N. Sreenivasa Rau, C.J.
1. These are references under Section 54 of the Mysore Stamp Act 1957 relating to the Stamp duty chargeable on two documents each of them dated 30-6-1957 purporting to be release deeds. The Mysore Stamp Act 1957 came into force on 1-6-1958. Hence it was the Mysore Stamp Act 1900 which governed the duty leviable on the documents and any question of adjudication relating thereto. The provision for the statement of any case before the High Court is Section 57 of that Act and we shall take the present references as made under that provision.
As both the documents are in the same terms, one of them is reproduced below:
This Deed of release executed this 30th day of June 1957, by Sri --aged about--years, son of Tallam Peddanarayana Setty, residing at 27, Kumarapark West Extension, Bangalore-3 hereinafter called the Releasor of the one part, and Tallam Peddanarayana Setty, son of Tallim Nanjundaiah Setty, aged about 65, Hindu Vysya, Merchant, Manchenhalli, Goribidanur Taluk, hereinafter referred to as the Releasee of the other part.
Whereas the Releasee and his sons including the Releasor constitute members of a Joint Hindu Undivided Family and have continued as such till this day, and,
Whereas the Releasee and his sons including the Releasor were carrying on their family business of money lending at Manchenahalli and the whole-sale cloth business at Bangalore under the name and style of 'Tallam Nanjunda Setty and. Bros.', and the family as such is a partner in the Firm of 'messrs. D.K. Aswathanarayana Setty and Sons' having a six annas share, and also owning immoveable properties.
Whereas the releasor expressed his desire to separate himself from the joint Family and the intention of the releasor was consented to by the other members of the Joint Family, on the condition that the releasor executes a release deed of all interests, rights and other claims on the releasee and other members of the Joint Family on receiving the consideration agreed to be paid by the releasee to the releasor as consideration in full quits of all his rights, title and the interests in respect of his share in the Joint Family Property, and
Whereas the releasee agreed to pay as the share of the releasor Rs. 75,000/- (Rupees Seventy Five thousands only) and the releasor agreed to receive the same in full quits of his share of the family properties,
Whereas the said agreement of the release is agreed to be duly recorded. Now therefore this instrument of release witnesseth:
1. The releasee agreed to pay to the releasor and has already paid the sum of Rs. 75,000/- as under:
Rs. 50,000/- by a transfer from the amount at the credit of the releasee in the books of 'Tailam Nanjunda Setty and Bros.' Wholesale cloth merchants, D.S. Lane Chikpet, Bangalore,
Rs. 25,000/- by a transfer from the amount at the credit of the releasee in the account books of M/s. D. R. Aswathanarayana Setty and Sons, Old Tharugupet, Bangalore', a registered firm under the Indian Partnership Act, to the credit of the releasor in the above account books and the releasor has agreed to receive the same in full and final settlement in lieu of his share of the Joint Family properties,
2. The releasor hereby declares that the releasee and the other members of the family and that he has no more claim, right or interest in the rest of the property of the releasee.
3. The releasee agrees that the amount paid herein as the share of the releasor by the individual property of the releasor with full rights of disposal in any manner whatsoever.
In witness whereof the parties hereto have affixed their hands to this deed of release this 30th day of June 1957 in the presence of the witnesses attesting hereunder:''
2. The relevant provisions of the Act which have a bearing on the question under consideration are given below.
3. Section 2(9) reads as follows: 'Conveyance' includes a conveyance on sale and every instrument by which property, whether moveable or immoveable is transferred inter vivos and which is not otherwise specifically provided for by Schedule I (or by Schedule I-A., as the case may be): . Article 18 of Schedule I-A gives the stamp duty leviable in respect of a conveyance.
4. Section 2 (15) defines an instrument of partition as follows:
'Instrument of partition' means any instrument whereby co-owners of any property divide or agree to divide such property in serveralty, and includes also a final order for effecting a partition passed by any Revenue authority or any civil Court and an award by an arbitrator directing the partition,
5. The term 'release' is not defined in the body of the Act. But Article 42 of the Schedule I-Astates:
'Release, that is to say, any instrument not being such a release as is provided for by Section 23-A, whereby a person renounces a claim upon another person or against any specified property'.
It may be mentioned that Section 23-A (2) relates to the release of an instrument given by way of security on money advanced or to be advanced by way of loan or for an existing or future debt and has no bearing on the present question.
6. The Assistant Commissioner, Bangalore Sub-Division, to whom the documents were submitted by the Sub-Registrar before whom they were presented for registration held that they were in the nature of deeds of conveyance and ordered that stamp duty in accordance with Article 18 of Schedule I-A of the Act together with penalty of Rs. 5/- be recovered. The matter came up before the Chief Controlling Revenue Authority, Mysore (Commissioner of Stamps), at the instance of the executants. He came to the conclusion that the documents were instruments of partition and setting aside the order of the Sub-Division Officer directed that appropriate stamp duty together with a penalty of Rs. 100/- be levied on the documents.
