MUNICIPAL CORPORATION OF DELHIversusPRAMOD KUMAR GUPTA

           MUNICIPAL CORPORATION OF DELHI                                A
                                  v.
                   PRAMOD KUMAR GUPTA

                       DECEMBER 17, 1990

      [LAUT MOHAN SHARMA AND R.M. SAHAI, JJ.]                            B

      Delhi Municipal Corporation Act, 1957: Section 147-Levy of
duty on transfer of immovable property-Expression 'instrument of sale
of immovable property'-Scope of-Word 'instrument'-Whether has
the same connotation as under the Indian Stamp Act, 1899.

     Code of Civil Procedure, 1908: Order XXJ, Rules 92-94-Auction
                                                                         c
sale-Certificate of sale issued by Civil Court-Whether instrument of
sale-Whether chargeable to duty under section 147 of the Municipal
Corporation Act, 1957 -Object of the sale certificate explained.

     Indian Stamp Act, 1899: Section 2 Clause (JO) and ( 14)-'Con- D
veyance' and 'instrument'-Meaning of.

      The respondent purchased the property in question at an auction
sale held in exerution of a decree of the Civil Court. The sale was
conf"rrmed under Order XXI, Rule 92 of the Code of Civil Procedure,
1908 and the High Court directed issuing of a sale certificate under Rule E
94. On the question of payment of duty the respondent contended that
no duty was chargeable under section 147 of the Municipal Corporation
Act, 1957. A single judge of the High Court accepted his plea and
directed payment of only stamp duty (under the Stamp Act, 1899) with-
out any surcharge under section 147 of the 1957 Act for issuance of the
sale certificate. On appeal the judgment of the single judge· was F
confirmed by a Division Bench of the High Court. Hence this appeal by
Municipal Corporation.

      Dismissing the appeal, this Court,

      HELD: 1. The expression 'instrument of sale of immovable pro- G
perty' under section 147 of the Municipal Corporation Act, 1957 means
a document effecting transfer. The title to the property in question has
to he conveyed under the document. The document has to be a vehicle
for the transfer of the right, title and interest, A document merely
stating as a fact that transfer has already taken place cannot be
included within this expression. A paper which is recording a fact or is H

                                  547
    548         SUPREME COURT REPORTS                [1990] Supp. 3 S.C.R.

A   attempting to fUrnisb evidence of an already concluded transaCtion
    under which title bas already passed cannot be treated to be such an
    instrument. [SSOB-D]

          2. The provisions of Order XXI of the Code of Civil Procedure,
    1908 make it clear that the title to the property put on auction sale
B   passes by force of law when tbe sale is held and the transfer becomes
    final when an order under Rule 92 confirming it is made. By the certifi-
    cate issued under Rule 94, the Court is formally declaring the effect of
    the same and is not extinguishing or creating title. The object of
    issuance of such a Certificate is to avoid any controversy with respect to
    the identity of the property sold, and of the purchaser thereof as also
C   of the date when the sale becomes absolute. The use of past tense in the
    rule stating that the sale "became" absolute, is consistent with this
    interpretation. The Certificate of sale, therefore, cannot be termed to
    be an instrument of sale so as to attract section 147 of the Delhi Munici-
    pal Corporation Act. [550E-H; SSlA-D]

D         CIVIL APPELLATE JURISDICTION: Civil Appeal No. 6081
    of 1990.

         From the Judgment and Order dated 1.4.1987 of the Delhi High
    Court in L.P.A. No. 68 of 1987.

E         Ranjit Kumar for the Appellant.

          Arun Mohan and P.H. Parekh for the Respondent.

          The Judgment of the Court was delivered by

F         SHARMA, J. Special leave is granted. The short question which
    arises in this appeal is whether duty is payable under s. 147 of the
    Delhi Municipal Corporation Act, 1957, on a sale certificate issued by
    the civil court under Order XXI, Rule 94 Code of Civil Procedure.

          2. The property in question was auction sold in execution of a
G   decree in the civil court and was purchased on August 4, 1986 by the
    respondent Pramod Kumar Gupta for a sum of Rs.17 ,00,000. The sale
    was confirmed on November 6, 1986, and the High Court directed the
    issuing of the Sale Certificate under Order XX!, Rule 94, C.P.C. On
    the question of payment of stamp duty, the respondent cont~nded that
    no duty was chargeable under s. 147 of the 1957 Act. The learned
H   single Judge of the High Court agreed with him and directed payment
                 M.C.D. v. P.K. GUPTA [SHARMA, J.]                   549

of only the stamp duty without surcharge for issuance of the Sale
                                                                           A
Certificate. The judgment was confirmed on appeal by a Division
Bench. The petitioner-appellant Municipal Corporation of Delhi has
challenged the High Court's decision in the present appeal.

