1. I agree with my brother Parekh that the questions must be answered in the negative.
2-3. The question is whether the instrument before us is a power of attorney given for consideration and authorising the attorney to sell immovable property. If it is so, the proper stamp duty is the same as a conveyance for the amount of the consideration. There is no dispute that the instrument is a power of attorney authorising the Bank as attorney to sell immovable property. The question is whether the power of attorney has been given for consideration. The executants say that there is no consideration, while the Revenue contends that the instrument has been given for consideration and that the consideration is the amount of the two decrees.
4. There was a compromise between the Bank and the executants in the suits filed by the Bank, and the power of attorney was executed and given to the Bank in compliance with the terms of the compromise. Under the instrument, the Bank has been authorised to sell the property by public auction for payment of the decretal amount, to grant a receipt for the purchase money paid by the auction purchaser, to appropriate from the sale proceeds so received a sum representing the total decretal amount and to pay the balance to the executants. There is nothing to suggest, either expressly or by necessary implication, that by merely-executing and delivering the power of attorney to the Bank the liability of the executants under the decrees stood discharged. On the contrary, the discharge of the decrees is contemplated only upon appropriation of the decretal amount by the Bank out of the sale proceeds. Had there been a condition in the instrument that the power conferred by the instrument upon the Bank to sell the immoveable property and appropriate the sale proceeds would amount to a complete discharge of the liability under the decrees, it may have been possible to say that the power of attorney was given for consideration. I find no such provision, either in terms or by necessary inference. It will also be apparent from Clause (5) of the instrument that the due payment of the instalments and interest under the two decrees is a necessary condition before the amount is appropriated from the sale proceeds towards the liability under the decrees. That it seems to me, reinforces the conclusion that the mere execution and grant of the power of attorney to the Bank does not amount to a discharge of the liability of the executants under the two decrees.
5. The power of attorney was not given for consideration and, in my opinion, is not an instrument contemplated by Article 48 (f) of Schedule 1-B.
6. Accordingly, I answer the questions referred in the negative.
7. This is a reference under Section 57 of the Indian Stamp Act, 1899, by the Chief Controlling Revenue Authority, U. P., Allahabad. The following questions have been referred for decision by this Court:--
'(i) Whether or not the document in question is in the nature of a power of attorney given for a consideration authorising the attorney to sell immoveable property, chargeable with a duty of Rs. 19,687-50 P. under Article 48 (f) read with Article 23 of Schedule 1-B of the U. P. Stamp (A) Act, 1962; and
(ii) Whether the Stamp duty is chargeable on the amount of consideration i.e., Rs. 4,37,272.80 P. on account of two equitable mortgages by the executants, and in view of Section 24 of the Stamp Act.'
For the determination, of both the questions referred to this Court it is necessary to reproduce the document i. e. the power of attorney itself:--
To all to whom these presents shall come, We, Murlidhar Kanodia, resident of 45, Cantonment, Kanpur for self and as guardian of his minor son Arvind Prakash Kanodia, resident of 45, Cantonment, Kanpur and Vijay Prakash, Ved Prakash Kanodia, Jagdish Prakash Kanodia and Jai Prakash Kanodia, all adults and all residents of 45, Cantonment, Kanpur (hereinafter also called The Executants' which expression shall include their heirs, successors and assigns unless excluded by the context) send Greetings.
Whereas The Hindustan Commercial Bank Ltd., having registered office at Birhana Road, Kanpur (hereinafter also called 'The Bank' which expression unless otherwise excluded by the context shall include its successors and assigns) filed a suit being suit No. 141 of 1957 of the Court of Civil Judge, Kanpur, against the executants inter alia for the enforcement of equitable mortgage, for a sum of Rs. 1,36,470.11 NP. and the said Bank had also filed a suit being suit No. 164 of 1957 of the court of I Civil Judge, Kanpur, against the executants inter alia for the enforcement of an equitable mortgage for a sum of Rs. 3,00,822.69 NP the property equitable mortgage being premises No. 58/ 74-76, known as Kanodia Commercial Building situated at Bkhana Road, Kanpur.
