Oral Judgment:
1. Heard. Rule. Rule made returnable forthwith. Heard the petition finally with the consent of the parties at the stage of admission.
2. By way of the present petition, the Petitioners are assailing the order dated 13.10.2022 passed below Exhibit – 22 by the learned 5th Joint Civil Judge, Senior Division, Latur in Special Civil Suit No.47/2021, whereby the Application filed by the Original Defendants / Respondents for impounding the agreement to sell dated 23.11.2020 came to be allowed.
3. The suit was filed for specific performance of contract. In the said suit, the Defendants filed an application below Exhibit - 22 contending that the agreement of sale dated 23.11.2020, allegedly executed by the Original Defendants / Respondents in favour of the Original Plaintiffs / Petitioners, was an unregistered document, and therefore, cannot be read in evidence unless it is impounded.
4. The learned Counsel for the Petitioners invited the attention of this Court to the document sought to be impounded, placed at Page No.38 of the paper-book. She submits that the agreement is in respect of sale of property without delivery of possession, and therefore does not require registration. She further submits that the document is not a conveyance and hence is not compulsorily registrable. In support of her contentions, reliance is placed on the Judgment of the Hon’ble Supreme Court in S. Kaladevi Vs. V. R. Somasundaram & Ors., Civil Appeal No.3192 of 2010 (arising out of SLP (C) No.1451 of 2009], decided on 12.04.2010, and submits that the impugned order deserves to be set aside.
5. Per contra, the learned Counsel for the Respondents / Original Defendants submits that the agreement of sale dated 23.11.2020 was executed on a stamp paper of Rs.100/- and is insufficiently stamped. Therefore, the said document cannot be read in evidence unless proper stamp duty is paid. He supports the impugned order and relies upon the Judgment of the Hon’ble Supreme Court in Bidyut Sarkar and Another Vs. Kanchilal Pal (Dead) through Lrs. And Another, reported in 2024 SCC Online SC 2603.
6. Having heard the learned Counsel for the parties, there is no dispute that the suit is for specific performance of contract. Upon perusal of the agreement placed at Page No.38 of the paper-book, it is clear that the recitals specifically state that the possession would be handed over only after execution of sale deed. Thus, the said agreement to sell is without delivery of possession and it cannot be treated as a conveyance.
The Maharashtra Stamp Act, 1958 defines the conveyance under Section 2 (g) as follows:
“ Conveyance ” includes,—
(i) a conveyance on sale,
(ii) every instrument,
(iii) every decree or final order of any Civil Court.
(iv) every order made by the High Court under section 394 of the Companies Act, 1956 or every order made by the National Company Law Tribunal under sections 230 to 234 of the Companies Act, 2013 or every confirmation issued by the Central Government under sub-section (3) of section 233 of the Companies Act, 2013, in respect of the amalgamation, merger, demerger, arrangement or reconstruction of companies (including subsidiaries of parent company); and every order of the Reserve Bank of India under section 44A of the Banking Regulation Act, 1949 in respect of amalgamation or reconstruction of Banking Companies; by which property, whether moveable or immoveable, or any estate or interest in any property is transferred to, or vested in, any other person, inter vivos and which is not otherwise specifically provided for by Schedule I ;
Explanation.—An instrument whereby a co-owner of any property transfers his interest to another co-owner of the property and which is not an instrument of partition, shall, for the purposes of this clause, be deemed to be an instrument by which property is transferred inter vivos ; ”
The Article 25 of the Schedule – I of Maharashtra Stamp Act, 1958 reads as follows:
| Description of Instrument(1) | Proper Stamp Duty(2) |
| 25. CONVEYANCE (not being a transfer charged or exempted under Article 59)—On the true market value of the property, which is the subject matter of Conveyance,— (a) if relating to movable property (b) if relating to immovable property situated,— (i) within the limits of any Municipal Corporation or any Cantonment area annexed to it or any urban area not mentioned in sub-clause (ii). (ii) within the limits of any Municipal Council or Nagar Panchayat or Cantonment area annexed to it, or any rural area within the limits of the Mumbai Metropolitan Region Development Authority, or the Influence Areas as per the annual statement of rates published under the Bombay Stamp (Determination of True Market Value of Property) Rules, 1995. (iii) within the limits of any Grampanchayat area or any such area not mentioned in subclause (ii). (c) if relating to both moveable and immoveable property. (d) * * * * (da) if relating to the order of High Court in respect of the amalgamation or reconstruction of companies under section 394 of the Companies Act, 1956 or under the order of the Reserve Bank of India under section 44A of the Banking Regulation Act, 1949. (e) 2* * * * Exemption Assignment of copyright under the Copyright Act, 1957. Explanation I.— For the purposes of this article, where in the case of agreement to sell an immoveable property, the possession of any immoveable property is transferred or agreed to be transferred to the purchaser before the execution, or at the time of execution, or after the execution of, such agreement then such agreement to sell shall be deemed to be a conveyance and stamp duty thereon shall be leviable accordingly : Provided that, the provisions of section 32A shall apply mutatis mutandis to such agreement which is deemed to be a conveyance as aforesaid, as they apply to a conveyance under that section : Provided further that, where subsequently a conveyance is executed in pursuance of such agreement of sale, the stamp duty, if any already paid and recovered on the agreement of sale which is deemed to be a conveyance, shall be adjusted towards the total duty leviable on the conveyance : Provided also that, where proper stamp duty is paid on a registered agreement to sell an immovable property, treating it as a deemed conveyance and subsequently a conveyance deed is executed without any modification then such a conveyance shall be treated as other instrument under section 4 and the duty of one hundred rupees shall be charged. | 3 per cent. of the market value of the property.5 per cent. of the market value of the property. 