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A SEMINAR ON THE LAW ON STAMP DUTY AND REGISTRATION IN A.P.

(AN ANALYTICAL STUDY) ( PART I )

Dr. B.SIVA SANKARA RAO,


MCOM, LLM.,Ph.D.
Judge,HIGH COURT OF A.P.

I .INTRODUCTION ( PART I)

1(a) The Indian Stamp Act is a fiscal legislation with an object to protect revenue & to collect
revenue (tax) in the shape of stamps on transactions covered by the instruments. It is in fact to
exclude proof of any transaction by an instrument not duly stamped till Stamp duty is levied &
paid in order to protect the revenue-held in 2001(7) SCC 573 in the case of Hameed Vs. Abdul.
See also-Sethuraman vs. Ramanathan-AIR-1946-Madras-437; AIR-1960-AP-155, 2003(1)LS-
382-in-Bolleddula Laxmi Devi vs. B. Papanna, 2003(2)ALD-640-in-Jannuchenderbabu vs.
Manchikatla & 2003(2)ALD-638-in-Rachakonda vs. Manohar fuel centre. In the above Apex
Courts judgment of 2001(7) SCC 573 it was also held that strict construction of the provisions is
required; however, it cannot over ride other statutes such as Limitation Act etc., which operate
completely in a different sphere.
In District Registrar vs. Canara Bank-2005(1)SCC-496-at page 500 (M) para-10-it was held that
the benefit of any ambiguity or conflict in different provisions of the taxing Statutes like Stamp
Act, shall go to the citizen. In this decision of 2005(1)SCC-496-it was also held at page 500(K)
paras-44,58 &59 that Section-tion-73 of the AP Amended Act 17/86 is unconstitutional.
1(b) The Indian Registration Act is one way a legislation having public policy to protect public
and prevent fraud by conservation of evidence, assurance of title and publicity of document. It is
thus meant to prevent people from being duped into entering transactions relating to property
with persons having no right or title and publicity from documents registered about right and title
over the property in order to prevent fraud & mischief. Virtually registration of an instrument is a
notice by way of definite recorded information to the world at large to enable public to verify
records and enquire there from right, title and obligations if any on any immovable property.
Regarding scope and object of the Indian Registration Act-in Jogidas vs. Fakir panda-AIR-1970-
Orissa-22(B)-it was held that it is to provide a method of public registration of documents so as
to give information to people regarding legal rights and obligations arising and affecting a
particular property, and to perpetuate documents which may afterwards be of legal importance,
and also to prevent fraud. Registration lends inviolability and importance to certain classes of
documents.

