V.S. Deshpande., J.
1. Shri Satya Pal Pehal held certain land on perpetual lease from the Delhi Development Authority. The lessee could not transfer the lease except with the previous consent in writing of the Lesser. In granting such consent, the Lesser could impose terms and conditions and was to be entitled to claim and recover 75 per cent of the 'unearned increase in the value', i.e. the difference between the premium paid and the market value, of the land at the time of the transfer from the existing lessee to the new lessee. This amount was to be a first charge on the land. Satya Pal Pehal transferred the lease to Dayal Singh on 23.8.1969. The Delhi Development Authority granted permission to the transfer 'subject to a deposit of Rs. 52,401.95 as non-earned increase and further Rs. 271.85 as non-construction penalty which the vendee has agreed to pay after the completion of the lease deed'. The transfer deed further says that 'the vendor hereby sells, transfers, conveys all his lease-hold rights' in consideration of a sum of Rs. 29,700/- paid to the vendor on 29.7.1961 by the vendee.
2. The question referred to us for opinion under Section 57(2) of the Indian Stamp Act, 1899 are :-
(1) Whether under Section 24 of the Act Rs. 52,401,95 and Rs. 271.85 agreed to be paid by the vendee to the vendor can be treated as a part of the consideration for the transfer deed dated 23.8.1969?
and (2) Whether the transfer duty livable under Section 147 of the Delhi Municipal Corporation Act, 1957 on the above mentioned transaction in the form of a surcharge on the duty imposed by the Indian Stamp Act, 1899 is further subject to the provisions of Section 33 and 40 of the Stamp Act which authorises the impounding of the transfer deed and the levy of a penalty on the same?
Question No. 1:-
There is no dispute that the amount of Rs. 29,700/- paid by the vendee to the vendor was a consideration for the sale deed dt. 23.8.1969. It is however, disputed by the vendee that the other two sums of Rs. 52,401.95 and Rs. 271.85 to be deposited by the vendee for payment to the Delhi Development Authority are a part of the Consideration for the sale deed. The consideration for a transfer on which stamp duty is chargeable has to be found out in accordance with Section 24 of the Stamp Act which runs as follows :-
'24. 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 contingentaly the payment or transfer of any money or stock, whether being or constituting a charge or incumbrance 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.
Explanationn.-- In the case of a sale of property subject to a mortgage or other incumbrance, any unpaid mortgage money or money charged, together with the interest (if any) due on the same, shall be deemed to be part of the consideration for the sale.
Provided that, where property subject to a mortgage is transferred to the mortgage he shall be entitled to deduct from the duty payable on the transfer the amount of any duty already paid in respect of the mortgage.
(1) A owes B Rs.1000. A sells a property to B, the consideration being Rs.500 and the release of the previous debt of Rs.1000. Stamp-duty is payable on Rs.1500.
(2) A sells a property to B for Rupees 500 which is subject to a mortgage to C for Rs.1000 and unpaid interest Rs.200, Stamp-duty is payable on Rs.1700.
(3) A mortgages a house of the value of Rs.10,000 to B for Rs.5000. B after-wards buys the house from A. Stamp-duty is payable on Rs.10,000 less the amount of stamp-duty already paid for the mortgage.'
We may also consider the definition of 'consideration' in Section 2(d) of the Indian Contract Act, 1872 which is as follows:--
'(d) When, at the desire of the promisor, the promise or any other person has done or abstained from doing, or does or abstains from doing, or promises to do or to abstain from doing something, such act or abstinence or promise is called a consideration for the promise.'
3. In the sense in which the word 'consideration' is used in Section 2(d) of the Contract Act, it is clear that the consideration for the sale deed was constituted by all the three sums payable by the vendee, namely, Rs.29,700/- to the vendor and Rs.52,401.95 and Rs.271.85 to the Delhi Development Authority.
4. Shri G.L.Sanghi learned counsel for Dayal Singh however argues that the consideration for the transfer is to be determined exclusively under Section 24 of the Stamp Act. According to him, only such transfers of property are covered by the principal part of Section 24 'where any property is transferred to any person in consideration . . . . . . . . subject either certainly or contingently to the payment or transfer of any money'. According to the learned counsel, the expression 'subject to' means that there is no sale unless and until the money is paid. Ordinarily the payment of price is not a condition precedent to the passage of title in a sale under Section 54 of the Transfer of Property Act. This is why 'sale' is defined there under as a 'transfer' of ownership in exchange for a price paid or promised or part-paid and part-promised'. The sale deed in question is, thereforee, a sale within the meaning of Section 54 of the Transfer Property Act. The sale deed is, however, already completed prior to the payment of Rs.52,401.95 and Rs.271.85 by the vendee to the Delhi Development Authority. These payments are to be made by the vendee after the completion of the lease deed by the Delhi Development Authority in favor of the vendee. Learned counsel says that the title to the property has passed to him even prior to these payments. The sale was not, thereforee, 'subject to payment of these sums. They can not, thereforee, be consideration or a part of the consideration for the sale deed.
