Star Paper Mills Ltd. vs Smt. Anisa Begum And Others
2023 Latest Caselaw 4 ALL

HIGH COURT OF JUDICATURE AT ALLAHABAD
 
 

Court No. - 6							Reserved
 
									     A.F.R.
 
Case :- CIVIL REVISION No. - 18 of 2008
 

 
Revisionist :- Star Paper Mills Ltd.
 
Opposite Party :- Smt. Anisa Begum and others
 
Counsel for Revisionist :- Mr. Kshitij Shailendra, Advocate
 
Counsel for Opposite Party :- Mr. Pankaj Agarwal, Advocate
 

 
Hon'ble J.J. Munir,J.

This revision is directed against the order of the Additional District Judge, Court No.2, Saharanpur, rejecting the defendants' application under Order XIII Rule 8 CPC read with Rule 60 of the General Rules (Civil), 1957 and Sections 31, 32, 33, 38 and 40 of the Indian Stamp Act, 1899 (for short, 'the Act of 1899) asking the Court to impound the document bearing paper No. 354-Ka filed by one Farid Ahmad, a third party, seeking impleadment, in support of his impleadment application.

2. The facts in a nutshell leading to this revision are that Smt. Anisa Begum, a resident of Kori Tilla, Saharanpur, instituted O.S. No. 317 of 1991 in the ex-Court of the Civil Judge, Saharanpur [now Civil Judge (Sr. Div.)] against the two defendants, who are substantially the same party, that is to say, Star Paper Mills Pvt. Ltd. through its Managing Director and the General Manager of the said company, claiming a mandatory injunction in terms hereinafter indicated.

3. The plaintiff's case is that the suit property, admeasuring 7940 square yards, Khasra No. 538, Khewat No. 13, Mahal Gher, Daiyan Mohammad Hasan Khan, Village Pathanpura, is the plaintiff's property, of which she is the owner in possession. She is recorded as such in the revenue record. The aforesaid property shall hereinafter be called 'the suit property'. It is the plaintiff's case that the suit property is abadi and located within the city of Saharanpur. As such, zamindari relating to the said land has not been abolished and the plaintiff continues to be its zamindar with all rights attached to the estate. After pleading her chain of title and the manner of acquisition of the suit property through sale deeds by the plaintiff's father, Nisar Ahmad, it is asserted that the plaintiff has inherited the said property from her father. Her father was in possession of the suit property as zamindar along with other properties that he had purchased. His name was mutated in the revenue records.

4. Shorn of details that are not relevant for the purpose of the limited issue that arises in this revision, the plaintiff's case in the suit appears to be that though she continues to be the zamindar of the suit property, wherein the defendants have, through a chain of successive transfers, acquired a limited right to the use of a grove etc., the defendants, that is to say, Star Paper Mills Pvt. Ltd. are ignoring the zamindar's rights and threatening to fell trees, some of which have already been cut away. The efforts to prevent the defendants have failed. The defendants are also threatening to raise constructions over the suit property after felling the various trees there in derogation of the zamindar's rights that the plaintiff holds. Accordingly, the suit was instituted by Smt. Anisa Begum, praying that a mandatory injunction be issued, directing the defendants to remove all their effects, like goods, building materials etc., whatsoever, from the suit property shown in the schedule to the plaint, within time fixed by the Court, failing which the Court may cause these materials and effects to be removed through the Court's process.

5. The suit was instituted on behalf of Smt. Anisa Begum through the holder of her general power of attorney, Jalil Ahmad. He has been rather peculiarly described in the array as plaintiff No. 1/1. He is not an LR of Anisa Begum, substituted in her stead. Jalil Ahmad has signed and verified the plaint, describing himself as the holder of general power of attorney from Smt. Anisa Begum, who has been shown as the plaintiff, acting through her attorney in the verification clause. In the cause title of the plaint, Anisa Begum and her attorney, Jalil Ahmad have been rather awkwardly described with Jalil Ahmad, as already said, being shown on the plaintiff's side as plaintiff No. 1/1, below Anisa Begum's name.