1(c) The main difference between the provisions of stamp Act and Registration Act from effect
of not duly stamped and not registered are while considering the effect of not duly stamping an
instrument, the effect of non-registration mentioned in Section- 49 Registration Act is not
relevant. It is because there is no total bar for admitting unregistered document if duly stamped,
since it can be used for collateral purpose or other purposes specified in Section-49, though
u/s.49 an unregistered document (when compulsory to register) is inadmissible for main purpose
to affect any rights in immovable property and the terms and conditions in the instrument. Where
as an unstamped document is not at all admissible (even for collateral purpose) unless it is duly
stamped since, there is a total bar to admit any part of the instrument in evidence.
In Rachakonda vs. Manohar fuel centre-2003(2)-ALD-638-it was held while considering the
scope of Section-35 of the Indian Stamp Act and Section-49 of the Indian Registration Act, by
following the decision reported in AIR-1972-AP-373-Sanjeeva Reddi vs. Johanputra Reddi-that
for an unstamped document there is a total bar for its admission and no part of the document, be
it-a single sentence or a word or a signature can be admitted, hence it cannot be admitted even
for any collateral or other purposes unless stamp duty is levied and paid; whereas an unregistered
document once duly stamped or stamp duty and penalty is paid, even though u/s 17 of the Indian
Registration Act, it is compulsorily registerable one, for collateral purpose or such other
purposes specified in Section-49 r/w 17 of the Registration Act, it can be admitted and looked
into. See also 2003(1)LS-382-Smt.Bolleddula Laxmi Devi vs. B. Papanna & AIR-1962-A.P-
132-Bhaskarabhotla vs. Bhaskarabhotla-in which it was held that an unstamped and unregistered
instrument of partition,(In AIR-1957-AP-237(FB)-it was laid down what is an instrument of
partition) only on duly stamped can be admitted in evidence for any collateral purposes. See
also:-
(a).2005(5)ALT-616-Kunchenapalli vs. Sub-Registrar-(Instrument of partition-unregistered and
insufficiently stamped-on stamp duty impounded and paid can be looked into for collateral
purpose);
(b).2005(5)ALD-274-Pallampalli vs. Pallampalli-(Instrument of partition-unregistered and
insufficiently stamped-on stamp duty impounded and paid can be looked into for collateral
purpose );
(c).2005(4)ALT-411-Giri-Yadav vs. L.R.Goud-(Instrument of Lease for above one year-
unregistered and insufficiently stamped-on stamp duty impounded and paid can be looked into
for collateral purpose);
(d).2005(1)ALD-607-Ambati vs. Pericherla-(Instrument of Lease for above one year-
unregistered and insufficiently stamped-on stamp duty impounded and paid can be looked into
for collateral purpose);
(e).2005(5)ALD-381-Dr.Rayadurgam vs. Chowdam-(sale agreement-unregistered and
insufficiently stamped-on stamp duty impounded and paid-can be admitted for specific
performance main purpose and for refund of amount with damages as collateral purpose);
2005(5)ALD-381
(f).2005(5)ALD-206-v.Anjaneyulu vs. V.Vadapalli-(Instrument-unregistered and insufficiently
stamped-runs in two parts which are separable-on stamp duty required to be paid on impounded
respectively-the portion which is required to be registered can not be looked into but for
collateral purpose and the other portion which is not required to be registered can be looked into
for main purpose); and
(g).2003(2)ALD-640-Jannuchenderbabu vs. Manchikatla - (sale agreement-non-possessory-
followed by endorsement on it or by separate letter evidencing delivery of possession-
unregistered and insufficiently stamped-as comes under Schedule-1-A & Article-47-A-liable for
stamp duty as sale deed-on stamp duty impounded and paid-can be admitted for specific
performance main purpose-referred-1999(6)ALT-59; 1999(1)JT-186(SC); 1999(1)ALT-596 &
1995(2)ALT-828).
(h).2000(4)ALD-203=(3)ALT-787-Pulavarti vs. Pulavarti-entry in the account books about
settlement of the disputes regarding properties of the joint business of the parties-with no value
of it mentioned-held it does not amount to instrument of partition or settlement-to require any
stamp duty and registration.
The Stamp Act and Registration Act are not in pari-materia. The principles that govern the
interpretation of the Stamp Act cannot be applied to the interpretation of the provisions of the
Registration Act. However, in- Leela DD vs. EC.Shinde-AIR-1970-Bombay-109(E)at-page-114-
para-12,it was held by relying upon-AIR-1914-Bombay-55 & AIR-1928-Bombay-553-that these
two Acts, though not in pari materia may be read together and the definition in one Act may be
applied to the other Act only when there is no such definition in the other Act.
Execution of a document (instrument) means completion by the last act out of series of acts
which complete the document i.e., writing or scribing, singing, sealing if any, attestation if any,
and delivery of document as per the full bench judgement of the Madras High Court held
between-The CCRA-BOR, Madras vs. The CI&BS.Ltd-reported inAIR-1969-Madras-1(at para-
9-page-4)by relying upon AIR-1963-SC-1307.
In this-AIR-1963-SC-1307-New Central Jute Mills Ltd vs. State-it was held that when a
document was executed in one State after it is duly stamped as per Law of that State, it can be
used in that State, and if to be used in another State, if stamp duty payable there is less or equal
nothing more is payable where as it is more than that, the deficit is to be paid.
1(d) Once a document or instrument is filed in Court,(i) It is the duty of the Court, where the
document is unregistered to consider as to whether it requires registration or not and, if required
and even compulsory registerable document, whether it can be used for any purpose at least for
collateral purpose or not without registration. In fact, as per Section-23 of the Registration Act
from the date of completion of execution, such documents must be presented and be accepted for
registration within four months. The exception to it is in the case of a will and cases taken under
Section-25 of the Registration Act on imposing ten times penalty to the original registration fees.
Section-23-A of the Act only deals with re-registration.
ii) Further regarding Stamp duty it is the main duty of the Court to consider whether it is
properly stamped or not and whether it is liable for stamp duty or not. Once it is found that it is
liable for stamp duty, then to consider as to what is the stamp duty that is payable to impound
and collect for a document not duly stamped i.e.; unstamped or insufficiently stamped. The
penalty payable in such case is ten times to the value of stamp duty payable in addition to the
actual value as per Section-35 proviso (a) of the Stamp Act.
As per Strouds judicial Dictionary Volume-3, the word IMPOUND implies its being put in an
enclosed place. A document is impounded when it is ordered by a court to be kept in the custody
of its officer.
In H.gangaram vs. Kamalabai-1967(2)AnWR-515(FB)-by holding that the view of the Madras
High Court in AIR-1953 Madras-764(FB)-in Crompton Engineering Co. case as not good Law
and by approving the view of the AP. High court in 1959(2)AnWR-102(FB)-in Midde Vara
Prasada Raos case-it was held that to ascertain stamp duty the value of the property on which
duty payable is market value as on the date of document. It was also held that considerations
whether the document is validly executed under TP.Act or Registration Act are immaterial. See
also-1985(1)LS-33 (SRC).
Or.13 R.8 CPC., speaks about impounding of any document or instrument liable for stamp duty.
Order XIII Rule-5, 7,9,11 & Rule 7(2) of A.P.amendment, Order XI Rules 6 to 16, Order XII
Rule 2, 2(a)& 8 CPC,& Rules 117 to 133 of Civil Rules of Practice(Chapter-X) deal with
Documents, Search, Admission and Inspection etc.

