in G.Dayanand Vs. District Registrar, Hyderabad and another 2012 (5) ALT 603.
3. Aggrieved by the orders passed by Court below, the petitioner preferred present revision petition stating that trial Court admitted unregistered and unstamped agreement of sale deed dated 19.07.2009, which is hit by Section 17 of Registration Act, which cannot be received in evidence.
4. I have heard both sides.
5. Learned counsel Mr.M.Srikanth, for revision petitioner would submit that document dated 19.07.2009 is not a release deed, which is an agreement of sale evidencing delivery of possession, which cannot 3 be received in evidence even as per Section 49 of Registration Act, which created right in immovable property. He prays to allow the revision petition.
6. Learned counsel Mr.V.Nitesh for the respondent would submit that parties are no other than full blood brothers and document dated 19.07.2009 is a release deed as one of the co-owners executed document in favour of another co-owner by agreeing to receive money towards ½ portion of value of the property. He would further submit that the present case is similar to the circumstances which this Court held in G.Dayanand case referred supra. He prays to dismiss the revision petition.
7. Now the issue that emerges for consideration of this Court is:-
"Whether the Order under challenge is sustainable and tenable and whether the same warrants any interference of this court under Article 227 of the Constitution of India?"
POINT:-
8. It is not in dispute that the respondent has filed suit against the revision petitioner for specific performance of a contract in pursuance of document dated 19.07.2009. The English translated copy of document is extracted hereunder:-
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TRUE TRANSLATION AGREEMENT OF SALE "This deed of agreement is executed on this the 19th day of July, 2009 between (1)Kambam Narasimhulu Setty and (2) Kambam Jagadeesh Kumar Setty, both residents of Muddanur Village as follows:
The house bearing No.4/55A, which is in our joint possession, I sold the same to our for an amount of Rs.4,00,000/- (Rupees four lakhs only) and possession of the same has been delivered to you. On payment of the said amount within three months, I will execute a registered sale deed in your favour with your expenses.
The stock in the shop, outstanding amounts to be payable to the shop, etc., should be borne by you and I have no concerned with the same.
Boundaries to the house:
South : Jammalamadugu Road North : Panchayat Road West : House of Kaparappa Vijaya East : House of Kotha Jagadeesh"
9. Admittedly, the revision petitioner and the respondent are full blood brothers, who said to be jointly purchased plaint schedule property on 19.10.1989 under registered sale deed and now the revision petitioner said to be executed the document dated 19.07.2009 5 agreed to receive Rs.4,00,000/- and delivered his portion of the property to the respondent herein. Now it would be beneficial to discuss specific averments in the plaint wherein it is specifically stated by the respondent that the revision petitioner agreed to sell away schedule property and executed an agreement of sale dated 19.07.2009 in his favour and also handed over the shop also therein to the plaintiff with delivery of possession of plaint schedule property with a stipulation to receive the sale consideration of Rs.4,00,000/- within three months and ever since the plaintiff also has got exclusive possession and enjoyment of the schedule property.
10. It is no doubt true that nature of the document has to be decided on perusal of the contents of document not nomenclature or recitals in the plaint. The Hon'ble Apex Court in Omprakash ... Appellant Vs. Laxminarayan and others ... Respondents in Civil Appeal No.9032 of 2013 explaining the scope of definition of conveyance and considering similar amendment in Madhya Pradesh amendment to Indian Stamp Act held that agreement to sell followed by and evidencing delivered of possession required stamp duty and penalty as "conveyance".