And whereas a compromise has been effected in the said suits Nos. 141 and 164 of 1957.
And whereas in terms of the compromise in both suits the Bank is entitled to sell the aforesaid mortgaged premises No. 58/74-76, known as Kanodia Commercial Building, through an auctioneer appointed for the purposes in certain contingencies mentioned in the compromise.
And whereas it was also agreed that the executants shall grant a power of attorney to the Bank to enable it to sell the said premises without recourse to court proceedings to recover the amount if any that may be due under the decree passed in Suit No. 141 of 1957 and/or suit No. 164 of 1957 of the Court of I Civil Judge, Kanpur and to appropriate the sale proceeds thereof towards the amount due under the decrees as mentioned above and the amount of the premium paid by the Bank in terms of the decree and the costs and expenses of arranging, advertising and conducting the sale.
And Whereas the Executants have in pursuance of the said compromise agreed to appoint the Bank as their attorney for the purpose mentioned hereinafter:--
Now this deed witnesseth as follows:--
1. That the executant above named do hereby appoint, nominate and constitute Hindustan Commercial Bank Ltd., as their true and lawful attorney and do hereby authorise the Bank to do the following acts, deeds and things in their name and on their behalf:
(a) To sell and dispose of by public auction through an auctioneer appointed by it after giving 3 months' notice in writing to the executants the property' being premises No. 58/74-76, known as Kanodia Commercial Building, situate at Birhana Road, Kanpur, and bounded and stated at the foot of this deed which is the property mentioned in suit No. 141 of 1957 and Suit No. 164 of 1957 for the payment of the decretal amount due thereunder, provided, however, that it shall be sufficient compliance in respect of the service of notice if the notices are sent by registered post to the executants at the addresses given in the plaint or at addresses notified to the Bank so that the period of 3 months elapses between the date of the putting of the notices in post under registered cover and the actual date of sale. It shall not be necessary for the Bank to prove the actual service of notice. On proof that the notices were sent by registered post at the addresses given in the plaint, the notices shall be deemed to have been served on the executants.
(b) Upon the receipt of the consideration of the purchase money for the same to give receipt thereof which receipt shall exonerate the person paying such money from seeing to the application thereof or being responsible for the loss or misapplication thereof.
(c) To receive the sale consideration in respect of the aforesaid property and to appropriate the same towards its dues under the decree in the aforesaid suit and costs and expenses of the sale and towards any premium paid for insuring the property against fire as provided in the compromise.
(d) To sign, seal and attest or get attested as our act and deed, deliver any deed or instrument in writing and to do every other thing whatsoever which may be necessary or proper for carrying any agreement for the purchase into complete effect and execution in such manner that all our estate, right, title and interest, in or to the said property and premises with the appurtenances may be effectually and absolutely conveyed and assured to the purchaser thereof in such manner and form as he shall direct.
(e) To present the said deed of conveyance for registration to the proper registration authority, to admit the execution thereof and the receipt of the considerations money and to have the said deed or deeds of sale registered according to law and in fact todo all acts, deeds and things which may be necessary for conveying the aforesaid property and executing and registering the sale deed or deeds thereof fully and effectually in all respects as the executants could do the same if they were personally present.
(f) To pay the sale proceeds remaining due in their hands after realising their dues as aforesaid to the executants subject to the provisions of clause-
(g) Herein provided that payment of such sum to any of the executants shall be complete discharge to the Bank for the excess amount payable to the executants.
2. That the power of attorney hereby granted shall not be revocable till all payments due under the decrees in the aforesaid suit No. 141 of 1957 and/or suit No. 164 of 1957 have been made to the Bank.
3. That the power of attorney shall not stand revoked in case of death or insolvency or disability of any of the executants.
4. That the Bank shall be able to exercise the power conferred upon it under this deed through any director, manager or principal officer thereof.
