HIMALAYA HOUSE CO. LTD. BOMBAY versus CHIEF CONTROLLING REVENUE AUTHORITY

Citation: [1972] 3 S.C.R. 332 · Decided: 01-02-1972 · Supreme Court of India · Bench: K.S. HEGDE · Disposal: Appeal(s) allowed

Cited by 2 judgment(s) · see the full citation network in Lexace

Judgment (excerpt)

332 
IUMALAYA HOUSE CO. LTD. BOMBAY 
v. 
CHIEF CONTROLLING REVENUE AUTHORITY 
February 1, .1972 
[K. S. Hl!GDB AND P. JAGANMOHAN REDDY, JJ;] 
Indian Stamp Act (2 of 1899), Sch.·I;art. 23-Dtterml"'1ion of.value 
of consideration by Revenue-How should be done. 
'The lessee of a plot of land from Government sub-leased it and tho 
sub-lessee built a building on it consisting of flats, shops and officles. 11» 
.sub-lessee assigned the rights of occupation of those &ts etc. under various 
agreements. 1bereafter, the appellant-company was incorporated and the 
.sub-lessee pwported to assign all his rights in the building to the appellant-
-company. In the pre3111blo to tho deed it was recited that the company 
bad been formed foi" the bettor admiJligtration of .the building and for the 
,protection of the interests of tho persons occupying the flats etc., and that 
tho su!Hessee had ugroed to assign to tho 
appellant-company all his 
interests in the land and the building. The consideration mentioned in 
1he document waa nil and the document bore a stamp of 12 amr.is. When 
it waa presented for registration, the authority impounded the deed, held 
<hat the appellant<,bmpany was formed of and for the pei"SOns who b&d 
purch3aed the fiats etc., that tho real consideration for the aasigrunent wos 
made up oartly of what was paid by the occupiera of the flats etc., and 
determined the stamp duty and penalty under s. 40 of the Stamp Act, 
1899. 
. 
. 
On a reference to the High Court it was held, that the article in the 
Schedule to the Sbmp. Act applicable is ~ 23. 
On the question of 
.consideration, however, while one Judge held that the consideration was 
'nil' as mentioruod in the deed, the majority held that the Revenue was 
not bound to accept the quantum of consideratiOll mentioned in the deed, 
c 
D 
that the deed incl:>rporated into itself the various agreements entered into 
between !he sub-lessee and the persons to whom rights were assigned in f 
the flats etc., and that the consideration was the total amount payable to 
<he sub-lessee by those assignees. 
Allowing the appeal to this Court, 
HELD : (I) Before the terms and conditions of an agreement 03D ·be 
"Said to have been incorporated into another document, it must be shown 
that the parties intended to do so. In the present case, the mere reference 
. G 
to the earlier transactions in the deed did not amount to an incorpOration 
;;n it of the te'rms and conditions of those transactions, ~338 F-H] 
(2) In view of s. 27 of the Stamp Act the parties to a; docwnent are 
required to set forth in the document fully and. truly, the coilsideratioo 
(if any) .ind all other facts and c)ircumstances affecting the chargeability 
of that document with duty. But a failure to do so is merely pllJ!isl>al!le 
under s. 64 of the Stamp Act. 
There is no provision empowemjg ·the 
H 
Revenue authorities to make an independent inqwry of the ·.value of the 
-property conveyed for determining the duty, even usuming that the 
.charging words in art. 23 do not mean that the Revenue 111118t b&ve regard 
A 
'.HIMALAYA HOUSE v. REVENUE AUTHORITY (Hegde, J.) 333 
only to what the parties to the instrument have elected to state the con-
sideration to be, but can assess the duty upon the value of the considera-
tion as disclosed upon an examination of the terms of the instrument as 
a whole. [339 A-DJ 
B 
(3) There is a Jong line of decisions of the High Courts holding that 
the Legislature had not empowered the Revenue to make an independent 
inquiry M regards the valuation of the right sought to be assigned. Thal 
view IS correct and the question must also be held to be settled bY stare 
decisls. (340 D-FJ 
c 
D 
E 
1 
Ramen Chetty v. Mohomed Ghouse, I.L.R. 16 Cal. 432, Sakhart:m 
Shankar v. Ranu:handra Babu Mohire, I.L.R. 27 Bom. 279, Muhammad 
Muzafjar A.Ii, In re. IL.R. 44 All. 339, Sri Siloart:olfn Ramal/a & Anr. v. 
State of Bihar, I.L.R. 39 Pat. 228 and Bharpet Mohammad Hussain Sahib 
& A.nr. v. District Registrar, Kurnool, I.L.R. [1964] A.P. ) , approved. 
( 4) In any event, there was no basis for holding that the considera-
tion for the deed was the '<IIllOllnt ~eceived by the sub-lessee from tloe 
persons to whom he assigned rights in the fiats etc, Those penona 
ccquired an independent right and title.-whether perfect or not~n 
before the impounded deed was executed, and their rights did not 11ow 
from the impounded deed. (340 F-0] 
CIVIL APPELLATE JURISDICTION : Civil Appeals Nos

Excerpt shown. Read the full judgment & AI analysis in Lexace.