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Hatesingh Munnalal Vs. Kishan Saligram and anr. - Court Judgment

LegalCrystal Citation
SubjectProperty
CourtMadhya Pradesh High Court
Decided On
Case NumberCivil Revn. No. 507 of 1970
Judge
Reported inAIR1973MP172; 1973MPLJ175
ActsStamp Act, 1899 - Sections 2(17) - Schedule - Article 35; Transfer of Property Act, 1882 - Sections 58
AppellantHatesingh Munnalal
RespondentKishan Saligram and anr.
Appellant AdvocateS.L. Garg, Adv.
Respondent AdvocateS.G. Gokhale, Adv.
DispositionAppeal allowed
Cases ReferredCrompton Engineering Co. Madras Ltd. v. Chief Controlling Revenue Authority. Madras.
Excerpt:
- .....whether the aforesaid document was liable to be stamped as a deed of mortgage. for the purposes of stamp duty, it is the definition of a 'mortgage-deed' given in clause (17) of section 2 of the stamp act. which will require consideration. 'mortgage deed' has been defined by section 2(17) of the stamp act as under:--''mortgage-deed' includes every instrument whereby, for the purpose of securing money advanced, or to be advanced by way of loan, or an existing or future debt or the performance of an engagement one person transfers or creates, to or in favour of. another a right over or in respect of specified property.'according to the aforesaid definition of 'mortgage-deed' the essential ingredients of a mortgage deed are as under:--(1) the instrument must be for the purpose of securing.....
Judgment:
ORDER

S.R. Vyas, J.

1. The plaintiff-non-applicants instituted a suit against the applicant on the allegations that on 17-5-1964 accounts were settled between them and the defendant; that an amount of Rs. 7237/- was found due from the plaintiffs to the defendant; that for the payment of this amount the plaintiffs had mortgaged with possession suit lands with the defendant as Per document of that date; that the aforesaid land was mortgaged with possession with the defendant for a period of 8 years as a mode of repayment of the aforesaid amount; that this transaction was against the provisions of the M. P. Land Revenue Code and that in spiteof the defendant being called upon to restore the possession of the suit lands, the defendant has not done so.

2. The defendant in his written statement denied the allegations made in the plaint and alleged that the relations of a landlord and tenant subsists between the plaintiffs and himself; that the suit lands were leased to him for a period of 8 years; that the document relied upon by the plaintiffs is neither stamped nor registered and that the plaintiffs were not entitled to any relief.

3. After issues were raised, evidence was recorded. During the examination of the plaintiffs witnesses an unstamped and unregistered document dated 17-5-1964 was sought to be tendered in evidence. An objection was raised on behalf of the defendant (sic) that this document was either an instrument of lease or an instrument of mortgage and that because of being not stamped and registered it was not admissible in evidence. The learned trial Judge by his impugned order dated 15-9-1970 held that the disputed document was required to be stamped either as an instrument of lease or as an instrument of mortgage. Accordingly without giving any decision as to the nature of the document it was found that it was liable to duty and penalty amounting to Rs. 2062-50 payable by the defendant. It is against this order that the present application has been filed.

4. The defendant contends thatthe view taken by the learned trialJudge is erroneous and is liable to beset aside. On behalf of the plaintiffs, itwas contended that being an interlocutory order the present application wasnot maintainable and that thedefendant should have followedthe other remedies provided for inthe Stamp Act. I have considered therespective contentions raised by both the parties. In my opinion, this application must be allowed for the following reasons.

5. I will first consider as to whether the aforesaid document was liable to be stamped as a deed of mortgage. For the purposes of stamp duty, it is the definition of a 'mortgage-deed' given in Clause (17) of Section 2 of the Stamp Act. which will require consideration. 'Mortgage deed' has been defined by Section 2(17) of the Stamp Act as under:--

''mortgage-deed' includes every instrument whereby, for the purpose of securing money advanced, or to be advanced by way of loan, or an existing or future debt or the performance of an engagement one person transfers or creates, to or in favour of. another a right over or in respect of specified property.'

According to the aforesaid definition of 'mortgage-deed' the essential ingredients of a mortgage deed are as under:--

(1) The instrument must be for the purpose of securing money advanced or to be advanced by way of loan or an existing or future debt or the performance of an engagement:

(2) One person must transfer or create to. or in favour of another, a right;

(3) Such right must be over or in respect of a specified property; and

(4) The transfer must be valid in law,

Even assuming that the first three essential ingredients mentioned above are present in the disputed document dated 17-5-1964. it is clear that the last ingredient, namely there must be a transfer and the said transfer must be valid in law does not appear to be present in this case. Accordingly to this definition the transfer contemplated by the definition of 'mortgage-deed' must be complete in law. According to Section 59 of the Transfer of Property Act where the principal money secured is one hundred rupees or upwards. and mortgage other than a mortgage by deposit of title deeds can be effected only by a registered instrument signed by the mortgagor and attested by at least two witnesses. Section 58 of the Transfer of Property Act defines the 'mortgage' as the transfer of an interest in specific immovable property for the purpose of securing the payment of money advanced or to be advanced by way of loan, an existing or future debt or the performance of an engagement which may give rise to the pecuniary liability. Thus according to the provisions of Sections 58 and 59 of the Transfer of Property Act. there can be no transfer of interest in immoveable property if the principal money secured is more than one hundred rupees unless the mortgage is effected by a registered instrument signed by the mortgagor and attested by at least two witnesses.