5. That if in exercise of the powers conferred under the decree in said suit No. 164 of 1957 and in pursuance of this power of attorney granted in connection thereof the aforesaid premises No. 58/74-76, known as Kanodia Commercial Building, Birhana Road, Kanpur, is sold by the Bank as attorney for the executants and if at the time of said sale no default has occurred in payment of the instalment and interest as aforesaid under decree in suit No. 141 of 1957, the sale proceeds in excess of the amount then due in terms of the decree in Suit No. 164 of 1957 to the extent of the amount then due in suit No. 141 of 1957 shall be appropriated by the Bank towards the decretal amount under compromise decree in suit No. 141 of 1957 and if in exercise of the powers conferred under the decree in Suit No. 141 of 1957 and in pursuance of the power of attorney granted herein the aforesaid premises No. 58/74-76, known as Kanodia Commercial Building, Birhana Road, Kanpur is sold by the Bank as attorney for the executants and if at the time of the said sale no default has occurred in payments of the instalments and interest as aforesaid under decree in Suit No. 164 of .1957, the sale proceeds in excess of the amount then due in terms of the decree in Suit No. 141 of 1957 to the extent of the amount then due in -Suit No. 164 of 1957 shall be appropriated by the Bank towards the decretal amount then due under the compromise decree in Suit No. 164 of 1957. On payment of the amount due in 'terms of the decree in Suit No. 141 of 1957 and/or on payment of the amount due in terms of the decree in Suit No. 164 of 1957 as the case may be the Bank shall pay the balance of the sale proceeds as has not been appropriated towards the decretal amount of the aforesaid decree to Sri Murli-dhar Kanodia one of the executants, and if the said Sri Murlidhar Kanodia does not survive at the time when the contingencies of making such payment arises, the said amount shall be deposited in the Court -for being withdrawn by the executants.
6. That the executants do hereby declare and agree that all and every receipt, deed, matter and things which shall be, by our said attorney, given, made, executed or done for the aforesaid purposes shall be as good, valid and effectual to all intents and purposes whatsoever as if the same shall be signed, sealed, attested, delivered, given or made or done by us and we hereby undertake to confirm and ratify all, all whatsoever that our said attorney shall lawfully do it or cause to be done by virtue of these presents concerning the sale of the aforesaid premises.
From the perusal of the document it would appear that the executants were indebted to the Hindustan Commercial Bank, Kanpur (the attorney) in the sum of Rs. 4,37,272.80 p. on account of the two equitable mortgages. The Bank filed two suits for the recovery of the amount by sale of the property mortgaged being Civil Suits Nos. 141 of 1957 and 164 of. 1957 of the Court of the Civil Judge, Kanpur. After the filing of the suits as it appears a compromise was arrived at between the executants of the document and the Bank. The Bank under the document has been authorised to sell the properties mentioned in the document without recourse to Court proceedings and to recover and appropriate the sale proceeds thereof towards the amount due under the decrees aforesaid. The Bank is also authorised to charge all costs and expenses for arranging and advertising and conducting such sale. For the purposes aforesaid executants appointed and nominated the plaintiff Bank, as their true and lawful attorney, to sell the property and to do other acts and things connected therewith and mentioned in the document. After the realisation of the sale proceeds and after its adjustment the balance of the amount thus remaining in the hands of the bank is payable to the executants of the document. This power of attorney has been granted to remain in force till all the payments due under the aforesaid decrees have been made to the Bank. The documents will remain irrevocable by the time. The document shall not stand revoked in case of death or insolvency or disability of any of its executants.
8. Power of attorney has been defined in Sub-section (21) of Section 2 of the Indian Stamp Act. The definition runs thus:--
''Power of attorney' includes any instrument (not chargeable with a fee under the law relating to court-fees for the time being in force) empowering a specified person to act for and in the name of the person executing it;'
Section 8 of the Stamp Act gives out the instruments which are chargeable with duty. Stamp duty on instruments under the Indian Stamp Act as amended in its application to Uttar Pradesh has been given in Schedude I-B of Section 3 of the Act. Article 48 has now been included in Schedule I-B. Under this article the power of attorney has been included and the proper stamp duty has also been indicated in the second column. Article 48 (f) reads thus:--
'48. Power of Attorney (as defined by Section 2(21)) not being a Proxy (No. 52) -
(f) when given for consideration and authorising the attorney to sell any immovable property.'
