M/S TIRUPATI DEVELOPERSversusSTATE OF UTTARAKHAND & ORS.

                        [2013] 9 S.C.R. 598


A                  M/S TIRUPATI DEVELOPERS
                                 v.
                STATE OF UTTARAKHAND & ORS.
                  (Civil Appeal No. 6619 of 2013)
                         AUGUST 08, 2013
B
         [K.S. RADHAKRISHNAN AND A.K. SIKRI, JJ.]

       Indian Stamp Act, 1899 - s.28 rlw Art.5 (b-1) of Schedule
  18 [as applicable to the State of Uttarakhand] and ss.33, 38
C and 47A - Deficit stamp duty - Agreements for sale executed
  in favour of appellant - Presented before the Deputy Registrar
  for registration - Matter referred by him to Assistant
  Commissioner (Stamp and Registration) who held that the
  stamp duty paid on the documents was deficient and directed
o the appellant to make up for the deficit stamp duty alongwith
  penalty imposed as well as interest - Writ Petitions in High
  Court - Partial relief given to appellant modifying the orders
  of Deputy Registrar, inasmuch as deficient stamp duty was
  worked out at a lesser amount and on this reduced penalty
E of 15% was imposed - Held: The subject matter of the
  documents fell u/s. 33 - Subsequent conduct of the parties in
  cancelling the agreements cannot be a reason for not taking
  action u/s. 33138 - Main argument of the appellant before the
  High Court was that at the relevant time stamp duty was
  payable @ Rs. 801- per thousand whereas the Assistant
F Commissioner (Stamps) had calculated the same @ Rs. 1251
  - per thousand - This argument has already been accepted
  by the High Court whereby stamp duty payable was reduced
  and relief to that extent has already been given - Likewise the
  High Court also set aside the order of the Assistant
G Commissioner (Stamps) in so far as the interest payment was
  imposed upon the appellant - In any case, High Court
  reduced the penalty to 15% of the deficit stamp duty, thereby
  giving sufficient succour to the appellant - No further relief can
  be granted to the appellants.
H                               598
       TIRUPATI DEVELOPERS v. STATE OF                 599
                 UTTARAKHAND
     Eleven Agreements for sale were executed in favour       A
of the appellant/petitioner. In each of these agreements
a part of land situated in a village in Uttarakhand was
sought to be purchased by the appellant. The Deputy
Registrar concerned impounded all these documents as
he felt that the documents were not sufficiently stamped.     8
Matter was referred by him to the Assistant Commissioner
(Stamp and Registration) who directed the appellant to
make up for the deficit stamp duty alongwith penalty
imposed as well as interest. Revision Petition before the
Additional Commissioner was dismissed. That order was         C
challenged by filing Writ Petitions in the High Court which
met the same fate in so far as issue regarding deficient
stamp duty is concerned. However, partial relief was
given to the appellant modifying the orders of Deputy
Registrar, inasmuch as deficient stamp duty was worked
                                                              0
out at a lesser amount and on this reduced penalty of
15% was imposed.

     In the instant appeals, the appellant referred to the
provisions of Section 2, Section 3 and Section 10 of the
Indian Stamp Act, 1899, and on that basis submitted that      E
at the time of agreement to sale, stamp duty is not
payable at all.

    The appellant, further argued that in the instant
cases, the Assistant Commissioner (Stamps) had                F
adjudicated the matter under Section 33/38 of the Stamp
Act which was clearly illegal as these provisions were not
applicable and instead, the case should have been dealt
with u/s 47 A of the Stamp Act.

    Dismissing the appeals, the Court                         G

    HELD: 1. A conjoint reading of Section 28 of the
Indian Stamps Act, 1899 read with Article 5 (b-1) of
Schedule 1B, as applicable to the State of Uttarakhand
clearly depict that the stamp duty is payable on 50% of       H
   600     SUPREME COURT REPORTS              [2013] 9 S.C.R.

A the Value of consideration of the sale agreement. As per
  this, in the illustrative case chosen by this Court, where
  the total consideration was Rs. 24,70,000/-, stamp duty
  was to be calculated on Rs. 12,35,000/-. Instead the
  appellant had paid stamp duty of Rs. 10,000/- only. It is
B manifest, therefore, that the stamp duty paid on the
  document was deficient which was rightly impounded by
  the Deputy Registrar and sent for adjudication. [Paras 11
  and 12) [606-B, F-H]

       2. As per Section 33 of the Stamps Act, every person
C having, by law or consent of parties authority to receive
  the evidence or every person in-charge of a public office
  is duty bound to impound the instrument when produced
  before him, and he finds that such an instrument is not
  duly stamped. The agreements in question were
D presented before the Deputy Registrar for registration
  who felt that the stamp duty on these documents was
  deficient. Therefore, it is rightly held by the Courts below
  that the subject matter of the documents fell under
  Section 33 of the Act and not under Section 47 A of the
E Act. [Para 14) [607 -E-F]

