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Judgment
The petitioners before this Court have filed this present petition being aggrieved by the order dated 09.08.2012 passed by the Collector of Stamps in
R.R.C. No.63/A-76/11-12.
The facts of the case, as stated in the writ petition, reveal that the petitioners, who are plaintiff before the trial Court have filed a civil suit seeking
specific performance of contract and also for grant of injunction in the respect of the suit property situated at Survey No.426/3/2, Patwari Halka No.1
(New No.39) situated at Village-Khajrana, Tehsil & District-Indore admeasuring 0.150 hectares (16200 sq.ft.).
The facts of the case, as stated in the writ petition, further reveal that the plaintiffs and defendant have entered into an agreement to sale dated
11.12.2010 for selling off the property in question and in the agreement the terms and conditions of the payment was detailed. The suit property was
agreed to be sold for Rs.1,70,00,000/- and as sale deed was not executed, a suit for specific performance of contract was filed.
Learned senior counsel has argued before this Court that an application was preferred under Section 33 of the Stamp Act, 1899 before the trial Court
and the learned Judge has allowed the application for impounding of the agreement in question and the matter was referred to the Collector of Stamps.
It has further been stated that the order was passed on 17.04.2012 by the learned Judge of the trial Court and a writ petition was preferred i.e. W.P.
No.6274/2012 and this Court by an order dated 13.07.2014 has stayed the order passed by the learned District Judge and by no statute of imagination,
the impugned order could have been passed by the Collector of Stamps, as has been done in the present case on 09.08.2012, as the stay order was
continuing.
It has also been stated that the Collector of Stamps has erroneously passed the aforesaid order directing payment of stamp duty as well as penalty
contrary to statutory provisions, as no possession was delivered by the defendants while executing the agreement to sale.
Attention has been invited to the judgment delivered by the Karnataka High Court in the case of Huleppa Balappa Karoshi v/s Sub-Registrar ILR
1995 Karnataka 3589 and it has been argued that while impounding the document and while assessing the stamp duties, only the contents of the
documents are to be looked into, and therefore, the Collector has erred in law and facts in taking into account the plaint averment in respect of
possession.
Reliance has also been placed upon a judgment delivered by Hon'ble the Apex Court in the case of Peteti Subba Rao v/s Anumala S. Narendra (2002)
10 SCC 427 as well as the judgment delivered in the case of Hindustan Steel Limited v/s M/s Dilip Construction Co. AIR 1969 SC 1238 and a prayer
has been made for quashment of the impugned order.
On the other hand, learned senior counsel appearing for respondent No.2 has argued before this Court that the petitioner has deliberately omitted his
impleadment in the present writ petition knowing fully well that respondent No.2 is a defendant in the civil suit and later on when this fact was pointed
out, by way of an amendment, respondent No.2 has been impleaded as a party.
Shri V.K. Jain, learned senior counsel has drawn the attention of this Court towards the order passed by the learned District Judge and his contention
is that by an order dated 17.04.2012, the learned District Judge has decided three applications. He has stated that first application was preferred under
Order 7 Rule 11 of the C.P.C., second application was preferred under Section 33 of the Stamps Act, 1899 and third application was preferred under
Section 151 of the C.P.C.
He has further stated that in respect of the application preferred under Section 151 of the C.P.C., which was preferred by the defendant, an order
was passed directing the plaintiffs to deposit a sum of Rs.1,19,10,000/- in the Court and the petitioners being aggrieved by the order only to the extent
the Court has directed deposit of Rs.1,19,10,000/-, the petitioners at the relevant point of time were aggrieved and in those circumstances, they have
preferred a writ petition i.e. W.P. No.6274/2012. The record of the same was requisitioned by this Court and it is also listed along with the present
writ petition.
The facts as mentioned in paragraph-5 of the W.P. No.6274/2012 also makes it very clear that the petitioner was aggrieved by the order passed by
the District Judge dated 17.04.2012, by which, the application preferred under Section 151 of the C.P.C. was allowed with a direction to deposit
Rs.1,19,10,000/-.
Paragraph 6.1 to 6.10 of the grounds reads as under:-
“6.1 THAT, the order impugned dt. 17.04.2012 is contrary to peculiar facts and circumstances of the case, documents on record without
considering the settled principles of the law applicable to the present case.
