Summary
The plaintiff sued for specific performance of a 1996 memorandum of agreement and a 2011 agreement to sell. Both recited that the land was already in his possession, and he sought only an injunction against interference with that possession, not possession itself. The trial court treated the agreements as agreements to sell 'followed by or evidencing delivery of possession' under Entry 5 of Schedule 1-A of the Indian Stamp Act as amended in Punjab. It ordered him to pay deficient stamp duty at the conveyance rate under Entry 23 with a penalty, and the High Court dismissed his revision. The Supreme Court allowed the appeal. The recitals showed that possession pre-dated the agreements and was not delivered under them, so the Punjab Entry 5 was not attracted and the demand for deficient duty and penalty was set aside.
Issues
- Whether an agreement to sell reciting that the purchaser was already in possession is an agreement 'followed by or evidencing delivery of possession' attracting conveyance duty under the Punjab amendment to Entry 5 of Schedule 1-A of the Indian Stamp Act
Provisions considered
- Schedule 1-A, Entry 5(cc) read with Entry 23, Indian Stamp Act, 1899 (as amended in Punjab)Conveyance-rate duty applies to an agreement to sell followed by or evidencing delivery of possession. Where the agreements recite that the purchaser was already in possession, possession is not delivered under them, and the entry does not apply. (¶¶ 2, 4.1, 5)
Held
- The 1996 memorandum recorded that the land was 'already with' the plaintiff, and the 2011 agreement that possession was 'already with' him and continued. Possession was not delivered under either agreement whose specific performance was sought. (¶ 4.1)
- Entry 5(cc) of Schedule 1-A as applicable in Punjab, which levies duty under Entry 23 on agreements to sell followed by or evidencing delivery of possession, was therefore inapplicable. This was reinforced by the plaintiff seeking only a permanent injunction protecting his existing possession, not delivery of possession. The orders directing payment of deficient stamp duty with penalty were unsustainable. (¶¶ 4.1, 5)
Result
Appeal allowed. The orders of the High Court and trial court directing payment of deficient stamp duty with penalty were set aside; no costs.