The petitioners' applications for referring the matter to the High Court were unsuccessful. Thereupon they approached this Court in W. P No. 600/58 and W. P. No. 74/59. This Court directed that references be made. It is under these circumstances that the Chief Controlling Revenue Authority has referred to this Court for opinion the question whether the above instruments should bear the stamp duty payable on deeds of partition.
7. It is not disputed that two executants at the deeds and the executes of both the documents are members of a joint Hindu family, the executants being the sons of the executee. It is contended by the learned Advocate for the petitioners that the documents in question both in form and in substance represents transactions of release. It is urged that the documents do not show that there is any agreement to divide the family property, that in the case of a release there is an augmentation of the interest of the releasee, while in a partition there is no such augmentation and that while a partition binds every party a release binds only the releasor, and that judged by these tests the documents are seen to be release deeds.
8. On the other, hand it is urged, by the learned Government Pleader that the substance of the transaction has to be looked into and that what the documents really effected was allocation of the family property amongst its members and that this in reality amounts to a partition.
9. While learned Advocate for the petitioners places reliance upon the case reported in Reference from Secy. to Govt. Revenue Dept., 8 Mys C.C.R. 294 (FB), the learned Government Pleader relies upon the case reported in In re Govind Pandurang Kamat, ILR 35 Bom 75, which it may be mentioned is also relied upon by the Chief Controlling Revenue Authority in his decision. Some other cases also have been referred to in the course of arguments. All these will be considered.
10. In Eknath S. Gownde v. Jagannath S. Gownde, ILR 9 Bom 417, two brothers passed to another brother an instrument under which they relinquished their right to certain property in favour of that brother and it was provided that the latter should discharge certain debts of the executants and pay them an annuity. It was held that the latter provisions were a mere recital of the consideration moving from the executee, that no interest in favour of the executants was created by the document and that the document should be stamped as a release only.
It will be noticed that the question whether the document was one of partition or one of release did not come up for consideration and the only question considered was the effect of the recitals placing certain obligations on the exeeutee. This decision cannot, therefore, he regarded as an authority for the proposition that such a document is a release deed and not an instrument of partition.
11. In Reference under Stamp Act Section 46, ILR 12 Mad 198 (FB), each of two persons who had originally claimed exclusive right as heirs to the property of a deceased person executed what was entitled a deed of relinquishment of right in favour of the other in respect of part of the property. It was held by the Court that although the documents are styled releases they were instruments , of partition since the parties purported to be co-owners of the property and in that capacity agreed to divide the property in severalty. In the present case the documents are not mutual. But the principle laid down that if the result of the transaction is a division in severalty of what the parties considered to be common property the transaction, is a partition, seems to apply to his case.
(12) In the case reported in Reference under Stamp Act Section 46, ILR 18 Mad 233 (FB), the facts as stated in the Head Note are as follows:
'A Hindu executed in favour of his father as representing the interest of the other members of his family an instrument by which he relinquished his rights over the joint property of the family in consideration of certain lands being allotted to him for life, and certain debts incurred by him being paid. The instrument further provided that the lands allotted to the executant for life should go towards the shares of his sons at any partition effected after his death.'
13. It was held that the instrument was not a deed of partition but a release, as it was not one by which the co-owners agreed to divide the property in severalty but by which one co-owner renounced his claim for partition against the family property in consideration of a certain income to be enjoyed by him for life out of certain lands over which he was to have no power of alienation.
The learned Judges also observed that thecase was similar to ILR 9 Born 417 referred toabove. It has already been stated that the lattercase cannot be regarded as having given a decision on the question whether the document in thatparticular case was a release deed or an instrument of partition. It will be seen that the executant relinquished his interest in the family property with a view to secure enjoyment of a portionof the property during his life time and it may,therefore, be regarded as a case in which, whilerelinquishment of the executant's right was complete, there was no allocation of full rights in thefamily property as between him and the othermembers.
On the other hand, it is difficult to see why the conferment of life interest itself cannot be regarded as an allocation of property since such interest also is property and is carved out of the family property and the other members are deprived of it.
14. In the case reported in 8 Mys C.C.R. 294 (FB), the executant released in favour of his three brothers his 1/4 share in the immoveable property belonging to them in common in consideration of Rs. 4,000/- received in cash. The question referred to the Court for opinion was whether the instrument should be treated as a release or as a conveyance for the stated consideration. The Court observed.
