Secy., Revenue Dept., Hyd 2 Ot vs M/S Global Shelters Pvt Ltd., ...
2022 Latest Caselaw 3855 Tel

      * THE HON'BLE THE CHIEF JUSTICE UJJAL BHUYAN
                          AND
        THE HON'BLE MRS JUSTICE SUREPALLI NANDA

                   + W.A.Nos.96 AND 148 OF 2013


% Date: 25-07-2022

# Government of A.P., and others
                                                              ... Petitioners
                                   v.

$ M/s. Global Shelters Private Ltd and others
                                                            ... Respondents

! Counsel for the Petitioners : Mr. Parsa Ananth Nageswara Rao, Learned Government Pleader for Revenue (Assignment)

^ Counsel for respondents : Mr. Deepak Battacharjee, Learned Standing Counsel for Mr. Dishit Battacharjee, learned counsel

< GIST:

      HEAD NOTE:


? CASES REFERRED:

              1. 2004 (6) ALD 849
              2. 2014 (1) ALD 83 (SC)
              3. (1972) 1 SCC 726
              4. AIR 1991 SC 401
              5. 1996 SCALE (4) 278

6.(2015) 16 SCC 787 : 2015 SCC OnLine SC 925

THE HON'BLE THE CHIEF JUSTICE UJJAL BHUYAN AND THE HON'BLE MRS JUSTICE SUREPALLI NANDA

WRIT APPEAL Nos.96 AND 148 OF 2013

COMMON JUDGMENT: (Per the Hon'ble the Chief Justice Ujjal Bhuyan)

This order will dispose of both writ appeal Nos.96

and 148 of 2013.

2. Writ appeal No.96 of 2013 arises out of

W.P.No.33182 of 2010 whereas writ appeal No.148 of

2013 arises out of W.P.No.28639 of 2010. Both the writ

petitions were filed by the respondents herein. Appellants

are the State and its officials who were respondents in

the writ petitions.

3. We have heard Mr. Parsa Ananth Nageswara Rao,

learned Government Pleader for Revenue (Assignment) for

the appellants and Mr. Deepak Bhattacharjee, learned

Senior Counsel for the respondents.

4. Both the appeals have been preferred by the

appellants assailing the legality and validity of the order

dated 05.03.2012 passed by the learned Single Judge

allowing the related two writ petitions filed by the

respondents.

5. Relevant facts may be briefly noted. First

respondent is a construction company incorporated

under the Companies Act, 1956. It entered into a

Development Agreement cum General Power of Attorney

on 30.07.2007 with the second respondent, a partnership

firm and two other firms i.e., respondent Nos.3 and 4.

The Development Agreement cum General Power of

Attorney (referred to hereinafter as 'the development

agreement') was for development of property admeasuring

28,396 square yards in survey No.194/10, Ward No.1,

Block No.8 at Begumpet, Balanagar Mandal, Ranga

Reddy District (referred to hereinafter as 'the subject

property'). The development agreement was registered as

document No.1789 of 2007.

6. District Registrar, Hyderabad i.e., appellant No.2

initiated proceedings under Section 41A of the Indian

Stamp Act, 1899 (for short, 'the Act' hereinafter) alleging

that the development agreement had the effect of

conveying title in favour of some of the parties and

therefore, the stamp duty which is payable on a

transaction of sale ought to have been paid. In this

connection, a show cause notice was issued by appellant

No.2 on 13.08.2010. A joint representation was

submitted by the respondents to the said show cause

notice on 31.08.2010. However, appellant No.2 passed an

order dated 18.09.2010 holding that the development

agreement conveys title and therefore it is basically a sale

cum development agreement. He worked out that total

stamp duty required to be paid was Rs.4,87,26,390.00

but only Rs.3,00,000.00 was paid as stamp duty. The

duty required to make up the deficit was determined at

Rs.4,84,26,390.00. Respondents were therefore called

upon to pay the aforesaid deficit stamp duty.

7. Aggrieved by the aforesaid order dated 18.09.2010,

first respondent preferred an appeal before the third

appellant under Section 56 of the Act. By the order dated

09.11.2010, the appellate authority noticed that by virtue

of the development agreement, there is conveyance of

property between parties of the first part and parties of

the second part. Therefore, the development agreement

had to be treated as a document showing sale cum

development agreement cum general power of attorney.

Accordingly, the order of the second appellant was

confirmed and the appeal was dismissed.

8. At this stage first respondent filed W.P.No.28639 of

2010 assailing the legality and validity of the order dated

18.09.2010 as affirmed by the order dated 09.11.2010.

9. Respondents wanted to withdraw from the

development agreement on account of certain reasons.

Therefore, the parties thereto executed a document titled

'surrender of development rights agreement' on

20.09.2010. When the document was presented for

registration before the Sub Registrar, Secunderabad on

28.09.2010, the Sub Registrar informed the respondents

that since an order under Section 41A of the Act was

passed for collection of stamp duty and registration

charges, a charge had been created against the subject

property. Consequently, the document could not be

registered. This order dated 28.09.2010 came to be

challenged in W.P.No.33182 of 2010.

