Bihar State Housing Board and Others vs Atma Ram Shah

The Appellant Bihar State Housing Board and its officers-required of the Respondent to pay a figure of stamp duty chargeable not only on the original price of Rs. 34,500/- as fixed but also on the interest paid from time to time on deferred payment of installments. Its attempt was scuttled by a Division Bench of the Patna High Court, forbidding it to charge stamp-duty relatable to the interest but only to charge stamp-duty on the sale price of Rs. 34,500/-.

The main obligation incurred by the Respondent subject is embodied in paragraph 2 of the deed executed before hand. It mentions that the total sale price of the house was Rs. 34,500/- the possession of the house having already been delivered to the Respondent. It was admitted that the Respondents had paid a sum of Rs. 14,500/- by that time and the balance of Rs. 20,000/- would be treated as loan amount in his hands, payable by him with interest in as many as 282 monthly installments in the manner stipulated. Steps and action were envisaged in the event of failure to make timely payments with which we are not concerned for the present. All what needs emphasis is that a fiction apparently had been ' created, whereby the price, which was/otherwise payable had been left with the purchaser as a loan which would fetch interest at the rates stipulated. Section 23 of the Indian Stamp Act, 1899 specifically states that where interest is expressly made payable by the terms of an instrument, such instrument shall not be chargeable with duty higher than that with which it would have been chargeable had no mention of interest been made therein. The law envisaged the consideration for an instrument and the interest accruing thereon in a given situation to be treated separately: Section 24 of the Act provides the method as to how stamp duty is chargeable in consideration of debt or subject to future payment, etc. The provision as pressed by learned Counsel for the Appellant would have no applicability to the present set of facts. Interest chargeable on loan cannot be put at par with encumbrances; it remaining a liability though. Thus, in our view, the High Court was right in Intervening In the matter and forbidding the Appellant to charge stamp duty beyond the consideration of Rs. 34,500/- and not on the sum total of interest paid by the transferee by adding it to the sale consideration.

We therefore find no merit in this appeal and the same is dismissed. There shall be no costs, there being no opposition.