'The document may be regarded as a conveyance of his undivided share, using the word 'conveyance' in its general sense, it may also be regarded as a release, since one brother has renounced all claim against the family property. The Stamp Regulation defines 'a conveyance' as 'including' every instrument by which property whether moveable or immoveable is transferred inter vivos and which is not otherwise specifically provided for by Schedule I. Schedule I specifically provides for release and consequently the document ought not to be required to be stamped as a conveyance'.
It will be noticed that the question whether the document was an instrument of partition was neither referred to the High Court, nor considered by it.
15. In the case reported in In the matter of Hiralal Navalram, ILR 32 Bom 505 the document in question was one in which a person purporting to be entitled to a four annas share in a going pressing factory transferred it to the other -person entitled to the remaining 12 annas share for a particular amount. It was held that the document was a conveyance on sale and not a release. The brief judgment does' not contain any reason in support of the conclusion.
16. In the case reported in Jiban Kuar v. Govind Das, ILR 38 All 56: (AIR 1915 All 421 FB), two persons each of whom claimed right to the property of a deceased relation arrived at a compromise and gave effect to it by means of two deeds by which each relinquished in favour of the other his or her claim to a portion of the assets of the deceased. It was held that as the executants did not purport to be co-owners agreeing to divide the common property, they were not instruments of partition but documents of release. It will be noticed that the matter related to a settlement of doubtful claims and no reliance can be placed upon this decision in support of the petitioners' case as is sought to be done by their learned Advocate.
17. In the case reported in ILR 35 Bom 75, the facts are given in the Head Note as follows:
'One of 'three undivided brothers agreed to take from the eldest brother, the Manager of the family, as his share in the family property moveable and immoveable, certain cash and bonds for debts due to the family, and passed to the eldest brother a document in the form of release. Subsequently one of the two brothers passed to the eldest brother a document in the form of a release whereby he and the eldest brother divided the remaining family property by the latter handing over to the former securities for money'.
It was held that the documents were not releases but instruments of partition. The judgment is brief and reads as follows:
'Scott, C. J.:
The, question referred to us is whether the two documents, dated respectively the Ist of September and the and of September 1909, are instruments of partition or release.
They are instruments of partition if they are instruments whereby co-owners of any property divide or agree to divide any property in severalty.
By the first document Anant Pandurang agreed to take from his brother, as his share in the family property, moveable and immovable, Rs. 4,000/- in cash and certain securities for money in the form of bonds securing debts due to the family. The document was in the form of release executed in favour of Govind Pandurang, the eldest brother and manager of the family. The effect of the document was to divide the property of the three co-owning brothers between Anant on the one hand and Govind and Warn an on the other. Govind took a certain share of the family assets not converted into cash and we therefore think that the document passed by him amounts to an instrument of partition.
Similarly on the and September, Waman Pandurahg passed to his brother Govind a document in the form of a release whereby he and Govind divided the remaining family property by 'Govind handing over to Waman securities for money of the nominal value of Rs. 40,183/- and of the estimated value o Rs. 12,500/-. That also, in our opinion, for the reasons already stated, amounts to an instrument of partition whereby the two remaining co-owners divide their property in severally.
Our answer to the reference is, therefore, that both the documents are instruments of partition.'
18. It would appear from the judgment that the Court arrived at the conclusion that each of the documents was an instrument of partition on the ground that the effect of the document was to divide the property between the executant on the one hand and the remaining member or members of the family on the other. It is also stated,
'Govind (this appears to be mistake for Anant)took a certain share of the family assets not converted into cash. We, therefore, think that the document passed by him amounts to an 'instrument of partition.'
It is not clear whether, by this statement it was intended to convey that if the share of the assets had been converted into cash the document would be or might have been a, release.
19. The case reported in In re Narasamma, 12 Mys LJ 260 relates to a document executed by the holder of a maintenance decree releasing all her rights in property which was liable to the decree. It was contended that it was an agreement. But the Court held that it was a release. The question whether it amounted to a partition did not arise and obviously could not arise, since there was no question of common ownership involved. The case has no bearing on the question under consideration.
20. In Board of Revenue v. V.M. Murugesa Mudaliar, : AIR1955Mad641 (FB) the question for consideration was the stamp duty leviable on a document which proceeded on the footing that the five persons, namely the three executants and the two persons in whose favour the instrument was executed, who were carrying on the business of a firm owned the property as co-owners, the executants being entitled to 3/5th share and the other two being entitled to 2/5th share.
The document recited that in consideration of certain amount the executants released their right in respect of the property. The Board of Revenue which referred the matter to the High Court was of the opinion that the document was liable to be charged with stamp duty under each of three Articles i.e. Article 39 (b) (Instrument of Dissolution of Partnership), Article 44 (b) (Release) and Article 19 (Conveyance). The Court was of the view that if came only under Article 44 (b). It will be noticed that the question whether the document evidenced a partition did not come up for consideration. On the other hand it was stated.
