IN THE HIGH COURT OF JUDICATURE OF ANDHRA PRADESH : HYDERABAD WEDNESDAY, THE FOURTEENTH (14TH) DAY OF SEPTEMBER, TWO THOUSAND AND ELEVEN Present: HON’BLE SRI JUSTICE G.V.SEETHAPATHY CRP No.1958 of 2011 Between: Smt. Dadi Ramulamma (Died) & others … Petitioners And: Pulamarasetty Ramunaidu (died) & others … Respondents HON’BLE SRI JUSTICE G.V.SEETHAPATHY Civil Revision Petition No.1958 of 2011 ORDER: This revision is directed against the order dated 07.03.2011 in IA No.979 of 2010 in OS No.138 of 2006 on the file of the 7th District Judge (FTC), Visakhapatnam, where in the said application filed by the petitioners herein-defendants under section 38 of the Indian Stamp Act, requesting the Court to levy stamp duty and penalty on the suit agreement of sale dated 27.02.2004, was dismissed. 2. Heard both sides. Perused the record. 3. The respondents herein-plaintiffs, originally filed suit for permanent injunction restraining the petitioners-defendants from interfering with their possession and enjoyment of the plaint schedule property. Subsequently, the plaint was amended seeking the relief of specific performance of agreement of sale dated 27.02.2004. According to the plaintiffs, on the date of the suit agreement dated 27.02.2004 itself possession of the suit property was delivered to them by the defendants. The defendants filed written statement contesting the suit. 4. During the course of trial, the defendants filed IA No.979 of 2010 under section 38 of the Stamp Act, seeking a direction to the plaintiffs to pay necessary stamp duty and penalty. According to the defendants, as the suit agreement envisages delivery of possession but however, executed on a stamp of only Rs.100/-, the same is inadmissible in evidence, unless proper stamp duty and penalty are levied and collected. The plaintiffs filed counter inter-alia contending that the suit agreement does not specifically state that possession was delivered and therefore, no stamp duty and penalty are required to be paid. By impugned order, the learned Additional District Judge, dismissed the said application, observing that since the suit agreement does not specifically reveal the possession was delivered to the plaintiffs, the document does not require to be stamped as per Article 47-A of Schedule I-A of the Stamp Act. Aggrieved by the same, the defendants preferred the present revision. 5. Explanation I to Article 47-A of Schedule I-A, Stamp Act (for short ‘the Act’) states that ‘an agreement to sell followed by or evidencing delivery of possession of the property agreed to be sold shall be chargeable as a ‘sale’ under this Article’. Article 47-A was inserted by A.P. Amendment Act 22/1986 which came into force from 16.08.1986. Subsequently, Explanation-I was substituted by Act 21 of 1995, which came into force from 01.04.1995. 6. The suit agreement of sale is said to have been executed on 27.02.2004 subsequent to the above amendment. Initially the suit was filed for permanent injunction claiming that the plaintiff was in possession and enjoyment of the suit property. The plaintiffs opposed the present application on the ground that the suit agreement of sale does not recite that possession was delivered under the agreement and therefore, the said document is not required to be stamped as per Article 47-A. The plaintiffs however claim that they got possession of the suit property only under the suit agreement of sale. 7. A perusal of the said document would show that it is styled as ‘possessory agreement of sale’ in respect of the immovable property. The nomenclature employed for describing the title of the document itself indicates that possession was delivered under the agreement. Of course, it is well settled that the nature of the documents cannot be ascertained going by the nomenclature alone. A perusal of the contents of the document shows that as against the agreed sale consideration of Rs.25 lakhs, advance of Rs.2 lakhs in cash and Rs.3 lakhs by way of cheque, totaling Rs.5 lakhs was paid and the balance sale consideration was agreed to be paid within three months for obtaining a regular sale deed. It was further agreed that in the event of failure to pay the balance sale consideration within the stipulated time by the defendants, the advance amount shall be returned to them and the agreement shall stand cancelled or alternatively, agreement shall be continued on the basis of lease on payment of Rs.10,000/- per year till the execution of the registered sale deed. Thus, the parties have agreed upon two alternatives in the event of default on the part of the defendants in payment of balance sale price within the stipulated period of three months. The first alternative is to refund the advance amount of Rs.5 lakhs and treat the agreement as cancelled and the second alternative is to continue the agreement, as if the land is under lease in favour of the plaintiffs subject to payment of Rs.10,000/- per year by the plaintiffs. The stipulation that the agreement be continued on the basis of lease on payment of rental of Rs.10,000/- per year, necessarily implies that possession was delivered to the plaintiffs under the agreement. This inference is fructified by the fact that the suit agreement is titled as possessory agreement of sale. When the possession of the land was not delivered under the agreement, the contemplation of continuing the agreement deeming the possession of the plaintiffs as that of lessees on payment of Rs.10,000/- per year does not simply arise. The document does not disclose that possession would be delivered on a future date. It is inconceivable that the parties would be contemplating delivery of possession to the plaintiffs on a future date, in the event of default in payment of balance sale price by the defendants. The very fact that the parties have contemplated the alternative of continuing the agreement on lease basis leads to irresistible inference that possession was delivered under