6.2 THAT, while passing the order impugned dt. 17.04.2018, Ld. Trial Court has not considered the provisions as contained under Section 16 (c) of
the Specific Relief Act which is merely a provision creating personal bars to the grant of relief of specific performance and provides that averments
regarding readiness and willingness are required to be made in the plaint and no actual tendering or deposit of money is required to be made in court.
However, the Ld. Trial Court without appreciating the intent and object of the provisions of law in light of the facts and circumstances of the case has
erred in directing the petitioners/plaintiffs to deposit the money in the court merely on malafide technical objection raised by the respondent/defendant
No.1 which should not have been allowed to cause prejudice to the claim of the petitioner/plaintiff. As the same has not been considered and
appreciated at all by the Ld. Trial Court, therefore, the order impugned is not sustainable.
6.3 THAT, while passing the impugned order dt. 17.04.2012 the Ld. Trial Court has completely failed to appreciate the facts of the case according to
which the petitioners/plaintiffs has already provided an amount of Rs.51,00,000/- to the respondent/defendant No.1 despite which the respondent has
failed to comply his part of contract and had concealed material facts from the petitioners/plaintiffs regarding covering of land under the government
road thereby reducing of large proportion of the land, payment of which amount under consideration should not be responsibility of the
petitioners/plaintiffs.
The Ld. Court below has also failed to consider that it is the petitioners/plaintiffs hwo had been ready and willing to perform their part of contract ever
since towards which they have also provided a substantial amount of money but direction of depositing remainder consideration of amount which
amounts to Rs.1,19,10,000/- would cause serious prejudice to the petitioners/plaintiffs as their substantial money would be choked for a large period of
time till the suit is decided by the Ld. Trial Court which remains against all the percepts of justice irrespective of the fact that a large piece of land
amount Rs.45,00,000/- approx. remains a major dispute in controversy. However, the Ld. Court below has completely failed to appreciate this aspect
of the matter while passing the impugned order for which reason also the impugned order is liable to be set aside.
6.4 THAT, the Ld. Court below while passing the impugned order has failed to appreciate that the suit has been filed by the petitioner/plaintiffs
seeking specific performance of contract in pursuance of agreement to sale executed between the parties, which has been adduced before the Ld.
Trial Court on the basis of which the petitioner/plaintiff claims his case.
However, the said agreement has been presented before the trial court to demonstrate the peculiar facts and circumstances of the case wherein the
respondent/defendant despite receipt of payment has ben refusing to make performance of his part and the Ld. Court below itself believing he case of
the petitioners/plaintiffs be prima facie strong has granted orders of interim status quo in favour of the petitioners/plaintiffs.
In such a situation also when the court itself has believed the case of the petitioners/plaintiffs prima facie and has ordered the maintaining of status
quo in the matter and contrary to the said fact has ordered deposit of substantial sale consideration at preliminary stage of the case and not on final
stage of decision after evidence which is another reason as to why the impugned order is liable to be set aside.
6.5 THAT, while passing the impugned order dt. 17.04.2012, the Ld. Trial Court has completely failed to appreciate that the plaintiff/petition had
completed has been ready and willing to perform his part of contract and such a fact remains not in dispute in light of payment documents and detailed
on record. When in a situation the stamp itself was purchased by the respondent/defendant No.1 as evincible from back page of the stamp itself,
therefore at a later stage the person who is not involved in purchase of stamps should not have been made liable for any objections whatsoever.
In such a situation the payment of large substantial amount cannot be disbelieved completely in view of the conduct of the defendant/respondent itself
and the readiness and willingness on part of the petitioners/plaintiffs while entering into agrement, making payment of large consideration and further
issuing notice and filing a suit for spefic performance cannot be doubted in any manner despite which merely on a technical and malafide application
of the defendant/respondent. Despite the said facts the Ld. Court below by a unreasoned order and non-speaking order has directed the
petitioners/plaintiffs to make deposit of large amount of money at preliminary stage of the case therefore also the impugned order is liable to be
dismissed.
6.6 THAT, order impugned dt. 17.04.2012 is clearly untenable in the eye of law, because the Ld. Trial Court has completely erred in considering the
provisions of law in its real spirit and object. The Ld. Trial Court has completely failed to appreciate the fact that the provisions contained under
Section 12, 13 and 16 of the Specific Relief Act as also the importance as well as object of leading evidence in the matter.