      3. Unde.r the Provisions of s. 147 of the Act, duty is levied on
transfers of immovable property. The relevant part 3f sub-section (2)      B
is mentioned below:

           "(2) The said duty shall be levied-

                 (a) in the form of a surcharge on the duty imposed by
           the Indian Stamp Act, 1899, as in force for the time being
           in the Union Territory of Delhi, on every instrument of the
                                                                           c
           description specified below, and

                 (b) at such rate as may be determined by the Corpo-
           ration not exceeding five per cent., on the amount specified
           below against such instruments:                                 D

                 Description of           Amount on which duty
                 instrument               should be levied
           (i)   Sale of immovable       The amount or value of the
                 property.               consideration for the sale, as
                                         set forth in the instrument.      E

           (ii) Exchange of immov-       The value of the property of
                ble property.            the greater value, as set forth
                                         in the instrument.
           (iii) Gift of immovable       The value of the property, as
                 property.               set forth in the instrument.      F

           (iv) Mortgage with posses- The amount secured by the
                sion of immovable     mortgage as set forth in
                property.             the instrument.
           (v)   Lease in perpetuity    The amount equal to one·
                 of immovable property. sixth of the whole amount or       G
                                        value of the rent which would
                                        be paid or delivered in res-
                                        pect of the first fifty years of
                                        the lease as set forth in the
                                        instrument.;;
                                                                           H
    550         SUPREME COURT REPORTS               [1990] Supp. 3 S.C.R.

A The duty is thus payable "on every instrument of" sale of immovable
  property. The question is whether a Certificate issued by civil court
  under Rule 94 of Order XXI, C.P.C., is an instrument of sale.

        4. The experssion "instrument" ins. 147 of the Act has the same
  connotation as the word has under the Indian Stamp Act, the refe-
B rence to which has been expressly made. Clause 14 of s. 2 of the Stamp
  Act gives an inclusive definition of the expression as referring to any
  document by which any right or liability is p~rported to be created,
  transferred, limited, extended, extinguished or recorded. Clause 10 of
  the said section states that "conveyance" includes a conveyance on
  sale and every instrument by which property, whether movable or
C immovable, is transferred inter vivas. The expression 'instrument of
  sale of immovable property' under s. 147 of the Act must, therefore,
  mean a document effecting transfer. The title to the property in ques-
  tion has to be conveyed under the document. The document has to be
  a vehicle for the transfer of the right, title and interest. A document
  merely stating as a fact that transfer has already taken place cannot be
0
  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 cannot be treated to be such an
  instrument. The question, iherefore, is as to whether a Certificate
  issued by a Court under Rule 94 of Order XXI can be said to be such
  an instrument so as to attract the provisions of s. 147 of the Act or not.
E
          5. An examination of the relevant provisions of Order XXI of
    the Code of Civil Procedure will show that the title to the property put
    on auction sale passes under the law when the sale is held. The owners
    and certain other interested persons are afforded opportunity under
    the Code to make a prayer for setting aside the sale on enumerated
F   grounds, and after all such matters are disposed of without disturbing
    the sale, the sale is confirmed under Rule 92. The relevant part of Rule
    92 reads as follows:

                "92. Sale when to become absolute or be set aside.-(!)
                Where no application is made under Rule 89, Ru lie 90 or
G               Rule 91, or where such application is made and disallowed,
                the Court shall make an order confirming the sale, and
                thereupon the sale become absolute."

    The stage for issuing a Certificate of sale arises only thereafter, and
    Rule 94 states:
H
                   M.C.D. v. P.K. GUPTA [SHARMA, l.]                    551

                 "94. Certificate to purchaser.-Where a sale of               A
            immovable property has become absolute, the Court shall
            grant a certificate specifying the property sold and the
            name of the person who at the time of sale is declared to be
            the purchaser. Such certificate shall bear date the day on
            which the sale became absolute."              ·.
                                                          ~                   B
It is manifest that the title passes under the auction sale by force of law
and the transfer becomes final when an order under Rule 92 confirm-
ing it is made. By the Certificate issued under Rule 94, the Court is
formally declaring the effect of the same and is not extinguishing or
creating title. The object of issuance or such a Certificate is to avoid
any controversy with respect to the identity of the property sold, and        c
of the purchaser thereof as also the date when the sale becomes abso-
lute. The use of past tense in the rule stating that the sale "became"
absolute, is consistent with this interpretation. The Certificate, there-
fore, cannot be termed to be an instrument of sale so as to attract s.
147 of the Delhi Municipal Corporation Act. The appeal is accordingly         D
dismissed with costs.

T.N.A.                                                 Appeal dismissed.