the agreement. For the application of Article 47-A of Schedule I-A, it is not necessary that the document shall recite about the delivery of possession. It is sufficient, if the agreement of sale is followed by or evidences delivery of possession, to be charged as a ‘sale’. What is to be seen is not whether the document contains a recital regarding delivery of possession, but whether the said document is followed by delivery of possession or evidences delivery of possession. When the contents of the suit agreement of sale are read as a whole in proper perspective, the conclusion is inevitable that possession of the suit property was delivered to the plaintiffs under the agreement. The fact that the plaintiffs, initially filed suit for permanent injunction pleading that they are in possession and enjoyment of the suit property is also indicative of delivery of possession under the suit agreement. The defendants, of course totally deny the execution of the suit agreement of sale and also delivery of possession. The question as to whether or not the suit agreement of sale is true, valid and binding is a matter to be considered by the trial court on evidence that may be adduced during trial. But in the context of admissibility of the suit agreement of sale in evidence, in the light of the provisions of Article 47-A of Schedule I-A of the Act, it must be held that the suit agreement of sale is liable to be stamped as a sale, as the possession of the property agreed to be sold is shown to have been delivered therein. 8. Learned counsel for the respondents relies upon the decision in ‘Cheryala Srinivas v. Moola Sujatha & others[1]’, wherein this court held that ‘the possession mentioned in Explanation-I, must be effective, actual, and the one, recognized in law. Unless the party under the agreement has the benefit of possession of the property, without any dispute, or challenge, from a party to the agreement, he cannot be mulcted with the liability to pay the stamp duty, as though it is a sale deed’. 9. In the above case, last sentence of the agreement mentions that the possession was delivered, but the said delivery of possession was preceded by several conditions. It was found that the petitioner therein himself was not the absolute owner of the property and he was holding it under the agreement of sale and it was further agreed that the petitioner would obtain proper conveyance from his vendor and he would get boundary fixed in accordance with the Khasara pahanies etc. and he has also undertaken to provide access to the property from another person’s land. Under those circumstances, it was found difficult to conclude that the petitioner therein had delivered possession under the suit agreement. It was further observed that it is only a piece of land, with specific boundaries in respect of which, the vendor has absolute rights, that he can effectively deliver possession to others and when the vendor himself was not certain about the boundaries and does not hold title, the plea as to delivery of possession cannot be accepted. Such a situation does not arises in the present case, as the suit agreement of sale would disclose that the vendor had absolute title to the property and the land is clearly identifiable with specific boundaries mentioned in the agreement. There was no ambiguity nor any condition attached in the matter of conveyance of title by the defendants in favour of the plaintiffs. The plaintiffs were certainly having effective control over the land and were in possession to enjoy the benefits of the same and hence, it was recited that in the event of default by the defendants in payment of balance of sale price, the agreement would be continued on lease basis treating the possession of the plaintiffs as that of lessees subject to payment of Rs.10,000/- per year by them till registration. 10. Learned counsel for the respondents relied upon the decision in ‘B.Bhaskar Reddy v. Bommireddy Pattabhi Rami Reddy (died) by LRs & others[2]’, wherein, it was held that an agreement to sell is not chargeable as a sale unless it is followed by or evidencing delivery of possession of property agreed to be sold, and though admittedly, agreement of sale recited delivery of possession, there was exchange of notices for delivery of possession and therefore, possession was not delivered and hence, the agreement was not chargeable as a sale. 11. In the above case on facts, it was found that though possession was recited to have been delivered, there was in fact, no such delivery of possession. It was further observed in the above case, pleadings of the parties, nature of the document, recitals therein and attendant circumstances are also to be taken into consideration for the purpose of Explanation I to Article 47-A of the Act. The above decision is not applicable to the facts of the present case, for the reason that the pleadings, contents of the suit agreement and the surrounding circumstances, taken together into consideration, inference is inevitable that possession was delivered under the suit agreement. 12. Under those circumstances, the impugned order, holding that the document does not require to be stamped under Article 47-A Schedule I-A of the Act is held unsustainable and the same is accordingly set aside. Consequently, IA No.979 of 2010 stands allowed. It is however, open to the plaintiffs to avail other remedies available under the Stamp Act including the impounding of the suit agreement of sale by the Stamp Collector. It is made clear that the observations made herein above shall not be understood as expression of opinion on the merits of the case and the trial court shall decide the matter on its own merits without in any way being influenced by any of the observations made herein above. 13. In the result, the civil revision petition is allowed. No order as to costs. ___________________ G.V.SEETHAPATHY, J Date: 14.09.2011 bss [1] 2010(1) ALD 246 [2] 2010(6) ALD 307