IN THE HIGH COURT OF PUNJAB & HARYANA AT CHANDIGARH CWP. No. 10720 of 2010 Date of Decision: 15.12.2010. Anil Kumar Goyal --Petitioner Versus State of Haryana and others --Respondents CORAM:- HON'BLE MR.JUSTICE PERMOD KOHLI. Present:- Mr. Dinesh Arora, Advocate for the petitioner. Mr. R.D. Sharma, D.A.G., Haryana. *** PERMOD KOHLI.J (ORAL) Mother of the petitioner namely Prem Lata Goyal executed a sale deed dated 28.8.2007 in favour of the petitioner in respect to property No.269/16, Ward No.17 measuring 163.50 sq. yards situated within the limits of Municipal Committee, Rohtak for a consideration of Rs.7,10,000/-. This property was under the tenancy of Punjab National Bank, Rohtak for the last about 22 years at the time of sale. It is common case of the parties that stamp duty equal to 1/3rd of the market value of the property as determined by the Collector during the relevant year was paid at the time of registration. After the registration of the document the petitioner was served with a notice dated 27.5.2008 under Sub Rule 1 of Rule 4 of Stamp Duty (Haryana Amendment) Act, 1978 communicating the petitioner that the valuation of the sale deed at Rs.7,10,000/- is the lesser valuation of the property. Petitioner was accordingly asked to appear before the Collector (City Magistrate) on 7.7.2008. In response to the aforesaid notice the petitioner appeared and filed his reply. Collector, however, passed the order dated 29.5.2009 under Section 47-A of the Indian Stamp Act, 1899 and CWP. No. 10720 of 2010 -2- asked the petitioner to deposit the deficient stamp duty of Rs. 1,30,800/- on the valuation of the property which was assessed as Rs.23,46,000/-. Petitioner was also asked to pay an amount of Rs.7500/- as deficient registration fee. Aggrieved of the Collector's order petitioner preferred an appeal before the Commissioner, Rohtak Division, Rohtak. This appeal has also been dismissed by the Appellate Authority vide order dated 10.3.2010 The sole question involved in the present case relates to the interpretation of the Govt. Instructions dated 5.4.2001 which inter alia provide for payment of 1/3rd of the stamp duty in respect to the sale of the properties under tenancy for a period of more than 12 years and less than 30 years. Indubitably, the property subject matter of the sale was under the tenancy of the Punjab National Bank for over a period of 22 years at the time of sale by the mother of the petitioner in his favour. It was on that basis that 1/3rd of the stamp duty was charged at the time of registration of the sale deed. Collector after the sale deed was registered and handed over to the vendee issued notice to the petitioner after about 9 months of its registration. The issue relates to the interpretation of the guidelines dated 5.4.2001. The relevant portion of the aforesaid guidelines reads as under:- “ 4. Necessary guidelines to get benefit in market value in case of lease/tenancy. Benefit in the value on lease any tenancy of less than 12 years should not be given. In case tenancy or lease is more than 12 years but less than 30 years, then in that case, whatever is total market value, stamp duty will be charged on its 1/3rd share. For example as per fixed market price, value of property comes to be Rs. One lac, then if lease or tenancy is between 12 to 30 years, then in that case, stamp duty will be paid on Rs.33,500/- value of property. In case lease or tenancy is more than 30 years, then in that case, what will be market value of the property, stamp duty will be charged on its 1/4th share.” CWP. No. 10720 of 2010 -3- The Collector has interpreted this clause of the Govt. guidelines to mean that if the property is under tenancy of the purchaser, it is only in that eventuality that 1/3rd of the stamp duty would be payable and since admittedly the property was not under the tenancy of the vendee, the Collector in his wisdom found the stamp duty deficiently paid and passed the impugned order for payment of the full stamp duty on the market value of the property at the time of its sale. I have carefully perused the para 4 of the Govt. guidelines dated 5.4.2001. It only provides charging of 1/3rd stamp duty where the property is under tenancy for a period of more than 12 years and less than 30 years. There is not even a suggestion that the property should be under the tenancy of the vendee to attract the benefit under Clause 4 of the Govt. guidelines. It simply provides for tenancy and not the tenancy in favour of the vendee. There seems to be logic in the provision of the Govt. guidelines. A property under tenancy i.e possession of another person definitely losses its market value as an important component of sale i.e the possession remains with another person, thus, considerably