The Ld. Trial Court has failed to appreciate that in accordance with the provisions of law and legal requirement it is the petitioners/plaintiff who have
made a clearly averment in their readiness and willingness in performance of their part as per the provisions of law but no provision of law mandates
the deposit of balance consideration in the court to demonstrate and prove their readiness and willingness in the performance of their part but the same
remains a fact to be proved by the parties by leading their respective evidence.
In the present case the Ld. Court has held that in order to test the readiness and willingness to make payment on part of the plaintiffs/petitioners it
would be appropriate to require deposit of remaining consideration in the court and accepted a malafide application filed by the respondent/defendant
merely to harass the petitioners/plaintiffs who have approached the court seeking specific performance of court. While passing the impugned order
despite pertinent facts of the case Ld. Court below has committed a mistake in law, in accepting the application filed by the respondent/defendant
No.1 as it is settled law that a purchase, in order to succeed in a suit for specific performance, need not show that he had the consideration money
with him nor he has arrangements for it, but that he was ready and willing to perform his part which remains a question of fact to be proved by leading
cogent evidence.
However, the Ld. Trial Court despite such fact has erred in directing the entire remaining consideration should be deposited in court to rest readiness
and willingness of the petitioners/plaintiffs which is to be tested by leading of evidence in the matter and not by means other than evidence. Therefore,
also the impugned orders passed by the Ld. Court below is liable to be set aside.
6.7 THAT, even in the case the Ld. Court below could have assigned any reason as to reach a just conclusion as why the deposit of substantial
amount of money is required to be deposited in the peculiar facts and circumstances at an early stage of case which is not required under any
provision of law applicable in the case by use of provision under Section 151 of the Code of Civil Procedure.
While passing the impugned order the Ld Court below has failed to consider that where a contract involves payment of money, it is not always
essential for the plaintiff to actually tender to the defendant or to deposit in the court any money as such other wise in all cases of specific
performance of contract it is in order to prove readiness and willingness to pay the plaintiffs would make deposit by which no further consideration and
leading of evidence in accordance with provisions of law would be essential.
The Ld. Court below at an early stage of litigation has erred in directing the deposit of money as it is not the position of case to make the said money
easily and readily available for immediate execution of sale deed soon time. Here is the case a large part of land is under dispute being acquired under
road which consideration is not required to be deposited in the manner despite consideration of which an order is passed directing deposit against all
the percepts of justice. This another reason why the impugned order is liable to set aside.
6.8 THAT, thus, the order passed by the Ld. Trial Court is not only prejudicial to the interest of the petitioners/plaintiffs who are directed to deposit a
large amount of money so as to restrict its use till decision of suit which is highly detrimental to their interests of the respondent/defendant No.1, who
in case of such deposit would fail to have chance to rebut the evidence on readiness and willingness to pay as per the provisions of law.
It is also pertinent to mention that no provision of law requires making of such deposit pre-hand and what all is required is to prove that one's own
readiness and willingness to perform his part of the contract and the directing envisaged in the explanation is a measure of exception and it cannot be
understood at the stage of inception but at the stage of end to facilitate the registration under directions of court at the end of trial. As per the
provisions of law there remains no intention of legislature to make such condition in suit for specific performance otherwise in all suit for specific
performance upon deposit of payment there would be no further requirement to prove readiness and willingness upon deposit of money. Therefore,
also the impugned order is liable to be set aside as the same remains against the intentions and objects of the legislation.
6.9 THAT, the order impugned dt. 17.04.2012 if allowed to stand would occasion failure of justice and would cause loss to the petitioners/plaintiffs
unnecessarily blocking their cash funds; therefore, the impugned order cannot be allowed to stand.
6.9 THAT, the petitioners/plaintiffs beg to submit other ground also at the time of hearing of the petition, if needed.
6.10 THAT, the petition is being submitted on the fixed Court fee with the certified copy of the order impugned dt. 17.04.2012. Other relevant
documents have ben annexed with the petition for the perusal and kind consideration of this Hon'ble Court.â€
The aforesaid grounds make it very clear that the entire petition was in respect of the application preferred under Section 151 of the C.P.C.