Whether objection can be raised at the time of numbering plaint and whether the plaint can be
rejected for non- compliance:-In 1961(1)AnWR-425-K.Santa kumari vs. V.Susheela Devi-it was
by explaining the Balaramdass case of AIR-1958-659 and by relying up on 1955(1)MLJ-457-
Daivasikhamanis case-held that it is not proper for the trial Court to consider the question of
stamp duty and penalty and ask for payment of those amounts when there was a great probability
amounting to practical certainty that at the time of considering the admission of the documents, it
would be rejected as inadmissible due to want of registration. Section 35 proviso (a) of the
Stamp Act provides that the instrument which is unstamped or insufficiently stamped shall be
admitted in evidence on payment of duty and penalty. This suggests that the collection of stamp
duty should not be done before the stage of admissibility of the document in evidence. Further if
the stamp duty and penalty are collected in advance and later the document is not admitted in
evidence, the party concerned would have to pay penalty equal to ten times the duty or deficit
duty and the take the chance of getting afterwards u/s 39 and the loose the chance of having to
pay a smaller penalty in the first instant at the discretion, of the Collector u/s 40(I)(b) without the
advantage of the document being admitted in evidence. This would cause undue hardship to the
party. Such undue hardship will be avoided if the provision under Proviso (a) to Section 35 were
followed. The trial Court therefore erred in ordering payment of stamp duty and penalty before
the stage of admission of documents in evidence was reached.
In AIR-1953-Madras-698(B)S.Ranga Raju Naidu vs. D.S.Kamesham it was held interpreting
the words in Section 33 of the Stamp Act is produced or comes in the performance of his
functions that a mere handing over of a document, even if it is as a result of a summons from
Court, cannot be said to be production. There must be volition on the part of the person bringing
it to Court to use it for some purpose. The mechanical act of carrying the document as a result of
an order of Court and handing it over to an officer of Court would not be production. But such an
act would come within the meaning of the term comes before the Court in the performance of
its judicial functions.
Following the above decisions, in 1997(3)ALD336=(2)AnWR-42-Link well Electronics Ltd vs.
APEDC Ltd-it was held that plaint can not be rejected on the mere ground of non-payment of
deficit stamp duty payable on a document filed along with plaint since such question shall be
considered only when the document is sought to be tendered in evidence, since Order 7 Rule 1
CPC., does not contemplate that the deficit stamp duty, if any, on any document should be paid
at the inception. It is also unnecessary to decide the nature of the document.
In Y.Vijaya vs. B.Bhagaiah-2004(4)ALT-177-it was held that the impounding of the document
arises only during evidence in enquiry or trial and not before.
In Kasim Sahib vs. s.Hanumanthu-2005(1)ALT-507-it was held following the above Link well
Electronicss case of 1997(3)ALD336= (2)AnWR-42-that, plaint can not be rejected by raising
objection for numbering under Order 7 Rule 11 CPC., on the mere ground of non-payment of
deficit stamp duty payable on a document filed along with plaint since such question shall be
considered only when the document is sought to be tendered in evidence during enquiry or trial.
In-Ch.Annapurnamma vs. AP.Shastri-2000(3)ALD-649(DB)-it was by considering the above
decision reported in 1997(3)ALD336 and also the decisions reported in AIR-1975-AP96 and
AIR-1977-AP-397 and also AIR- 1970-MP-74(FB)-held that, when a document is unstamped or
insufficiently stamped and party knows that it cannot be admitted in evidence thereby, he should
have taken steps as option lies with him to pay the duty and the penalty when Court impounded
the document or to ask to forward the same to Collector u/s.38(2). When he kept quite with no
explanation for it, the enquiry which had begun ought not to be stalled till the document is sent to
collector and received back from collector, which would take months or years that lead to delay
in trials and enquires.
Further, in AIR 1981-AP 274 Y.Peda Venkaiah vs. RDO-it was held referring to AIR-1975-AP-
96 and 1967(2)AnWR-268-that, when original document was sent to the Collector at request of
party u/s.38(2) of the Stamp Act by the Court, the trial of the case need not be stayed till the
document is received back by the Court.

