1 IN THE HIGH COURT OF JUDICATURE AT BOMBAY APPELLATE SIDE, BENCH AT AURANGABAD APPEAL FROM ORDER NO. 1 OF 2010 WITH CIVIL APPLICATION NO. 274 OF 2010 IN APPEAL FROM ORDER NO. 1 OF 2010 Dilip Ganpatrao Bharitkar and another ...Appellants/ Applicants Versus M/s. Saishraddha Developers & others ...Respondents ..... Mr. A.N. Nagargoje, advocate for the appellants/applicants Mr. S.K. Shinde, advocate for the respondent 1(i) to 1(iv) ..... CORAM: S. S. SHINDE, J. DATED: 25TH AUGUST, 2010 PER COURT:- 1 This appeal from order preferred against the judgment and order dated 29.10.2009 passed by the learned C.J.S.D. Sangamner below Exh.5 in Special Civil Suit No. 35 of of 2008. 2 The respondent No.1 herein is the original plaintiff, who filed Special Civil Suit No. 35 of 2008 against the appellants herein and respondent Nos. 2 and 3 for specific performance of contract in respect of the land bearing survey No. 107/2 admeasuring 36 R 2 situated within the Municipal limits of Sangamner. 3 The plaintiffs have contended in the said suit that the father of the appellants and respondent Nos. 2 and 3 had executed an agreement to sale on 9.6.2005 and thereby had sold the suit property for a consideration of Rs.71.00 lacs to the plaintiffs. It is the contention of the plaintiffs that entire consideration amount was paid, however, the sale deed was remained to be executed due to some technical difficulty. It is further contended that the father of the appellant viz. Ganpatrao Bharitkar expired on 8.11.2005. It is further pleaded that since the joint family business of the deceased Ganpatrao Bharitkar was in financial crises, therefore, he agreed to sale the suit land. After demise of Ganpatrao Bharitkar the plaintiffs requested the present appellants and the respondent Nos. 2 and 3 to execute the sale deed on behalf of deceased Ganpatrao Bharitkar, however, the present appellants and the respondent No.3 have not executed the sale deed. The plaintiffs therefore, filed a suit for specific performance of contract dated 9.6.2005 and in the alternative it is prayed that if the specific performance of contract is not possible, then the appellants be directed to pay the amount of consideration alongwith the interest @ 18% p.a. and also pay the compensation of Rs. 50.00 lacs for breach of the contract. 4 The appellants herein appeared in the suit and filed their written 3 statement thereby denying the contentions raised by the plaintiffs in the plaint. It was specifically stated that Ganpatrao Bharitkar was not having any right to alienate the suit property. The agreement to sale was also denied. It was also denied that there was financial crises to the joint family, therefore, Ganpatrao Bharitkar agreed to sale the suit land. The suit property is reserved for public purpose by the Municipal Council and therefore, the said land cannot be alienated. The appellants herein prayed for dismissal of the suit as well as the application filed below Exh.5. The trial court, on 29.10.2009, has allowed the application below Exh.5 and restrained the appellants from alienating the suit property in any manner till final disposal of the suit. 5 Counsel for the appellants submitted that the alleged agreement to sale is conveyance within the meaning of provisions of Bombay Stamp Act 1958 and, therefore, it should have been stamped as per the provisions of said Act, however, it has been executed on stamp paper of Rs.500/-. Since the alleged agreement to sale is not sufficiently stamped, therefore, it is inadmissible in evidence and no reliance can be placed on said documents. Be that as it may, the learned trial Court by placing reliance on the said documents has passed the impugned order. He invited my attention to Schedule 1 Article 25 of the said Act. He further invited my attention to Section 34 of the said Act and submitted that since agreement to sale was not duly stamped, as contemplated under the provisions of Bombay Stamp 4 Act, no reliance could have been placed by the trial court while passing the impugned order. It is further submitted that while passing interim order, the trial court should not have placed reliance on the alleged agreement to sale since the same cannot be read in the evidence in view of provisions of Sections 33 and 36 of the Bombay Stamp Act 1958. It is further submitted that entire case of the plaintiffs is based upon the alleged agreement to sale, which is not stamped sufficiently. Learned counsel further invited my attention to the grounds taken in the appeal memo and also the grounds taken in the application for stay and submitted that in the first instance there was no agreement to sale between the said Ganpatrao Bharitkar and even assuming that there was an agreement to sale, he was not authorized to enter into an agreement to sale since the property in question is joint family property. Learned counsel further