LAWS(KAR)-1980-10-27

K AZRA JABEEN Vs. STATE OF KARNATAKA

Decided On October 03, 1980
K.AZRA JABEEN Appellant
V/S
STATE OF KARNATAKA Respondents

JUDGEMENT

(1.) This is a Reference made by the Chief Controlling Revenue Authority under S. 54 of the Karnataka Stamp Act, 1957. The matter arises in this way: In March 1975, a coffee plantation at Mudigere Taluk was purchased in the joint names of Mrs. K. Azra Jabeen and her brother K. Anwar Ali. In January 1976 they entered into a partnership firm styled as 'Kodagibyle Estate'. The entire property purchased by them was put into the stock of the partnership firm. In July 1978 the firm was dissolved and a document dated 24th July, 1978 was executed distributing the assets of the firm in-specie as between the two partners. The estate along with building thereon was allotted to the share of the sister while a cash of Rs. 4,80,786 was pa,id to her brother. The Stamp duty on the deed was paid treating it as a deed of partition with an additional stamp duty payable on a deed of dissolution of partnership. When the deed was presented for registration, it was impounded by the Sub-Registrar of Mudigere and later referred to the Deputy Commissioner under S. 33 of the Stamp Act. On 12th December, 1978, the Deputy Commissioner made an order holding that the document was a conveyance and not a deed of partition. He directed recovery of deficit stamp duty of Rs. 42,649-50 P. with a penalty equal to tep times thereon. Being aggrieved by the said order, the petitioner appealed to the Chief Controlling Revenue Authority under S. 53(1) of the Act. The said Authority, following the decision of this Court in M.A.Venkatachalapathi v. State of Mysore (1) has confirmed the order of the Deputy Commissioner. But at the request of the petitioner, the case has been referred to this Court for opinion on the disputed question.

(2.) We have now to determine the true nature of the document. Mr. Nanjundaswamy, counsel for the petitioner persuasively urged tha,t the document is no more than, a deed of dissolution of partnership, although it was styled as an instrument of partition. He also urged that the decision of this Court in Venkatachalapathi's 1966 (1) Mys.L.J. 21 = AIR 1966 Mys. 323. case is no longer good law in view of the subsequent decisions of the Supreme Court. The document in question states:

(3.) Venkatachalapathi's case, if we may say so with great respect, did not take into account the real nature and incidents of a partner's interest in a partnership firm and the consequences of a dissolution deed by which the assets of the quondam firm are distributed in-specie amongst the erstwhile partners. The said decision also seems to have overlooked the legal effect when one of the partners takes a,way either cash or property in lieu of his share in the partnership assets. In Commissioner of Income-Tax, M. P. v, Dewas Cine Corporation, (AIR 1968 SC 676) Shah, J. (as he then was) observed: "4. The distribution of surplus is for the purpose of adjustment of the rights of the partners in the assets of the partnership, it does not amount to transfer of assets.