'It is not the case of anyone that there was a division of the property by metes and bounds and in accordance with the said shares.'
21. The question under consideration is not free from difficulty. It is suggested by the learned Advocate for the Petitioners that while in the case of a release there is augmentation of the interest of the releases there is no such augmentation in the case of a partition. This statement is not wholly correct, since even in the case of a partition the person to whom a specific share of the common property is allotted becomes the exclusive owner of that portion thus securing augmentation of his interest in it while he no doubt loses the interest he had in the share or shares allotted to the others.
Nor can we accept the test that a partitiondeed must be executed by all the parties obtainingshares, while it is only the releasor that executes a release. The real test is the intended result. Whether the particular result is achieved or not does not come within the scope of the Stamp Act. If the result intended to be achieved by the execution of a release deed is to divide common property into exclusive shares, there is no reason why it should not be regarded as an instrument of partition. In other words, the substance of the transaction has to be looked into. It is no doubt true that when a partition is effected amongst common owners, there is necessarily release of interest in respect of the shares allotted exclusively to each of the owners by the others. But this only means that every transaction of partition is a transaction of release also.
It is also true that in every release there is augmentation of the interest of the releasee. Gene rally speaking both a release and a partition presuppose the existence of a common interest in the patties to the transaction. But a release may relate to the settlement of a doubtful claim and there may be cases of release in which the releasor does not obtain for himself any portion of the common property, as when the release is without consideration or when the consideration comes from outside the common property. In the case of a partition there is a double or multiple release accompanied by the acquisition of full right by each of the co-owners in the portion of the common property allotted to him.
Thus while every release may not represent a partition of the common property, every partition necessarily involves a double or multiple release. This only leads to the conclusion that a partition is a specific kind of release. If the Statute contains two provisions, one relating to transactions which come under a general category and the other to transactions under a special category though in the same general category the later transactions are necessarily governed by the provision relating to the special category of transactions.
22. It is urged by the learned Advocate for the Petitioners that in the case on hand each of the executants did not get any item of immovable property from the common property but only got cash by way of consideration for the release and that therefore the deeds are release deeds. On the other hand it is contended by the learned Government Pleader that the two petitioners executed the documents purporting to be release deeds on the same day and the real intention was to effect partition in the guise of release deeds. It seems to us that neither the circumstance that the releasor received cash nor the circumstance that the documents were executed on the same day offer any conclusive test in regard, to the character of the transaction.
A partition is not confined to items of immoveable property. The property owned in common may be of any character and in effecting partition, allocation may be made to a sharer either of one category of property or of another or of more categories of property than one. If the cash allotted comes from the common property, it does not cease to be a partition. Again the circumstance that the releasers effected releases on the same day does not touch the real character of the transaction. If the time factor makes any difference, even a day, or hours or minutes should count, apart from the fact that two or more release deeds are rarely executed at the same amount. It is only in the last named contingency that all the transactions together being considered as a single transaction of partition can arise. If there are successive transactions, even each transaction results in change in the interest of the parties to the transaction and has to be considered independently, irrespective of the interval between two such transactions.
If each of the transactions is in its true character a release and not a partition there is no reason why such releases should be deprived of their true character on account of their taking place in close proximity of time to each other, as for example in the case reported in ILR 38 All 56 : AIR 1915 All 421 (FB) in which it was held that the transactions were releases. It will be noticed on the other hand that in the decision reported in ILR 35 Bom 75 the release deeds were executed on successive days. The Court nevertheless held that each of them was in reality an instrument of partition.
23. It appears to us that the true principle is whether the transaction results in allotting exclusive shares from the common property. It has already been mentioned that a partition involves an element of release also, since each of the sharers relinquishes in favour of the other his interest in the property allotted to the other. At the same time he obtains full interest in the property allotted to him.
A release may be for consideration or without consideration. In the latter case no difficulty arises since no question of the releasor getting any portion of the common property exclusively for himself can arise. Where the release results in the releasor getting exclusive right to a portion of the common property, what happens in reality is a division of the common property. If, on the other hand, the releasor gets as consideration for the release cash or other property which does not form part of the common property, such a release does not result in any division of the common property into exclusive shares.
Such would be the case where the releasee pays from out of his separate funds the consideration for the release. That would be the position even where the consideration takes some other form such as immovable property exclusively owned by the releasee though the transfer of such property would have to be made by an appropriate instrument. In the case on hand the documents in question make it clear that the executants are intended to get cash assets which formed part of the common property. It appears to us, therefore, that the documents in question are instruments of partition.
24. A copy of this judgment shall be sent to the Chief Controlling Revenue Authority, Mysore, in each of these cases.
25. Reference answered.