submitted that though respondent No.2 has subsequently alienated the land and to that effect sale deed is executed that is restricted to the share of respondent No.2 and said sale deed cannot bind the appellants herein. It is further submitted that from the transaction in question, it cannot be said that the said land is sold as a part of the earlier agreement to sale between Ganpatrao Bharitkar and the plaintiffs. It is submitted that the suit is barred by limitation since the said suit is filed in the year 2008 and said Ganpatrao Bharitkar is died in the year 2005 and the alleged agreement to sale is executed in the year 2005. It is further contended that deceased Ganpatrao died in the year 2005, the suit is filed in the 5 year 2008. Therefore, learned counsel in support of his contention that the alleged agreement to sale is not properly stamped and the said cannot be read in evidence, placed reliance on the reported judgment of the Hon'ble Supreme Court in the case of State of Maharashtra and others Vs. Mahavir Lalchand Rathod and another, reported in 1993 Mh.L.J. 1492. Learned counsel further placed reliance on the reported judgment of this Court in the case of Naginbhai P. Desai Vs. Taraben A. Sheth, reported in 2003 (1) Mh.L.J. 994 and more particularly head Note (c). Learned counsel further invited my attention to the reported judgment of the Hon’ble Supreme Court in the case of Veena Hasmukh Jain and another Vs. State of Maharashtra and others, reported in (1999) 5 SCC 725 and more particularly para 8 of the said judgment and prayed that the impugned order deserves to be set aside. 6 On the other hand, counsel appearing for the respondents submitted that since the suit is proceeded and the evidence of the plaintiffs is already recorded in the pending suit by the trial Court and the trial court prima facie found that the case is made out by the plaintiffs and therefore, directed the appellants not to create third party rights in the suit property till disposal of the suit. According to the counsel for the respondents, the order passed by the trial court is to the extent only not to create third party rights and the said order being an interim order, cannot be interfered with by this court. Learned 6 counsel further invited my attention to the affidavit in reply filed on behalf of the respondents. It is further submitted that if the interim order is stayed or interfered with, the appellants may sale the property during pendency of the suit and the same will make the suit redundant. It is further submitted that since the entire consideration amount is paid at the time of agreement to sale, the appellants are bound to execute the sale deed. It is further submitted that the respondent No.2 has already executed the sale deed and that itself shows that the agreement to sale which was entered into by Ganpatrao was for legal necessity for the joint family since the family was under financial crises and therefore, the appellants are also bound to execute the sale deed. Therefore, learned counsel for the respondents would submit that the Appeal From Order as well as the Civil Application for stay are devoid of any merits and the same be dismissed. 7 I have heard learned counsel for the appellants and the learned counsel for the respondents at length. From the grounds taken in the appeal memo as well as the contention raised in the civil application for stay, I find considerable force in the arguments advanced by the counsel for the appellants to the effect that the alleged agreement to sale is not stamped in view of the provisions of Bombay Stamp Act and the same cannot be read in the evidence. Section 34 of the Bombay Stamp Act 1958, reads thus:- 7 34. Instruments not duly stamped inadmissible in evidence, etc. No instrument chargeable with duty shall be admitted in evidence for any purpose by any person having by law or consent of parties authority to receive evidence, or shall be acted upon, registered or authenticated by any such person or by any public officer unless such instrument is duly stamped (or if the instrument is written on sheet of paper with impressed stamp [such stamp paper is purchased in the name of one of the parties to the instrument] Provided that, - (a) any such instrument shall, subject to all just exceptions, be admitted in evidence on payment of- (i) the duty with which the same is chargeable, or in the case of any instrument insufficiently stamped, the amount required to make up such duty and; (ii) a penalty at the rate of 2 per cent of the deficient portion of the stamp duty for every month or part thereof, from the date of execution of the such instrument; Provided that, in no case, the amount of the penalty shall exceed double the deficient portion of the stamp duty) Bare perusal of the provisions of the Section 34 of the said act, would show that unless instrument is duly stamped, the same cannot be admitted in the evidence. 