# Ramesh Chandra Srivastava v. State of U.P. and others

- **Citation:** (2007) 1 ILRA 116
- **Court:** High Court of Judicature at Allahabad
- **Decided:** 2006-10-09
- **Case number:** Reference No. 1 of 1994
- **Bench:** A.K. Yog, Prakash Krishna, Mrs.) Saroj Bala
- **Source:** https://unisonlegal.in/judgment/allahabad-high-court/ramesh-chandra-srivastava-v-state-of-u-p-and-others-40791
- **Pages:** 22

## Headnote

Sri S.M.A. Kazmi, Adv. General
Sri R.V. Singh
1 All] Ramesh Chandra Srivastava V. State of U.P. and others
117
S.C.

Indian Stamp Act, 1899-Section 47-A(1)-
charging of Stamp duty whether the
stamp duty can be charged on the
amount mentioned in civil court decree
or on the market valuation of the
property-held-for evoking power under
section 47-A(1) stamp duty chargable on
the basis of market value.

Held: Para 21

We, therefore, hold that the stamp duty
is chargeable on the basis of market
value of the property conveyed by the
instrument of conveyance and the fact
that in the instrument executed by Civil
Court is of no relevance for the purposes
of invoking power under Section 47-A of
the Act. The question no. 1 is answered
accordingly.

Indian Stamp Act, 1899, Section 47A(1)-relevant date for charging stamp
duty-is the date when the court executed
the sale deed on behalf of renders.

Held: Para 56

In view of the above discussion we
answer the second question by holding
that the relevant date for determining
the market value of the property for
being subject matter of the sale deed is
the third i.e. January 3, 1985 when the
Court executed the sale deed in question
on behalf of the vendors.
Case law discussed:
1999 (2) ACJ 1211, AIR 1986 Alld-107 (D.B.),
1998 (1) ACJ-199, AIR 1972 SC-899, AIR 1987
SC-720, 1991 U.P.T.C.-1209, AIR 2002 A.P.-8,
AIR 1966 Myssore-229, 1999 ACJ-1299, 1998
ACJ-199, AIR 1986 Alld.-107, CCRA-2000, AIR
1954 W.P. 51, AIR 1999 SC-2129, 1881 (5)
ILB (Bom.)-188

## Text

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116 INDIAN LAW REPORTS ALLAHABAD SERIES [2007
view is taken in another English case in
Rex Vs. Scoffin [LR (1930) 1 KB 741].

Probably the legislature recognizing
the aforesaid principle expressly provided
in section 4 of Indian Majority Act, 1875
criteria for computation of age of
majority. Section 4 of the Act of 1875
reads as under:-

4. Age of majority how compute:-In
computing the age of any person, the day
on which he was born is to be included as
a whole day, and he shall be deemed to
have attained majority, if he falls within
the first paragraph of Section 3, at the
beginning of the twenty-first anniversary
of that day, and if he falls within the
second paragraph of Section 3, at the
beginning of eighteenth anniversary of
that day.

7. A Division Bench of Hon'ble
Mysore High Court in AIR 1967 Mysore
135 G. Vatsala Rani Vs. Selection
Committee
following
the
aforesaid
judgments, has also taken same view and
has observed as under:-

"But in the absence of any such
express provision, we think, it is well
settled that any specified age in law has to
be computed as having been attained or
completed on the day preceding the
anniversary of the birth day, that is, the
day preceding the day of calendar
corresponding to the day of birth of the
person."

8. The apex Court has also approved
the aforesaid principle and in Prabhu
Dayal Sesma Vs. State of Rajasthan
and another AIR 1986 SC 1948 has held
as under:-

"In calculating a person's age, the
day of his birth must be counted as a
whole day and he attains the specified age
on the day preceding the anniversary of
his birthday."

9. The appellant having born on 1st
July, the day of his birth is to be counted
as a whole day and that being so, he
completed one year of age on 30th June in
the next year. Thus he attained 60 years of
age on 30th June, 2003. That being so, he
is not entitled for the benefit of extended
employment up to 30th June inasmuch as
rule 29 as amended in 1987 clearly
exclude such teachers who attain age of
superannuation on 30th June.

10. In the result we are of the view
that the Hon'ble Single Judge has rightly
dismissed the writ petition since the
petitioner is not entitled for any relief.
Accordingly, the special appeal lacks
merit and is dismissed without any order
as to costs.

Appeal Dismissed.
---------
ORIGINAL JURISDICTION
CIVIL SIDE
DATED: ALLAHABAD 09.10.2006

BEFORE
THE HON'BLE A.K. YOG, J.
THE HON'BLE PRAKASH KRISHNA, J.
THE HON'BLE (MRS.) SAROJ BALA, J.