6. Pending suit, one Farid Ahmad, a third party, made an application, seeking impleadment on 23.08.2007 under Order XXII Rule 10 CPC. It was alleged by Farid Ahmad, who is opposite party No. 2 and, in fact, the contesting opposite party, that the plaintiff, Jalil Ahmad, by oral gift dated 16.05.2006, had gifted him the suit property, that is to say, the zamindar's estate, which Smt. Anisa Begum held. Farid Ahmad accepted the oral gift (hiba) and acting on the oral gift, took possession of the suit property. Later on, on 23.07.2006, Jalil Ahmad wrote a memorandum of oral gift, meant to serve as a record of the antecedent hiba. It was also asserted that Jalil Ahmad being ill was unable to properly prosecute the suit. On the said assertion, Farid Ahmad prayed that he may be impleaded as a plaintiff along with Jalil Ahmad and permitted to prosecute the suit. This application by Farid Ahmad bears paper No. 347-C.

7. Apparently, Farid Ahmad did not file the document dated 23.07.2006, the memorandum of oral gift, on the basis of which he sought impleadment. Later on, he brought on record the document dated 23.07.2006, which is described in vernacular as "yaddasht hiba". A copy of the said document is on record as Annexure No. 2 to the affidavit in support of the stay application.

8. Jalil Ahmad filed objections to the application made by Farid Ahmad, seeking impleadment, wherein he said that after making the oral gift, he had ceased to have any interest in the suit property. It was mentioned that the said fact be noted. The defendant-revisionist filed objections to the application seeking impleadment by Farid Ahmad with a case that the latter had no locus standi to move the application or seek impleadment. The basis of the objection was that the document bearing paper No. 354-Ga relied upon as evidence of the oral gift was a waste paper and did not confer any right, title or interest upon Farid Ahmad. It was urged that Fariid Ahmad sought impleadment on the basis of the memorandum of oral gift, bearing paper No. 354-Kha to establish his right to the suit property as an oral gift.

9. It was further urged through the objection preferred by the defendant-revisionist that the document was unregistered and insufficiently stamped. It was, therefore, required to be impounded under Section 33 of the Act of 1899. The defendant-revisionist referred to the provisions of Sections 30, 32, 33, 38 and 40 of the Act of 1899 and the amended definition of an instrument of gift under sub-Section (14-A) of Section 2, introduced in the Act of 1899, in its application to the State of Uttar Pradesh vide U.P. Act No. 38 of 2001. It was impressed upon the Trial Judge that a memorandum of oral gift carrying a declaration about the making or acceptance of an oral gift would also be taxable to stamp duty. The Trial Judge by the impugned order rejected the revisionist's application under Order XIII Rule 8 CPC, seeking to impound the instrument, bearing paper No. 354-Ga/ the memorandum of oral gift.

10. Aggrieved, this revision has been instituted.

11. Heard Mr. Kshitij Shailendra, learned Counsel for the revisionist and Mr. Pankaj Agrawal appearing on behalf of opposite party No. 2. No one appears on behalf of the heirs and LRs of the plaintiff-opposite party Nos. 1/1/1, 1/1/2, 1/1/3 and 1/1/4.

12. Mr. Kshitij Shailendra, learned Counsel for the revisionist and Mr. Pankaj Agarwal, learned Counsel appearing for contesting opposite party No. 2 are at sharp variance about the proposition that a memorandum of oral gift (hiba), which does not by itself bring about a transfer of immovable property or create, extinguish or enlarge rights, but merely records an antecedent oral transaction, accompanied by acceptance and delivery of possession, is neither compulsorily registerable nor taxable to stamp duty. While Mr. Kshitij Shailendra submits that it is both compulsorily registerable and taxable to stamp duty, Mr. Agarwal says that it does not require either. Mr. Agarwal has supported the order impugned passed by the learned Trial Judge, refusing to impound the instrument.

13. Since this revision arises out of the defendant's application under Order XIII rule 8 CPC read with Sections 31, 32, 33, 38 and 40 of the Act of 1899, seeking to impound the document, paper No. 354-Ka, the issue whether the document is compulsorily registerable or not, does not arise in this case. All that is to be examined is: whether the document is required to be taxed to stamp duty or it can be received in evidence, without any stamp duty being paid thereon, or even if insufficiently stamped? It is interesting that the learned Counsel appearing for both parties have relied upon the decision of this Court in Mohammad Shamim Akhtar v. State of U.P. and others, 2012(11) ADJ 698 to canvass their diametrically opposite submissions. In Mohammad Shamim Akhtar (supra), it was held:

"8. The definition of the instrument under Section 2(14) of the Act is very wide and it includes every document or record which purports to create, transfer, limit, extend, extinguish or record the right or liability of a party in respect of any property.

