Madras High Court
Mrs.Tamanna Deepak vs The Chief Controlling Revenue ... on 27 November, 2023
Author: P.Velmurugan
Bench: P.Velmurugan
W.P.No.4151 of 2023
IN THE HIGH COURT OF JUDICATURE AT MADRAS
ORDERS RESERVED ON : 10.11.2023
ORDERS PRONOUNCED ON : 27.11.2023
CORAM:
THE HONOURABLE MR.JUSTICE P.VELMURUGAN
W.P.No.4151 of 2023
and
W.M.P.No.4196 of 2023
1.Mrs.Tamanna Deepak
2.Mr.Akshay Deepak
3.Mrs.Manjula Sankecha ...Petitioners
-Vs-
1.The Chief controlling Revenue Authority
cum Inspector of General of Registration,
No.110, Santhome High Road,
Chennai - 600 028.
2.The Sub Registrar,
Triplicane Sub Register Office,
(In the cadre of District Registrar),
No.182, Bharati Salai,
(Pycrafts Road),
Royapettah, Chennai - 600 014. ...Respondents
(C.M.A.No.1964 of 2022 converted into writ petition as per order dated
24.01.2023)
Prayer: Writ petition filed under Article 226 of the Constitution of India
praying for issuance of a writ of certiorarified mandamus calling for the
records from the 1st respondent and quashing the impugned order of the 1st
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1/12
W.P.No.4151 of 2023
respondent dated 26.04.2022 in proceedings Pa.Mu.25641/P1/2020
making false and vexatious demand of Rs.6,26,444/- as penalty under the
impounded final order in I.No.01/2020 dated 02.09.2020 of the 2nd
respondent as the same is arbitrary, unconstitutional, biased, illegal and
unlawful and against all principles of law and natural justice in respect of
sale deed in pending Doc.No.3 of 2020 on the file of the 2 nd respondent
herein and further direct the respondents to release and handover the
pending Doc.No.3 of 2020 on the file of the 2nd respondent to the petitioner
and pass such order.
For Petitioners : Mr.S.L.Sudarasanam
For Respondents : Mr.P.Gurunathan
Additional Government Pleader
ORDER
This Writ Petition is filed for issuance of a writ of certiorarified
mandamus by quashing the impugned order of the 1st respondent dated
26.04.2022 in proceedings Pa.Mu.25641/P1/2020, making false and
vexatious demand of Rs.6,26,444/- as penalty under the impounded final
order in I.No.01/2020 dated 02.09.2020 of the 2nd respondent, as the same
is arbitrary, in respect of sale deed in pending Doc.No.3 of 2020 on the file
of the 2nd respondent herein and further direct the respondents to release
and handover the pending Doc.No.3 of 2020 on the file of the 2nd
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respondent to the petitioner.
2. The case of the petitioners is that the said property is multi-storied
complex, which was promoted by one M/s.The Union Company (Motors)
Private Limited, which covered under the subject sale deed. On
27.07.2002, the petitioners entered into a sale agreement and construction
covered under the sale deed and the entire consideration paid by the
petitioners in the said possession was also handed over to the petitioners
pursuant to the said agreement. Thereafter, the petitioner also obtained
property tax, water tax from the Corporation of Chennai and Electricity
connection in their names and the petitioners continued to be in absolute
possession and enjoyment of the said property. Further, the petitioners
have also entered into the registered lease deed with Ms.ABN AMRO
Bank on 05.10.2005. The same was registered on the file of the SRO,
Triplicane. The mutation of records of petitioners 1 and 2 made them the
absolute owners of the said property and intended to sell the property to
the 3rd petitioner herein, and they approached M/s.The Union Company
(Motors) Private Limited to join the sale as confirming party, since the
undivided share in the land vested with the said Company on the date of
the sale without receipt of any sale consideration.
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3. The owners of the property in respect of the building and the
above said Company, as owner of the undivided share in the land, had
jointly executed and registered the sale deed in the name of the 3 rd
petitioner. The entire sale consideration covered under the sale deed was
received by petitioners 1 and 2 from the 3rd petitioner. In order to convey
the title, the said Company joined the sale in favour of the 3rd petitioner.
