Andhra Pradesh High Court - Amravati

Kota Ganta Rao vs Kamineni Anjaneyulu on 6 January, 2023

        HONOURABLE SRI JUSTICE SUBBA REDDY SATTI

           CIVIL REVISION PETITION No.2848 of 2022

   Between:

   Kota Ganta Rao, S/o Kota Sambasiva Rao,
   aged about 32 years, R/o Etukuru, Guntur
   Rural Mandal, Guntur District.
                                                      ... Petitioner.
                Versus

   Kamineni Anjaneyulu (died) and 36 others.
                                                 ... Respondents.

Counsel for the petitioner              : Sri Paladugu Ganesh
Counsel for respondents                 : ---

                               ORDER

1st Plaintiff in the suit filed the above revision against

the order dated 28.11.2022 in O.S.No.101 of 2009 on the file

of Principal Senior Civil Judge, Guntur.

2. Plaintiffs filed suit O.S.No.101 of 2009 against the

defendants seeking specific performance of possessory sale

agreements dated 08.11.1996, 12.02.1997, 29.01.1997,

28.09.1996, 22.12.1996, 14.12.1996, 24.11.1996,

24.11.1996, 24.11.1996, 14.12.1996, 30.10.1996,

30.10.1996, 15.11.1996, 03.01.1996, 24.10.1996,

29.01.1997 and 10.11.1996 respectively etc.

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3. Defendants by filing written statement are contesting

the suit.

4. P.W.1 filed affidavit in lieu of chief examination along

with possessory agreement of sale dated 08.11.1996. Trial

Court by docket order dated 29.11.2022 came to the

conclusion that document dated 08.11.1996 is liable for

stamp duty and penalty and hence, declined to receive the

same. Aggrieved by the same, the above revision is filed.

5. Heard Paladugu Ganesh, learned counsel for petitioner.

6. Learned counsel for petitioner would submit that sale

agreement is in dispute and hence, stamp duty need not be

paid. He would also submit that suit is filed for specific

performance of agreement of sale date 08.11.1996 and hence

the agreement of sale can be received for collateral purpose.

He would further submit that though possession was

delivered under the agreement of sale dated 8-11-1996,

according to learned counsel the document can be treated as

simple agreement and necessary stamp duty till be paid after

decree when the document is presented before the Sub

Registrar for registration. Thus, he would contend that unless

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the suit is decreed, no stamp duty need be paid on the

document dated 08.11.1996.

7. Now, the point for consideration is:

Whether the document dated 08.11.1996 requires stamp duty under Schedule I-A of Article 47-A of the Stamp Act, 1899?

8. The document dated 08.11.1996, as per the

nomenclature, possessory agreement of sale. Recitals in the

document, disclose that schedule property is handed over on

the date of execution of agreement i.e. 08.11.1996. The

agreement dated 08.11.1996 was scribed on stamp paper

worth Rs.101/-. Whether the agreement of sale with

possession requires stamp duty and if so what the stamp

duty as per the provisions of the Stamp Act is to be

considered.

9. It is appropriate to extract the explanation to Schedule I-

A of Article 47-A of the Stamp Act, 1899, which reads as

follows:

"Explanation-I: An agreement to sell followed by or evidencing delivery of possession of the property agreed to be sold shall be chargeable as a "sale" under this article:

SRSJ CRP No.2848 of 2022

Provided that, where subsequently a sale deed is executed in pursuance of an agreement of sale as aforesaid or in pursuance of an agreement referred to in clause (B) of Article 6, the stamp duty, if any, already paid or recovered on the agreement of sale shall be adjusted towards the total duty leviable on the sale deed."

10. The Division Bench of the composite High Court of

Andhra Pradesh in B.Ratnamala Vs. G.Rudramma1, while

answering reference held thus:

"9. While considering the provisions of the Indian Stamp Act, it has to be borne in mind that the said Act being a fiscal statute, plain language of the section as per its natural meaning is the true guide. No inferences, analogies or any presumptions can have any place. As the incidence of duty is on the execution of the deed, regard must, therefore, be had only to the terms of the document. Thus the main question that falls for consideration is the interpretation of the expressions "followed by or evidencing delivery of possession". These expressions cannot be read in isolation and one has to find the true meaning by reading the entire Explanation and more so in conjunction with the earlier expression i.e., "agreement". Even if these two expressions are looked independently, it means an agreement to sell followed by delivery of possession and an agreement to sell evidencing delivery of possession. In the first case, i.e., "followed by delivery", possession cannot be disjuncted from the basic source i.e., agreement to sell. Therefore, the expression followed by delivery of possession should have a direct nexus to the agreement and should be read in juxtaposition to the word 'agreement' and it cannot be independent or outside the agreement. Therefore, the delivery of possession should follow the agreement i.e., through the agreement. It takes in its sweep the recital in the agreement itself that delivery of possession is being handed over. It will also

AIR 2000 AP 167 = 1999 (6) ALT 59.