10. Learned Single Judge after hearing the matter held

that there was nothing in the development agreement to

come to any conclusion that one party to the document

had conveyed title in respect of the subject property to

the other party. Even if there were some doubts earlier,

once the explanations were given by the respondents,

second appellant ought to have dropped the proceedings.

It was not for the second appellant to brand the

development agreement as a sale deed, muchless to

expand the scope of it. Accordingly, the order dated

18.09.2010 was interfered with. Since the Sub Registrar,

Secunderabad had refused to register the surrender of

development rights agreement vide order dated

28.09.2010, learned Single Judge held that once the

order under Section 41A of the Act is set aside, the very

basis for order dated 28.09.2010 ceases to exist.

Accordingly both the writ petitions were allowed by

setting aside the impugned orders.

11. Hence the writ appeals.

12. Mr. Rao, learned Assistant Government Pleader for

Revenue (Assignment) submits that if the development

agreement is carefully gone into, it is apparent that by

the said agreement, there is conveyance of title by one

party to the other party. Therefore, the Sub Registrar had

issued notice to the respondents. Though the

respondents contended that there was no transfer of title

having regard to the recital of the development

agreement, second appellant had rightly passed the order

dated 18.09.2010 construing the development agreement

as an agreement for sale, whereafter the chargeable

stamp duty was computed. Learned Single Judge was not

justified in interfering with the aforesaid order.

12.1. In support of his submissions, learned Government

Pleader has placed reliance on the following decisions.

(1) Natraj Steels (Private) Limited v. Chief Controlling Revenue Authority1, and (2) Omprakash v. Laxminarayan2.

2004 (6) ALD 849

13. Per contra, Mr. Deepak Bhattacharjee, learned

Senior Counsel for the respondents asserts that by way of

the development agreement, the owners and the vendors

had only conferred development rights on the developer

i.e., first respondent. Such an agreement could not have

been construed to be the document conveying title.

Therefore, learned Single Judge rightly interfered with the

order of the second appellant. Supporting the order of the

learned Single Judge, learned Senior Counsel has placed

reliance on the following decisions:

(1) Himalaya House Company Limited, Bombay v. Chief Controlling Revenue Authority3,

(2) Municipal Corporation of Delhi v. Pramod Kumar Gupta4,

(3) Namburi Basava Subrahmanyam v. Alapati

Hymavathi5, and

(4) Yellapu Uma Maheswari v. Buddha Jagadheeswara Rao6.

2014 (1) ALD 83 (SC)

(1972) 1 SCC 726

AIR 1991 SC 401

1996 SCALE (4) 278

(2015) 16 SCC 787 : 2015 SCC OnLine SC 925

14. Submissions made by learned counsel for the

parties have received the due consideration of the Court.

15. We have already noted the substance of the dispute

between the parties. Question before the learned Single

Judge was whether the registering authority under the

Act was justified in construing the development

agreement as a document conveying title and thereafter

levying higher stamp duty? This was answered by the

learned Single Judge in the following manner:-

A development agreement was executed in respect of the property mentioned above in favour of the petitioner. In the course of narration, the transactions that took place between the various parties, in the context of acquiring rights over the property were mentioned. There is nothing to disclose that one party to the document has conveyed title in respect of the property to the other. Even if there exists any doubt in this regard, the replies given by the petitioner and other recipients of notices clearly show that they did not intend to bring about any transaction of transfer of property through the document. Therefore, whatever may have been the justification for the Registrar to initiate proceedings under Section 41-A of the Act, he ought to have dropped them once the persons concerned stated that they never intended to convey title in respect of the property. Added to that, the document was registered as "Development Agreement-cum-General Power of Attorney". It is not open to the Registrar to brand the

document as a sale deed, much less to expand the scope of it.

The only reason, on account of which the Sub- Registrar refused to register the "Surrender of Development Rights Agreement" is that an order was passed under Section 41-A of the Act in relation to the development agreement and that charge has been created against the property, for payment of the deficit stamp duty. Once this Court has set aside the order passed under Section 41-A of the Act, the very basis for this ceases to exist.

Therefore, the writ petitions are allowed and the impugned orders are set aside.

16. To appreciate the above, it would be apt to briefly

refer to certain relevant provisions of the development

agreement. The development agreement has got three

parties. Respondent Nos.2, 3 and 4 herein are parties of

the first part, who have been referred to as the owners.

There were altogether thirty-five parties of the second

part who were the vendors. The third party is respondent

No.1 who is the developer.