When the document was presented for registration, they received the letter
from the 2nd respondent regarding the duty chargeable in respect of
undivided share (UDS) by the said Company in favour of petitioners 1 and
3 under Article 23 of Schedule -1 of the Indian Stamp Act is a sum of
Rs.6,26,444/-, which is unsustainable and the duty cannot be levied by the
2nd respondent for the reason that in the present sale deed pending
Doc.No.3, the petitioners along with M/s.The Union Company (Motors)
Private Limited, joined together to convey the undivided share in the land
and the building in favour of the 3rd petitioner. There cannot be double
duty for the sale deed. As per the common order dated 04.12.2014 passed
by this Court in W.P.No.13355 of 2012 and W.P.No.31274 of 2014 and
judgment dated 23.09.2015 in W.A.Nos.303, 304 and 474 of 2015 and
later on by order dated 16.05.2016, the 1st respondent had clearly
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withdrawn the circular regarding the charging of double stamp duty and in
case of confirming parties joining the sale, it is construed that the stamp
duty chargeable is only single and not double. Time and again, the Courts
have held that the confirming parties joining the sale will only amount to
single transaction and the stamp duty would be charged only single.
Therefore, the letter issued by the 2nd respondent is not valid and the same
is liable to be set aside.
4. The case of the respondents in the counter affidavit is that the
three items of property, each shown in the sale deed in question, which is
kept pending registration as P.No.3/2020, are owned by different
Companies, viz item No.1 - the M/s.The Union Company (Motors) Private
Limited, item No.2 – M/s.Carburettos Limited and item No.3 – M/s.Minica
Real Estates Ltd. All three have jointly engaged the promoter, namely,
M/s.Asiatic Private Limited, to develop the lands to construct commercial
buildings. The owner of the land, M/s.The Union Company (Motors)
Private Limited, entered into an unregistered sale agreement with
petitioners 1 and 2 herein on 27.07.2002, to sell the property, which is 703
Sq.ft. Undivided share in land and handed over the possession of the said
land to petitioners 1 and 2 herein, and as such, the mutations were effected
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in their names in the property tax records of the Corporation of Chennai
and other Governmental agencies without any sale deed in their favour.
Thus, petitioners 1 and 2 herein, without any proper sale deed in their
favour, with regard to undivided share in the land, stating as owners of the
land and building, numbered as Unit No.00212 in the second floor,
executed a sale deed dated 09.01.2020, in favour of the 3rd petitioner
herein for a sale consideration of Rs.1,13,50,000/- and presented the same
for registration before the 2nd respondent. The 2nd respondent kept the sale
deed in question as pending Document No.3/2020 and impounded the
same under Section 33 read with Section 40 of the Indian Stamp Act,
1899, treating the sale deed that, since the Union Company (Motors)
Private Limited joined in execution of the sale deed as “confirming
party/3rd vendor” in order to give better title to the purchaser, 3rd petitioner
herein.
5. The 2nd respondent treated the sale deed as one falling within
Section 5 of the Indian Stamp Act, 1899, as dual nature i.e. sale of
undivided share in land by the confirming party/3rd vendor to petitioners 1
and 2 herein as vendors of the sale deed in question and in turn the
petitioners 1 and 2 herein as vendors to the purchaser, the 3rd petitioner
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herein of the undivided share in land together with commercial building
and covered car park area and issued final order under Section 40(b)
demanding the stamp duty and penalty of Rs.6,26,444/- for the sale of
undivided share in land by M/s.The Union Company (Motors) Private
Limited as vendor to the petitioners 1 and 2 herein as purchaser in
proceedings No.1/2020 dated 02.09.2020. The petitioners herein filed
Revision Petition before the 1st respondent, and the 1st respondent herein,
after hearing of the parties, dismissed the said Petition, by order dated
26.04.2022, in proceedings D.Dis.No.25641/P1/2021. Aggrieved by both
the orders, the petitioners have filed this writ petition.
6. Mere entering into a sale agreement and handing over possession
of the property is only a part of the performance of the contract under
Section 53-A of the Transfer of Property Act and the sale agreement does
not confer any ownership to the agreement holder, but with limited right of
enforcing the said contract for specific performance. The mutation in the
public records will not confer any ownership over the property and the
mutation makes the person whose name is found in the record liable to pay
the rates and tax.