9. Recently, the Apex Court in Hafeeza Bibi and others v. Shaikh Farid (Dead) by Lrs. and others, 2011 (2) ARC 218, has dealt with gift under the Mohammedan Law and has ruled as under:

'In our opinion, merely because the gift is reduced to writing by a Mohammadan instead of it having been made orally, such writing does not become a formal document or instrument of gift. When a gift could be made by Mohammadan orally, its nature and character is not changed because of it having been made by a written document.''

10. The Apex Court in the aforesaid decision distinguishing the decision of the Full Bench of Andhra Pradesh High Court in the case of Inspector General of Registration and Stamps, Govt. of Hyderabad v. Smt. Tayyaba Begum, AIR 1962 AP 199, approved the view of the Calcutta High Court in the case of Nasib Ali v. Wajed Ali, AIR 1927 Cal 197, holding that a deed of gift by Mohammedan is not an instrument effecting, creating or making the gift but a mere piece of evidence. Such writing is not a document of title but a piece of evidence only.

11. In view of the above decision of the Supreme Court, though the Court therein has not considered the impact of definition of the instrument as contained in the Act, clearly ruled that the nature and character of the gift made by the Mohammedan does not change merely for the reason that it has been written down and that a gift by the Mohammedan is not an instrument effecting, creating or making the gift in writing but only a piece of evidence.

12. In addition to the above, the definition of 'instrument' under Section 2(14) of the Act contemplates a document or a record creating or extinguishing rights and liabilities which means existence of a document in some form or the other. Therefore, where an oral gift is permissible and made there happens to be no document or record of rights and liabilities which could be subjected to stamp duty. Liability of payment of stamp duty arises only on the execution of an instrument. (Reference: AIR 1934 All 1052 Sukhdeo Prasad). The subsequent writing it out on a paper would not make it a gift deed as the gift stood completed in the past by making an oral declaration, its acceptance and delivery of possession. His Lordship of the Rajasthan High Court in Hanuman Prasad v. The State of Rajasthan, AIR 1958 Raj 291, ruled that a document which is not an instrument of gift but only a record of the past transaction does not require to be stamped under the Act.

13. In the above situation neither the gift made by a Mohammedan orally nor its reduction in writing subsequently would amount to execution of an instrument which could be subjected to payment of stamp duty. Thus, I am of the opinion that the authorities below grossly erred in law in subjecting the above memorandum of gift dated 8.5.2002 to stamp duty."

14. There is little doubt, particularly, in view of the holding of the Supreme Court in Hafeeza Bibi and others v. Shaikh Farid (Dead) by LRs and others, 2011 (2) ARC 218, that an oral gift made by a mohammedan, which is subsequently reduced to writing 'does not become a formal document or instrument of gift', as observed by their Lordships of the Supreme Court.

15. The remarks of this Court in Mohammad Shamim Akhtar based on Hafeeza Bibi (supra) that a deed of gift by a Mohammedan is not an instrument effecting, creating or making a gift, but a mere piece of evidence and that such a writing is not a document of title, but a mere evidence of it, is trite exposition of the law, so far as the position goes under the Central Statute. This Court may only add that under the Central Statute also, if a deed of gift were made in writing conveying thereby the donor's interest to the donee in an immovable property, it would be taxable to stamp duty, like any other instrument of gift. It is only in cases where oral gift under the Mohammedan law is made and concluded by acceptance with delivery of possession, and a record of it, is subsequently drawn up, often called a memorandum of oral gift, or a record made of the antecedent and concluded transaction of hiba that it is not chargeable to stamp duty. But, this position obtains under the Central Statute. In Mohammad Shamim Akhtar, the U.P. State Amendment brought in vide U.P. Act No. 38 of 2001, adding sub-Section (14-A) to Section 2 of the Act of 1899 as applicable in the State of U.P. was noticed, but the Court did not consider or pronounce upon it, because in that case the oral gift had been made on 17.12.2001, of which a memorandum was drawn up on 08.05.2002, whereas U.P. Act No. 38 of 2001 came into force w.e.f. 20.05.2002.

