A.P.SRIVASTAVA, J. - (1.) THIS is a reference by the Board of Revenue under Section 57 of the Indian Stamp Act, 1899.
(2.) SEVERAL persons, who were carrying on business in the name of Messrs. Munna Lall and Sons, were lessees of a plot of land situated in Qasimganj, Kanpur. On a portion of that plot they had constructed an oil mill known as Sri Govind Oil Mills. In another portion they had an ice and cold storage factory in respect of which they had taken two persons Sri Shyam Sunder Gupta and Sri Satya Prakasli Gupta as their partners. The entire land as well as the constructions standing upon it were equitably mortgaged with the Chartered Bank of India, Australia and China in the year 1938. By the year 1952 a sum of over Rs. 10,00,000/ - was due to the bank in respect of the mortgage. When the bank started insisting on the repayment of its dues the mortgagors decided to sell all their rights in the Sri Govind Oil Mills as well as in the Kanpur Ice and Cold Storage Factory in favour of Messrs. Oil Corporation of India Limited. It will be convenient to refer to the mortgagors hereafter as vendors and the Oil Corporation of India Limited as vendees. The two initial obstacles to the sale were the mortgage for over Rs. 10,00,000/ - which stood in favour of the Chartered Bank and the fact that Messrs. Shyam Sunder Gupta and Satya Prakash Gupta were partners in the business of the Kanpur Ice and Cold Storage Factory. Messrs. Shyam Sunder Gupta and Satya Prakash Gupta, however, agreed to consent to the sale of the Ice and Cold Storage Factory provided a sum of Rs. 60,000/ - was paid to them. The bank also agreed to release the property from the charge it held over it provided a sum of Rs. 5,00,000/ - was paid to it. The arrangement which was ultimately arrived at between the vendors and the vendees therefore was that the properties mentioned below should be sold to the vendees for the consideration mentioned against each of them. (1) The plant, machinery and goodwill of the Kanpur Ice and Cold Storage Factory ... Rs. 1,12,000/ -. (2) Machinery of Sri Govind OilMills. ... Rs. 3,00,000/ -. (3) Stores of Sri Govind Oil Mills. ... Rs. 25,000/ -. (4) Goodwill of Sri Govind Oil Mills. ... Rs. 18,000/ -. (5) The vendors? rights in the buildings standing over the plot and as lessees in the land ... Rs. 1,00,000/ -. Rs. 5,55,000/ - Out of the amount that was to be paid by the vendees Rs. 68,000/ - were to be paid to Messrs. Shyam Sunder Gupta and Satya Prakash Gupta and Rs. 4,89,000/ - were to be paid to the Chartered Bank of India, Australia and China. As the bank had agreed to release the property from its charge only on payment of Rs. 5,00,000/ - the vendors themselves undertook to pay the balance of Rs. 11,000/ - to it. In pursuance of this contract the vendees paid to the bank a sum of Rs. 3,89,000/ - and agreed to pay Rs. 66,000/ - to Messrs. Shyam Sunder Gupta and Satya Prakash Gupta for which they furnished to the said persons a guarantee of the Bank of Bikaner Limited. A sale deed of the immovable property, viz. the rights of the vendors in the buildings and the land, was thereafter executed on the 15th of December 1952 by the vendors in favour of the vendees for an ostensible consideration of Rs. 1,00,000/ - and a stamp duty of Rs. 4,400/ - was paid in respect of it. When the deed was presented before the Sub -Registrar of Kanpur he held it to be insufficiently stamped and impounded it. He was of opinion that as the property which had been sold was subject to an remembrance in favour of the bank in respect of Rs. 10,00,000/ - under Section 24 of the Indian Stamp Act, a duty of Rs. 24,000/ - was payable on the sale deed. He also pointed out that under Sec. 107(1) of the Cawnpore Urban Area Development Act, 1945, a further duty of Rs. 20,000/ - was payable in respect of the deed. He sent the document to the Collector of Kanpur for necessary action. The Collector was of the view that the real consideration of the safe was Rs. 5,55,000/ - and stamp duty was payable on that amount only. It came on calculation to Rs. 13,320/ -. In regard to the duty payable under the Cawnpore Urban Area Development Act the Collector was of opinion that it was payable only on Rs. 1,00,000/ - the value of the immovable property which was being transferred. He was, however, not sure about the correctness of his view and referred the whole case to the Board of Revenue under Sec. 56(2) of the Stamp Act for decision. The Board at first accepted thy view taken by the Collector that a sum of Rs. 13,320/ - was payable as stamp duty but subsequently it was requested to revise its orders or to refer the case to this Court. The Board has therefore referred the following points for the decision of this Court; 1. Whether the documents is a sale deed for a consideration of Rs. 1,00,000/ - as contended by the executants. 2. Whether in view of the provisions of Section 24 of the Stamp Act, the sale consideration shall be deemed to be Rs. 5,55,000/ - and duty liable to be paid thereon as held by the Board, 3. Whether the consideration of the sale will be deemed to be Rs. Ten Lakhs, i.e. the entire amount due to the mortgagee Bank, and duty is payable thereon. 4. On what amount is the additional stamp duty under Sec. 107 of the Cawnpore Development Act, 1945, leviable. The first three questions are inter -related and have therefore to be considered together. A copy of the sale deed in respect of which the stamp duty has to be assessed has been appended by the Board of Revenue to its order of reference and a perusal of it shows that after reciting in its preliminary clauses the facts which have already been narrated by us the terms and conditions of the sale were set forth in seven clauses. The first clause contains the details of the property which was being transferred and also mentions the consideration for which the sale was being made. The second clause declares that the property was being sold free from all encumbrances except the charge in favour of the bank which was to be paid off in the manner indicated in the preliminary clauses. The third clause contains an assurance about the vendors title and right to transfer and the fourth contains the covenant of quiet enjoyment. The fifth clause relates to the apportionment of liability for taxes and lease rent. In the sixth clause the vendors undertake to have the mutation effected in favour of the vendees and in the seventh they guarantee the reimbursement of any loss which the vendees suffer on account of defective title or the discovery of any other encumbrance. At the end there is a description of the properties which were being conveyed.
(3.) IT is thus clear that though in the preliminary clauses there is a recital in respect of the other properties which had also been transferred in connection with the same transaction, e.g. machinery, stores and goodwill the deed was being executed only to effect the transfer of the immovable properties described therein. In fact, a registered sale deed was required only in respect of the immovable property that was being conveyed. The other properties could be transferred even without a deed. In the first term of the deed, therefore, the vendors described in detail what they purported to "sell, transfer and assign" to the vendees and at the end of the deed they describe the properties "hereby conveyed taken as a whole".;