(1.) THIS is a reference under S. 57 of the Indian Stamp Act, the question being whether the instrument under consideration is not liable to be stamped under Art. 45 of the Stamp Act as a deed of partition, or chargeable to duty as a release. The revenue contends that having regard to its terms and true intention, the deed is a partition. But, on the other hand, it is said that inasmuch as one of the sharers was not allotted any joint family property to specie as and for his share, but the agreement was that the other sharers who were to take the entire joint family properties should, in consideration of the sharer releasing his interest in the joint family properties, pay a sum agreed upon, the deed operates as a release.
(2.) THERE was one B. S. Mallayya who died in January 1935. He left two sons sundararaj Mallayya, who died in November 1936 and Bantwal Anand Mallyya. Bantwal Anand Mallayya has two sons Dinesh Mallayya and Harish Mallayya. Sanjeev Mallayya and Srinivas Mallayya are the sons of Sundararaj Mallayya. There was an agreement dated 14-3-1966, between Sanjeev Mallayya and his sons on the other the terms of which were that it became expedient and desirable to divide the joint family properties as between the sharers and after prolonged negotiations it was agreed that Sanjeev Mallayya and Srinivasa Mallayya should be allotted their share of the net assets in the form of cash, freed from any other further obligation to discharge the family debts. Accordingly it was provided in the agreement that B. Anand Mallayya described as the first party should pay Sanjeev mallayya and Srinivasa Mallayya styled as the second parties Rs. 1,15,750 each as and for his share and that for this purpose the second parties authorised the first party to sell any of the joint family immoveable properties. This was followed by a deed described as one of release which was executed in January 1967 between the same parties. The deed contained a recital that the properties belonged to the joint family and then the following--
"it was considered desirable and in the interests of good relationship and harmony to partition the assets of the joint family. Sanjeev Mallayya and srinivasa Mallayya requested that in the event of a partition their interests in the joint family should be paid to them separately and that the releases may continue as between themselves as a Hindu undivided family. . . . . The joint family is possessed of two items of immoveable properties listed as items 1 and 2 in Schedule II hereto. The moveable properties, namely, shares and liquid cash belonging to the family do not permit of division in such a way that the properties could be divided between the branch consisting of Sundararaj Mallayya and his sons bantwal Anand Mallayya and his sons. Sanjeev Mallayya, and Srinivas mallayya want their separate interests in the joint family to be handed over to them. There are also liabilities of the joint family listed in schedule III to this document to be discharged. In the circumstances, it has become necessary to sell one of the immoveable properties of the joint family so that Sanjeev Mallayya and srinivasa Mallayya could be paid their interests in the joint family. . . . . It was agreed that both Sanjeev Mallayya and Srinivasa Mallayya, the releasors herein, should be paid an ascertained amount, namely, Rs. 1,16,750, each as representing their interests in the joint family assets leaving it to the releases either to sell the assets or pay them the amount representing their interests in the assets" . The operative part of the deed says:-
"now this deed of release witnesseth that in consideration of these presents and in consideration of the sum of Rs. 1,15,750. . . . . paid to each of the releasors herein, the receipt of which sum of Rs. 1,15,750 each of the releasors hereby acknowledges, the releasors hereby release and relinquish in favour of the releasees all their interests in the properties mentioned in Schedule II, so that the releasees may take the same freed from any claim or demand of the releasors against the assets mentioned in Schedule II to this document or any other asset omitted to be included in the schedule by inadvertence or mistake" . Having regard to the recitals in the agreement and the partition deed which followed, we have no hesitation in holding that the document is a partition. That expression has been defined by S. 2 (15) of the Indian Stamp Act as an instrument whereby co-owners of any property divide or agree to divide such property in severalty. The essence of the definition is that there should be co-ownership and it should be of property and by the division the co-ownership should be put an end to with the result that such property is divided in severalty. It is not in dispute that the property which was the subject-matter of the document under consideration belonged to a Hindu joint family. It is not also denied that when the status of coparcenary as such is put an end to by division by metes and bounds, the process is a partition. But what is contended is that it would be a partition only if in such a process, an asset of the erstwhile joint family is allotted as such as and for the share of one of the sharers and that it will not be a partition within the meaning of the Stamp Act, if the agreement between the sharers is that one of them in lieu of his share should be paid a certain ascertained sum of money by sale of one of the items of the joint family property allotted to the other sharers. In support of this contention, our attention has been invited to Board of Revenue v. Murugesa Mudaliar, FB and Chief Controlling Revenue authority v. R. N. Patel, FB. It seems to us that in neither of these cases, the point that actually arises for decision in this reference was considered. In the first of them, the parties charged with the stamp duty had themselves agreed that the document was a release falling under Art. 44 (b ). In view of this, the court stated that it was not called upon to discuss the Article. The real question that had to be decided was whether while the document was a release, it could be regarded as a conveyance. There were three partners of a registered firm which came to an end on a certain date. They executed a document amongst themselves describing them as co-owners of immoveable property mentioned in the document and that the executants were entitled to a three-fifths share therein and that they having retired from the firm desired to renounce all interest in the property by the deed receiving the proportionate value of their share in cash. Obviously, no one can describe this process as a kind of partition. There was no occasion for the court to decide in that case whether the document operated as a partition and not as a release. As we said, it was agreed by the executants that the document was a release. On the question whether it was a conveyance, the court was of opinion that in such a case as that where the parties owned assets in co-ownership, there need be no conveyance as such by one of the co-owners in favour of the other co-owners. It was pointed out that each co-owner in theory was entitled to enjoy the entire property in part and in whole and, therefore, it was not necessary for one of the co-owners to convey his interest to the other co-owner. It was sufficient if he released his interest which would have the effect of enlargement of the share of the other co-owner. This proposition is undoubtedly correct. But then the learned Judges in that case went further and observed:
"we can see no difference in principle between such a document as between members of a coparcenary and the document in question, which is a document between co-owners. " This observation is relied on for the respondent in support of his contention that the document here in question should be considered as a release deed. We fail to see how the observation aforesaid helps the respondent in that regard. All that was pointed out in that case was that where property was owned in common and it was divided between the co-owners, whether the co-ownership takes the form of a firm of partners or a coparcenary, there was no conveyance involved in the process. No occasion arose in that case to differentiate the case between a release and partition.
(3.) FB does not take the matter further. But, as it appears, it merely followed the principle of FB;