      3. The main argument of the petitioner before the
  High Court was that at the relevant time the stamp duty
  was payable at the rate of Rs. 80/- per thousand whereas
F the Assistant Commissioner (Stamps) had calculated the
  same at the rate of Rs. 125/- per thousand. This argument
  has already been accepted by the High Court whereby
  stamp duty payable was reduced and relief to that extent
  has already been given. Likewise the High Court had also
  set aside the order of the Assistant Commissioner
G (Stamps) in so far as the interest payment was imposed
  upon the appellant. Even the penalty was reduced to 15
  percent only. [Para 16) [607-H; 608-A-B]

     4. In regard to the contention that no adjudication
H was permissible at all because of the reason that these
         TIRUPATI DEVELOPERS v. STATE OF                    601
                   UTTARAKHAND
agreements for sale were subsequently cancelled, that               A
too within two months of the execution thereof, this Court
is of the opinion that the subsequent conduct of the
parties in cancelling the agreements cannot be a reason
for not taking action under Section 33/38 of the Act. That
action was necessitated when the documents were                     B
produced before the Dy. Registrar and he found the same
to be deficient. The subsequent cancellation would be of
no avail. In any case, keeping in view this aspect the High
Court reduced the penalty to 15 percent of the deficit
stamp duty, thereby giving sufficient succour to the                c
appellant. No further relief can be granted to the
appellants. [Paras 17, 18] [608-C-F]

    CIVIL APPELLATE JURISDICTION : Civil Appeal No.
6619 of 2013.
                                                                    D
    From the Judgment and Order dated 29.09.2011 of the
High Court of Uttarakhand at Nainital in Writ Petition (M/S) No.
2068 of 2011.
                                WITH
                                                                    E
    C.A. Nos. 6620, 6621, 6622, 6623, 6624, 6627, 6628,
6629, 6630 & 6631 of 2013.

    Vibha Datta Makhija, Ashok Kumar Sharma for the
Appellant.
                                                                    F
    Rachana Srivastava, Prateek Dwivedi (for Anuvrat
Sharma) for the Respondents.

    The Judgment of the Court was delivered by
                                                                    G
    A.K. SIKRI, J. 1. Leave granted.

     2. Eleven Agreements for sale were executed in favour of
the petitioner herein. In each of these agreements a part of land
comprising area 0.385 Hectare, falling in Khasra No. 25
                                                                    H
    602     SUPREME COURT REPORTS                  [2013] 9 S.C.R.


A situated in village Mahua Kheda, Tehsil Kashipur, Udham Singh
  Nagar, Uttarakhand was sought to be purchased by the
  petitioner. The petitioner had also paid earnest money of
  varying amounts against the total consideration which are
  agreed to in each of the agreements. For example, in one
B agreement dated 4.12.2007, total consideration mentioned
  was Rs. 24,70,000/- and at the time of signing the agreement
  for sale, an advance amount of Rs. 6, 15,000/- was paid. A sum
  of Rs. 10,000/- was paid as stamp duty on this deed of
  Agreement of Sale. In a similar manner, other 10 agreements
c were also presented for registration, paying a sum of Rs.
  10,000/- as stamp duty on each of them.

        3. The Deputy Registrar concerned impounded all these
  documents as he felt that the documents were not sufficiently
  stamped. Matter was referred by him to the Assistant
D Commissioner (Stamp and Registration) for adjudication of
  proper stamp duty and to recover deficit stamp duty from the
  petitioner. Notices were issued to the petitioner by the Assistant
  Commissioner (Stamp and Registration) and an enquiry was
  conducted. After receiving his objections, the Assistant
E Commissioner (Stamp and Registration) passed the orders
  holding that the stamp duty paid on these documents was
  deficient. In each of the cases, he directed the petitioner to
  make up for the deficit stamp duty alongwith penalty imposed
  as well as interest. For example, in respect of, document,
F illustrated above, the petitioner was called upon to pay Rs.
  1,44,375/- as deficient stamp duty and Rs. 70,000/- as penalty
  with interest. Similar orders were passed in other ten cases.

       4. Challenging these orders, the petitioner preferred
G Revision Petition before the Additional Commissioner, Kumaon
  Mandal, Nainital which was, however, dismissed by an order
  dated 10.3.2011. That order was challenged by filing Writ
  Petitions in the High Court of Uttarakhand, Nainital which have
  met the same fate in so far as an issue regarding deficient
H stamp duty is concerned. However, partial relief is given to the
        TIRUPATI DEVELOPERS v. STATE OF                      603
           UTTARAKHAND [A.K. SIKRI, J.]
petitioner modifying the orders of Deputy Registrar, in as much      A
as deficient stamp duty is worked out at Rs. 88,800/- and not
Rs. 1,44,375/-. On this amount reduced penalty of 15% is
imposed i.e. Rs. 13,320/-.