5. This contention is unacceptable for more than one reasons. Firstly, Section 24 of the Stamp Act is not to be construed as modifying or repealing Section 54 of the Transfer of Property Act unless there is any irreconciliable repugnancy between the two. We do not find any conflict between the two. Section 24 cannot, thereforee, be construed to mean that only such transfers are covered by it as are conditional on the payment of price. Secondly, the meaning of the expression 'subject to' in Section 24 is not to make the transfer conditional. It simply means that the sale is in consideration of payment of money. The consideration can assume three forms, namely, (a) debt, or (b) money or (c) stock. A sale in consideration of payment of money is said to be subject to the payment of money. Thirdly, the same expression 'subject to' is used in the Explanationn to Section 24 and unless there is any indication to the contrary, it is to be presumed to be used in the same sense therein in which is used in the principal part of the section. The meaning of that expression had to be considered by the Supreme Court in Board of Revenue, U.P. v. Sidhnath Mehrotra : 2SCR269 . The Court was of the view that the expression 'subject to' qualified the word 'sale' and not the word 'Property'. That is to say, the sale was subject to the liability imposed on the vendee for payment of the mortgage debt due from the vendor. Fourthly, the Explanationn fully covers the present case inasmuch as it makes it clear that the money payable by the vendee towards the satisfaction of an unpaid mortgage or other incumbrance forms a part of the consideration for the sale. In the present case, the claim of the Delhi Development Authority for the unearned increase is a charge on the land. The payment towards the satisfaction of this charge is a part of the consideration for the sale under the Explanationn to Section 24. Lastly, the Illustrations to Section 24 place it beyond doubt that the payment of the unpaid amount charged on the property is a part of the consideration for the sale.
6. We may further point out that the vendee has expresly undertaken the liability to pay the Delhi Development Authority. This undertaking is given solely because the vendee is purchasing this property. There is no other reason for it. The payment to the Delhi Development Authority is, thereforee, a part of the consideration for the sale.
7. We, thereforee, answer the first question referred to us in the affirmative.
8. Under Section 99(1)(e) of the Delhi Municipal Corporation Act, 1957 (hereinafter called the Corporation Act) the municipal fund is constituted, inter alia, by all moneys raised by any tax, rate or cess levied for the purposes of the Act. Chapter Viii of the Corporation Act deals with the levy of various kinds of taxes. Section 113(1)(e) authorises the Corporation to levy a duty on the transfer of property. Sections 147 and 148 of the Corporation Act deal with the duty on transfer of property. The relevant part of Section 147(2) is as follows:--
'(2) The said duty shall be levied-
(a) in the form of a surcharge on the duty imposed by the Indian Stamp Act, 1899, as in force for the time being in the Union Territory of Delhi, on every instrument of the description specified below, and
(b) at such rate as may be determined by the Corporation not exceeding five per cent on the amount specified below against such instruments:-- Description of instrument Amount on which duty should be levied. (I) Sale of immovable The amount or value of the property. Consideration for the sale, as set forth in the instrument ... ... ...'
Section 148 is as follows:--
'On the introduction of the duty on transfers of property-
(a) Section 27 of the Indian Stamp Act, 1899, as in force in Delhi shall be read as if it specifically required the particulars to be set forth separately in respect of property situated within and without Delhi:
(b) Section 64 of the said Act shall be read as it if referred to the Corporation as well as the Government.'
There is no reference at all to any duty on transfer of property in the Stamp Act.
9. The first question is whether the duty on transfer of property is levied under the Corporation Act or is it levied under the Stamp Act? The answer cannot be in doubt. The only provisions which authorise levy of this duty are those contained in the Corporation Act. The duty must be said to be levied, thereforee, there under. What is the effect of the provision of Section 147(2) that the duty shall be levied 'in the form of a surcharge on the duty imposed by the Indian Stamp Act, 1899'? The words 'in the form of' are significant. They show that the reference to the Stamp Act is only to borrow the form in which the stamp duty is imposed and collected. Just as the stamp duty is levied and collected by the sale and affixation of stamps to an instrument the duty on transfer of property is also to be levied by the sale and affixation of stamps on an instrument. Why is the transfer duty levied in the form of a 'surcharge' on stamp duty? The answer simply is that the transfer duty is levied and collected over and above the stamp duty. This is why it is surcharge on the stamp duty. It is to be noted that the use of the word 'surcharge' does not mean that the transfer duty is levied and recovered as a part of the stamp duty. Any such suggestion would be negatived by the following reasons: Firstly, the transfer duty is levied under the Corporation Act while the stamp duty is levied under the Stamp Act. Secondly, the transfer duty is payable to the Delhi Municipal Corporation and goes into the municipal funds while the stamp duty is payable to the government and goes into the Consolidated Fund of India or of the State concerned. Lastly, the transfer duty is not a percentage of the stamp duty. On the other hand, it is a percentage of the amount or value of the consideration for the sale as set forth in the instrument. The transfer duty is thus assessed independently of the stamp duty on the amount of the consideration for the sale. It is not assessed on the amount of the stamp duty as a percentage thereof. It is thus an independent duty and is not a part of the stamp duty.