11. The contention of the respondent is that document dated 19.07.1989 is only a release deed as it is executed between the 6 brothers as held by this Court in G.Dayanand case referred supra. In the said case also two brothers entered into a document of property of their mother and thereafter widow of one of his brothers by receiving Rs.20,00,000/- executed release deed, which was presented for registration and stamp duty of one per cent was paid but registering authority kept document pending and directed the parties to pay stamp duty as "conveyance" as per Schedule I-A of Article 47-A of Indian Stamp Act, which was set aside by this Court when parties filed a writ petition and held that one of the owners of an item of property, releases himself of the legal rights and obligations in favour of the rest of the co-owners, or some of them, such release can be with or without any consideration and though a sale and release resemble each other in the context of loss of title of the transferor or rights in favour of others, when it is between the brothers and co-owners not with the strangers, it is only a release deed. The ratio laid down in the said decision is rendered when question of stamp duty raised by registration authority not by co-owner.
12. In the present case, suit itself is filed by the respondent/plaintiff for specific performance of a contract and recitals of the document as referred supra clearly shows that there is a clause of executing registered sale deed after receiving Rs.4,00,000/- within three months 7 which itself shows that document is agreement of sale though it is between co-owners wherein there is a recitals with regard to delivery of possession and document, which is an agreement of sale is followed by delivery of possession. This Court in Makineni Srinivas Rao and others Vs. Manthena Prabhakar Reddy 2014 (6) ALD 261 had an occasion to consider the scope of Explanation I of Article 47-A of Schedule I-A of the Indian Stamp Act, 1899 and opined at Para Nos.7 to 11 which extracted hereunder:-
"7. Explanation I of Article 47-A of Schedule I-A of the Act envisages that an agreement to sell followed by or evidencing delivery of possession of the property agreed to be sold shall be chargeable as a "Sale". In the opinion of this Court, the words "followed by or evidencing delivery of possession of the property" shall be construed to mean that delivery of possession shall be concurrent with or immediately after the execution of agreement of sale and the said provision does not attract a case where delivery of possession takes place long time after the execution of the agreement of sale. The words "followed by or evidencing delivery of possession" in Explanation I fell for consideration of a Division Bench of this Court in B. Ratnamala v. G. Rudramma 1999 (6) ALT 159 : 1999 (6) ALD 160. While reading the two phrases viz., "followed by" and "evidencing" separately, the Bench held that in the former case, even in the absence of a recital in the agreement, the delivery must be contemporaneous with the execution of agreement and that possession should be intimately and inextricably connected with the agreement. In the latter case, it held that in order to attract this explanation, the agreement must contain a 8 recital of delivery of possession either prior to or after the agreement.
8. On a careful reading of Explanation I and the Division Bench judgment in B. Ratnamala (2 supra), I am of the opinion that in cases where the agreement does not contain the recital of delivery of possession, it must be examined whether possession "followed" the agreement. What precisely is the meaning of the word "followed"? The Oxford dictionary, Thesaurus and Word power guide (Indian edition 2007) explained the meaning of the word "follow" as move or travel behind "go along" "come after in time or order" "be a logical consequence of" "(follow through) continue (an action or task) to its conclusion".
9. Thus, in the absence of express recital in the agreement on delivery of possession, in order to levy stamp duty chargeable to conveyance in respect of an agreement of sale, it must be shown that possession followed as a logical consequence of the agreement. As explained by the Apex Court in Veena Hansmukh Jain v. State of Maharashtra , by introducing Explanation I, the legislature intended that the stamp duty as applicable to conveyance shall be collected in advance where delivery of possession was involved at the agreement stage itself and execution of conveyance deed remains a mere formality.
10. Where the agreement does not contain the recital relating to possession, what needs to be seen is whether delivery of possession was in contemplation of the parties at the time of execution of the agreement itself. This can be ascertained with reference to the point of time of such delivery. If delivery is simultaneous to or concurrent or contemporaneous with the execution of agreement of sale, it can be safely concluded that the parties have intended delivery of 9 possession though such a recital is absent in the agreement. If on the contrary there is a reasonable time lag between execution of agreement and delivery of possession, it cannot be construed that such delivery followed the agreement. At best it amounts to delivery of possession in pursuance of and not following the agreement of sale.
