Stamp Duty should be paid while registering Agreement to Sell which shows transfer of physical possession of property, Supreme Court
Judgment dated 24th September 2024
Cause title : SHYAMSUNDAR RADHESHYAM AGRAWAL & ANR VS PUSHPABAI NILKANTH PATIL & ORS
Case No: Civil Appeal No. 10804 of 2024
A Bench of Supreme Court Hon'ble Justice Mr. Pankaj Mithal and Hon'ble Justice R.Mahadevan dismissed the appeal filed by the petitioner against the order directing payment of stamp duty for the agreement to sell registered with clause that the physical possession of properties were transferred. One of the Defendants took out an application under Sections 33, 34 & 37 of the Maharashtra Stamp Act, 1958 r/w Section 17 of the Registration Act, to impound the six original agreements for sale produced by the appellants, so as to get them registered, on the premise that the said documents include a clause that the physical possession of the properties mentioned therein, was transferred to the purchasers; however, they were not duly stamped; and hence, the documents require the payment of stamp duty of the conveyance. The trial court allowed the said application, thereby impounding the documents and directing to send the same to the Collector of Stamp, Thane, for adjudication of stamp duty and penalty, if any, payable by the appellants. High Court affirmed the order of Trial Court, hence a petition was filed in the Supreme Court.
Facts of the case are:
The appellants instituted a suit in Special Civil Suit No.200 of 2008 seeking declaration and injunction. Denying the plaint averments, the defendants filed their written statements. Thereafter, the Defendant No.46 took out an application under Sections 33, 34 & 37 of the Maharashtra Stamp Act, 1958 r/w Section 17 of the Registration Act, to impound the six original agreements for sale viz., Exh.145/3 dated 20.07.1994, Exh.145/9 dated 20.07.1994, Exh.145/15 dated 12.10.1994, Exh.145/19 dated 12.10.1994, Exh.145/23 dated 27.04.2006 and Exh.145/25 dated 19.09.2004 produced by the appellants, so as to get them registered, on the premise that the said documents include a clause that the physical possession of the properties mentioned therein, was transferred to the purchasers; however, they were not duly stamped; and hence, the documents require the payment of stamp duty of the conveyance. By order dated 26.10.2016, the trial Court allowed the said application, thereby impounding the documents and directing to send the same to the Collector of Stamp, Thane, for adjudication of stamp duty and penalty, if any, payable by the appellants. Aggrieved by the same, the appellants filed writ petition in the High Court, which was dismissed by the High Court.
Observation and Direction of the Hon'ble Supreme Court:
"15. Taking note of the facts and circumstances of the case and
legal position, the trial Court rightly observed that the subsequent
sale deed cannot be construed as a principal transaction and the
agreements to sell would be treated as the principal conveyance as
per Explanation I of Article 25 of Schedule-I of the Act and
impounded all these documents and directed to send the same to the
Collector for adjudication of stamp duty and penalty. After, a
detailed analysis, the High Court held that no case for interference
was made out by the appellants, which, we affirm, to be correct.
16. In addition, we wish to further record that the second proviso
to Article 25 only states that if the stamp duty is already paid or
recovered on the agreement to sale, then the same shall be deducted
while computing the stamp duty payable when the sale deed is
executed; the proviso does not contemplate a situation similar to
this case, where the document ought to have been registered with
payment of stamp duty on the agreement for sale initially and only
the balance, on the deed of sale after deduction of the duty already
paid ought to have been collected. Since, the state cannot recover
by way of stamp duty in excess of what it is entitled to, the
recovery shall be restricted only to the extent of difference in
stamp duty and the entire penalty from the date of execution of the
agreement for sale till the date of payment of stamp duty. Needless
to say, that until the defect is cured by satisfying the
requirements under Section 34, the documents impounded cannot also
be used in evidence.
17. In view thereof, we find no reason to interfere with the
orders passed by the Courts below. Accordingly, this appeal fails
and is dismissed. Pending application(s), if any, shall stand
closed."
Download Judgment dated 24th September 2024 in SHYAMSUNDAR RADHESHYAM AGRAWAL & ANR VS PUSHPABAI NILKANTH PATIL & ORS, Civil Appeal No. 10804 of 2024.