8 Explanation I of Article 25 of Schedule 1 of Bombay Stamp Act 1958 reads thus:- [Explanation I] – For the purposes of this article, wherein the case of agreement to sale an immovable property, the possession of any immovable property is transferred (or agreed to be transferred) to the purchaser before the execution or at the time of execution, or after the execution of, such agreement then such agreement to sale shall be deemed to be a conveyance and stamp duty thereon shall be leviable accordingly; Provided that, the provisions of Section 32A shall apply mutatis mutandis to such agreement which is deemed to be a conveyance as aforesaid, as they apply to a conveyance under that section; Therefore, it follows from the aforesaid provisions of Bombay Stamp Act that the agreement to sale an immovable property like case in hand is conveyance and required to be stamped. However, in the instant case, it is an admitted position that agreement to sale is not stamped, as contemplated under the provisions of Bombay Stamps Act, 1958. On careful perusal of the reasons recorded by the trial court in the order passed below Exh.5, it is abundantly clear that the trial court 9 has relied upon the agreement to sale which is not stamped as contemplated under the provisions of Bombay Stamps Act, 1958. Apart from this, there is total non application of mind on the part of the learned Judge while passing the impugned order. In para 3 of the impugned order, the trial court has observed thus, ‘the execution of the sale deed dated 9.6.2005 by the deceased Ganpat Ravji Bharitkar has not been specifically disputed by the non applicants.’ It is nobody’s case that there is sale deed dated 9.6.2005. However, it is also relevant to mention that when there is no sale deed dated 9.6.2005 by the deceased Ganpatrao Ravi Bharitkar, there is no question of disputing the same by the appellants i.e. original non applicants. (Emphasis supplied). 8 The Hon’ble Supreme Court in the case of Veena Hasmukh Jain and another (supra) held thus:- “ The duty in respect of an agreement covered by Schedule I, Article 25, Explanation I of the Bombay Stamp Act, 1958 is leviable as if it is a conveyance. The conditions to be fulfilled are that if there is an agreement to sell immovable property and possession of such property is transferred to the purchaser before the execution or at the time of execution or subsequently without executing any conveyance in respect thereof, such an agreement to sell is deemed to be a “conveyance”. In the event a conveyance is executed in pursuance of such agreement subsequently, the stamp duty 10 already paid and recovered on the agreement of sale which is deemed to be a conveyance shall be adjusted towards the total duty leviable on the conveyance.“ It is further held thus;- “ If the legislature thought that it would be appropriate to collect duty at the stage of the agreement itself, if it fulfills certain conditions instead of postponing the collection of such duty till the completion of the transaction by execution of a conveyance deed inasmuch as all substantial conditions of a conveyance have already been fulfilled such as by passing of a consideration and delivery of possession of the property and what remained to be done is a mere formality of execution of a sale deed, it would be necessary to collect duty at the agreement stage itself though right title and interest may not have passed as such. Still, by reason of the fact that under the terms of the agreement, there is an intention of sale and possession of the property has also been delivered, it is certainly open to the State to charge such instruments at a particular rate which is akin to a conveyance. Therefore, it cannot be said that levy of duty is not upon the instrument but on the transaction. The object of the Explanation is clear that if an agreement is entered into and that agreement itself contemplates the delivery of possession of the property within the stipulated time, then such an agreement should be deemed to be a conveyance for the purpose of duty leviable under the Bombay Stamp Act.” 11 9 Keeping in mind the provisions of the Bombay Stamp Act referred to above and the authoritative pronouncements of the Hon’ble Supreme Court in the case of Veena Hasmukh Jain and another (supra), the judgments of this Court in the cases of State of Maharashtra and others Vs. Mahavir Lalchand Rathod and Anr (supra) and Naginbhai P. Desai Vs. Taraben A. Sheth (supra), in my opinion, case for admission of appeal and grant of interim relief is established. 10 In the result, Appeal is admitted. 11 In the light of the discussions made herein above, civil application No. 274 of 2010 is allowed in terms of prayer clause “A” and disposed of. 12 Liberty in favour of the parties in appeal, to apply for early hearing. *****