- (1.) G. P. Mathur, J. Who is liable to pay the stamp duty on a deed on conveyance of immovable property is the question which requires consideration here.
(2.) THIS petition under Article 226 of the Constitution has been filed for quashing of the proceedings initiated against the petitioners in pursuance of recovery certificate dated 12-3-1997 issued by ADM, (Finance and Revenue) for recovery of Rs. 96,400/- towards deficiency of stamp duty. The learned Standing Counsel was granted time on 28-3-2001 and on several occasions thereafter to file counter- affidavit but no counter-affidavit has been filed. Since the issue involved is a purely legal once, the writ petition has been finally heard with the consent of the parties. A sale-deed of certain agricultural plots owned by the petitioners was executed on 2-5-1996 in favour of M/s. Reliance Farms Limited, a company having its office at 94, Indra Nagar, Bareilly, and the deed was registered in the office of Sub- Registrar, Khair, District Aligarh on 1-6-1996. According to the petitioners, the sale-deed had been obtained from them by playing fraud and no consideration was paid to them. They accordingly filed O. S. No. 504 of 1998 in the Court of Civil Judge (Jr. Division), Haveli, Aligarh for cancellation of the sale-deed. The suit was decreed ex parte by the judgment and decree dated 11-8-1999 and thereafter information was also sent from the Court of Civil Judge (Jr. Division) to the Sub- Registrar, Khair for making an endorsement that the sale-deed has been cancelled. According to the petitioners, the decree passed in the suit has become final as neither any application to set aside the decree nor any appeal has been preferred. It appears that proceedings under Section 47-A of the Stamp Act were initiated against the vendees, namely, M/s. Reliance Farms Limited and the ADM (F and R), Aligarh, by his order dated 6-3-1998 determined the market value of the subject-matter of sale-deed as Rs. 9,99,750/ -. On the aforesaid valuation of the property, the proper stamp duty according to the Schedule of the Stamp Act was Rs. 1,45,000/- whereas the duty actually paid was Rs. 48,600/- and, thus, a deficiency of Rs. 96,400/- was determined. The ADM (Fandr) passed an order on the same day i. e. on 6- 3- 1998 directing that the deficiency in stamp duty amounting to Rs. 96,400/- should be paid by the vendee (purchaser of the property ). A copy of the order has been filed as Annexure-5 to the writ petition and this shows that the notice of the proceedings had been issued to the vendees and they had also contested the matter. The vendees did not deposit the amount and accordingly proceedings were initiated to recover the same by the attachment and sale of the property which was the subject-matter of the sale-deed, dated 2-5-1996. When the petitioners came to know about the attachment and proposed auction of their land, they moved an application before the Tehsil authorities informing that the sale-deed had been cancelled by the judgment and decree dated 11-8-1999 passed in O. S. No. 504 of 1998. The Naib Tehsildar submitted a report on 14-9-1999 that in view of the decree passed by the Civil Court, the sale-deed stood cancelled and, therefore, the recovery of the deficiency in stamp duty could not be made by attachment and sale of the property of the petitioners. The Tehsildar, Khair, accordingly returned the recovery certificate by making a note to that effect on 4-10-1999. It appears that some audit objection was raised and the Board of Revenue, U. P. , Lucknow sent a reminder for recovery of the amount and thereafter ADM (Fandr) passed an order on 1-12-2000 directing the Deputy District Magistrate, Khair, to recover the deficiency in stamp duty. It is in these circumstances that the petitioners, who are the owners of the property and were vendors of the sale-deed dated 2-5-1996 on 1-6-1996 have filed the writ petition for quashing of the recovery proceedings initiated against them. Sri Manoj Mishra, learned Counsel for the petitioners has submitted that in view of Section 29 (c) of the Stamp Act, the liability to pay the stamp duty is upon the grantee, namely , the vendee and not that of the vendor and, therefore, the proceedings initiated against the petitioners for recovery of the amount are illegal. He has further submitted that the sale-deed having been cancelled by a decree of the Civil Court, the effect thereof would be as if no sale-deed was executed and in such circumstances, the authorities cannot recover any amount as deficiency in stamp duty. Sri Kripa Shankar Singh, learned standing Counsel has, on the other hand, submitted that Section 29 (c) of the Stamp Act comes into play only between a vendor and vendee and it has no bearing or effect upon the right of the State to recover the balance amount of stamp duty. Sri Singh has submitted that Section 29 (c) regulates the liability of the parties inter se and gives a right to the vendor to recover the amount from the vendee but the Collector or the State in their discretion can recover the entire duty from any one or from all the parties. He has further submitted that the payment of entire stamp duty is the condition precedent for registration of a document and the subsequent cancellation of the deed by a decree of the Civil Court has no bearing at all and the parties to the document can not escape their liability to pay full amount of stamp duty merely on the ground that the deed has been subsequently cancelled by a decree of the Court.
(3.) CHAPTER II of the Stamp Act (as applicable to State of Uttar Pradesh) deals with Stamp Duties and the heading of Part E is - "duty by whom payable. " Sections 29 (c) and 48 reads as under : "29. duty by whom payable.- In the absence of an agreement to the contrary, the expense of providing the proper stamp shall be borne : - (c) In the case of a conveyance (including a reconveyance of mortgaged property) by the grantee; in the case of a lease or agreement to lease - by the lessee or intended lessee. 48. Recovery of duties and penalties.- All duties, penalties and other sums required to be paid under this Act may be recovered by the Collector by distress and sale of the movable property of the person from whom the same are due, or by any other process for the time being in force for the recovery of arrears of land revenue. " Section 29 (c) clearly lays down that in the case of a conveyance in absence of any agreement to the contrary, the expenses for providing proper stamps shall be borne by the grantee. The language used in the Section is very clear and this provision makes it obligatory upon the vendee to pay the stamp duty. This Section casts no obligation upon the vendor to pay the stamp duty. Section 48 empowers the Collector to recover the duties, penalties and other sums required to be paid under the Act by distress and sale of the movable property of the person from whom the same are due or by any other process for the time being in force for the recovery of the arrears of land revenue. This provision clearly provides that deficiency in stamp duty can be recovered only from the person from whom it is due and not from every person who may be a party to the deed. For finding out the person from whom the duty is due, one will have to refer to Section 29 of the Act. It, therefore, follows as a corollary that in the case of a sale-deed of immovable property the deficiency in the stamp duty can be recovered from the vendee only and not from the vendor. Section 44 contemplates a situation where any duty or penalty has been paid under Sections 35, 37, 40 or 41 by any person in respect of an instrument and by agreement or under the provisions of Section 29 some other person was bound to bear the expenses of providing the proper stamp for such instrument. In such a case that person is entitled to recover the amount from the person who was bound to bear the expenses of providing the proper stamp for such instrument in accordance with Section 29. This provision again shows that the liability to pay stamp duty has to be ascertained in accordance with Section 29 of the Act and the person who has paid the amount under Sections 35, 37, 40 or 41 of the Act is entitled to recover the amount from the said person. These provisions show in unequivocal terms that in case of a sale-deed of immovable property, the liability to pay stamp duty is that of the vendee and not that of the vendor.;