THE HON’BLE SRI JUSTICE L.NARASIMHA REDDY WRIT PETITION No.25433 of 2008 ORDER: The first petitioner purchased 1268 square yards of land in premises bearing No.8-2-293/82/A/564-A 48 situated at Hakeempet, and part of lay out of Jubilee Hills Cooperative House Building Society Limited, Hyderabad, through a sale deed, dated 19.02.2004. In the sale deed, the purchaser is described as, “M/s. Global Enterprises represented by its Proprietor Mr.Neeraj Kumar Agarwal”. The first petitioner executed a gift deed in favour of the second petitioner, his wife, Smt. Ishitha Agarwal, on 23.08.2007, and presented the same before the respondent, for registration. Stamp duty at 1% of the value of property was paid, by treating the document as gift settlement deed, as mentioned in Article 49 of Schedule I-A of the Indian Stamp Act, 1899 (for short ‘the Act’). However, the document was kept pending and not registered. The respondent issued a notice dated 08.05.2008, to the petitioners demanding a sum of Rs.40,38,215/-, towards deficit stamp duty etc. This figure was arrived at by levying stamp duty at 3% and by enhancing the value of the property. The petitioners feel aggrieved by the notice. Petitioners contend that though the document is named as ‘Gift Deed’, it is a deed of settlement, since the disposition is made by one member of the family in favour of another and in that view of the matter, Article 49 of Schedule I-A of the Act, gets attracted. It is stated that the Act specifically excludes a settlement covered by Article 49 from the purview of ‘gift’, as is evident from Article 49 of Schedule I-A of the Act. The respondent filed a counter-affidavit, stating that the transferor of the document is a proprietary concern and a transfer made by such an agency cannot be said to be in favour of a member of the family. According to the respondent, the nomenclature of the document and the contents thereof, attract Article 29 of Schedule I-A of the Act. Sri S.Ravi, learned counsel for the petitioners, submits that a proprietary concern is, in no way different from the proprietor, and the name given to it, has no special significance, except depicting the nature of activity. He contends that various acts and omissions, vis-à- vis a proprietary concern are squarely referable to the proprietor i.e. an individual and the concern does not have any independent legal or corporate personality. Learned counsel further contends that the document attracts Article 49, and not 29, of Schedule I-A of the Act. He places reliance upon certain decided cases. Learned Government Pleader for Revenue, on the other hand, submits that, when the name of the transferor is not mentioned as an individual, it becomes difficult to imagine the concept of family, much less relationship, in such matters. He contends that the document is named as ‘Gift Deed’ and that no exception can be taken to the impugned notice, or the stand taken by the respondent. Two questions arise for consideration, in this regard, viz., (a) whether a proprietary concern has any status or existence, other than that of its proprietor; and (b) whether Article 29 or 49 of Schedule I-A of the Act applies to the document executed by the 1st petitioner in favour of the 2nd petitioner. The root cause of the controversy appears to be the description of the transferor in the document and nomenclature of the document itself. The property was purchased through a sale deed, dated 19.02.2004. The name of the purchaser in that document is “M/s Global Enterprises, represented by its Proprietor Sri Neeraj Kumar Agarwal”. The property acquired was sought to be gifted through a document, dated 23.08.2007. The document is named as ‘Gift Deed’ and the description of donor is “Sri Neeraj Kumar Agarwal, son of Satish Kumar Agarwal, aged 29 years, occupation: Proprietor of Global Enterprises.” The respondent treated the vendor as a Proprietary Concern, and not individual. On that basis, he refused to treat the document as Settlement Deed, since according to Article 49 of Schedule I-A of the Act, a settlement can be made only by one member of the family in favour of another. The title given to the document, added further strength to his view. Whatever may have been the justification in treating the purchaser under the sale deed, dated 19.02.2004, i.e. M/s.Global Enterprises, as an entity, other than individual, such a view becomes untenable as regards donor in document in question. The description was of an individual and the Proprietary Concern was mentioned, in the context of the avocation of the transferor. Therefore, the very basis