The proper stamp duty has been indicated as 'the same duty as a Conveyance (No. 23) for the amount of the consideration.'
9. The short question, therefore, is whether the power of attorney which has been executed in favour of the Bank to sell immovable property has been given for consideration or not In my opinion there is no consideration for authorising the Bank to sell the immovable property. The word 'consideration' has not been defined in the Indian Stamp Act. In relation to a contract the word 'consideration' has some relevance as the contract without consideration, may be ineffective in certain circumstances. In the instant case, compromise, therefore, may be taken to be a good consideration but we are not concerned with good consideration in this case because when we turn to Article 23 according to which the powers of attorney for consideration are to be valued we have to look to the value. Therefore, a consideration in relation to power of attorney can only mean a valuable consideration and not good consideration. In the instant case the compromise is a good consideration so far as the contract of agency or the appointment of agent or attorney is concerned. But it is certainly not a valuable consideration. A true copy of the compromise has been filed in this case on behalf of Kanodias and I have gone through the compromise. In my opinion the compromise may be a good consideration for execution of the power of attorney conferring upon the Bank (the agent) all those powers mentioned in the document but the compromise is not a valuable consideration. The compromise is not such which can be evaluated in terms of money or property. 'Consideration' in relation to Sub-clause (f) of Article 48 means a valuable consideration and not a good consideration as it may mean in relation to any other contract. Power of attorney can be without consideration as well. Under Section 185 of the Indian Contract Act a contract of agency may be without consideration. So if in this case the compromise has been made for a good consideration, it may be so but it is not a valuable consideration. The power in this case has been delegated by the executants to the Bank to sell the property' covered by the mortgage decrees aforesaid and for the purposes of appropriation of the sale proceeds towards the decretal amount. The balance after appropriation is to be paid to the executants. Obviously the title to the property sought to be transferred or alienated by the attorney will remain with the executants till the sale deed is executed by the attorney. The deed of conveyance that may be signed, sealed and attested in favour of the prospective purchaser is to be done by the Bank as an attorney of the executants and not on its own behalf. It may also be observed that the decretal amount of the aforesaid two decrees is not treated as satisfied on the execution of the document in question. The bank after realisation of the sale proceeds is to adjust the amount towards the payments of the decrees passed in its favour. The amount in excess of the decretal amount, in case of failure of the executants to receive it, is liable to be deposited in the Court for the benefits of the executants. In these, circumstances I am satisfied that the power given is for the appointment of an agent and not for any valuable consideration. The instrument, therefore, is not chargeable with duty under Article 48 (f) read with Article 23. of Schedule I-B of the Indian Stamp Act.
10. Section 24 of the Stamp Act reads thus:--
'Where any property is transferred to any person in consideration, wholly or in part, of any debt due to him, or subject either certainly or contingently to the payment or transfer of any money or stock, whether being or constituting a charge or in cumbrance upon the property 'or not, such debt, money or stock is to be deemed the whole or part, as the case may be, of the consideration in respect whereof the transfer is chargeable with ad valorem duty:
Provided that nothing in this section shall apply to any such certificate of sale as is-mentioned in Article No. 18 of Schedule I.'
It contemplates a transfer to any person in consideration of whole or any part of any debt due to him. In the instant case as I have observed in the earlier part of the judgment that the executants through the document in question have not transferred the property or any part thereof to the Bank for payment of its debts or for any other valuable consideration. The title in the property remains with the executants till the deed of conveyance is executed by the attorney Bank in favour of the prospective purchaser. Therefore, it is not a case of transfer for consideration of any debt. Section 24 does not apply to the facts of the case. The stamp duty is, therefore, not chargeable on the amount of consideration of Rupees 4,37,272.80 P, on account of the two equitable mortgages.
11. My answer to both the questions referred to is in the negative.
12. I agree and have nothing to add.
BY THE COURT
13. For the reasons given in our respective judgments we answer the questions referred in the negative. We make no order as to costs.