10. Section 2(6)) of the Stamp Act defines 'chargeable' to mean 'chargeable under this Act.' Section 2(11) of the Stamp Act defines 'duly stamped' to mean 'that such stamp has been affixed or used in accordance with the law for the time being in force in India'. Under Section 33 it is only when an instrument is 'chargeable' with duty' and is 'not duly stamped' that it can be impounded. Can the sale deed in question be impounded under Section 33 because the transfer duty is either not paid or is insufficiently paid? The answer must be 'No'. For, the meaning of the expression 'any instrument chargeable' or the expression 'instrument not duly stamped' used in Section 33 of the Stamp act is to be understood in the light of the definitions in Sections 2(6) and 2(11) 'Chargeable' means chargeable under the Stamp Act only and not under any other Act. The Stamp Act authorised the levy of stamp duty only and not of the duty on transfer of property. The latter is authorised by the Corporation Act alone. The sale deed in question is not, thereforee, 'chargeable' to transfer duty under the Stamp Act at all. It is not, thereforee, an instrument chargeable to duty within the meaning of Section 33 of the Stamp Act.
11. It is true that the words 'stamp has been affixed or used in accordance with the law for the time being in force in India' in Section 2(11) of the Stamp Act are capable of being misunderstood if not read in the context of the other provisions of the Stamp Act. The words 'the law for the time being in force in India' can mean only the law governing the imposition of stamp duty such as the various amendments to the Stamp Act and the Schedule thereof made by the various State Legislatures inasmuch as the subject of stamps is covered by all the three Lists in the Seventh Schedule to the Constitution. The reason is that the expression 'duly stamped is dependent of the expression 'chargeable'. Unless an instrument is chargeable to duty, the question of it being duly stamped does not arise. It is only the stamps for the payment of stamp duty which are to be affixed under the Stamp Act to an instrument. The Stamp Act does not deal with the affixation of stamps to an instrument for any purpose other than the levy of stamp duty. It is not concerned, thereforee, with the affixation of stamps on an instrument for the levy of transfer duty. It is only the Corporation Act which is concerned with the levy and recovery of stamp duty. It is also concerned with the affixation of stamps for the payment of transfer duty. This is why it is Section 147(2) and not any provision of the Stamp Act which provides that the transfer duty is to be levied in the form of a surcharge on the stamp duty. It is clear, thereforee, that a sale deed being neither chargeable nor being stamped for the purpose of transfer duty under the Stamp Act, it cannot be impounded under Section 33 of the Stamp Act if the transfer duty is either not paid or is deficient.
12. Section 148 of the Corporation Act applies only Sections 27 and 64 of the Stamp Act to the recovery of duty on transfer of property. It the duty on transfer of property were to be a part of the stamp duty then like the stamp duty the duty on transfer of property would also be governed by all the provisions of the Stamp Act. It would have been needless, thereforee, for the Legislature to apply one Sections 27 and 64 of the Stamp Act to the duty on transfer of property. The reason is that only Sections 27 and 64 can be relevant to the transfer duty. Unless Section 27 of the stamp Act it is necessary to state clearly all the facts and circumstances affecting the chargeability of any instrument with duty and the amount of the duty with which it is chargeable. It is because Section 27 has been made applicable that it has become necessary for the executant of every transfer deed to state therein the facts relating to the payment of duty on transfer of property and the amount of such duty payable on the particular transfer. Had S. 27 not been applied, there would have been no duty on the executant to state these facts. The provisions of S. 147 of the Corporation Act that the transfer duty shall be levied in the form of a surcharge on stamp duty would then have become unworkable. It would have been impossible to assess the transfer duty unless the necessary facts were stated. Section 64 is a corollary to Section 27. It provides a penalty for non-compliance with Section 27 with intent to defraud the Government. Thereby the provisions of Section 27 have become enforceable.
13. Sections 147 and 148 of the Corporation Act in a sense incorporate only the manner of the levy and recovery of the stamp duty and Sections 27 and 64 from the Stamp Act into the Delhi Municipal Corporation Act, 1957. This incorporation is effected by the reference to these provisions in Sections 147 and 148. thereforee, even if the Stamp Act of 1899 were to be repealed, the provisions of the Stamp Act which have been so incorporated in the Corporation Act would continue to be a part of the latter Act. It is the Corporation Act, thereforee, which is a complete code in itself for the purpose of the levy and recovery of the duty on transfer of property.
14. Section 40 of the Stamp Act applied only when an instrument is impounded under section 33 or it is sent to the Collector under Section 38 of the stamp Act. Neither Section 33 nor Section 38 applied to the duty on transfer of property. They apply only to stamp duty. It would follow, thereforee, that Section 40 also does not apply to the duty on transfer of property.
15. In answer to question No.2, thereforee, we are of the view that an instrument cannot be either impounded under Section 33 or can be subjected to the imposition of a penalty under Section 40 of the Stamp Act on the ground that the duty on transfer of property levied under the Delhi Municipal Corporation Act, 1957 is either not paid or is insufficiently paid.
16. The reference is answered accordingly without any order as to costs.
17. Answered accordingly.