Reference No. 1 of 1994

Ramesh Chandra Srivastava ...Applicant
Versus
State of U.P. and others ...Respondents

Counsel for the Applicant:
Sri Sharad Malviya

Counsel for the Respondents:
Sri S.M.A. Kazmi, Adv. General
Sri R.V. Singh
1 All] Ramesh Chandra Srivastava V. State of U.P. and others
117
S.C.

Indian Stamp Act, 1899-Section 47-A(1)-
charging of Stamp duty whether the
stamp duty can be charged on the
amount mentioned in civil court decree
or on the market valuation of the
property-held-for evoking power under
section 47-A(1) stamp duty chargable on
the basis of market value.

Held: Para 21

We, therefore, hold that the stamp duty
is chargeable on the basis of market
value of the property conveyed by the
instrument of conveyance and the fact
that in the instrument executed by Civil
Court is of no relevance for the purposes
of invoking power under Section 47-A of
the Act. The question no. 1 is answered
accordingly.

Indian Stamp Act, 1899, Section 47A(1)-relevant date for charging stamp
duty-is the date when the court executed
the sale deed on behalf of renders.

Held: Para 56

In view of the above discussion we
answer the second question by holding
that the relevant date for determining
the market value of the property for
being subject matter of the sale deed is
the third i.e. January 3, 1985 when the
Court executed the sale deed in question
on behalf of the vendors.
Case law discussed:
1999 (2) ACJ 1211, AIR 1986 Alld-107 (D.B.),
1998 (1) ACJ-199, AIR 1972 SC-899, AIR 1987
SC-720, 1991 U.P.T.C.-1209, AIR 2002 A.P.-8,
AIR 1966 Myssore-229, 1999 ACJ-1299, 1998
ACJ-199, AIR 1986 Alld.-107, CCRA-2000, AIR
1954 W.P. 51, AIR 1999 SC-2129, 1881 (5)
ILB (Bom.)-188

(Delivered by Hon'ble Prakash Krishna, J.)

1. Bungalow known as ''White
House' being House No. 15/71, Civil
Lines Kanpur standing on plot nos. 104,
104-A 104-B, total area of about 14972
sq. yards was sought to be purchased by
the present applicant, namely, Sri Ramesh
Chandra Srivastava (now dead) and
represented by his heirs and legal
representatives from its owner namely
Lucknow Diocesan Trust Association
(L.D.T.A), duly incorporated under the
Companies
Act,
for
a
sum
of
Rs.1,50,000/-. On 5th May, 1960 the
applicant
and
LDTA
entered
into
registered agreement to purchase the
aforesaid premises by means of a
registered
agreement
to
purchase.
Applicant paid Rs.5000/- as earnest
money
for
the
aforesaid
bungalow
standing on lease hold property and there
was a condition in the lease deed
prohibiting alienation except with the
sanction of the District Magistrate, and,
therefore, an application for permission to
sell the lease hold rights in favour of the
applicant
was
moved.
Requisite
permission was granted by the District
Magistrate on 27th August, 1970. The
owner of the aforesaid property, for one
reason or the other failed to execute the
sale deed in pursuance of the aforesaid
agreement, which led to the filing of Suit
No. 207 of 1982 in the Court of Ist Addl.
Civil
Judge,
Kanpur,
for
specific
performance
of
the
aforesaid
sale
agreement. The suit was decreed on 14th
May, 1984 directing the vendors to
transfer the said property as agreed upon
by the sale agreement, within three
months, failing which the Court will
execute the sale deed. The Court as a
matter of fact on the failure of the vendor
(owner), executed sale deed on 3rd
January, 1985. The said sale deed/sale
certificate under signature of Civil Judge
Ist Kanpur was sent for its registration to
the Sub Registrar Kanpur, who in turn in
118 INDIAN LAW REPORTS ALLAHABAD SERIES [2007
exercise of power conferred on its under
Section 47-A (1) of the Indian Stamp Act,
1899 (hereinafter referred to as the Act),
referred it to the District Stamp Officer
for determination of proper stamp duty on
the aforesaid sale deed. It was registered
as Stamp Case No. 87 of 1986.

2. In response to the show cause
notice issued by the District Stamp
Officer, the applicant took a stand that
legally leviable stamp duty has been paid
and affixed on the document, in as much
as the sale deed in question was executed
in pursuance of agreement to sell, dated
5th May, 1960, although sale deed was
executed by the Court on 3rd January,
1985, but for the purpose of stamp duty,
the sale consideration mentioned in the
said sale agreement should be taken into
account, market value of the premises in
question prevailing on the date of
execution of agreement to sell - alone is
relevant, and the present market value of
the property in question in the year 1985
is irrelevant.

