Punjab-Haryana High Court
Sanjeev Gupta vs State Of Punjab And Others on 11 January, 2023
CWP No.15361 of 2020 (O&M) -1-
IN THE HIGH COURT FOR THE STATES OF PUNJAB AND
HARYANA AT CHANDIGARH
CWP No.15361 of 2020 (O&M)
Date of Decision.11.01.2023
Sanjeev Gupta ...Petitioner
Vs
State of Punjab and others ...Respondents
CORAM: HON'BLE MS. JUSTICE JAISHREE THAKUR
Present: Mr. Rajesh Punj, Advocate
for the petitioner.
Mr. Deepanjay Sharma, AAG, Punjab.
-.-
JAISHREE THAKUR J. (ORAL)
The petitioner herein seeks to challenge order dated 24.02.2020
(Annexure P-9) and order dated 17.04.2018 (Annexure P-6) passed by
respondent No.2 and 3 respectively being illegal, arbitrary, null and void and
against the principles of law.
In brief, the facts are that the property measuring 5165 sq. yards
was purchased by a partnership firm on 05.09.1972 belonging to four
partners namely Radha Kishan son of Gian Chand, Parduman Kumar Gupta,
Sagar Gupta and Revti Raman Gupta sons of Radha Kishan. Radha Kishan,
partner and father of Parduman Gupta, Sagar Gupta and Revti Raman Gupta
expired on 01.10.1978, consequent to which the partnership firm dissolved.
The property in question dissolved in favour of three sons by Will dated
4.6.1978 executed by Radha Kishan. The legal representatives of Radha
Kishan executed a release deed dated 3.7.2000 (Annexure P-1) and thereby
relinquished all their rights being LRs of Radha Kishan in favour of
Parduman Gupta. It is thereafter that Parduman Gupta executed a transfer
deed in favour of his son Sanjeev Gupta and the transfer deed was registered
vide wasika No.1507 on 07.05.2018. Respondent No.3-Sub Registrar
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referred the issue under Section 47-A of the Indian Stamp Act to the
Collector regarding the transfer deed and the deficit stamp duty paid on the
same. A show cause notice was issued to the petitioner by respondent No.2
under Section 47-A of the Indian Stamp Act to which a reply was filed
stating that no stamp duty was payable considering that Parduman Kumar
Gupta transferred the property in question to his son, a blood relative and
therefore, no stamp duty was payable. The Collector-respondent No.2 vide
order dated 24.02.2020, while admitting that Section 47-A of the Indian
Stamp Act is not applicable, opined that as the property was owned by the
proprietorship firm, stamp duty would be payable and remanded the matter
back to Sub Registrar, Ludhiana (Central) with a direction to reconsider
whether the deed is to be charged with stamp duty and if so, same be
recovered as arrears of land revenue. Aggrieved against the said order,
present writ petition has been filed.
Learned counsel appearing on behalf of the petitioner would
argue that after registration of the transfer deed, Sub Registrar himself
becomes functus officio and would not be competent to impound the transfer
deed dated 07.05.2018, apart from reference being made by an authority,
which has become functus officio. Counsel for the petitioner lays great
stress that the Collector erred in remanding the matter back to an authority,
which was not even competent to decide the issue. It is argued that the
Collector has erred in not taking cognizance of the notification dated
07.05.2014 whereby it has been stated that the stamp duty would not be
chargeable on the instrument pertaining to transfer of immovable property
by an owner during his life time to any of his blood relation i.e. children,
grand children, brothers and sisters.
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Per contra, learned counsel appearing on behalf of the
respondent-State would argue that the petitioner is liable to pay the stamp
duty on the deed registered, as the property was owned by a proprietorship
firm and not by Parduman Kumar Gupta in his individual capacity.
I have heard learned counsel for the parties and have gone
through the pleadings of the case as well as the case laws cited.
It is an undisputed fact that the property in question initially
belonged to a partnership firm, titled M/s Hindustan Steel Industries, 43-R,
Industrial Area-B, Ludhiana and purchased vide sale deed wasika No.4500
dated 05.09.1972. The partnership firm comprised of Radha Kishan
Aggarwal s/o Sh. Gian Chand and Sh. Parduman Kumar Gupta, Sagar Gupta
and Revit Raman Gupta. On the death of Radha Kishan Aggarwal,
partnership firm was dissolved and on the basis of the Will, property came to
be inherited by three sons. Two sons of late Radha Kishan Aggarwal
executed a release deed in favour of their brother Parduman Kumar Gupta
vide release deed dated 03.07.2000. Consequent to the release deed,
Parduman Kumar Gupta, petitioner herein became the sole owner of the said
property. It would be pertinent to note that M/s Hindustan Steel Industries,
Ludhiana instead of being a partnership firm continued its existence as a sole
proprietorship, its owner being Parduman Kumar Gupta.