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cover cases of delivery of possession contemporaneous with the execution of agreement, even if there is no specific recital in the agreement. In other words, the delivery of possession should be intimately and inextricably connected with the agreement. And in the second type, i.e., agreements evidencing delivery of possession, if the document contains evidence of delivery of possession by a recital in that behalf, that is sufficient. Such delivery of possession can be prior to the date of agreement and need not be under the agreement. If the Agreement records the fact that the possession was delivered earlier and such recital serves as evidence of delivery of possession, though prior to the Agreement, it falls under the second limb. Therefore, on a proper interpretation of the said expressions, it would follow that an agreement containing specific recital of delivery of possession or indicating delivery of possession even in the past is liable for stamp duty as a 'sale' under the said Explanation."

The Division Bench also placed reliance on Veena

Hasmukh Jain Vs. State of Maharastra2, wherein the

provisions of the Bombay Stamp Act, 1958 were considered

by the Hon'ble Apex Court and observed thus:

"Explanation I to Article 25 of Schedule I to the Bombay Stamp Act reads as follows:

Explanation I: For the purposes of this Article, where in the case of agreement to sell an Immovable property, the possession of any Immovable property is transferred to the purchaser before the execution, or at the time of execution, or after the execution of such agreement without executing the conveyance in respect thereof, then such agreement to sell shall be deemed to be a conveyance and stamp duty thereon shall be leviable accordingly".

AIR 1999 SC 807 = (1999) 5 SCC 725

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Interpreting the said explanation, it was held:

"The duty in respect of an agreement covered by the Explanation is leviable as if it is a conveyance. The conditions to be fulfilled are if there is an agreement to sell Immovable property and possession of such property is transferred to the purchaser before the execution or at the time of execution or subsequently without executing any conveyance in respect thereof, such an agreement to sell is deemed to be a "conveyance". In the event a conveyance is executed in pursuance of such agreement subsequently, the stamp duty already paid and recovered on the agreement of sale which is deemed to a conveyance shall be adjusted towards the total duty leviable on the conveyance. Now, in the present case, the agreement entered into clearly provides for sale of an Immovable property and there is also a specific time within which possession has to be delivered. Therefore, the document in question clearly falls within the scope of the Explanation I. It is open for the Legislature to levy duty on different kinds of agreement in different rates. If the Legislature thought that it would be appropriate to collect duty at the stage of agreement itself if it fulfills certain conditions instead of postponing the collection of such duty till the completion of the transaction by execution of conveyance deed inasmuch as all substantial conditions of a conveyance have already been fulfilled such as by passing of a consideration and delivery of possession of the property and what remained to be done is a mere formality of execution of a sale deed, it would be necessary to collect duty at a later stage itself though right, title and interest may not have passed as such. Still by reason of the fact that under the terms of the agreement there is an intention of sale and possession of the property has also been delivered, it is certainly open to the State to charge such instruments at a particular rate which is akin to a conveyance and that it exactly what has been done in the present case. Therefore, it cannot be said that levy of duty is not upon the instrument but on the transaction."

11. Eventually, the Division Bench concluded that delivery

of possession before the execution or at the time of execution

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or after the execution of an agreement and such agreements

are deemed to be conveyances for the purpose of imposing

stamp duty.

12. Learned counsel for petitioner placed reliance on the

judgment in Sri Lakshmi Housing Enterprises rep. by GPA,

Vs. Haji Begum and others3. In the said case, there is no

recital in the agreement about delivery of possession. Hence,

the Court came to the conclusion that no stamp duty need be

paid. The judgment relied on by learned counsel for petitioner

in E.Padma Rao @ Vadla Padma Rao and others Vs. Vijay

Kumar and another4 will not come to the aid of petitioner, as

the facts therein are different from the facts of the case on

hand. In fact, learned single Judge observed thus:

"The possession which is delivered for the limited purpose of dividing the land into plots, cannot be treated as the one that enables the party to enjoy the property without any fetters. When the factum of delivery of possession has the effect of elevating agreement of sale covered by Article-6 of the Schedule IA of the Act, to the level or status of a sale deed, covered by Article 47-A of the Act, it cannot be a mere permission to enter the land to divide it into plots".