3. The Assistant Commissioner
Stamps, Kanpur, who received the file on
transfer, vide order dated 18th March,
1991 rejected above contention of the
applicant and found that the market value
of the property in question should be
determined with reference to the date of
execution of the deed, i.e. on the basis of
the prevailing circle rate (as fixed by the
District Magistrate) applicable on the date
of execution of the deed in question i.e.
3.1.1985. On that criterion, he calculated
market
value
of
the
property
at
Rs.48,91,040/- which required stamp duty
of Rs.5,13,607-50; after adjusting stamp
duty already paid he detected deficiency
in stamp duty to the tune of Rs.4,97,85750
and
also
imposed
penalty
of
Rs.2,20,142-50. Thus, by the order dated
18th March, 1991, the liability of Rs.
seven lac was created towards payment of
deficit stamp duty and penalty.

4.

The
aforesaid
order
was
challenged by way of Revision, under
Section 56 (1) of the Act, before the Chief
Controlling Revenue Authority i.e. Board
of Revenue, Allahabad who in turn
referred the matter after framing the
following two questions of law under
Section
57
(1)
of
the
Act
for
determination to this Court. The questions
referred to this Court are as follows:-

Q. No.1. Whether the stamp duty is
chargeable according to the amount
mentioned in the civil court decree or on
the basis of market valuation of property
conveyed
by
this
instrument
of
conveyance.

Q. No.2. If stamp duty is to be charged on
the basis of market value of the property
what should be the date with reference to
which the market value of the property
forming the subject matter of the
instrument is to be determined? What
should be the date with reference to which
the market value of the property forming
the subject matter of this sale deed is to be
determined? In this matter prima facie
three dates appear, first is 23/5/1960 when
the earnest money was accepted in part
performance of the agreement by the
vendor, the second date is 14/5/1984
when the vendees case of specific
performance was decreed by the court of
Civil Judge first Kanpur and third is
03/01/1985 when the court executed the
sale deed in question on behalf of the
vendors.
1 All] Ramesh Chandra Srivastava V. State of U.P. and others
119
5. Sri Sharad Malaviya, learned
counsel for the applicant submitted that
stamp
duty
is
payable
on
sale
consideration
as
mentioned
in
the
document in question, the market value in
the present case of the property in
question should be market value for the
purpose of payment of stamp duty as it
was on the date of agreement. Elaborating
the argument he submitted that the
applicant should not suffer for the delay
in execution of sale deed. The agreement
in question was executed in the year 1960,
on the basis of the then prevailing market
value of the property in question and sale
deed was executed by the Court in
pursuance of decree passed in Suit No.
270 of 1982 in the year 1985. He
submitted that the valuation of the
property in question which was agreed in
the agreement and said agreement since
being specifically in force, the valuation
as mentioned in the agreement is to be
adhered to and the same can not be
different for the purpose of payment of
stamp duty under the provisions of the
Act. He has placed reliance on the
definition of Section 2 (6) which defines
''chargeable' Sec.2 (10) which defines
''conveyance' Sec.2 (12) which defines
''executed and execution' and Section 17
of the Act. Heavy reliance is placed by
him on a judgment of Madras High Court
in the case of S.P. Padamawati Vs. State
of Tamil Nadu, A.I.R. 1997 Madras
296. Further reference was made by him
to the following decisions:-
(1) 1999 ACJ 1299 Smt Har Pyari and
another Vs. District Registrar.
(2) 1998
ACJ
199
Girish
Kumar
Srivastava Vs. State of U.P.
(3) AIR 1986 Allahabad 107 Kaka Singh
Vs. Addl. Collector and others.

6. In contra, Sri SMA Kazmi,
learned Advocate General assisted by Sri
R.V. Singh, learned Standing Counsel
submitted that the Stamp Act is a fiscal
statute and it should be construed on its
plain language. Nothing can neither be
added or ignored in the statute. The only
relevant
date
for
the
purpose
of
determination of stamp duty on deed of
conveyance is the date of its execution.
The fact that the deed is executed in
pursuance to a ''Decree' passed by the
Court is wholly immaterial. The sale
consideration,
as
mentioned
in
the
agreement to sell, is not a guiding factor
for the purpose of determination of stamp
duty payable on a sale deed executed in
pursuance of said agreement to sell. To
put it differently, he submitted that the
''relevant fact' for the purposes to
determine the stamp duty, with respect to
deed of conveyance, is the date on which
said deed is executed. The charging
provision is Section 3 of the Act.
Elaborating
the
argument,
it
was
submitted that a document has to be
considered as chargeable to stamp duty
when it is executed. Reference is made to
the definition clauses of the words
''instrument,' ''conveyance,' chargeable',
duly stamped, as defined under the Act.
Reliance is placed on Single Judge
judgment of this Court in the case of
Govind Ram Mishra Vs.. CCRA,- 2000
Revenue Decision 394. In Re Shri Kirti
Ram AIR 1954 HP 51, and a Division
Bench decision of this Court in the case of
Har Pyari Vs. District Registrar (supra).

