- (1.) THIS is a revision petition filed under section 56 (1) of the Indian Stamp Act against the order of Collector Jodhpur dated 20-5-1969 where by an additional stamp duty of Rs. 1908 plus penalty of double this amount was imposed upon the petitioners.
(2.) THE facts of the case, in brief, are the Smt. Shiela Kumari petitioner No. 1 sold her house No. 1013 in Ward No. 35 at Sardarpura 'd, Road, Jodhpur to Shri-mati Jas Kanwar for Rs 34,000 vide sale deed dated 8-11-1966 registered on 5-12-1966 with a condition that the seller will have the right to repurchase it for the same amount within a period of 18 months and the purchaser will be bound to sell the same to Shrimati Shiela Kumari or her nominee. Subsequently Smt. Shiela Kumari and Smt. Jas Kanwar sold it to Shri Suresh Garg vide sale deed dated 6-5-1969 and registered on 7-5-1968 a condition that in case Smt, Shiela Kumari wished to purchase it, she could do so within 18 months on payment of Rs. 38,000 to Shri Suresh Garg. Before this, Shri Basant Raj Mehta present petitioner No. 2, and his wife Smt. Chandra Kala Mehta, petitioner No. 3, purchased Smt. Sheila Kumari's right to repurchase the property, vide sale deed date 8-4-1969 valuing it at Rs. 2000 and stamp duty of Rs. 66 was paid on it. THE petitioner No. 2 and 3 purchased the property from Shri Suresh Garg with the consent of Smt. Shiela Kumari with a stamp of Rs. 1854 for Rs. 38000 vide sale deed dated 19-3 1969, but it was presented for registration on 30-6-1969, while the sale deed executed by Smt. Shiela Kumari on 8-4-1969 was presented by her for registration before the sub-registrar Jodhpur on the same date i. e. 8-4-1969. THE Sub-Registrar on examination of the document found it to be a sale of equity of redemption, without disclosing the amount of mortgage, which was required to be disclosed under section 27 of the Stamp Act. On examining the sale deed registered on 6 5-1968 in favour of Shri Suresh Garg, the Sub-Registrar found that the property was mortgaged to Shri Suresh Garg for Rs. 38000. He found that on the sale deed before him a stamp duty of Rs. 66 on consideration of Rs. 2,000 was paid, while it should have been been Rs. 1974 on the total amount of Rs. 40,000 Under the circumstances he impounded the sale deed on 15-4-1969 and submitted the case to the Collector, Jodhpur under section 38 (2) of the Stamp Act for deter-ruination of Stamp duty. The Collector, after inspection of stamp and registration on behalf of the State and hearing; the Advocate on behalf of the present petitioners, passed an order on 20-5-1969 holding that on Rs. 40,000 the stamp duty payable was Rs. 1974 against which Rs. 66 only was paid, hence be directed that on the payment of the balance of the (stamp duty amounting to Rs. 1909 as also penalty of Rs. 3816 a certificate to this effect be recorded under section 40 (1) (b) of the Act, the document be returned to the Sub-Registrar, Jodhpur for further necessary action. It is against this order that the present revision petition has been filed. I have heard the learned counsel on behalf of the petitioner and the Dy. Gove. Advocate on behalf of the State and have also examined the record. In this very case, the Collector, Jodhpur while sending his file summoned in connection with his revision had made a reference to the Board of Revenue under section 56 (2) of the Stamp Act. Section 56 (2) provides that if any Collector acting under Section 31, section 40 or 41, feels doubt as to the amount of duty with which any instrument is chargeable he may draw up a statement of the case, and refer it with his own opinion thereon for the decision of the Chief Controlling Revenue Authority. The Collector, in his reference made on 4-11-1969 has given the view point of the Sub Registrar and also of the party concerned. According to the the Sub-Registrar stamp duty on the sale deed of Rs. 2000 and the other of Rs. 38000 totalled at Rs. 40,000 was chargeable at Rs. 1974. The party had paid stamp duty of Rs. 66 on the former sale deed and of Rs. 1854 on the later, thus the balance of the Stamp duty of Rs. 54 (wrongly mentioned as Rs. 60) was recoverable and since the rights of mortgage have been transferred a further stamp duty of Rs. 7. 50 was also chargeable. The contention of the party was that the sale deed was simply a transfer of rights of the mortgage, hence stamp duty of Rs. 7. 50 only was chargeable. Even then the party had paid stamp duty of Rs. 1854 on Rs. 38,000 and of Rs. 66 on Rs 2,000 Hence full stamp duty has been paid. The main point for decision in this case is whether the sale deed dated 6-5-1968 is a mortgage by conditional sale or it was an out and out sale with a condition of the transfer. The learned counsel has argued that a sale with a condition of having a right to repurchase with in a stipulated period was not a mortgage, but was an out and out sale. In Section 58 (c) of the Transfer of Property Act, a mortgage by conditional sale is defined as follows - "58, c) Where the mortgagor ostensibly sells the mortgaged property on condition that on default of payment of the mortgage-money on a certain date the sale shall become absolute or on