The Apex Court discussed the legal rule of discerning the real and true meaning of the instrument by ascertaining the intention of the parties from the contents and the language employed in the whole instrument. The description or the nomenclature given to the instrument by the parties is immaterial.
Facts of the Case:
The appellants filed a suit for declaration and injunction against the Defendants, who then filed an application to the court for impounding the original agreements for sale. The trial court allowed the application and directed the documents be sent for adjudication of stamp duty and penalty, if any, payable by the appellants.
The High Court upheld the order of the trial court, when the Appellants filed an appeal in the Supreme Court against the impugned order.
The Appellants argued:
The trial court has failed to appreciate that the sale deed in respect of the same immoveable properties have been duly registered by payment of the stamp duty and so the prior agreements to sell are not required to be registered and stamped.
One of the agreements have been executed in favour of the Municipal Corporation and hence, no separate stamp duty is required to be paid
The trial court has erred and allowed the impounding the documents while directing to send the same to the Collector for adjudication of stamp duty and penalty,
The High Court has also erroneously affirmed the order.
The Respondents submitted that as the agreements for sale have a specific clause about the transfer of the physical possession to the purchaser, the trial court has rightly allowed the application and needs no further interference.
The court order and analysis:
The court observed that the instruments /documents under dispute were not forming part of a single transaction between the same parties but were actually different transactions between different vendors and purchasers and during different times.
While the agreements for sale were being executed, the Explanation I to Article 25 of Schedule I, was amended and the agreement for sale came to be treated as ‘conveyance’ if the possession is handed over immediately or if it is agreed to be handed over within a particular time.
The agreements for sale, under discussion, included a clause whereby the possession was handed over to the purchaser implying acquisition of possessory rights protected under Section 53A of the Transfer of Property Act. This Section requires payment of proper stamp duty and registration as mandated under Section 17 of the Registration Act.
The court opined the requirement to treat the instrument as conveyance was satisfied and the execution of the sale deed was a mere formality.
As such, the agreement for sale became the principal document on which stamp duty has to be paid and the liability was not absolved by payment of stamp duty on the sale deed.
The court upheld the orders of the trial court and the High Court and dismissed the appeal.
The Supreme Court of India
Civil Appeal No. 10804 Of 2024
Shyamsundar Radheshyam Agrawal & Anr. ...Appellant(S)
Versus
Pushpabai Nilkanth Patil & Ors. ...Respondent(S)
Order dated 24th September 2024
Authors:
Ms. Mahua Roy Chowdhury
Managing Partner
Ms. Dhanashree Chowdhury
Partner
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