reducing its market value. It goes without saying that property with possession has better market value as against the property without possession, rather, it has only a title without the privilege of its actual user. Sale has been defined under Section 54 of the Transfer of Property Act, it also provides how sale is made. This provision reads as under:- “ 54. “Sale” defined-”Sale” is a transfer of ownership in exchange for a price paid or promised or part-paid and part- promised.” CWP. No. 10720 of 2010 -4- Sale how made:- Such transfer, in the case of tangible immoveable property of the value of one hundred rupees and upwards or in the case of a reversion or other intangible thing, can be made only by a registered instrument. In the case of tangible immoveable property of a value less than one hundred rupees, such transfer may be made either by a registered instrument or by delivery of the property. Delivery of tangible immoveable property takes place when the seller places the buyer, or such person as he directs in possession of the property.” Even though, the sale has not been specifically defined under the Stamp Act, however, it does fall within the general definition of conveyance as defined under Section 2(10) of the Indian Stamp Act, 1899 which reads as under:- “ 2 (10). Conveyance:- “Conveyance”includes a conveyance on sale and every instrument by which property, whether movable or immovable, is transferred inter vivos and which is not otherwise specifically provided for by Schedule I or by Schedule-I-A or (by Schedule 1-B) as the case may be.” Primarily the sale is dealt with by the Transfer of Property Act and in respect to the tangible immovable property the actual sale takes place when the seller places the buyer or such person as he directs in possession of the property. From the above, it becomes apparent that even though sale is permissive without possession as well, however, the delivery of possession is an important component of the transaction of sale. It was under these circumstances that the Govt. vide guidelines dated 5.4.2001 decided to CWP. No. 10720 of 2010 -5- reduce the stamp duty in respect to the properties where the possession is not with the vendor. It may be with a third person or even vendee as a lessee. The contention of the respondent-State that it is only when the possession is with the purchaser, the stamp duty is to be charge at 1/3rd of the total price. However, the guidelines do not say so. It simply mentions about the leased property irrespective of the fact whether the lease is with the purchaser or anybody else which seems to be more logical and appropriate. The interpretation sought to be placed by the respondents is based upon misconception and misconstruction of the Govt. guidelines. To the contrary the interpretation which can be reasonably placed and construed that the leased property itself reduces its value and consequently the sale price, thus, charging 1/3rd of the stamp duty on every leased property notwithstanding the fact whether the lease is with the vendee or any other person, seems to be the only intention of the document. There is another relevant factor which makes the impugned orders contrary to law. No reference was made by the registering authority at the time of registeration. It is only after about nine months that Collector initiated the proceedings. This issue has been considered by this Court in CWP No.5461 of 2008 decided on 30.9.2010 titled as Iqbal Singh and others Vs. State of Haryana and others, wherein following observations have been made:- “ A document once registered, the Registering Authority, ceases to have any control over the document and it becomes a functuous officio the moment he loses the control over the document. Stamp duty upon such a document/instrument becomes determinable either when the document is used by the parties by way of evidence before any authority or CWP. No. 10720 of 2010 -6- officer and he decides to proceed under Section 35 of the Indian Stamp Act or by the Collector or in accordance with sub section 3 of Section 47-A of the Indian Stamp Act. None of the situations have occurred. The Sub Registrar after a period of almost 3 years made a reference to the Collector for which he was not competent to do so. There was no action by the Collector on his own nor any reference was made to him by the Inspector General of Registration or the Registrar of a district in whose jurisdiction the property, subject matter of the instrument is situated.” This petition is, accordingly, allowed. Impugned orders of the Collector (Annexure P-4) and that of the Appellate Authority (Annexure P- 5) are hereby set aside. (PERMOD KOHLI) JUDGE 15.12.2010. lucky Whether to be reported? Yes.