such payment being made the sale shall become void or on condition that on such payment being made the buyer shall transfer the property to the seller the transaction is called a mortgage by conditional sale and the mortgagee a mortgagee by conditional sale : Provided that no such transaction shall be deemed to be a mortgage, unless the condition is embodied in the document which effects or purports to effect the sale. " Case law reported in AIR 1966 Supreme Court 902 was cited where it was observed that the definition of a mortgage by conditional sale postulates the creation by the transfer of a relation of mortgagor and mortgagee, the price being charged on the property conveyed. In a sale completed with an agreement to recovery, there is no relation of debtor and creditor nor is the price charged upon the property conveyed, but the sale is subject to an obligation to retransfer the property within the period specified, distinction between the transactions is the relationship of debtor and creditor and the transfer being a security for the debt. The question in each case is one of determination of the real character of the transaction to be ascertained from, the provisions of the document viewed in the light of surrounding circumstances. It was argued that in the document of 6-5-1968 registered on 9-5- 68 the condition of reconveyance, brought the conveyance in the category of out and out sale and not a mortgage because no relationship of debtor or creditor was created thereby, and the sale was simply subject to an obligation to retransfer it within 18 months if so desired by the seller. It was also argued that Basant Raj and his wife applicant No. 2 and 3 had purchased the right of Sheila Kumari to repurchase the property and this right was valued at Rs. 2000 Applicants No. 2 and 3 purchased the property from Suresh Garg vide sale deed dated 19-3-1969 on consideration of Rs. 38,000 and the same was put up for registration on 33-6-1969 and this delay was on account of Suresh Garg being busy in examinations and arrangements for full amount were being made. It was argued that the Collector misinterpreted the sale deed dated 8-4-1969 presented for registration before the Sub-Registrar in 8-4-1969, to be in respect of equity of redemption. The stamp duty was fully paid on the document and yet the Sub Registrar sent the case under section 27 of the Stamp Act read with sec. 33, holding that all the facts and circumstances affecting the chargeability of the instrument with duty were not fully and truely set forth thereon. It was argued that there was no intention of the party to intentionally undervalue or defraud the Govt. and in support AIR 1922 Allahabad p 82 was cited where it was held that for contravention of sec. 27 of the Stamp Act, prosecution under section 64 would protect the Govt. against the attempted fraud and that there was no provision in the law authorising the Collector to ascertain the value of the property with a view to causing the instrument to be stamped with reference to the value then ascertained. AIR 1953 Madras p. 941 was also cited wherein it was held that Registrar can under section 35 refuse registration on ground that the property is grossly undervalued and call for particulars. But if the document is registered and there is subsequent information as to undervaluation the proceedings under sec. 27 read with Sec. 64 can be ini- tiated. AIR 1960 Patna p. 470 was also cited where it was observed that there is no provision in the Indian Registration Act empowering the Distt Sub-Registrar to refuse registration of a document on the ground of undervaluation or to inquire into the correctness of the valuation as given in the document, which is conclusive for the purpose of registration. He must register the document if the stamp duty paid is sufficient on the valuation disclosed in the document. A registering officer has only the right to impound a document presented before him, if it appears to him that the same, is not duly stamped on the valuation disclosed therein. AIR 1966 Madhya Pradesh P. 20 was cited where it was observed that the proviso to impound an instrument can be exercised under section 33 (1) only when the instrument is produced before the registering authorities in the performance of their functions, that is, only so long as the function is not performed or completed, and not afterwards. Sec. 35 imposes a duty on the registering officer to examine whether an instrument presented for registration is duly stamped. This duty has to be performed before admitting the instrument to registration. It cannot be performed afterwards. Neither the Registration Act nor the Stamp Act contains any provision giving to the registering officer any power to examine whether an instrument already registered was or was not duly stamped and to impound it. As soon as the registering officer registers a document presented to him for registration, the function in the performance of which the document was produced before him is over and he thereafter becomes functus officio having no power under sec. 33 to impound the instrument. It was also argued that there was no malafide intention of