Undisputedly, there is no whisper about any part of the order, by which, the application preferred under Section 33 of the Stamp Act, 1899 was
allowed.
It is true that this Court has granted an interim order in the aforesaid case on 13.07.2017, but it has to be looked into keeping in view the writ petition,
the pleadings made by the parties and the petition was exclusively confined only in respect of order passed on an application preferred under Section
151 of the C.P.C.
Shri V.K. Jain has argued that in those circumstances, the Collector was justified in proceeding ahead in the matter and directing the petitioners to pay
the deficit stamp duty. He has further stated that the order was passed by the learned District Judge on 07.04.2012 and subsequently, the Collector
has passed an order on 09.08.2012 and the Collector has directed payment of stamp duty to the tune of Rs.33,00,000/-approximately including penalty
and in fact the State is suffering in the matter, as the State is loosing interest in respect of the aforesaid amount. A prayer has been made for dismissal
of the writ petition.
Heard learned counsel for the parties and perused the record. The matter is being disposed of at motion hearing stage itself with the consent of the
parties.
In the present case petitioner has filed a civil suit for specific performance of contract based upon an agreement, which is on record dated 11.12.2012
(Annexure-P/1). Paragraph-2 and 5 of the agreement reads as under:-
“2- ;g fd] mDr pj.k dzekad &1 esa mYysf[kr d`f""k Hkwfe fodzsrki{k us dszrki{k dks :i;s 1]70]10]000@& ¼v{kjh :i;s ,d djksM lRrj yk[k nl gtkj
ek=½ esa fodz; djus dk lkSnk r; fd;k gksdj fodz; izfrQy dh vf/kdka'k /kujkf'k dzsrki{k us fodzrki{k dks vkt fnukad 11@12@2010 dks jkf'k :i;s
5]00]000@& ¼v{kjh :i;s ikap yk[k ek=½ dk Hkqxrku psd dzekad 650982 LVsV cSad vkWQ bUnkSj 'kk[kk [kkrhokyk Vsad bankSj fnukad
11@12@2010 ds ek/;e ls vnk dj fn;k gS rFkk ftldh izkfIr vfHkLohd`fr fodzsrki{k bl ys[k ds ek/;e ls Lohdkj djrs gS rFkk c;kus dh nqljh fd'r jkf'k :i;s
37]50]500@& ¼v{kjh :i;s lSrhl yk[k ckou gtkj ikap lkS ek=½ dk Hkqxrku fnukad 11@02@2011 dks uxnh ;k vU; fdlh ek/;e ls dszrki{k }kjk
fodzsrki{k dks vnk dj fn;k tkosxk rFkk dzsrki{k mDr Hkwfe dh ;ksX; fy[kkilqfo/kkuqlkj djok ldsaxs] blesa fodzsrki{k] dszrki{k dks iw.kZ lg;ksx iznku djsxsa A mDr laifRr dh jftLVªh ,oa LFkkukUrj.k esa yxus okys leLr
[kpksZ dks ogu djus dh tokcnkjh dzsrki{k dh jgsxh A
5- ;g fd] laiw.kZ fodz; izfrQy dh izkfIr ij fodzsrk&izFkei{k mDr lEifRr dk fjDr ewfrZear vkf/kiR; e; leLr vly LoRo nLrkostksa ds f}rh;i{k dks lkSai
nsosaxsa A â€
A categoric question was asked to Shri Prateek Maheshwari appearing along with Shri A.K. Sethi, learned senior counsel i.e. whether the petitioners
are in possession of the suit property or not ? He has categorically stated that petitioners are in possession of the suit property and are running the
school over the suit property.
In the civil suit, which is pending before the District Judge, three applications were preferred, which has not been disputed by either side i.e. (a)
application under Order 7 Rule 11 of the C.P.C., preferred by the defendants (b) application preferred under Section 33 of the Stamp Act, 1899 and
(c) application preferred under Section 151 of the Code of Civil Procedure.
In respect of the application preferred under Order 7 Rule 11 of the C.P.C., the same was dismissed and a writ petition is pending challenging the part
of the order rejecting the application preferred under Order 7 Rule 11 of the C.P.C. i.e. W.P. No.9666/2012.
