Madras High Court

Narayan Sethuramon @ S.L.Narayan vs The Commercial Taxes And ... on 6 October, 2021

                                                                                  W.P. No.33678 of 2013

                                   IN THE HIGH COURT OF JUDICATURE AT MADRAS

                                                 DATED : 06.10.2021

                                                       CORAM

                                  THE HONOURABLE Mr. JUSTICE G.K.ILANTHIRAIYAN

                                              W.P. No.33678 of 2013 and
                                                   MP.No.1 of 2013


                     Narayan Sethuramon @ S.L.Narayan                               ... Petitioner

                                                           Vs

                     1.The Commercial Taxes and Registration Department,
                       Represented by its Secretary,
                       Secretariat, Fort. St.George,
                       Chennai 600 009

                     2.The Inspector General of Registration,
                       100, Santhome High Road,
                       Pattinapakkam, Chennai 600 028

                     3.The Sub-Registrar,
                       (District Registrar Cadre),
                       Mylapore, Chennai 600 004                        ...   Respondents


                     Prayer :- Writ Petition is filed under Article 226 of the Constitution of India

                     praying to issue a writ of certiorari calling for the records of the third

                     respondent in its proceedings on 05.11.2013 and quash the same.


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https://www.mhc.tn.gov.in/judis
                                                                                      W.P. No.33678 of 2013




                                  For Petitioner        : Mr.K.Harishankar
                                  For Respondents       : Mr.Richardson Wilson,
                                                          Government Advocate


                                                           ORDER

The writ petition has been filed to issue a writ of certiorari calling

for the records of the third respondent in its proceedings dated 05.11.2013

and quash the same.

2. The case of the petitioner is that the petitioner and his son

owned undivided 1/3 share of house property comprised in new No.3, old

No.2 situated at Sathyanarayana Avenue, Raja Annamalai Puram, Chennai.

They derived the title over the property by partition deed dated 19.05.2006

registered vide document No.2260 of 2006. Under the said partition deed

dated 19.05.2006, the remaining undivided 2/3rd share allotted to his father

who in turn settled the said share in favour of the petitioner by settlement

deed dated 12.10.2007 registered vide document No.2497 of 2007.

Therefore, the petitioner and his son executed settlement deed in favour of

the petitioner's mother and presented the document for registration. The

https://www.mhc.tn.gov.in/judis W.P. No.33678 of 2013

petitioner also duly paid registration fee of Rs.2,500/- and stamp duty of

Rs.10,000/-. It was registered as document No.2342 of 2012 on the file of

the third respondent. However, the third respondent refused to release the

same and issued notice dated 22.03.2013 thereby called upon the petitioner

stating that the settlement deed did not fall within the purview of the deeds

executed between family members as the definition of family does not

include settlement made by a grandson to his grandmother. Therefore, the

third respondent made a demand of Rs.31,89,420/- towards stamp duty

within a period of fifteen days from the date of receipt of notice. The third

respondent calculated stamp duty at 8% of the market value of the property.

By the letter dated 22.04.2013, the petitioner sent explanation about the

family circumstances and that the settlement deed can be executed by the

grandson in favour of the grandmother and it is coming under the purview

of family and as such no need to pay any deficit stamp duty. However, on

receipt of the same, no order has been passed by the third respondent.

Again, the third respondent issued the impugned notice dated 05.11.2013

and made demand to pay a sum of Rs.31,89,420/- as deficit stamp duty.

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3. Mr.K.Harishankar, the learned counsel for the petitioner

submitted that the term 'family' as mentioned in the explanation to Article 58

(a)(1) of the Indian Stamp Act as applicable in the State of Tamil Nadu. The

settlee is not an outsider but is the mother and grandmother respectively of

the first and second settlors i.e. the petitioner and his son. Therefore, the Act

does not require, indicate or imply that a settlement, particularly within a

family must be restricted to the members of the family upto a particular

degree.

4. Heard, Mr.K.Harishankar, the learned counsel for the petitioner,

and Mr.Richardson Wilson, Government Advocate appearing for the

respondents.

5. In support of his contention, the learned counsel for the

petitioner relied upon the judgment in the case of S.V.L.S.Ranga Rao Vs.