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7. It is seen that in the operative portion of the sale deed in question
containing terms and conditions, the word “vendor” denotes not only the
petitioners 1 and 2 herein, but also the said Union Company (Motors)
Private Limited, shown as 3rd vendor, without conveyance of undivided
share in land by the Union Company (Motors) Private Limited in favour of
the petitioners 1 and 2 herein, and to avoid the payment of stamp duty, the
said Union Company (Motors) Private Limited joined in execution of the
sale deed. Hence, the sale deed in question attracts Section 5 of the Indian
Stamp Act, resulting that the petitioners herein have to pay stamp duty for
the undivided share in land also.
8. The Union Company (Motors) Private Limited also joined as
vendor in the subjected document and it falls under Section 5 of the Indian
Stamp Act, 1899, and therefore, it attracts stamp duty. The contention of
the petitioners is that the petitioners 1 and 2 had not executed the sale deed
in favour of the 3rd petitioner herein, in which the Union Company
(Motors) Private Limited has joined as a confirming party for one year and
therefore, the documents falls under Section 5 of the Indian Stamp Act,
1899, and therefore, the demand made by the 2nd respondent is illegal, and
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therefore the consequential orders passed by the 1st respondent is also not
valid and therefore, without demanding any further amount, Doc.No.3 of
2020 has to be registered.
9. The specific case of the respondents is that the Union Company
(Motors) Private Limited joined as a vendor and not only merely as a
confining party, but also joined as one of the vendors of the said document
and therefore, the subject document only falls under Section 5 of the
Indian Stamp Act, 1899. Therefore, it attracts the stamp duty in demand.
Now the Court proceeds only on the basis that mere agreement will not
convey the title. Further, if the persons who entered into the agreement, in
case, the purchaser does not want to purchase the land or in case, the
purchaser assigns the sale to the 3rd party, if the vendor sold the property to
the assignee or the third party, it can be treated as only a single document,
and if third party supported it at the time of the agreement, the possession
was handed over and the vendor passed the title for mutations and all these
things, and subsequently, the said sale further conveyed the earlier
document, since it was not registered and the stamp duty was not paid, and
it was further conveyed to other. If the document was registered, then it
has to pay stamp duty for both. Though in this case, the respondents have
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clearly stated that the Union Company (Motors) Private Limited joined in
execution of the sale deed and not as mere confirming party and to avoid
the further complications, petitioners 1 and 2 impleaded the Union
Company (Motors) Private Limited as a witness and the document could
not fall under Section 5 of the Indian Stamp Act, 1899. Whereas, the
petitioners have stated in their writ petition affidavit itself that the subject
property is a multi-storied complex, which was promoted by the Union
Company (Motors) Private Limited. On 27.07.2002, they entered into the
agreement for sale cum construction agreement regarding the property
covered under the sale and the entire consideration was paid by them and
paid to the Union Company (Motors) Private Limited. The Possession was
also taken over by them in the said agreement and petitioners 1 and 2
obtained property tax and electricity connection and they continued to be
in possession, which means without registering the document and paying
the stamp duty, they conveyed the property. The agreement was not
registered. Now, petitioners 1 and 2 sold the property to the 3rd petitioner,
but in which the Union Company (Motors) Private Limited was also
shown as an executor, who is one of the joined vendor of the sale deed.
Therefore, under these circumstances, the subject sale deed falls under
Section 5 of the Indian Stamp Act, 1899.
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10. Considering the facts and circumstances of the case, the actual
transaction had taken place in this case and passed the order. There is no
merit in the writ petition.
11. In the result, the writ petition stands dismissed. No costs.
Consequently, connected miscellaneous petition is closed.
27.11.2023
cda
Index : Yes/No
Speaking/Non-speaking order
Neutral Citation : Yes/No
To
1.The Chief controlling Revenue Authority
cum Inspector of General of Registration,
No.110, Santhome High Road,
Chennai - 600 028.
2.The Sub Registrar,
Triplicane Sub Register Office,
(In the cadre of District Registrar),
No.182, Bharati Salai,
(Pycrafts Road),
Royapettah, Chennai - 600 014.
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P.VELMURUGAN, J.,
cda
Order in
Order pronounced on 27.11.2023
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