11. In my opinion, the legislature has consciously used the restrictive expression followed by preceding the words An agreement to sell in Explanation I. It has not used the expansive words such as in pursuance of for it evidently wanted levying and collection of stamp duty chargeable for conveyances only in cases where parties to agreement of sale intended delivery of possession at the agreement stage itself without waiting for execution of regular conveyance deed. It is trite that provisions of a fiscal statute need to be strictly construed."
13. The said decision is followed by this Court in Chunduru Abbaiah ... Petitioner Vs. Garlapati Satyanarayana ... Respondent 2020 (6) ALT 305 though the said decision it is held that recitals of agreement of sale shows that possession was not delivered and ratio in the said decision is that if possession is followed by or evidencing delivery of possession as per the document, it requires stamp duty under Article 47-A of Schedule I-A of Indian Stamp Act. This Court in G.Kiran Kumar ... Petittioner Vs. N.Venkateswara Reddy and others ... Respondent by following Judgment of Hon'ble Apex Court in C.R.P.No.2874 of 2017, dated 20.12.2018 following 10 ration laid down by Hon'ble Apex Court in Omprakash Vs. Laxminarayan and others and after elaborately discussing precedent law held that agreement of sale, which is inadequately stamped has to be impounded as per provisions of stamp act.
14. The contention of learned counsel for the revision petitioner is that the document dated 19.07.2009, which creates right in immovable property not admissible even under Section 17 and 49 of Registration Act. On perusal of recitals of the document which also contains a recital that a future document can be executed which shows that transaction of sale is not completed unless another document is executed due to that it cannot be said that it is a unregistered sale deed though it contains recital with regard to delivery of possession and document evidencing delivery of property. Though the document is said to be agreement of sale evidencing delivery of possession which can be treated as "Conveyance", which can be received in evidence in part performance of a contract after collecting stamp duty and penalty as a sale as per Explanation I of Article 47-A of Schedule I of Indian Stamp Act. This Court in Ummadi Subramanyam Vs. Ekka Dhanamma and another 1999 (4) ALT 706 held that proviso of Section 49 of Registration Act shows that an unregistered document effecting immovable property though required registration may be 11 received in evidence of a contract in a suit for specific performance after collecting stamp duty and penalty. The document dated 19.07.2009 containing the recital to execute another document having recital of delivery of possession which also mentioned in pleading by the respondent/plaintiff cannot said that it is a release deed and it is an agreement of sale followed by and evidencing delivery of possession of the property, which require stamp duty as per Explanation I of Article 47-A of Schedule I-A of Indian Stamp Act. Therefore, orders passed by Court below treating document dated 19.07.2009 as a release deed are not sustainable in law and also on facts, which are liable to be set aside and warrants interference of this Court invoking supervisory jurisdiction under Article 227 of the Constitution of India.
15. In the result, the Civil Revision Petition is allowed setting aside orders passed by Senior Civil Judge, Proddatur, with regard to admissibility of the document dated 19.07.2009, which held that it is a release deed. It is held that document dated 19.07.2009 is an agreement of sale evidencing and followed by delivery of possession require stamp duty as per Explanation I of Article 47-A and Schedule I- A of the Indian Stamp Act. The document dated 19.07.2009 can be admitted in evidence if the respondent/plaintiff pay stamp duty and penalty as required under Indian Stamp Act. It is needless to observe 12 that if the party consents for impounding document, the Court itself can impound the document, otherwise, it has to direct the party concerned to approach the Collector or person authorized by him, for getting document impounded before the same is received in evidence.
With the above directions, the Civil Revision Petition is allowed. No order as to costs.
Consequently, miscellaneous petitions pending, if any, shall stand closed.
The interim stay, if any, granted shall stand vacated.
___________________________ JUSTICE BANDARU SYAMSUNDER Date :22.11.2022 Chb 13 THE HON'BLE SRI JUSTICE BANDARU SYAMSUNDER C.R.P.No. 207 of 2016 Date : 22.11.2022 Chb