5 per cent. of the market value of the property. 4 per cent. of the market value of the property. The same duty as is payable under clauses (a) and (b). 10 per cent. of the aggregate of the market value of the shares issued or allotted in exchange or otherwise and the amount of consideration paid for such amalgamation : Provided that, the amount of duty chargeable under this clause shall not exceed,— (i) an amount equal to 5 per cent. of the true market value of the immovable property located within the State of Maharashtra of the transferor company ; or (ii) an amount equal to 5 per cent. of the aggregate of the market value of the shares issued or allotted in exchange or otherwise and the amount of consideration paid, for such amalgamation, whichever is higher : Provided further that, in case of reconstruction or demerger the duty chargeable shall not exceed,— (i) an amount equal to 5 per centum of the true market value of the immovable property located within the State of Maharashtra transferred by the Demerging Company to the Resulting Company ; or (ii) an amount equal to 0.7 per centum of the aggregate of the market value of the shares issued or allotted to the Resulting Company and the amount of consideration paid for such demerger, whichever is higher. |
7. The law laid down by the Hon’ble Supreme Court in the matter of S. Kaladevi Vs. V. R. Somasundaram & Ors. (Supra), is squarely applicable of the present case. The Apex Court while considering the issue of an unregistered agreement of sale, observed in Paragraph No.11 as follows :
“11. The main provision in Section 49 provides that any document which is required to be registered, if not registered, shall not affect any immovable property comprised therein nor such document shall be received as evidence of any transaction affecting such property. Proviso, however, would show that an unregistered document affecting immovable property and required by 1908 Act or the Transfer of Property Act, 1882 to be registered may be received as an evidence to the contract in a suit for specific performance or as evidence of any collateral transaction not required to be effected by registered instrument. By virtue of proviso, therefore, an unregistered sale deed of an immovable property of the value of Rs. 100/- and more could be admitted in evidence as evidence of a contract in a suit for specific performance of the contract. Such an unregistered sale deed can also be admitted in evidence as an evidence of any collateral transaction not required to be effected by registered document. When an unregistered sale deed is tendered in evidence, not as evidence of a completed sale, but as proof of an oral agreement of sale, the deed can be received in evidence making an endorsement that it is received only as evidence of an oral agreement of sale under the proviso to Section 49 of 1908 Act.”
8. The Apex Court has held that, considering the recitals in the Judgment, an unregistered document can be read in evidence, provided the agreement of sale specifically records that possession has not been delivered. As far as the judgment cited by Mr. Adgaonkar is concerned, he invited my attention to Paragraph Nos. 21 and 25 of the said Judgment - Bidyut Sarkar and Another (Supra), which are reproduced as follows:
“21. According to the language of the Section 35 of the Stamp Act, instruments not duly stamped would be inadmissible in evidence, and any instrument chargeable with duty would be admissible in evidence only and only if such instrument is duly stamped. The proviso gives illustration as to how the instrument would become admissible upon payment of duty with which it was chargeable or in case of instruments insufficiently stamped, the payment is made to make up such duty along with penalty mentioned therein. It also refers to exceptions where a document could be admissible in evidence under a given situation. As elaborated in Clauses (b), (c), (d) and (e) of the proviso, the instrument in question i.e. agreement to sell dated 23.03.1999 does not fall under any exception.
25. In the present case, the agreement to sell dated 29.03.1999 was found by the Trial Court to be insufficiently stamped. Consequently, the matter was referred to the Collector for determination of proper stamp duty and any applicable penalty. As per the provisions of Section 42 of the Stamp Act, such a document can only become admissible in evidence after deficiency in stamp duty and the penalty, if any, have been assessed by the Collector, and the requisite amounts have been paid. Once the deficiency and penalty are cleared, the Collector is required to certify the document by endorsement, indicating that the required duty and penalty have been paid. Only upon such certification can the document be admitted into evidence and acted upon legally.”
9. There is no dispute about the proposition laid down by the Apex Court with respect to the agreement of sale. However, the facts of the present case warrant that the agreement to sell placed on record cannot be considered as a conveyance as the possession was not delivered forthwith, and therefore no stamp duty was required to execute the same. Consequently, the learned Trial Court committed an apparent error in allowing the application filed by the Original Defendants / Respondents. Therefore, I am inclined to allow the petition by setting aside the order below Exhibit – 22.
10. The learned Counsel for the Respondents request that the order passed by this Court be kept in abeyance for a period of four weeks. The same request is opposed by the learned Counsel for the Petitioners. Considering the issue involved in the petition, I am not inclined to grant such relief. In fact, the order below Exhibit – 22 which has now been set aside by this Court was already stayed by this Court vide its order dated 19.01.2023. In view of the above, I am not inclined to entertain the request made by the learned Counsel for the Respondents. Hence, the request stands rejected.
11. In view thereof, I proceed to pass the following order:
ORDER
(I) Writ Petition No.13280/2022 is allowed.
(II) The order dated 13.10.2022 passed below Exhibit – 22 by the learned 5th Joint Civil Judge, Senior Division, Latur in Special Civil Suit No.47/2021 is quashed and set aside.
(III) Rule is made absolute in the above terms.