Article 47-A of Schedule 1-A of the Act agreement liable for registration and stamp duty.=opposing the same on the ground that the endorsement made on the back of the agreement of sale in question evidences delivery of possession of the property agreed to be sold thereunder and therefore it requires stamp duty and registration under Article 47-A of Schedule 1-A of the Indian Stamp Act, 1899 (for short "the Act"). -The lower Court is directed to exclude the said document from the evidence. The respondent is however given liberty to seek for sending the agreement of sale in question for impounding and registration to the competent authority, if he is interested in producing the same in evidence. Subject to the liberty given as above to the respondent, the Civil Revision Petition is allowed.


HON'BLE SRI JUSTICE C.V. NAGARJUNA REDDY        

C.R.P.No.1753 of 2012

27-9-2012

Ponnapoola Seetha Ramaiah

Sanagala Sreenivasulu

<GIST:

>HEAD NOTE:  

Counsel for petitioner : Sri V. Roopesh Kumar Reddy

Counsel for respondents : Sri G. Venkateswarlu

?CASES REFERRED:    
1. 2010(5) ALD 819
2. 2010(1) ALD 246
3. AIR 2000 A.P. 167 (D.B.)

ORDER:
This Civil Revision Petition is filed against order dated 22-2-2012 in
I.A.No.626/2011 in O.S.No.159/2010 on the file of the learned V Additional
District Judge, Nellore.
The respondent filed the above mentioned suit for specific performance of
agreement of sale dated 7-3-2005.  He filed the above mentioned I.A. to permit
him to mark the said agreement of sale in evidence on his side.  The
petitioner/defendant filed a counter-affidavit opposing the same on the ground
that the endorsement made on the back of the agreement of sale in question
evidences delivery of possession of the property agreed to be sold thereunder
and therefore it requires stamp duty and registration under Article 47-A of
Schedule 1-A of the Indian Stamp Act, 1899 (for short "the Act").   However, the
Court below has allowed the I.A. filed by the respondent/plaintiff.  Feeling
aggrieved thereby, the petitioner/defendant filed this Civil Revision Petition.
A perusal of the order of the lower Court shows that it has relied upon the
Judgments of this Court in Sri Lakshmi Housing Enterprises, Hyderabad Vs. Haji
Begum and others1 and Cheryala Srinivas Vs. Moola Sujatha and others2 and held  
that since the possession of the property was not delivered at the time of
entering into the agreement of sale, delivery of possession at a subsequent
point of time does not render the agreement liable for registration and stamp
duty.
In B. Ratnamala Vs. G. Rudramma3, a Division Bench of this Court has considered 
the Explanation to Article 47-A of Schedule 1-A of the Act and held that the
words "followed by or evidencing delivery of possession" therein shall be
construed as having a direct nexus to the agreement.  The Division Bench further
held that the said Explanation covers three situations, namely, where delivery
of possession has occurred prior to entering of the agreement, under the
agreement, or in pursuance of the agreement.  The Division Bench also further
held that the delivery of possession should be intimately and inextricably
connected with the agreement.  For better appreciation, the relevant portion of
the Judgment is reproduced hereunder:
"... Thus the main question that falls for consideration is the interpretation
of the expression "followed by or evidencing delivery of possession".  These
expressions cannot be read in isolation and one has to find the true meaning by
reading the entire Explanation and more so in conjunction with the earlier
expression i.e., "agreement".  Even if these two expressions are looked
independently, it means an agreement of sale followed by delivery of possession
and an agreement to sell evidencing delivery of possession.  In the first case,
i.e., "followed by delivery", possession cannot be disjuncted from the basic
source i.e., agreement of sale.  Therefore, the expression followed by delivery
of possession should have a direct nexus to the agreement and should be read in
juxtaposition to the word 'agreement' and it cannot be independent or outside
the agreement.  Therefore, the delivery of possession should follow the
agreement i.e., through the agreement.  It takes in its sweep the recital in the
agreement itself that delivery of possession is being handed over.  It will also
cover cases of delivery of possession contemporaneous with the execution of
Agreement, even if there is no specific recital in the Agreement.  In other
words, the delivery of possession should be intimately and inextricably
connected with the Agreement.  And in the second type, i.e., agreements
evidencing delivery of possession, if the document contains evidence of delivery
of possession by a recital in that behalf, that is sufficient.  Such delivery of
possession can be prior to the date of agreement and need not be under the
agreement.  If the Agreement records the fact that the possession was delivered
earlier and such recital serves as evidence of delivery of possession, though
prior to the Agreement, it falls under the second limb.  Therefore, on a proper
interpretation of the said expressions, it would follow that an agreement
containing specific recital of delivery of possession or indicating delivery of
possession even in the past is liable for stamp duty as a 'sale' under the said
Explanation."

In the instant case, it is not in dispute that the agreement, as it was
originally drafted, did not contain the recital relating to delivery of
possession of the property.  However, on the back of the agreement, several
endorsements were made relating to receipt of money by the respondent.  Two
endorsements were found against the date 28-5-2005.  In the later endorsement,
it is stated that on that day Rs.6,19,000/- was received towards the amount
under the agreement and the property was delivered.  This recital would clearly
show that the delivery of possession has taken place a few months after entering
into the agreement and in pursuance thereof.  Thus, delivery of possession is
directly connected with and traceable to the agreement of sale.  Hence, the
ratio laid down by the Division Bench of this Court in B. Ratnamala (3-supra)
clearly applies to this case.
The Judgment in Sri Lakshmi Housing Enterprises (1-supra) turned on its own
facts.  In the said case, there was no recital in the agreement that the
possession was delivered and there was also no evidence to show that the
delivery of possession related to the agreement of sale.
In Cheryala Srinivas (2-supra), there was a dispute as to the delivery of
physical possession even though the agreement contained a recital in respect
thereof.  This Court has held that unless the party under the agreement has the
benefit of possession of the property without any dispute or challenge from the
party to the agreement, he cannot be mulcted with the liability to pay the stamp
duty.
In the present case, there is no dispute relating to delivery of possession of
the property.  Hence, the Judgment Cheryala Srinivas (2-supra) has no
application.
For the above mentioned reasons, the order of the lower Court cannot be
sustained and the same is accordingly set-aside. The lower Court is directed to
exclude the said document from the evidence.  The respondent is however given
liberty to seek for sending the agreement of sale in question for impounding and
registration to the competent authority, if he is interested in producing the
same in evidence.
Subject to the liberty given as above to the respondent, the Civil Revision
Petition is allowed.
As a sequel, CRPMP No.2345 of 2012 is disposed of as infructuous.
________________________  
Justice C.V. Nagarjuna Reddy
Date : 27-9-2012

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