2) Scheme of the Indian Stamp Act (With A.P.Amendments)


2 (a) Sections:-The Indian Stamp Act contains eight chapters with 78 Sections besides Schedules
1 and 1-A & Rules framed under the Act.
Chapter-1 is Sections 1 and 2 i.e; extent of applicability and definitions.
Chapter-2 is Sections 3 to 30 regarding stamp duties, valuation and who to pay.
Chapter-3 is Sections 31 and 32 regarding adjudication as to proper stamp.
Chapter-4 is Sections 33 to 48 relating to instruments not duly stamped, power of impounding by
Court or Collector, use of the instruments, admissibility and objections relating to it in evidence.
Chapters-5 and 6 i.e., Sections 49 to 61 relate to allowances, reference and revision.
Chapter-7 is Sections 62 to 72 relates to criminal offences, jurisdiction of a Magistrate and
procedure.
Chapter-8 is Sections 73 to 78 relates to supplemental provisions.

2 (b) Rules-Out of the Rules under Stamp Act (Central Rules of 1925 and state Rules from time
to time): the A.P. Stamp prevention of under valuation of instruments Rules 1975 & Rules for
destruction of instruments impounded under Indian Stamp Act may be to some extent require
perusal. For several special exemptions from Stamp Duty on Instruments see Notifications of the
A.P. State Government from time to time (Pages.312 to 354 on Stamp Act by Sri K.V.Ramana
Rao) whenever special reference is required.