16. Here, the oral gift was admittedly made on 16.05.2006 in the presence of witnesses, where the donee accepted the oral gift and took ownership possession of the suit property. The memorandum of oral gift was drawn up on 23.07.2006 recording the antecedent transaction done orally on 16.05.2006. The memorandum of oral gift, described as 'yaddasht hiba' is not taxed to any stamp duty. The memorandum of oral gift here is one that was drawn after coming into force of the U.P. State Amendment to the Act of 1899 vide U.P. Act No. 38 of 2001. Also, the oral gift, that the memorandum records, was one made after enforcement of the U.P. State Amendment under reference. Section 2(14-A) introduced vide U.P. Act No. 38 of 2001 amends sub-Section 14 of Section 2 of the Act of 1899 as follows:

"2. In section 2 of the Indian Stamp Act, 1899, hereinafter referred to as the principal Act, -

(a) for sub-section (14), the following sub-section shall be substituted, namely : -

"(14) 'Instrument'-'Instrument' includes every document and record created or maintained in or by an electronic storage and retrieval device or media by which any right or liability is, or purports to be, created, transferred, limited, extended, extinguished or recorded,"

(b) after sub-section (14), the following sub-section shall be inserted, namely : -

"(14-A) 'Instrument of Gift'-'Instrument of Gift' includes and instrument whether by way of declaration or otherwise, for making or accepting an oral gift,"

(emphasis by Court)

17. An instrument of gift is taxable to stamp duty on the value of the property as set-forth in the instrument, that is to say, at the same rate as a conveyance under Item No. 33 of Schedule I to the Act of 1899. It is not the rate of the stamp duty at which an instrument of gift is taxable, but the fact that it is taxable to stamp duty that is in issue here. Now, what is to be seen is whether by virtue of sub-Section (14-A) of Section 2 of the Act of 1899, as amended in its application to the State of U.P., a memorandum of oral gift, which records a concluded oral gift or hiba by a mohammedan is taxable to stamp duty. But, for the provision of sub-Section (14-A) of Section 2, a memorandum of oral gift, which did not by itself create any right and merely recorded an antecedent, oral transaction of gift or hiba, has always been held to be not taxable to stamp duty. It is on that principle that this Court acted in Mohammad Shamim Akhtar following the Supreme Court in Hafeeza Bibi.

18. Here, the statutory context has changed because sub-Section (14-A) of Section 2 of the U.P. State Amendment has defined an instrument of gift, which the Central Statute does not. The definition of an instrument of gift in sub-Section (14-A) of Section 2 is an inclusive definition and expressly says that it includes an instrument of gift whether by way of declaration or otherwise, for making or accepting an oral gift. The express words employed by the Amendment extend the sweep of the Act to cover not only those instruments of gift that by themselves convey the property donated, but also include declarations of gifts made or accepted orally. A conveyance by oral gift of immovable property is not known to the corpus juris in India except under the Mohammedan Law, for which the Transfer of Property Act makes allowance. In all other cases, the Transfer of Property Act mandates vide Section 123 as follows:

"123. Transfer how effected.--For the purpose of making a gift of immoveable property, the transfer must be effected by a registered instrument signed by or on behalf of the donor, and attested by at least two witnesses.

For the purpose of making a gift of moveable property, the transfer may be effected either by a registered instrument signed as aforesaid or by delivery. "

19. Section 129 of the Transfer of Property Act makes allowance for oral gifts under the Mohammedan Law and death bed gifts of movable property alone for other citizens. Section 129 reads:

129. Saving of donations mortis causa and Muhammadan law.--Nothing is this Chapter related to gifts of moveable property made in contemplation of death, or shall be deemed to affect any rule of Muhammadan law.

20. This being the substantive law relating to disposition by gift and given the terms of the State Amendment vide sub-Section (14-A) of Section 2 of the Act of 1899, there is not the slightest doubt that after enforcement of the State Amendment, a memorandum of oral gift recording an antecedent transaction of hiba, howsoever described and in whatever kind of words couched, is taxable to stamp duty as an instrument of gift. The order impugned holding to the contrary passed by the learned Additional District Judge cannot be countenanced.

21. This revision succeeds and is allowed. The impugned order dated 07.12.2007 is hereby set aside and the application bearing paper No. 357-Ga-2 restored to the file of the Trial Court, to be decided afresh, after hearing parties, in accordance with the guidance in this judgment. Needless to add that orders on the said application shall be passed within a month of receipt of this order by the Trial Court.

22. There shall be no order as to costs.

23. The Registrar General is directed to circulate a copy of this order to all the learned District Judges, and the Chief Controlling Revenue Authority, Uttar Pradesh.

Order Date :- 02.01.2023

Anoop

(J.J. Munir, J.)