The question whether the proprietorship firm is a juristic person
on the same footing as a partnership firm or a company or a society has been
settled in various judgments namely M/s Bhagwati Vanaspati Traders versus
Senior Superintendent of Post Offices, Meerut (2015) 1 SCC 617, which
further noticed judgment rendered in Ashok Transport Agency Vs. Awadhesh
Kumar and another (1998) 5 SCC 567 wherein it has been held as under:-
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"6. A partnership firm differs from a proprietary concern
owned by an individual. A partnership is governed by the
provisions of the Indian Partnership Act, 1932. Though a
partnership is not a juristic person but Order 30, Rule 1 CPC
enables the partners of a partnership firm to sue or to be sued
in the name of the firm. A proprietary concern is only the
business name in which the proprietor of the business carries
on the business. A suit by or against a proprietary concern is by
or against the proprietor of the business. In the event of the
death of the proprietor of a proprietary concern, it is the legal
representatives of the proprietor who alone can sue or be sued
in respect of the dealings of the proprietary business. The
provisions of Rule 10 Order 30 which make applicable the
provisions of Order 30 to a proprietary concern, enable the
proprietor of a proprietary business to be sued in the business
names of his proprietary concern. The real party who is being
sued is the proprietor of the said business. The said provision
does not have the effect of converting the proprietary business
into a partnership firm. The provisions of Rule 4 Order 30 have
no application to such a suit as by virtue of Order 30, Rule 10
the other provisions of Order 30 are applicable to a suit against
the proprietor of proprietary business "insofar as the nature of
such case permits". This means that only those provisions of
Order 30 can be made applicable to proprietary concern which
can be so made applicable keeping in view the nature of the
case."
Similarly in the judgment rendered in CWP No.19796 of 2018
titled as Association of Property Professionals Vs. State of Haryana and
others decided on 12.12.2022, it has been held as under:-
"15. Ordinarily understood, sole proprietorship is an
unincorporated business that is just one owner by himself or
herself. Creation of a separate business or a trade name is not
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necessary or a prerequisite in a sole proprietorship/sole
proprietory business module and even if a separate business
name is used for carrying on the business, the same by itself
does not give any separate juristic entity or legal existence to
the proprietory name separate and distinct from the owner. The
said aspect has already been examined in detail by the Hon'ble
Supreme Court in the matter of M/s Bhagwati Vanspati
Traders (supra) extracted above and in the matter of "Ashok
Transport Agency versus Awadhesh Kumar and Another" that
a proprietor concern is only the business name in which the
proprietor of the business carries on the business. A sole
proprietorship concern thus allows a fictional use of a trade
name on behalf of the individual whereas truthfully only one
individual exists and that they can be substituted as each other
insofar as their entities are concerned. It makes no difference
whether the name of an individual is used or that of the trade
name.
The argument as raised that the property in question belongs to
a proprietorship firm and therefore, stamp duty would be payable is not
sustainable, in view of the ratio of the judgments referred to above wherein
it has been held that the proprietary concern and the proprietor are one and
the same and proprietorship has no separate legal identity. The impugned
order ought to have taken this factor into account that the proprietorship firm
and the individual namely Parduman Kumar Gupta are not distinct from
each other and therefore, transfer deed by Parduman Kumar Gupta in favour
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of petitioner i.e. his son would be exempt from payment of any stamp duty
by virtue of the notifications as issued by the Government of Punjab.
Moreover, the law is settled that the Sub Registrar is not clothed
with the power to issue notice for recovery of stamp duty, if any, after
registration of a document. At best, he can make a reference to the
Collector, which he did. The remand order would not be sustainable, in
view of the settled proposition that after a document is registered, Sub
Registrar ceases to have jurisdiction of the matter. Reference in this regard
can be made to the judgment rendered by a Division Bench of this Court in
CWP No.12655 of 1992 titled as M/s Ravindra Pharmaceutical (P) Vs. State
of Haryana 1994 (1) PLR 614.
Consequently, the impugned orders, being unsustainable, are
hereby set aside, holding that the transfer of property between father and son
is exempt from payment of stamp duty. The writ petition stands allowed.
(JAISHREE THAKUR)
JUDGE
January 11, 2023
Pankaj* Whether speaking/reasoned Yes/No
Whether reportable Yes/No
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