7. We have given our careful
consideration
to
the
respective
submissions of the learned counsel for the
parties and propose to answer the
questions referred to us in seriatim.
120 INDIAN LAW REPORTS ALLAHABAD SERIES [2007
Question No. 1.

8. Suit for specific performance of
contract to sell is required to be valued
under the provisions of Suits Valuation
Act. On the relief of specific performance
to sell court fee is to be valued in
accordance with the provisions of Court
Fees Act. Stamp duty, on an instrument, is
liable to be paid in accordance with the
provisions of the Indian Stamp Act. All
the three statutes referred to above have
been enacted with distinct and separate
''aims and objects' contained in these Acts
and operate in different fields. In U.P. the
court
fees
in
a
suit
for
specific
performance of contract is payable on the
sale consideration of the property in
question as disclosed in the agreement
deed executed by the parties. An owner is
free to sell his property at any price
provided there is a willing purchaser to
pay it. An owner may be willing for
various good reasons in good faith to
alienate his property below prevailing
market
rate,
unless
there
is
some
restriction or prohibition under law. There
may be circumstances, in which an owner
may be impelled to sell property below
prevailing reasonable market value. For
the purposes of court fees, and Suit
Valuation Act, the sale consideration as
mentioned in the agreement deed alone is
relevant, notwithstanding that market
value prevailing at the time of execution
of Agreement to sell of or the institution
of suit for specific performance is higher.
It may be noted that in a suit for specific
performance
of
contract
under
the
Specific
Relief
Act
inadequacy
of
consideration is not a valid defence.
Explanation 1 to Section 20 that mere
inadequacy of consideration shall not be
good ground to refuse the passing of
decree by a court, in its exercise of its
discretionary jurisdiction. The question of
market value of the property covered
under the agreement to sell is, therefore,
generally irrelevant and foreign to such
suit and consequently a Civil Court is
hardly called upon in the suit for specific
performance to sell to adjudicate upon the
question of market value of property in
question.

9. This Court in the case of Smt. Har
Pyari Vs. District Registrar, 1999 ACJ
1211 has considered the nature of sale
deed
executed
by
Civil
Court
in
pursuance of a decree of specific
performance, passed in a suit and has
come to the conclusion that in view of
Order 21 Rule 34 C.P.C. the legal position
is that the Court executes the decree on
behalf of the vendor and whatever stamp
duty is to be paid is paid by the purchaser
decree holder when the Court executes the
sale deed. There is no difference in
between the sale deed executed by a
vendor or through Court in pursuance of
decree
for
specific
performance
of
contract. Sale deed executed by Court is
as good as the one executed by the
Vendor/judgment debtor A sale deed
executed by a court, makes no difference.

10. Section 47-A as amended in
State of U.P. as it then existed provides an
instrument of conveyance is undervalued
to
deal
with
such
instrument
of
conveyance and reads:-

"47-A, Instrument of Conveyance
etc. (As was existed prior to 1991
Amendment ) - If undervalued, how to be
dealt with (1) If the market value of any
property which is the subject of any
instrument of conveyance, exchange, gift,
settlement, award or trust, as set forth in
such instrument is less than even the
1 All] Ramesh Chandra Srivastava V. State of U.P. and others
121
minimum value determined in accordance
with any rule made under this Act, the
registering officer appointed under the
Indian Registration Act, 1908, shall refer
the
same
to
the
Collector
for
determination of the market value of such
property and the proper duty payable
thereon on".
(2) Without prejudice to the provisions of
sub section (1), if such registering officer,
while registering any instrument on which
duty is chargeable on the market value of
the property, has reason to believe that
the market value of the property which is
the subject of such instrument, has not
been truly set forth in the instrument, he
may, after registering such instrument,
refer the same to the Collector for
determination of the market value of such
property and the proper duty payable
thereon.
(3) On receipt of a reference under sub
section (1) or sub section (2) the
Collector shall, after giving the parties a
reasonable opportunity of being heard
and after holding an inquiry in such
manner as maybe prescribed by rules
made under this Act, determine market
value of the property which is the subject
of the instrument and the duty as
aforesaid. The difference, if any, in the
amount of duty shall be payable by the
person liable to pay the duty.
(4) The Collector may, suo moto or on a
reference from any court or from the
Commissioner of Stamps or an Additional
Commissioner of Stamps or a Deputy
Commissioner of Stamps or an Assistant
Commissioner of Stamps or any officer
authorized by the Board of Revenue in
that behalf, within four years from the
date of registration of any instrument on
which duty is chargeable on the market
value of the property, not already referred
to him under sub section (1) or sub
section (2), call for and examine the
instrument for the purposes of satisfying
himself as to the correctness of the market
value of the property which is the subject
of such instrument and duty payable
thereon, and if after such examination he
has reason to believe that the market
value of such property has not been truly
set forth in the instrument, he may
determine the market value for such
property and the duty payable thereon in
accordance with the procedure provided
for in sub section (3). The difference, if
any, in the amount of duty, shall be
payable by the person liable to pay the
duty."