the applicants in non-presentation of the sale-deed by Suresh Garg because the prescribed time for its presentation for registration had not expired and the applicants were not asked to explain as to why the document dated 19-3-1969 was not produced for registration when the earlier document dated 8 4 1969 by which right of Shiela Kumari to repurchase the property was sold, was produced on 8-4-1969 and got registered on the same day. 1961 Madhya Pradesh P 6 was also cited where the value of property having not been set forth the person for failure to comply with sec. 27 was held liable to prosecution under sec. 64 of the Stamp Act, which unlike sec. 49 of the Registration Act, gave a direction dut did not impose a penalty that the document would be inadmissible in evidence. The learned Dy. Govt. Advocate argued that vide document executed on 8-4-1960, Shiela Kumari had sold her right to repurchase the property to Basant Lal and his wife, but prior to this Suresh Garg, who had purchased the property for Rs. 34,000 from Shiela Kumari vide sale deed dated 6-5-1968 reserving her right to repurchase it on payment of Rs. 38,000, had sold the same to Basantraj and his wife vide safe deed executed on 19-3-1969, they did not make any mention in it about this earlier sale and when the same was put up before the Sub-Registrar for registration on 30 6-1969, the registering officer was justified to believe that the intention was to purchase the right of redemption and that the equity of redemption was actually purchased and till the time this document was presented for registration, stamp duty on consideration of Rs. 38,000 had not been paid. Thus there was a clear intention to defraud the Govt. It was, therefore, urged that the Collector should be directed to hold inquiry about valuation of the property and then levy the stamp duty and give due allowance for the stamp duty already paid. In reply to this, it was reiterated that there was no previous debt or incum-berance upon the property and it was the right of repurchasing it that was sold by Shiela Kumari, and that the Collector could not make any enquiry about the valuation nor could he order for not registering the document. It was urged that Shiela Kumari was no longer the owner of the property after its sale by her in favour of Jaskanwar on 8-11-1966 and by herself and Mst. Jaskanwar in favour of Suresh Garg on 6-4-1968, reserving to herself the right to repurchase it. The circumstances of the case lead to the conclusion that Shiela Kumari had reserved to herself the right to repurchase the property for Rs 38. 000 within a period of 18 months when it was sold to Suresh Garg for which sale deed was executed on 6 5-1969 and registered on 9-51968. Basantraj and his wife vide sale deed dated 19-3-1968 purchased the property from Suresh Garg for Rs. 38,000 and they also purchased the right of repurchase from Shiela Kumari vide sale deed 8 4-1969, registered on 8-4-1969 for a consideration of Rs. 2,000. In the sale deed it seems to have been inadvertantly mentioned 'equity of redemption' and on the basis of this entry, when the Sub Registrar found that the amount of mortgage was not mentioned in it, which was necessary under section 27 of the Stamp Act he impounded the sale deed, and held the party liable to pay deficiency of Rs 67 with penalty. In my view the learned Collector erroneously held the sale with a condition of having a right to repurchase the property within a specified time, as a mortgage. In the present case, no relation of mortgagor and mortgagee was established and in this sale coupled with an agreement to recovery, there was no relationship of a debtor and creditor, nor was the transfer a security for any debt. The sale deed of 6-5-1968 was an out right sale and stamp duty had been paid on the same. Even if it is presumed that the intention of the party was to defraud the Government by not presenting the sale deed dated 19-3-1969 for registration before the sale deed dated 8-4-1969, the proper course was to take proceedings, for prosecution under section 64 of the Act, rather than ascertaining the value of the property or impounding the sale deed. The Sub Registrar had no authority to refuse registration. He had the authority to impound the document presented before him, if it was not duly stamped on the validation disclosed in it. He did not possess any power, after a document is registered by him, to examine thereafter whether the instrument already registered was or was not duly stamped. Perhaps the matter would have been clear if the sub-registrar had asked the party to explain as to how the sale-deed of 19-3-1969 was put up for registration after the sale deed dated 8-4-1969 was duly registered. In view of the above, and the fact that against the total stamp duty of Rs. 1981. 50 (Rs. 1974 plus Rs. 7. 50 the party has already paid stamp duty of Rs 1970 (Rs 1954 plus Rs 66) the balance of Rs 61. 50 was only payable. Since the sale deed was sufficiently stamped the question of imposing any penalty did not arise. The revision is therefore accepted and the order of the learned Collector dated 20-5 1969 is quashed. Pronounced in open Court. . ;