Secretary to Government, Commercial Taxes ad Others in WP.No.23263

of 2008, wherein this Court held that though explanation to Article 58 of

Schedule I of the Indian Stamp Act defines the persons coming under the

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word 'family', it could be said that it is only an illustration and not an

exhaustive one. Therefore, strict meaning cannot be construed so as to

include only those persons who have been named as 'family members'.

Furthermore, when adoptive mother and adoptive father could be included

as members of the family, it is neither legal nor logic to say that the

stepmother could not be construed as a family member. He also relied upon

the judgment in the case of Inspector General of Registration and Chief

Revenue Controlling Authority, Chennai and another Vs. R.Santhosh and

another reported in 2017 SCC Online Mad 32632, wherein the Hon'ble

Division Bench of this Court held that as per Article 58 (a) (i) under

Schedule I of the Indian Stamp Act, the word 'family' mean father, mother,

husband, wife, son, daughter, grandchild. In the case of anyone whose

personal law permits adoption, 'father', shall include an adoptive father

'mother' an adoptive mother. 'son' and adopted son and 'daughter' an adopted

daughter. Further, extracted the learned single judge's observation as

follows:

If a grandchild is included within the definition of the expression family I do not know how a grandmother or grandfather will stand excluded.

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There can be no quarrel about the proposition that if person executes settlement in favour of his grandchild, the case will be covered by Article 58(a). But to hold that the converse cannot be accepted, would militate against the very purpose of the provision. A settlement need not flow in a hierarchal fashion of the provision. A settlement need not flow in a hierarchal fashion from the elders to the younger ones. It can also flow in the reverse direction. If a gift in favour of a grandchild is covered by Article 58(a), the gift in favour of the grandparent should be equally covered as a corollary. Therefore, the writ petition is allowed. The impugned order is set aside. The respondents are directed to register the sale deed by treating as one filing under Article 58(a). No costs. Consequently, MP.Nos.1 of 2013 and 1 of 2014 are closed.

6. If a gift in favour of a grandchild is covered by Article 58 (a),

the gift in favour of the grandparent should be equally covered as a

corollary. The Hon'ble Supreme Court of India also held in the case of

Manish Mohan Sharma Vs. Ram Bahadur Takur Ltd reported in AIR

2006 SC 1690 that it has been repeatedly emphasised in several decisions

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that family settlements are governed by a special equity and are to be

enforced if honestly made. This would be so 'even if the terms may have

been agreed to on the basis of an error of the parties or originate in a

mistake or ignorance of facts as to what the rights of the parties actually are,

or of the points on which their rights actually depend'. This is because the

object of an arrangement is to protect the family from long drawn out

litigation, and to bring about harmony and goodwill in the family.

Therefore, a family settlement need not be confined to the one, among the

legal heirs, or successors. If the aim is only to provide for arrangement in

accordance to succession, the whole exercise would be redundant. The

reason is that the Law of Succession would take its course. It is only when

an arrangement, in slight or major deviation from natural succession, as a

price for bringing about comity and harmony is chosen, that a settlement

comes into existence. The provision under Section 24 (2) of the Indian

Stamp Act defines that term as under:

"Settlement" means any non-testamentary disposition, in writing, of movable and immovable property made -

(a) in consideration of marriage,

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(b) for the purpose of distributing property of the settler among his family or those for whom he desires to provide, or for the purpose of providing for some person dependent on him , or

7. Thus it is clear that the settlement, particularly, within a family

need not be restricted to the members of the family upto a particular degree.

In fact, the third respondent registered the settlement deed vide document

No.2342 of 2012 and thereafter issued impugned demand notice dated

05.11.2013. When the gift deed executed by the grandmother in favour of

grandchild is covered by Article 58(a), at the same time, the gift deed

executed by the grandchild in favour of grandparent should be also equally

covered under Article 58(a) of the Indian Stamp Act.

8. In view of the above, the present writ petition deserves to be

succeeded. Accordingly, the impugned notice dated 05.11.2013 is quashed

and the writ petition is allowed. The third respondent is directed to release

the settlement deed registered vide document No.2342 of 2012 to the