2 (c)-Definitions contained in Section 2 and Schedules contained in Schedules-1 and 1-A, (which
deal with nature and description of instruments and stamp duty payable) are to be read together.
(i). Instrument-As per Section-2(14) Instrument includes every document by which any right or
liability is, or purports to be, created, transferred, limited, extended, extinguished or recorded. In
AIR-1971-SC-1070, AIR-1946-Madras-298, AIR-1962-SC-110; 1961(1)AnWR-183 and AIR-
1973-AP-398-it was held that a copy of a document can not be called as an instrument under the
Stamp Act. See also-2002(5)ALT-624=(4)ALD-808=(2)LS-467-Akkam Lakshmi vs. Thota
Bhoomaiah.
A document which records an earlier gift is not an instrument held in AIR-1958-Rajastan-
291.Also see for Muslim gift reduced to writing stated gift made not requiring registration-
2001(4)ALT(SC)-5-Hafeeja Bibi vs. Sheik Fareed-in appeal against APHC decision, by
overruling the Decision of 1962(1)ALT-108=(1)AnWR-16(SB) and holding the decisions of
AIR-1975-AP-271,1954(2)MLJ-113&1985(2)MLJ-136 as not correct law.
In-Akkam Lakshmi vs. Thota Bhoomaiah-2002(5)ALT-624=(4)ALD-808=(2)LS-467-it was
further held that when the original document not duly stamped and not produced in proof, a copy
of the same since can not be an instrument no question of stamp duty payable thereon and further
it is not at all admissible as secondary evidence, in view of bar under Section-35 of the Stamp
Act-Relied on-AIR-1971-SC-1070.
The words document and instrument are used in the Stamp Act not to mention in the Registration
Act inter changeably. Since the word document is not defined in these Acts, one has to go to the
definition in the general clauses Act. Section-3(16) of the General clauses Act (10 of 1897) states
that document shall include any matter written, expressed or described upon any substance by
means of letters, figures or marks or by more than one of those means, which is intended to be
used, or which may be used, for the purpose of recording that matter.
(ii). Promissory-note-Schedule-1(49)&Section-2(22)-Section-2(22)-defines Pronote. As per
Schedule-1(49)-promissory note-where payable on demand-the highest revenue stamp to be
affixed on it is (Rs.0-25Ps.). (on Pronote why revenue stamp alone/can be affixed-see this notes
at Para- 3(B) under Section-37).
However, Endorsement of transfer on Pronote does not require stamp since it falls under
Schedule I(62) Exemption and Schedule I-A, (53) Exemption. See-1999(6)ALD-229.
The difference between promissory note and Bill of exchange is that, in case of Pronote the
executant with an unconditional undertaking-promises himself to pay, thus there are 2 parties
where as in case of bill of exchange he directs another to pay, thus there are 3 parties.
In case of Letter of credit which is neither Pronote nor Bill of exchange nor Bond, whether it is
general or special or open or conditional or confirmed or revocable or otherwise-there are 3
parties i.e one person requests some other to advance money (give credit) to another (3rd Party),
with a promise to repay.See-AIR-1962-Calcutta-325.
The difference between Pronote and Bond is that a mere promise to pay is not enough for
Pronote. If payable on demand to bearer or order it is not bond but Pronote. For a bond money
ultimately payable can even be uncertain. A bond requires undertaking the obligation to pay,
which requires a compulsory attestation. A bond may even have other qualities of a Pronote.
See-2011(4)ALT-14, AIR-1933-Madras-306; AIR-1976-MP-144(FB); AIR-1981-Allahabad-58;
AIR-1981-Allahabad-386; AIR-1966-AP-215; AIR-1959-AP-653; 1958(1)AnWR-224; AIR-
1957-AP-779-Chetlapalii vs. Vankamamidi-when a letter or Receipt amounts bond is stated.
AIR-1955Madras652(FB);AIR-1967-AP-123;1964(2)AnWR-472; AIR-1977-AP
SB;1997(2)ALT-292-Mabusaheb vs. V.krishnamurty;1997(3) ALT-805;1997(5)ALT-
628;1996(1)ALT-917=(2)ALD424(FB);1996(1)ALT- 810=(1)ALD1116-Voleti vs. Voleti;
1996(3)ALT-501=(3)ALD-590=(2)LS-135-Nookala vs. Gudapati; AIR-1966-Allahabad-
392(FB); 1983 (1) AnWR-269 and AIR-1967-SC1118 at 1121.
In case of Pronote-where the suit based on a Pronote insufficiently stamped is-since not
maintainable, (1) when plaintiff can fall back to original cause of action and (2) maintainability
of a suit on Pronote not duly stamped when marked with no objection, what is its affect etc.,
aspects are covered in the discussion on Sections-35 & 36. For further information in this regard
to know read with Sections 35 and 36 this notes at Para 3(B) under Sections 35 & 36.
iii). Receipt-Section-2(23) defines Receipt. As per Schedule-1(53)- a receipt for value above
Rs.500/-the stamp required to be affixed is Rs.1/- As per Section-35(b)proviso, for a receipt not
duly stamped the stamp duty and penalty payable is maximum Rs.3/-
Receipt is an acknowledgement between payee and payer about payment of money or delivery of
goods or discharge or satisfaction of a debt to support a claim or contention.
In 2003(6)ALD-491(1)-KN. Naidu vs. GS. Reddy-it was held that an entry in the account book
of the plaintiff contains signature of the defendant about the amount is received by him; it does
not require stamp duty since it is neither agreement nor Pronote.
(iv).Acknowledgement-As per Sch.1-A(a)- the stamp required to be paid on an
acknowledgement-is twenty paise.
Acknowledgements do not by themselves create any obligation to pay though such obligation
can be inferred by law.
(v). Letter-A letter(save that is covered by Sch.1-(A)-32 & 33)- unless it creates rights and legal
obligations on immovable property, it does not require registration and Stamp.
For difference between-Letter, Receipt and Acknowledgement and when Letter requires
registration-see-1988(1)ALT-18(NRC); AIR-1978-AP-257; AIR-1977-AP-123, AIR-1973-AP-
245; AIR-1965SC-59; AIR-1934-Allahabad-201, 1982-APLJ-375, AIR-1957-AP-779 & AIR-
1975-Bombay-79.
vi).Bond-Section-2(5)-of the Stamp Act defines Bond.
As per Schedule-1(A)48-on Security Bond and as per Schedule-1(A)30-on Indemnity bond-the
stamp duty payable is at 3% on the value of the Security as on the date subject to a maximum of
Rs.100/-
As per Schedule-1(A)13: on a Bond not otherwise provided for at Rs.3% up to Rs.1000/-and
above it Rs.15/- per every Rs.500/-or part thereof.
The essential requisites of Bond defined in Section-2(5) of the Stamp Act are-the obligation to
pay money or agricultural produce or the like. The whole document is to be read together to
decide whether the obligation to pay is created by the document to construe as bond or it is a
mere acknowledgement of a pre-existing liability. See-1980(2)APLJ-375, AIR-1957-AP-779 &
AIR-1977-AP-1(SB)& 2011(4)ALT-14.