In respect of the part of the order, which was passed on an application preferred under Section 33 of the Stamp Act,1899, no petition was preferred
before this Court.
In respect of the application preferred under Section 151 of the C.P.C., W.P. No.6274/2012 was preferred and in those circumstances, an order was
passed staying the impugned order passed by the learned District Judge dated 07.04.2012. The pleadings in the writ petition i.e. W.P. No.6274/2012
makes it very clear that the petition is confined to that part of the order, by which, learned District Judge has directed the plaintiffs to deposit the
amount of Rs.1,19,10,000/- with the Court. As there was no interim order in respect of the part of the order, by which, the matter was referred to the
Collector, the Collector has rightly passed the impugned order.
Schedule 1-A appended to the Indian Stamp Act, 1899-5E reads as under:-
“(e) If relating to sale of immovable property : -
(i) When possession of the property is delivered or is agreed to be delivered without executing the conveyance.
(ii) When possession of the property is not given.â€
The aforesaid statutory provision of law makes it very clear that in case the possession of the property is delivered or is agreed to be delivered without
executing the conveyance, the same duty as a conveyance (No.22) on the market value of the property has to be levied.
The Collector of Stamps taking into account the aforesaid statutory provision of law, has directed payment of stamp duty to the tune of Rs.16,00,000/-
with a penalty of Rs.16,00,000/-. The maximum penalty provided is ten times, however, the Collector has just imposed penalty (only one time) while
passing the final order.
In the considered opinion of this Court, the Collector was justified in passing the impugned order keeping in view the statutory provisions as contained
under the Stamp Act, 1899. The interim order passed in W.P. No.6274/2012 was certainly not in respect of payment of stamp duty/impounding of the
document. Undisputedly, the possession was handed over to the petitioners. The petitioners while filing the civil suit have categorically stated that they
are in possession of the suit property and even before this Court, it has been stated that the petitioners are in possession of the suit property. The
petitioners have constructed a building and are running a school in the suit property, and therefore, keeping in view the totality of the facts and
circumstances of the case, this Court is of the opinion that the Collector was justified in passing the impugned order and the stay order passed in W.P.
No.6274/2012 does not help the petitioners at all.
This Court has carefully gone through the judgment delivered in the case of Huleppa Balappa Karoshi (supra) and it is true that while calculating the
stamp duty, the description, nature, contents and provisions of the Stamp Act, 1899 are to be looked into. The Collector has certainly looked into the
description, nature, content and consideration in the instrument. A simple observation by the Collector in the impugned order that in the plaint also, the
petitioners have stated that possession has been delivered, will make no difference, and therefore, judgment relied upon by learned counsel for the
petitioner is of no help to the petitioners.
This Court has carefully gone through the judgment delivered in the case of Hindustan Steel Limited (supra). The judgment delivered in the aforesaid
case is again of no help to the petitioner, as the facts are distinguishable and it has only been held that once the object is achieved under the Stamp
Act, 1899 in respect of payment of duty, the instrument has to be looked into in accordance with law.
The another judgment over which reliance has been placed in the writ petition was in respect of imposition of penalty i.e. in the case of Peteti Subba
Rao (supra) and in the aforesaid case, it was held that it is not necessary to impose maximum penalty. Again the aforesaid judgment is of no help to
the petitioners.
In the considered opinion of this Court, the petitioners has not been able to make out any case for interference with the order passed by the Collector.
However, it is observed that the petitioner, who was well aware about the pendency of the civil suit, who was well aware that the respondent No.2 is
a necessary party, as he is defendant in the civil suit, has deliberately not impleaded the defendant as respondent in the present writ petition. In the
present case, the respondent No.2 was a party before the Collector also, and therefore, by way of caution, the petitioners are directed to come with
clean hand in future while assailing any order passed in the matter.
In light of the observation made by this Court, no further orders are required to be passed on the application preferred under Section 340 of the
Cr.P.C, and therefore, all the Interlocutory Applications stand disposed of. The revenue authorities shall also be free to recover interest also in the
matter in respect of the amount calculated towards stamp duty.
The petition was drafted based upon the instruction received by the client, and therefore, any observation made in the petition will not affect the
learned lawyer and it shall be confined to the petitioners alone.
With the aforesaid, the present writ petition stands dismissed.
Certified copy as per rules.