LexSOMAIYA ORGANICS (INDIA) LTD., ETC. versus BOARD OF REVENUE, U.P., ETC.
Open in Lexace · Ask the AI about this caseJudgment (excerpt)
A B c D E F G H 786 SCWIUA ORGANICS (INDIA) LTD. , ETC. v. BOARD OF REV"...NUE, U.P., ETC. MlVEMBER 29, 1985 [E.S. VENKATARAMIAH AliD R.B. MISRA, JJ.] Indian Stamp Act, 1899 ss.4 and 24, Article 23, Schedule I-B ~ Immoveable property - Property subject to equitable mortgage - Sale of property - Consideration for sale - Computa- tion of - For levy of stamp duty on sale deed - Debt, actual or contingent - Whether to forn. part of consideration. Words & l'hrases: 'contingent liability' - Meaning of - Indian Stamp .'ct, 1899 s.24. Godavari Sugar Mills - appellant in Civil Appeal No. 989 of 1972 - was the owner of a distillery plant consisting of the lands, buildings, machinery etc. It entered into a technical collaboration Agre""1ent and obtained a deferred payment guarantee up to the limit of Rs. 65,00,000 frOl!l the Punjab National Bank in favour of M/s. Speichim, Paris under an equitable mortgage by deposit of title deeds of its property including the aforesaid lands and buildings. Godavari Sugar Mills resolved to sell the lands, buildings and machinery to Somaiya Organics - appellant in Civil Appeal No.988 of 1972 - for a consideration of Rs.36,64,678 and a sale deed was executed on May 20, 1968. The sale deed recited that out of Rs. 36,64,678 Rs· 28,88,678 represented the price peyable for the machinery, vehicles, stores, finished goods etc. being all moveable items, the sale and transfer of which bad been completed by the parties to the document by manual delivery and the balance of Rs. 7,76,000 represented the price payable in respect of the lands and buildings as described in Schedule 'A' attached to the said document and that the said document was being executed for the purpose of conveying title in respect of the lands and buildings free of all enn•brences. The document further stated that in case the vendee was to pay any amount on account of any charge or encUUlbrances created by the vendor on the properties sold, the vendee would be entitled to get back the entire sale consideration with interest from the vendor. On October 28, 1968 a declaration was signed by each appellant to the effect ·that the properties which were being transferred under the document dated May 20, 1968 were being sold subject to the equitable oortgage which had been created in favour of the Punjab National Bank Ltd. in connection with the deferred payment guarantee, after the Board of Directors of the two appellants had S. ORGANICS v. BOARD OF REVf.1'UE, U.P. -787 passed resolutions to that effect. All· the three documents, namely, the sale deed dated May 20, 1968 and the two deecjs of declarations executed by the appellants acknowledging that the sale was subject to the equitable lllOrtgage were presented for registration. The document dated May 20, 1968 bad been written on a stamp paper of Rs. 35,000 treating that the consideration for the sale deed was Rs. 7,76,000. The Sub-ilegistrar was of the view that the properties bad been sold subject to two liabilities,· one for Rs.l,20,00,000 and another for Rs. 65, 00, 000 and therefore, the total consideration payable for sale was Rs. 1,92,76,000 that there was deficiency of stamp duty of Rs. 8,32,420 and that each of the two supplementary deeds of declarations which bad been written on stamp papers of Rs. 3.50 should have been written on stamp papers of Rs.4.50 and one rupee was payable on each of them as deficient duty• The Sub-ilegistrar accordingly impounded the sale deed and the deeds of the declarations and forwarded them to the Collector for necessary action. The Collector referred the matter to the Chief Controlling Revenue Authority - Board of Revenue, under s.56 (2) of the Indian Stamp Act 1899. The Board of Revenue made a reference to the High Court under s. 57 of the Act for its opinion. The High Court held that the two deeds of declarations were supplementary to the sale deed dated May 20, 1968 and all the three should be read together to ascertain the terms of sale settled between the parties, that the intention of the parties was that the imnovable property was being transferred subject to the equitable mortgage created in favour of the Punjab National Bank Ltd. for Rs. 65, -00,000, that under s.4 of the Act the duty of Rs. 4.50 was payable as against Rs. 3.50 on the two declara- tions, that the inclusion of Rs. 1,20,00,000 in the consideration for the sale was incorrect because the proper
Excerpt shown. Read the full judgment & AI analysis in Lexace.