Delhi High Court

M/S Bahia Properties (P) Ltd. vs Ndmc And Ors. on 19 October, 2010

Author: Rajiv Sahai Endlaw

             *IN THE HIGH COURT OF DELHI AT NEW DELHI

                                            Date of decision: 19 October, 2010.

+                           W.P.(C) 6962/2010

%        M/S BAHIA PROPERTIES (P) LTD.                ..... Petitioner
                      Through: Mr. Subhash C. Jindal, Adv.

                                   Versus

         NDMC AND ORS.                                         ..... Respondents
                     Through:             Mr. P.C. Sen, Adv.
                                          .
CORAM :-
HON'BLE MR. JUSTICE RAJIV SAHAI ENDLAW
1.       Whether reporters of Local papers may                       Yes.
         be allowed to see the judgment?

2.       To be referred to the reporter or not?                      Yes.

3.       Whether the judgment should be reported                     Yes.
         in the Digest?

RAJIV SAHAI ENDLAW, J.

1. The petitioner claiming to have purchased the Flat No.G-3, 1 Hailey

Road, Upasana Building, New Delhi from Sh. Rajender Singhal and Sh.

Narender Singhal has filed this writ petition seeking direction to the

respondent NDMC to mutate/transfer the said flat in its records in the name

of the petitioner. It is the case of the petitioner that inspite of the application

of the petitioner and payment of transfer charges by the petitioner to the

respondent NDMC, the NDMC has wrongfully and illegally not mutated the

flat in the name of the petitioner till now.

2. The emphasis of the counsel for the petitioner is on Section 74(1) of

the New Delhi Municipal Council Act, 1994 which is as under:

"74. Notice of transfers-

1) Whenever the title of any person primarily liable for the payment of property tax on any land or building is transferred, the person whose title is transferred and the person to whom the same is transferred shall within three months after the execution of the instrument of transfer or after registration, if it is registered, or after the transfer is effected, if no instrument is executed, give notice of such transfer in writing to the Chairperson."

3. The counsel for the petitioner has urged that under the aforesaid

provision, even if no instrument of transfer is executed, the transferee is

required to give notice of transfer and upon such notice having been given,

respondent NDMC is obliged to transfer/mutate property in its record in the

name of the applicant.

4. The counsel for the petitioner has also drawn attention to the

communication dated 28th January, 2010 of the respondent NDMC to the

petitioner asking the petitioner to furnish the following information before

its application for mutation could be processed:-

"1. To furnish any document which shows that the above said flat has come in the share of Sh. Rajender Singhal and Sh. Narender Singhal from whom you have purchased the flat as per Flat Buyer Agreement dated 11-07-2006.

2. To deposit `3,35,244/- as arrears of property tax up to 31-03-

2009, in the municipal treasury.

3. To intimate present status of the flat i.e. it is vacant/rented/self occupied."

5. The counsel for the respondent NDMC appearing on advance notice

states that the present writ petition is a guise to avoid payment of the house

tax arrears due till now with respect to the said flat and which were as

aforesaid, demanded from the petitioner. It is stated that without the

petitioner clearing the house tax arrears, the flat cannot be

mutated/transferred in his favour.

6. The counsel for the petitioner states that the petitioner is willing to

pay the said house tax arrears and respondent NDMC should be directed to

transfer/mutate the flat in the name of the petitioner on payment of the house

tax arrears.

7. The petitioner in proof of purchase of the aforesaid flat has filed

before this Court a Flat Buyer Agreement dated 11th July, 2006. The said

Flat Buyer Agreement is unregistered. The petitioner has in pursuance to

the said Flat Buyer Agreement and as expressly recorded therein has also

taken possession of the flat. Such an agreement, pursuant to the Registration

and Other Related Laws (Amendment) Act, 2001 in force w.e.f. 24 th

September, 2001, is required to be compulsorily registered. In the absence

of the said Flat Buyer Agreement being registered, it cannot be said that the

title to the flat has been transferred.

8. The argument of the counsel for petitioner that the Agreement may be

ignored and the case may be treated as falling under the category of Section

74(1) of "if no instrument is executed" cannot be accepted. The primary

requirement of Section 74(1) is of transfer of title to the property. If under

the law there can be no transfer of title of the property without a registered

document, then Section 74(1) would not come into play. The category of "if

no instrument is executed" is intended to apply to cases where the title is

transferred by devolution or operation of law and which is not the case over

here.

9. The counsel for the petitioner has argued that the practice followed by

the NDMC is of transferring the title on the basis of such Flat Buyer

Agreement and on receipt of transfer/mutation duty only and without

insisting upon the said document being registered. Even if that be the

practice of NDMC, that cannot prevail over the law. The NDMC before

transfer/mutation is required to satisfy itself that there is a transfer of title in

accordance with law. Without transfer of title, NDMC cannot on mere

asking mutate/transfer the property.

10. There is another aspect of the matter. The Indian Stamp Act, 1899

was also amended w.e.f. 24th September, 2001. A stamp duty of 90% of the

stamp duty payable on a conveyance has been provided on conveyance in

the nature of part performance, as the Flat Buyer Agreement dated 11 th July,

2006 relied upon by the petitioner is. The prescribed stamp duty has not

been paid by the petitioner. Under Section 33 of the Stamp Act, every

person in charge of public office, as the Officer of NDMC responsible to

effect mutation/transfer is, before whom any instrument chargeable with

duty and not duly stamped is produced, is required to impound the same.

The NDMC cannot accept the plea of petitioner of transfer of title of flat in

its favour on the basis of Flat Buyer Agreement aforesaid, for this reason

also. Moreover, if the mutation/transfer is effected by NDMC that would

result in loss to the exchequer. In the present case, the Govt. of NCT of

Delhi likely to be affected by non-payment of stamp duty has not been

impleaded as a party. The counsel for the petitioner of course states that

since that was not the issue, the Govt. of NCT of Delhi was not made a

party.

11. I find that the Supreme Court in MCD Vs. Trigon Investment and

Trading (P) Ltd. (1996) 3 SCC 630 in para 15 of the judgment has, in

relation to Section 128 of the Delhi Municipal Corporation Act, 1957 and

which provision is in pari materia to Section 74 of the NDMC Act has

observed:-

"The expression „transfer‟ is not defined in the Act. If so, it has to be understood in its normal sense, i.e., in the sense it is understood in the Transfer of Property Act, 1882 but with the rider that Section 128(1) recognizes a transfer, even where the instrument of transfer is not registered. The fact that possession of the flats was delivered to the respondent, that the respondent has paid the full consideration for the said flats and the further fact that the respondent has let out the flats and is in exclusive receipt of the rent clearly establishes that he is a transferee within the meaning of Section 128. Indeed he would be the „owner‟ as defined by clause 37 in Section 2 of the Act. He would be the „owner‟ within the meaning of and for the purposes of the Act--whatever may be the position in general law. In that sense the respondent is equally liable to pay the said taxes."

However, the aforesaid observations were made when law i.e. the

Registration Act and the Stamp Act did not require such Agreements to be

registered or stamped as aforesaid. However, in view of the amendments to

the said Acts w.e.f. 24th September, 2001 the aforesaid observations would

no longer apply.

12. The counsel for the petitioner has also argued that the petitioner in

response to the queries aforesaid of the respondent NDMC, had drawn

attention of the NDMC to the Flat Buyer Agreement where, in the recitals it

has been stated as to how the vendors of the petitioner acquired title of the

flat. However, for the reason of the said Flat Buyer Agreement being

unregistered, no cognizance thereof can be taken. Moreover, it is felt that

the Sub-Registrar before registering the document is required to satisfy