6. The document in question is not a registered instrument. It is no doubt signed by the mortgagor and purports to be attested by two witnesses but for want of registration the document could not and in fact has not transferred any interest in immoveable property. It might purport to transfer but in fact there was no transfer of any interest in immoveable property. If the document in spite of being deficiently stamped. had been registered, then apart from the question of deficiency of stamp duty the mortgage would have otherwise been complete. What is the legal effect in such cases so far as the question of payment of stamp duty is concerned, when an insufficiently stamped and unregistered document which might purport to transfer an interest in immoveable property of the value of more than rupees hundred but which in fact does not transfer, for want of registration, any interest in immoveable property, was considered in a Full Bench decision of the Madras High Court in Crompton Engineering Co. Madras Ltd. v. Chief Controlling Revenue Authority. Madras. AIR 1953 Mad 764 (FB) where it was held:--

'That the transfer contemplated by Section 2(17) Stamp Act. is a transfer valid in law. should be obvious. Such a valid transfer would not have been effected under the document dated 22-3-1948. which was neither attested nor registered. Under Section 59. T. P. Act. a valid mortgage can be effected only when the instrument is (1) signed by the mortgagor; (2) attested by at least two witnesses; and 31 registered.' It was further held in this case as under :-- 'The very difference between the definition of an instrument in Section 2(14) and mortgage deed in Section 2(17) should show that the 'transfer' provided for in Section 2(17) is a transfer valid in law. To make a document liable to stamp duty as a mortgage deed it is not enough if the document purports to effect a transfer. It must 'transfer'.'

7. Considered in the light of the aforesaid definition of 'mortgage-deed' and its interpretation by their Lordships of the Madras High Court in Crompton Engineering Company's case, AIR 1953 Mad 764 (FB) (supra), with which I respectfully agree, it must be said that since for want of registration the disputed document did not effect any transfer valid in law and is therefore, not liable to stamp duty as a mortgage-deed.

8. The next question that arises for consideration is as to whether the document was liable to be stamped as an instrument of lease. The word 'lease' has been defined in Clause (16) of Section 2 of the Indian Stamp Act as under:--

' 'lease' means a lease of immovable property, and includes also-

(a) a patta;

(b) a kabuliyat or other undertaking in writing not being a counterpart of a lease, to cultivate, occupy or pay or deliver rent for. immovable property.

(c) any instrument by which tolls of any description are let;

(d) any writing on an application for a lease intended to signify that the application is granted.' It is evident from the aforesaid definition that it is an inclusive definition and not exhaustive. If the document in question can be treated either as a Patta or a Kabuliyat or answers any of the descriptions given in sub-clauses (c) and (d) of Clause (16) of Section 2 of the Stamp Act. then certainly the document will be liable to stamp duty as provided by Article 35 (iii) of Schedule I of the Stamp Act.

9. Any document known as Patta is a lease of land for cultivation and is generally granted by either a Government Officer or the holder of a superior title to a cultivator. This is not a case where the document in question was executed either by a Revenue Officer of the Government or a Jamindar or a Proprietor or the holder of the superior title. This document therefore, cannot be treated as a Patta mentioned in Section 2(16) of the Stamp Act.

10. The disputed document cannot also be treated as a Kabuliyat or other undertaking to cultivate, occupy or pay or deliver rent for immovable property by a lessee. The disputed document is executed by the plaintiff, who are the recorded holders of the land in dispute and not by the defendant Hatesingh. who was to cultivate these lands. Accordingly, the document cannot be regarded as a Kabuliyat by a lessee in favour of the lessor.

11. The document simply recites that the plaintiffs owe a total amount off Rs. 7,273/- under a pronote that certain fields, the total area of which is about 20 Bighas shall be cultivated by Hatesingh from Samyat years 2021 to 2028 that the grass growing on the boundaries of these fields shall be used by the plain-tiffs and that other incidental charges. for the maintenance of the boundaries shall be borne by them. The question is as to whether this document can be treated as an agreement to lease. According to Article 35 of Schedule I of the Stamp Act even an agreement to lease is chargeable with the same duty as the lease deed itself. It has been held in re, Maneklal Manilal, AIR 1928 Bom 553 that though for the purposes of stamp duty an agreement to lease is included in the word 'lease' under the Stamp Act, but an agreement to lease must amount to an actual demise and not an agreement to lease for the purposes of stamp duty. In this case, the document in question does not amount to actual demise of the agricultural lands in favour of Hatesingh. In these circumstances, the document cannot also be regarded as an agreement to lease for the purposes of stamp duty.

12. In the light of the view that I have taken above with regard to the disputed document. I hold that the learned Judge was in error in treating the document either as a deed of Lease Or as a deed of agreement. The order for the payment of duty and penalty cannot, therefore, be maintained and is hereby set aside. However, the learned trial. Judge shall be free to consider as to whether the document is otherwise liable to stamp duty under the provisions of the Stamp Act. Costs of this application in this Court shall be borne by both the parties as incurred by them. Counsel's fee Rs. 50/- if certified.


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