vii). As per Schedule-1-A(3)-Adoption deed or Instrument conferring authority to adopt-requires


stamp duty of Rs.35/-,
viii). As per Schedule-1-A(4)- Affidavit (not for receiving pension or charitable
allowance)Rs.10/-. In this regard it is necessary to mention that prior to the AP. State amendment
XXVI of 1966 to stamp Act in Schedule-I-A(4)clause(b)-there was exemption of stamp duty on
affidavits being filed or used in any Court or before officer of Court.
As per High Court circular Roc.290/66-B-1 dt:4.7.1966 since the A.P. State amendment XXVI
of 1966 to stamp Act in Schedule-I-A(4) clause(b) of the exemptions are deleted related to
affidavits being filed or used in any Court or before officer of Court.
Further, the High Court of AP. in the case reported in AIR-1967-AP-87(DB)-explained the effect
of the amendments from which it requires stamp duty also on affidavit sworn or declared for the
immediate purpose of filing in any court, all courts have ensure payment of proper stamp duty on
all affidavit filed in courts.
However, it is pertinent to state that by G.O.Ms.No.604 Revenue-(v) Department, dt.26.6.74 the
Governor by virtue of powers U/s 9(1)(a) of the Stamp Act remits (i.e. refrain from demanding
and charging of Stamp duty) on affidavits or declarations in writing when made for the
immediate purpose of being used in any court or before the officer of any court.
In AIR-1947-Allahabad-37(FB) & also in AIR-1965-Rajastan-20--it was held that the word
immediate purpose refers to purpose and not to time.

(ix). As per Schedule-1-A(18)-On Chit Agreement relating to Chits under the AP. Chit Funds
Act, the stamp duty payable is Rs. 2/-.

(x). As per Schedule-1-A(16)-Certificate of sale granted to purchaser of property by Court on


public auction sale, the same as conveyance,

(xi). As per Schedule-1-A(20) & Section-2(10)-Conveyance As per Section-2(10) conveyance-


(by virtue of AP. amendment in 1998), it includes a conveyance on sale, every instrument and
decree or final order of a civil Court by which any property or interest therein transferred to or
vested in or declared to be of any other person, intervivos which is not otherwise specifically
provided by Schedules-1 or 1-A. It includes transfer of interest by one co-owner to another co-
owner not covered by instrument of partition. It also includes transfer of share in property in
partnership business by a partner to another partner with or without business assets on retirement
or dissolution or by contribution of his interest by transfer of right, interest and title to capital of
firm. The actual transfer of property is thus an essential feature-AIR-1961-AP-424. In
2002(3)ALD-33-KR.Laxmibhai vs. RDO.-it was held that a letter agreeing to give a girl in
marriage and take him as Illotham son-in-law by giving 1/3rd share in the property is not a
conveyance since no rights in immovable property are actually conveyed there under and hence
no stamp duty is required thereon to admit the letter.
As per schedule-1-A(20)-for Conveyance including for exchange of property i.e., Section-2.

(xii). Exchange of property is chargeable for greater value as per Schedule-1-A27-not being a
sale Rs. 5/- per hundred up to Rs.1000/- and above to it for every five hundred rupees or part
there of at Rs.25/-.

(xiii)-Provided that, in case of Sale Agreements stamped as of a conveyance on sale, for later
execution of Sale deed-the stamp is to be adjusted and further stamp duty payable is Rs.5/-as per
the proviso to Schedule-1-(47-A)-Explanation-1.
This Explanation says that-an agreement to sell followed by or evidencing delivery of possession
of property agreed to be sold shall be chargeable as sale.