17. From a perusal of the recitals of the development

agreement, it is seen that the development agreement

traces the history of how the vendors had conveyed and

delivered title of the subject property in favour of the

owners including by way of agreements of sale executed

earlier. By way of the development agreement, the

vendors i.e. parties of the second part jointly and

severally declared that the subject property was free from

any charge, encumbrance etc and that a clear marketable

title was conferred in favour of the owners i.e.,

respondent Nos.2, 3 and 4 herein. Respondents Nos.2, 3

and 4 being the absolute owners of the subject property

entered into construction agreement with the third party

i.e., the developer, who is none other than the first

respondent herein. The agreement further says that the

owners and vendors jointly and severally have decided to

devolve the entire subject property in favour of the

developer.

18. As per clause 1.1(d) of the development agreement,

development shall mean and include development of the

schedule property. Owners' allocation has been defined in

clause 1.1(t) to mean and include 2,11,750 square feet or

27.5% of the built up area in the building complex with

proportionate parking area thereon which the developer

agreed to compensate the owners along with all rights

appurtenant to such area, such as, undivided land share,

undivided share in common areas and facilities,

undivided share in roof right etc. Clause 2 of the

development agreement deals with development,

commercial exploitation and transfer. As per the said

clause, subject matter of the development agreement is

development, commercial exploitation and transfer of

property of a minimum area of 7,70,000 square feet with

adequate car parking and other amenities of 4,50,000

square feet in the same property as per the development

plan. As per clause 4.1, the land owners have agreed to

permit the developer to develop the subject property by

constructing a complex in accordance with the

permission sanctioned by the municipal authorities.

Clause 6.1 deals with owners' allocation. It says that in

consideration of the land, vendors allowing the developer

to construct the building complex on the subject

property, the developer agreed to compensate the land

owners by giving 2,11,750 square feet or 27.5% (approx)

of built up area in the building complex with adequate

car parking proportionately along with all rights

appurtenant to such area, such as, undivided land share,

undivided share in common areas and facilities etc.

19. Thus, from the above, it is evident that transfer of

rights in the subject land had earlier taken place between

the vendors and the owners i.e., between the parties of

the second part and the first part, by virtue of which

parties of the first part i.e., respondent Nos.2, 3 and 4

had become the absolute owners with marketable title.

Such conveyance had not taken place through the

medium of the development agreement but had taken

place earlier. The development agreement only takes note

of the earlier developments and records the same. By way

of the development agreement, only development rights

have been conferred on the developer i.e., party of the

third part, respondent No.1 herein, by the owners for

development of the subject land in terms of the

development agreement. Therefore, such a development

agreement cannot be construed to be a document for sale

or a document conveying title.

20. In Municipal Corporation of Delhi (supra), the

question before the Supreme Court was whether duty

was payable under Section 147 of the Delhi Municipal

Corporation Act, 1957, on a sale certificate issued by the

Civil Court under Order XXI Rule 94 of the Code of Civil

Procedure, 1908 (CPC). Supreme Court observed that the

expression 'instrument' appearing in Section 147 of the

Delhi Municipal Corporation Act, 1957 has the same

connotation as the word has under the Act. In the facts of

that case, Supreme Court held that the expression

'instrument of sale of immovable property' means a

document effecting transfer. The title to the property in

question has to be conveyed under the document. In

other words, the document has to be a vehicle for

transfer of the right, title and interest. A document

merely stating a fact that transfer had already taken

place cannot be included within this expression. A paper

which is recording a fact or is attempting to furnish

evidence of an already concluded transaction under

which title has already passed on cannot be treated to be

such an instrument.

21. Supreme Court in Namburi Basava Subrahmanyam

(supra) explained that nomenclature of the document is

not conclusive. Recitals in the document as a whole and

the intention of the executant besides acknowledgement

thereof by the parties are conclusive.

22. This has been reiterated in Yellapu Uma Maheshwari

(supra) wherein Supreme Court held that it is well settled

that the nomenclature given to the document is not the

decisive factor but the nature and substance of the

transaction has to be determined with reference to the

terms of the document.

23. In Omprakash (supra), Supreme Court held that an

agreement to sell is a conveyance within the meaning of

the Act and if such a document is not duly stamped it is

inadmissible in evidence.

24. We fail to understand as to how this decision can

be of any assistance to the appellants.

25. Similar is also the case in Natraj Steels (Private)

Limited (supra), whereby a learned Single Judge of this

Court had examined Section 41A of the Act and the

procedure laid down therein.

26. On due consideration, we are of the view that

learned Single Judge was justified in setting aside the

order of the second appellant dated 18.09.2010 as well as

the consequential order dated 28.09.2010. The said order

does not suffer from any error or infirmity to warrant

interference. We do not find any merit in the writ

appeals. Accordingly the writ appeals are dismissed.

Consequently, the interim orders stand vacated.

Miscellaneous applications, pending if any, shall

stand closed.

______________________________________ UJJAL BHUYAN, CJ

______________________________________ SUREPALLI NANDA, J 25.07.2022 Pln