11. Section 47-A of the Act
contemplates two situations to deal with,
when the instrument of conveyance etc. is
undervalued, (1) before registration of
instrument
(ii)
after
registration
of
instrument.

Section 47-A (1) contemplates a
situation,
when
an
instrument
of
conveyance,
(like
exchange,
gift,
settlement, award or trust) shall be
referred by Registering Officer (appointed
under the Indian Registration Act) to the
Collector for determination of market
value of such property if market value of
property, as set forth in instrument in
question is less than even the minimum
value determined in accordance with rules
made under the Act.

12. In the case in hand, the
Registering Officer invoked its power
under Sub Section (1) of Section 47-A
and referred the instrument to the
Collector (District Stamp Officer) for
determination of the market value of the
property in question.
122 INDIAN LAW REPORTS ALLAHABAD SERIES [2007
13. Reverting back to the facts of the
case, Rs.1,50,000/- was set forth as sale
consideration in the instrument as agreed
upon in the year 1960. The Registering
Officer was of the opinion that stamp duty
was chargeable on Market Value of the
property on the date of registration of the
instrument which was not correctly set
forth in the instrument in question as it
was less than the minimum market value
determined in accordance with Rule 341
and the sale consideration (Rs.1,50,000/-)
as set forth in the agreement to sell or the
decree of Civil Court was not relevant. .

14. The Assistant Commissioner
(Stamps), to whom the matter was
ultimately referred, was of the view that
the
instrument
was
under
valued
inasmuch the valuation of the property as
prescribed under Rule 341 of the of the
Stamp Rules 1942 (as enacted in the State
of U.P.), is much more. Section 47-A (1)
confers power on a Registering Officer to
look into the document and if it is found
that the market value of any property has
not been correctly set forth in the
instrument mentioned in this Section, he
may refer the same to the Collector for
determination of the market value of such
property and the proper duty payable
thereon. The Stamp Act does not provide
for
a
separate
treatment
when
an
instrument is executed by a court.

15. A Division Bench of this Court
in the case of Kaka Singh Vs. Additional
Collector and District Magistrate (supra)
has held that Section 47-A empowers the
Collector to deal with those cases where
the parties by arrangement deliberately
under valued the property by setting forth
the market value less than the minimum
determined under Rule 341 with a view to
defraud the Government of the legitimate
revenue by way of stamp duty. It repelled
the argument contrary to above.

16. Apex Court in the case of
Trideshwar Dayal and another Vs.
Maheshwar Dayal AIR 1990 SC 485,
rejected the contention that Collector has
no power to enquire into the correct
valuation of the property which was
subject matter of the instrument (in that
case an award) on the basis of Section 47A as inserted in U.P. authorizing the
Collector to examine correctness of the
valuation.

17. In Ramesh Chand Bansal and
others Vs. District Magistrate, AIR
1999 SC 2129 the Apex Court had
occasion to interpret Section 47-A of the
Act and it noticed that Section 47-A, as
introduced by U.P. Act No. XI of 1969,
confers
power
upon
a
registering
authority to deal with case of under
valuation. After reproducing Section 47A, it has observed as follows:-
"Sub section (1) provides, in case
valuation described in a n instrument is
less than the minimum value determined
in accordance with the said Rule then
such officer shall refer it to the Collector
for ascertainment of the market value of
such property, for levying proper duty on
such instrument. Sub section (2) is
without prejudice to sub section (1),
Similarly, under it if the Registering
Officer believes that the market value of
the property described in an instrument
has not been truly set forth, he may, after
registering such instrument refer the same
to the Collector for determination of true
market value of such property. So, we
find both under sub section (1) or (2)
where the value described in such
instrument is less than the minimum value
fixed under the Rules or even otherwise if
1 All] Ramesh Chandra Srivastava V. State of U.P. and others
123
such Registering Officer under sub
section (2) has reason to believe that the
market value of the property has not been
truly set forth he may refer the matter to
the Collector for true ascertainments of its
market
value.
On
receipt
of such
reference by the Collector under sub
section (3) he issues notice to the
concerned party and after giving such
party reasonable opportunity of being
heard, may be after holding an enquiry
determine the market value of such
property. Reading Section 47-A with the
aforesaid Rule 340 -A it is clear that the
circle rate fixed by the collector is not
final
but
is
only
a
prima
facie
determination of rate of an area concerned
only to give guidance to the Registering
Authority to test prima facie whether the
instrument has properly described the
value of the property. The circle rate
under this Rule is neither final for the
authority nor to one subjected to pay the
stamp duty. So far sub sections (1) and (2)
it is very limited in its application as it
only directs the Registering Authority to
refer to the Collector for determination in
case property is under valued in such
instrument. The circle rate does not take
away the right of such person to show that
the property in question is correctly
valued as he gets an opportunity in case of
under valuation to prove it before the
Collector after reference is made. This
also marks the dividing line for the
exercise
of
power
between
the
Registering Authority and the Collector.
In case the valuation in the instrument is
same as recorded in the circle rate or is
truly described it could be registered by
Registering Authority but in case it is
under valued in terms of sub section (1) or
sub section (2), it has to be referred and
decided by the Collector. Thus, the circle
rate, as aforesaid, is merely a guideline
and is also indicative of division of
exercise
of
power
between
the
Registering Authority and the Collector."