for the view, taken by the respondent becomes shaky. Assuming that the deed was executed by a Proprietary Concern, it needs to be noted that the description of the Proprietary Concern, is nothing but another way of presenting the individual behind it. Unlike a Company incorporated under the Indian Companies Act, a Proprietary Concern does not have an independent legal or corporate personality of its own. Further, it is not even comparable to a Firm constituted under the Indian Partnership Act. Though a firm cannot be ascribed an independent legal personality, it happens to be the cumulative or joint entity of its partners and on being registered, the firm is brought under a legal regime, which is distinct from the one applicable to the individuals. Similarity, if any is that, a name is given for the activities of the individual in a manner, resembling a Firm. Except that, the name is given for the activities of the concerned individual, a proprietary concern is in no way different, from that of the Proprietor. The rights and obligations of an individual do not undergo any change, simply because he brings about a proprietary concern. It is apt to refer to the observations of the Supreme Court in Shankar Finance and Investments v. State of Andhra Pradesh[1], wherein it observed as under: “As contrasted from a company incorporated under the Companies Act, 1956 which is a legal entity distinct from its shareholders, a proprietary concern is not a legal entity distinct from its proprietor. A proprietary concern is nothing but an individual trading under a trade name. In civil law where an individual carries on business in a name or style other than his own name, he cannot sue in the trading name but must sue in his own name, though others can sue him in the trading name.” The inevitable answer to the first question is, therefore, in the negative. Coming to the second question, one fundamental principle relating to construction of documents is that, irrespective of the nomenclature given to a document, the contents thereof become relevant, for the purpose of examining various legal implications. It has already been mentioned that document executed by the 1st petitioner was named as ‘Gift Deed’. In case, the settlement of the property is by one member of the family in favour of another, Article 49 of Scheulde I-A of the Act, gets attracted and the stamp duty leviable thereon is 1%. It becomes necessary to refer to the definition of Gift Deed under the Act. Article 29 of Schedule I-A of the Act defines gift, as under: “Gift:- Instrument of, not being a settlement (No.49) or will or Transfer (No.53) The same duty as a conveyance (No.20) for a consideration or market value equal t the market value of the property, which is the subject-matter of the gift.” From this, it becomes evident that the definition of gift adopted in Article 29 is independent of, and different from the one under the Transfer of Property Act. If the document answers the description of a Settlement Deed, as defined under Article 49, it ceases to be Gift Deed, irrespective of its nomenclature and the disposition under the document. It is not in dispute that the settlement of the property by the donor is in favour of his wife. In Mattegunta Dhanalakshmi v. Kantam Raju Saradamba[2], this Court dealt with this very question, and observed as under: “The wife of a Hindu is undoubtedly a dependant of her husband. The liability to maintain her during his lifetime and also to make provision for her maintenance thereafter rests upon him. Further, the wife is entitled to claim maintenance from out of the estate of her husband.… .…A settlement deed no doubt, also may amount to a gift deed but where a property is given without consideration with a view to make a provision for a dependent, it constitutes a settlement deed as defined under S.2(24) of the Indian Stamp Act. In my view, a reading of the document, Ex.B.18, leaves absolutely no doubt whatsoever that it is a settlement deed….” The principle laid down therein, squarely applies to the facts of the case on hand. It becomes clear that the document in question attracts Article 49 of Schedule I-A of the Act. Therefore, the Writ Petition is allowed, holding that the document deserves to be treated as Settlement Deed under Article 49 of Schedule I-A of the Act. As regards other aspects, such as market value etc., it shall be open to the parties to take necessary steps in accordance with law. There shall be no order as to costs. ____________________ L.NARASIMHA REDDY,J. Dated:24.02.2009 GJ [1] 2008 (4) MPHT 339 (SC) [2] AIR 1977 AP 348