A. Banerji, C.J. - (1.) THIS reference has been made by the Chief Controlling Revenue Authority under Section 57 of the Indian Stamp Act, 1899, in respect of a document, as it felt a doubt as to whether the stamp duty on the document was chargeable as on a settlement or as on a trust. The following question has been framed by the authority on which our opinion has been sought: "Whether the document under reference comes within the definition of a settlement as given in Section 2(24) of the Indian Stamp Act as chargeable with duty under article 58 of Schedule 1B thereof or is a declaration of trust chargeable under article 64 of Schedule 1B to the said Act ?" At the very outset, we may state that it appears to as that the question framed proceeds on an incorrect basis. The question shows that the Chief Controlling Revenue Authority proceeded on the basis that the instrument under the Stamp Act can either be a deed of "trust" or "settlement" only and not both. The proper question, in our opinion, is whether this particular instrument to which reference relates is a settlement or not, even though it may, on the face of it, be a deed of trust.
(2.) IN the present case, one Shri Manohar Lal Dudeja executed a document on April 18, 1972, purporting to create a trust for religious and charitable purposes and transferred a building valued at Rs. 7 lakhs for running a hospital. A duty of Rs. 1,605 under article 64 of Schedule 1B to the Stamp Act was paid. An objection was taken by an audit party of the office of the Accountant-General, U. P., that the instrument was a "settlement" as defined in Section 2(24) of the Stamp Act and a duty under article 58, Schedule 1B, was payable on it. The Additional Collector, Kanpur, having some doubt, referred the matter to the Chief Controlling Revenue Authority who, after a local inspection, found that the trust was created for educational, religious and charitable purposes. This included a charitable eye hospital duly equipped and was being run with a yogashram under a qualified doctor. The Chief Controlling Revenue Authority came to the conclusion that the instrument was an instrument of "trust" and not a "settlement" and he held that the document was properly stamped, vide order dated April 18, 1980. It appears that the decision was examined by the law department in the Government and they were of the view that it was a "settlement" as defined in Section 2(24) of the Stamp Act and relied on a decision in the case of Sudarshanlal v. Chief Controlling Revenue Authority, AIR 1979 Del 1962. Reference was also made to the case of Sita Ram v. Board of Revenue, AIR 1979 All 301, (Special Bench), wherein it was held that a transaction may amount to a "disposition of property", though it may not be a "transfer". Reference was also made to a decision in the case of Board of Revenue v. Sridhar [ 1964 ] ALJ 301, wherein it was held by a Special Bench that where the instrument clearly contained a disposition of the future rental income of the property, initially in favour of the trustee, with a direction to him to utilise that income for the benefit of the minor children of the donor, it would be a "settlement" satisfying the requirements laid down in Section 2(24). The Special Bench also held that this would be so even though the instrument is by way of declaration of trust. The present reference has thereafter been made by the Chief Controlling Revenue Authority, U. P., with the question as mentioned above. As indicated above, the question framed by the said authority is not quite correct. The proper question would be : "Whether the particular instrument to which this reference relates is a 'settlement' or not, even though it may on the face of it be a deed of trust ?" We have heard Mr. G. L. Tripathi, standing counsel, and Mr. D.B. Bahadur, appearing for Sri Manohar Lal Dudeja. A reference to the provisions of Section 2(24) of the Stamp Act would be necessary. It reads as follows : "(24) Settlement.--'Settlement' means any non-testamentary disposition, in writing, of movable or immovable property made- (a) in consideration of marriage, (b) for the purpose of distributing property of the settlor among his family or those for whom he desires to provide, or for the purpose of providing for some person dependent on him, or (c) for any religious or charitable purpose ; and includes an agreement in writing to make such a disposition and, where any such disposition has not been made in writing, any instrument recording, whether by way of declaration of trust or otherwise, the terms of any such disposition." In the present case, the property involved is an immovable property and the instrument is a non-testamentary disposition. We may then read Clause (c) of Sub-section (24) of Section 2 of the Stamp Act along with the opening part of the definition. It thus reads as follows : "settlement" means any non-testamentary disposition, in writing, of movable or immovable property made-- ... (c) for any religious or charitable purpose. " The tenor of the document shows that it is a disposition of immovable property for religious and charitable purposes. The author expressly states that he "transfers, conveys and grants unto the trustees" the properties of which he was the absolute owner. It, therefore, squarely comes within the definition of the term "settlement" as defined in Section 2(24) of the Stamp Act, 1899.
(3.) LEARNED standing counsel contended that it is not necessary to find whether there was a declaration of trust or not. It was enough if it showed that it was a "settlement" in writing of immovable property made for any religious or charitable purpose. Mr. D.B. Bahadur, on the other hand, contended that if it was a deed which purported to be a trust deed, then it would not be a "settlement" but would come within the term "trust" and the stamp duty payable would be under article 64 of Schedule 1B to the Stamp Act as applicable to Uttar Pradesh. That provision reads as under : JUDGEMENT_186_ITR189_1991Html1.htm As against this the stamp duty on an instrument which comes under the head "settlement" is provided for in article 58. It reads as follows : JUDGEMENT_186_ITR189_1991Html2.htm It would be seen that if it is an instrument of settlement then the duty would be the same as on a Bond (No. 15) for a sum equal to the amount or value of the property settled. In the case of a trust, the duty would be the same as on a bond where the amount or value does not exceed Rs. 10,000. If it exceeds Rs. 10,000, the duty payable will be the same as on Rs. 10,000 and rupees three for every additional one thousand rupees. In other words, the stamp duty payable on a trust deed would be at a lower basis if the amount or the value involved is more than ten thousand rupees, than on an instrument of settlement. It is obvious that a party would like to pay a lower amount of stamp duty, if permissible. The contention on behalf of Manohar Lal Dudeja is that the instrument was a deed of trust and not a deed of settlement. This has been accepted by the Chief Controlling Revenue Authority in his order dated April 18. 1980, but by a subsequent order dated January 17, 1983, the Chief Controlling Revenue Authority has not agreed with it and has made a reference.;