18. Section 47-A refers to the
minimum value determined in accordance
with any rules made under this Act. The
State of U.P. in exercise of rule making
power under Section 75, has inserted
Section 47-A with a view to avoid
evasion of Stamp Duty.

19. Section 47-A uses the words -
"minimum
value
determined
in
accordance with any rules made under the
Act. Rule 341 for the purpose of payment
of stamp duty prescribes the mode to
determine the minimum market value of
immovable property forming subject of
instrument of conveyance, exchange, gift
etc. The emphasis in the case of deed of
conveyance is on the market value of any
property covered under the instrument of
conveyance etc.

20. On plain reading of Section 47A, we are of the opinion that this Section
confers ample power on registering
authority to refer the instrument to the
Collector for determination of market
value of the property covered by the deed
of conveyance, if market value has not
been correctly disclosed and is less than
even the minimum value determined in
accordance with Act. The Stamp Act thus
operates in exclusion of the area, not
occupied by the Court Fees Act or Suits
valuation Act.

ANSWER

21. We, therefore, hold that the
stamp duty is chargeable on the basis of
market value of the property conveyed by
the instrument of conveyance and the fact
124 INDIAN LAW REPORTS ALLAHABAD SERIES [2007
that in the instrument executed by Civil
Court is of no relevance for the purposes
of invoking power under Section 47-A of
the Act. The question no. 1 is answered
accordingly.

Question No. 2.
22. For proper appreciation of the
controversy involved in the present case it
is necessary to have a look to the relevant
terms as defined under the Act

Section 2 (6) "Chargeable" Chargeable
means, as applied to an instrument
executed or first executed after the
commencement of this Act, chargeable
under this Act, and as applied to any other
instrument, chargeable under the law in
force in India when such instrument was
executed or, where several persons
executed the instrument at difference
times, first executed,

Section
2(10)
"Conveyance"
"Conveyance" includes a conveyance on
sale and every instrument by which
property, whether movable or immovable,
is transferred inter vivos and which is not
otherwise specifically, provided for by
Schedule I,. Schedule I A or Schedule I-B
as the case may be :

Section 2 (11) - "Duly Stamped" ''Duly
Stamped' as applied to an instrument,
means that the instrument bears an
adhesive or impressed stamp of not less
than the proper amount and that such
stamp has been affixed or used in
accordance with the law for the time
being in force in India:

Section
2
(12)
-
"Executed"
and
"Execution" "Executed" and Execution,
used with reference to instrument, means
''signed' and "signature";

Section 2 (14)- "Instrument" Instrument
includes every document by which any
right, or liability, is or purports to be
created transferred, limited, extended,
extinguished or recorded.

23. It is not in dispute that the Act is
a Taxing Statute. The Apex Court in the
case of District Registrar & Collector,
Hyderabad
&
another
Vs..Canara
Bank etc. JT 2004 (9) SC 379 has
observed as follows :-

"Stamp Act is a piece of fiscal
legislation. Remedial statutes which have
come to be enacted on demand of the
permanent public policy generally receive
a liberal interpretation. However, fiscal
statutes cannot be classed as such,
operating as they do to impose burdens
upon the public and are, therefore,
construed strictly. A few principles are
well settled while interpreting a fiscal
law. There is no scope for equity or
judiciousness if the letter of law is clear
and unambiguous. The benefit of any
ambiguity
or
conflict
in
different
provisions of statute shall go for the
subject. In Dowlatram Harji & Anr. Vs.
Vitho Radhoti & Anr. (1881) 5 ILR
(Bom) 188 the full bench indicated the
need for balancing the harshness which
would be inflicted on the subjects by
implementation of the Stamp Law as
against the advantage which would result
in the form of revenue to the State, the
later may not be able to compensate the
discontent which would be occasioned
amongst the subject."