     5. Similar corrections are made in other Writ Petitions in
                                                                     B
so far as exact quantum of deficit stamp duty is concerned and
the Writ Petitions are allowed partly to this extent.

     6. Undeterred and unsatisfied with the aforesaid outcome,
present Special Leave Petitions are filed invoking extraordinary
jurisdiction under Article 136 of the Constitution of India,         C
impugning the aforesaid verdict dated 29th September, 2011
of the High Court of Uttarakhand, Nainital.

    7. Operative portion of the impugned order reads as
under:                                                               D
           "Considering the peculiar facts and circumstances
    of the case that the agreement for sale had been cancelled
    within a period of two months from the date of execution
    of agreement for sale coupled with the fact that no
    opportunity of hearing was afforded to the petitioner on the     E
    point of imposition of penalty, this Court is of the opinion
    that to meet the ends fo justice, penalty be imposed at the
    rate of 15 percent of the deficit stamp duty. This order shall
    not be treated as a precedent for other cases".
                                                                     F
     8. Ms. Vibha Datta Makhija, learned Counsel who
appeared on behalf of the petitioner in all these cases, referred
to the provisions of Section 2, Section 3 and Section 10 of the
Indian Stamp Act, 1899 (hereinafter to be referred as the
Stamp Act), on the basis of which her submission was that at         G
the time of agreement to sale, stamp duty is not payable at all.
She, further argued that in the instant cases, the Assistant
Commissioner (Stamps) had adjudicated the matter under
Section 33/38 of the Act which was clearly illegal as these
provisions were not applicable and instead, the case should
                                                                     H
    604      SUPREME COURT REPORTS                   [2013] 9 S.C.R.

A   have been dealt with u/s 4 7 A of the Stamp Act.

         9. In so far as first argument of the petitioner's Counsel is
    concerned, on the reading of the aforesaid provisions of the
    Indian Stamp Act to which our attention was brought, one would
    get an impression that there is some merit in the said
8
    submission. However, this argument ignores that there is a
    State amendment thereto and applicability of this provision
    demolishes the aforesaid plea comprehensively.

          10. Section 28 of the Stamp Act reads as under:
c
           "28. Direction as to duty in case of certain
                conveyances.

           (1)   When any property has been contracted to be sold
                 for one consideration for the whole, and is conveyed
D                to the purchaser in separate parts by different
                 instruments, the consideration shall be apportioned
                 in such manner as the parties think fit, provided that
                 a distinct consideration for each separate part is
                 set forth in the conveyance relating thereto, and
E                such conveyance shall be chargeable with ad
                 valorem duty in respect to such distinct
                 consideration.

           (2)   Where property contracted to be purchased for one
F                consideration for the whole, by two or more persons
                 jointly, or by any person for himself and others, or
                 wholly for others, is conveyed in parts by separate
                 instruments to the persons by or for whom the same
                 was purchased, for distinct parts of the
G                consideration, the conveyance of each separate
                 part shall be chargeable with ad valorem duty in
                 respect of the distinct part of the consideration
                 therein specified.

           (3)   Where a person, having contracted for the
H                purchase of any property but not having obtained
  TIRUPATI DEVELOPERS v. STATE OF                      605
     UTIARAKHAND [A.K. SIKRI, J.]

      a conveyance thereof, contracts to sell the same to     A
      any other person and the property is in
      consequence conveyed immediately to the sub-
      purchaser, the conveyance shall be chargeable with
      ad valorem duty in respect of the consideration for
      the sale by the original purchaser to the sub-          8
      purchaser.

(4)   Where a person having contracted for the purchase
      of any property but not having obtained a
      conveyance thereof, contracts to sell the whole, or
      any part thereof, to any other person or persons,       C
      and the property is in consequence conveyed by the
      original seller to different persons in parts, the
      conveyance of each part sold to a sub-purchaser
      shall be chargeable with ad valorem duty in respect
      only of the consideration paid by such sub-             D
      purchaser, without regard to the amount or value of
      the original consideration; and the cc;mveyance of
      the residue (if any) of such property to the original
      purchaser shall be chargeable with ad valorem duty
      in respect only of the excess of the original           E
      consideration over the aggregate of the
      consideration paid by the sub-purchaser.

           Provided that the duty on such last-mentioned
      conveyance shall in no case be less than one            F
      rupee.