24. Chapter II of the Act deals with
the liability of instrument to duty and it
has been divided in different sub heads as
ABCD and E. Sub Division A of Chapter
1 All] Ramesh Chandra Srivastava V. State of U.P. and others
125
2 deals with the liability of instrument to
duty Section 3 is the charging Section
which
envisages
the
instrument
mentioned therein shall be chargeable
with duty of the amount indicated in
schedule I as proper duty there for. Deed
of conveyance finds mention in Schedule
I-B of the Act at entry no. 23.

25. The relevant portion of Section 3
of the Act is reproduced below:-

Section 3.- Instrument chargeable
with duty :- Subject to the provisions of
this Act and the exemption contained in
Schedule I, the following instruments
shall be chargeable with duty of the
amount indicated in that Schedule as the
proper duty therefore, respectively, that is
to say-
(a).......
(b).......
(c)........
(aa) every instrument mentioned in
Schedule 1-A or 1-B, which not having
been previously executed by any person
was executed in Uttar Pradesh:
(i).......
(ii).....
(bb).....
(i).......
(ii )........
(i)........
(ii) any instrument for the sale,
transfer
or
other
disposition,
either
absolutely or by way of mortgage or
otherwise, or any ship of vessel, or any
part, interest, share or property of or in
any ship or vessel, registered under the
Merchant Shipping Act, 1894, or under
Act XIX of 1838, or the Indian
Registration of Ships Act, 1841 (x of
1841), as amended by subsequent Act.

Article 23 of Schedule 1-B reads as
follows :-
Description
of
instrument
Proper stamp
duty
Article 23 Conveyance
[as
defined
by
sec.2(10)] not being a
transfer
charged
or
exempted under no.62
Sixty rupees
(a)
if
relating
to
immovable
property
where the amount or
value
of
the
consideration
of
such
conveyance as set forth
therein or the market
value of the immovable
property which is the
subject
of
such
conveyance, whichever
is
greater
does
not
exceed Rs.500/-

Where
it
exceeds
Rs.500/- but does not
exceed Rs.1000/-
One hundred
and
twenty
five rupees
and for every Rs.1000/-
or part thereof in excess
of Rs.1000/-
One hundred
that the duty
payable shall
be rounded off
to
the
next
multiple of ten
rupees.
(b) if relating to movable
property
where
the
amount or value of the
consideration
of
such
conveyance as set forth
therein does not exceed
Rs.1000/-
Twenty
rupees..
and for every Rs.1000/-
or part thereof in excess
of Rs.1000/-
Twenty
rupees
126 INDIAN LAW REPORTS ALLAHABAD SERIES [2007
26. A close reading of aforesaid
section 3 would clearly show that on
every instrument mentioned in Schedule
I-A or I-B executed by any person in
U.P., liability to pay duty is there as soon
as soon as it is executed. The contention
of the applicant is that word ''executed'
with reference to a date of conveyance
which has been followed in pursuance of
the agreement of sale, refers execution of
date of execution of the sale agreement,
requires examination in the light of the
definition of the word "executed" as
defined under the Act. The definition of
word "execution" as per section 2 (12) of
the Act means ''signed and ''signature'.
The "instrument" includes under section 2
(14) every document by which any right
or liability is, or purported to be created,
transferred,
limited,
extended,
extinguished or recorded.

Section 17 of the Act reads as follows:-

"17. Instruments executed in India.
All instruments chargeable with duty and
executed by any person in India shall be
stamped before or at the time of
execution."

From a conjoint reading of words
"instrument", "executed" as defined under
Section 2 (14) and 2 (12) with Section 17,
it is clear that the stamp duty payable on
instrument refers to, at the time of
execution occurring in Section 17, leaves
no room of doubt that the duty on the
instrument is to be paid at the time of
execution. It does not refer to any other
thing which have preceded prior to the
execution of the instrument. On plain
reading of Section 17 with Charging
Section 3 it is clear that relevant point for
determining the stamp duty on instrument
is the date of execution of the instrument.
i.e. not the date of registration as such.

27. The Apex Court in the case of
Hindustan Lever and another Vs. State
of Maharastra JT 2003 (9) SC 67 has
held that "duty under the Stamp Act is
charged on the instrument and it is on
execution of the instrument. The measure
of charging stamp duty may be fixed or ad
voleram it is to be determined by the
Legislature."

Stamp
duty
is
levied
on
the
instrument as soon as it comes into
existence by way of execution and the
measure is the valuation of the property
transferred. In that case a dispute arose as
to whether the stamp duty is payable on
the order passed by the High Court
granting amalgamation of companies. In
that connection the Apex Court observed
that the judgment, order and award of the
court and of tribunal are instrument and
liable to stamp duty if they create or
transfer any right, title or interest in the
property. On the same analogy, the deed
of conveyance, transfers of ownership
right is liable to be stamped by way of
payment of duty and the instrument is
complete, moment it is signed and
executed, the prevailing market value on
the date of execution of deed of
conveyance is chargeable under the
Stamp Act.
This view is further fortified by
Rules framed in exercise of power under
Section 76 of the Act. The learned
Advocate General has rightly placed
reliance upon the then Rules 340 & 341 of
the Stamp Rules framed by the State
Government.

The relevant portion of the said
Rules is reproduced below:-
1 All] Ramesh Chandra Srivastava V. State of U.P. and others
127
340. In the case of an instrument of
conveyance, exchange, gift, settlement,
award or trust relating to immovable
property chargeable with an ad valorem
duty on the market value of the property,
the following particulars shall also be
fully and truly given in the instrument in
addition to the market value of the
property in compliance with sub section
(2) of section 27 of the Indian Stamp Act
as amended in its application to Uttar
Pradesh :-

(1) In case of land :
(a) ...........
(b) ............
(c) being non agricultural land situate
within the limits of any local body
constituted
under
the
U.P.
Nagar
Mahapalika
Adhiniyam,
1939,
U.P.
Municiplaities Act, 1916, or U.P. Town
Areas Act 1914, as the case may be, the
arera of the land in square meters with
the average price per square metre
prevailing in the locality in which the
land is situate on the date of the
instrument.
(2)..............
(3).............

341. For the purpose of payment of stamp
duty, the minimum market value of
immovable property forming the subject
of
an
instrument
of
conveyance,
exchange, gift, settlement, than that as
aggrieved on the basis of the multiple
given below

(i) Where the subject is land :-
(a) in case of Bhimidhari- 800 times the
land revenue;
(b) in case of Sirdari land 400 times the
land revenue;
(c) .......
(d)........
(d) where the land is non agricultural and
is situate within the limits of any local
body referred to in clause (e) of sub rule
(i) of rule 340- equal to the value worked
out on the basis of the average price per
square metre, prevailing in the locality on
the date of the instrument. (emphasis
supplied)

(ii) where the subject is grove or garden :
(a)...........
(b)..........
(iii) Where the subject is building :-

(a) where the building is assessed to
house tax and is occupied by the owner or
is wholly or partly let out to tenants 25
times the actual or assessed annual rental
value, whichever is higher as the case
may be;
(b) where the building is not assessed to
house tax and is occupied by the owner or
is wholly or partly let out to tenants- 25
times the actual or assumed annual rental
value, whichever is higher as the case
may be."

28. From conjoint reading of Section
3 which is charging Section), Article 23
of Schedule 1- B prescribing duty on deed
of conveyance and Rules which specifies
certain facts and particulars to be stated
fully
and
truly
in
instrument
for
conveyance, exchange, gift, settlement,
award or trust relating to immovable
property and Rule 341 wherein made all
determination of the minimum market
value of immovable property forming the
subject of instrument referred to above,
clearly spells out the following :-

(i) Deed of conveyance, exchange, gift,
settlement, award or trust relating to
immovable property is chargeable
with ad voleram duty;
128 INDIAN LAW REPORTS ALLAHABAD SERIES [2007
(ii) Taxable event for the purpose of
payment of stamp duty on the
aforesaid documents, is the execution
of such document, vide Section 3 of
the Act;
(iii) Duty on such instrument is payable
''on market value of such property'.
(iv) For the purpose of determination of
duty under Article 23 of Schedule 1B of the Act, it is the value of
consideration as set forth in the deed
or the ''market value' ''whichever is
greater'.
(v) The minimum market value is to be
ascertained as per Rule 341 (i) (d),
wherein it has been provided for as
"on the date of the instrument".

29. The argument is that although
under the Act it is provided that the stamp
duty is payable on the market value of the
subject
matter
of
instrument
of
conveyance but the Act is silent and does
not speak about the date in respect of
which the market value of the subject
matter of instrument of conveyance is to
be looked into for the purpose of
determination of the stamp duty. He
submitted that in the present case the
instrument of conveyance is chargeable to
the market value of the subject matter of
the instrument as it was on 5th May,
1960, viz the date on which the agreement
to sell was executed between the parties.
It is difficult to accept the aforesaid
submission. It may be that the Act does
not specifically say so, about the date in
respect of which the market value of the
instrument is to be determined but it is
also equally evident that on plain reading
of the various Sections of the Act and
giving them harmonious construction, the
market value of instrument of conveyance
is referable to only one date i.e. the date
of execution of the instrument.