(5)   Where a sub-purchaser takes an actual
      conveyance of the interest of the person
      immediately selling to him, which is chargeable with
      ad valorem duty in respect fo the consideration paid    G
      by him and is duly stamped accordingly, any
      conveyance to be afterwards made to him of the
      same property by the original seller shall be
      chargeable with a duty equal to that which would be
      chargeable on a conveyance for the consideration        H
    606       SUPREME COURT REPORTS                  [2013] 9 S.C.R.


A                obtained by such original seller or, where such duty
                 would exceed five rupees, with duty of five persons."

         11. The aforesaid provision has to be read with Article 5
    (b-1) of Schedule 18 of the Indian Stamps Act, as applicable
    to the State of Uttarakhand, which is as under:
8
     Description of Instrument                 Proper Stamp Duty

      (bi)     If relating to the sale   The same duty as on
        of an immovable property         conveyance [No. 23 Cl. (a)
c       where possession is not          on one half of the amount of
        admitted to have been            consideration as set forth in
        delivered nor is agreed to       the agreement.
        be delivered nor is agreed
        to be delivered without
D       executing the conveyance.

           Provided that when
          conveyance in pursuance of
          such     agreement       is
          executed, the duty paid
E         under this clause in excess
          of the duty payable under
          Cl.(c) shall be adjusted
          towards the duty payable
          on the conveyance."
F
        12. The conjoint reading of the aforesaid provisions would
  clearly depict that the stamp duty is payable on 50% of the
  Value of consideration of the sale agreement. As per this, in
  the illustrative case chosen by us, where the total consideration
G was Rs. 24,70,000/-, stamp duty was to be calculated on Rs.
  12,35,000/-. Instead the appellant had paid stamp duty of Rs.
  10,000/- only. It is manifest, therefore, that the stamp duty paid
  on the document was deficient which was rightly impounded by
  the Deputy Registrar and sent for adjudication. In fact, this legal
H position was even conceded to by the appellant before the High
        TIRUPATI DEVELOPERS v. STATE OF                         607
           UTTARAKHAND [A.K. SIKRI, J.]
Court which has been recorded in the impugned judgment as               A
follows:

    "It is admitted to both the parties that the petitioner is liable
    to pay the stamp duty, which is payable on 50 percent of
    the valuation of the sale consideration on the date of
                                                                        8
    execution of the agreement for sale".

     13. In so far as second argument predicated on, Section
47 A of the Stamp Act is concerned, we find no substance
therein. Section 33 of the Act, which was invoked in the present
case reads as under:                                                    C

    "Every person having by law or consent of parties authority
    to receive evidence and every person in-charge of a public
    office, except an officer of police, before whom any
    instrument, chargeable, in his opinion with duty is produced        D
    or comes in the performance of his functions, shall, if it
    appears to him that such instrument is not duly stamped,
    impound the same".

     14. As per the aforesaid provisions, every person having,
by law or consent of parties authority to receive the evidence          E
or every person in-charge of a public office is duty bound to
impound the instrument when produced before him, and he
finds that such an instrument is not duly stamped. The
agreements in question were presented before the Deputy
Registrar for registration who felt that the stamp duty on these        F
documents was deficient. Therefore, it is rightly held by the
Courts below that the subject matter of the documents fell under
Section 33 of the Act and not under Section 47 A of the Act.

    15. Presumably, knowing this legal position, this argument          G·
was, though, taken before the Assistant Commissioner
(Stamps) and was not, thereafter, pressed before the High
Court.

    16. The main argument of the petitioner before the High
Court was that at the relevant time the stamp duty was payable          H
    608      SUPREME COURT REPORTS               [2013] 9 S.C.R.


A at the rate of Rs. 80/- per thousand whereas the Assistant
  Commissioner (Stamps) had calculated the same at the rate
  of Rs. 125/- per thousand. As mentioned above, this argument
  has already been accepted by the High Court whereby stamp
  duty payable is reduced and relief to that extent has already
B been given. Likewise the High Court has also set aside the
  order of the Assistant Commissioner (Stamps) in so far as the
  interest payment was imposed upon the appellant. Even the
  penalty is reduced to 15 percent only.

C      17. Last attempt of Ms. Makhija was that no adjudication
  was permissible at all because of the reason that these
  agreements for sale were subsequently cancelled, that too
  within two months of the execution thereof. We are of the
  opinion that the subsequent conduct of the parties in cancelling
  the agreements cannot be a reason for not taking action under
D Section 33/38 of the Act. That action was necessitated when
  the documents were produced before the Dy. Registrar and he
  found the same to be deficient. The subsequent cancellation
  would be of no avail. In any case, keeping in view this aspect
  the High Court reduced the penalty to 15 percent of the deficit
E stamp duty, thereby giving sufficient succour to the appellant.

        18. We are of the opinion that no further relief can be
    granted to the appellants. Thus, these appeals are dismissed
    as devoid of any merits.
F         19. No costs.

    B.B.B.                                   Appeals dismissed.