(xiv)-Article-47-A-speaks of the stamp duty payable for a Sale- deed depending upon the
existence of property at different places,

(xv)-Schedule-1-A(6)-Speaks of the Stamp duty payable on an Agreement.


For Sale Agreement (other than possessory Sale Agreement covered by the explanation to
Schedules-1-A & 47-A),
As per Schedule-1-(A)-6(A)-the stamp payable is;
On value up to Rs.5,000/- - Rs.10/-
Above to it up to Rs.20,000/- - Rs.20/-
Above to it up to Rs.50,000/- - Rs.50/-
On value above Rs.50,000/- - Rs.100/-
As per Schedule-1(A)-6(B)-if the agreement is relating to construction of a house or building
including a multi unit house or building or unit of apartment/flat/portion of multi-storied building
or for development/sale of any other immovable property at Rs.5% on the market value or
estimated cost mentioned in the agreement or on value arrived at in accordance with the schedule
of rates prescribed by public works authorities which ever is higher.
As per Schedule-1(A)-6(C)-in any other case Rs.100/-
2004(1)ALD-557 Pechetti Ramakrishna vs. NVM Raoit was held in the schedule-IAArticle-
6(A) is a general provision, Article-6(B) would be applicable only in such specified cases and the
same cannot override the general provisions Article-6(A), and Article-6(C) should be construed
to be case not falling under either A or B. In case of agreement of sale of vacant landthe stamp
duty payable as per Article-6(A) and not as per Article-6(B). See also 2005(1)ALT-507-Krishna
Sahib vs. S.Hanumanthu.
In-2003(2)-ALD-640-Jannuchenderbabu vs. Manchikatla-it was held that an agreement of sale
originally without delivery of possession, when there is a subsequent recital by way of
endorsement on the agreement or by a separate document acknowledging delivery of possession,
this recital regarding delivery of possession comes under Article-47(A)of Schedule- 1(A), hence
liable for stamp duty as if sale. The contention that the endorsement is evidencing money and is
only a receipt despite recital there in regarding delivery possession is untenable in view of
Sections 5 & 6 of the Stamp Act.
In-2004(1)ALD-380Chintam Kantham vs. DVRao-it was held further that even prayer for
delivery of possession made in the plaint makes no difference since the document is liable for
stamp duty as sale from the subsequent endorsement about delivery of possession. Referred-
AIR-2000-AP-167=1999(6)ALT-59(DB)=(6)ALD-160-B.Ratnamalas case; 1999(1) ALT-
596=(1)ALD-159-MA.Gafoors case; AIR-1995-AP-329=1995(2)ALT-828= (2)ALD-59; AIR
1999-SC-807=JT-1999(1)SC-186.
See also-1996(3)ALT-725; AIR-1977-SC-500; AIR-2002-AP-218=(3) ALD-321=(2) ALT-
703=(1)LS-261.
In-2003(2)LS162=(4)ALD-61-on the peculiar facts of the case, it was held with reference to
specific pleadings of parties that, the possession is as a lessee and not followed by or evidencing
delivery of possession in pursuance of the agreement to sell the land, hence not chargeable as
conveyance with sale deed stamp.
In 2004(1)ALD-260M.Madhusudhana Reddy vs. M.Kamaleswar-it was held that the agreement
of sale not mentioning about delivery of possession, there was a subsequent oral delivery of
possession when not endorsed on the sale agreement, there is no instrument evidencing delivery
of possession, thus, it is not liable for stamp duty as a sale deed, relied on-1999(6)ALD-160-
Ratnamalas case.
See also-1999(1)ALD-159=(1)ALT-596-MA.Gafoor vs. Md.Jani-which was discussed and held
as not good Law in the later bench judgement of B.Ratnamalas case of 1999(6)ALT-
59(DB)=(6)ALD-160.
In the above referred-AIR-2000-AP-167=1999(6)ALD-160=(6)ALT-59(DB)-B.Ratnamala vs.
G.Rudramma-it was clearly held that Article-47-A applies to a case where possession has been
delivered to the purchaser under an agreement of sale, if it is done in pursuance of the agreement.
The said article also applies if delivery is affected even in the past and the same is recorded in
the agreement. When possession was already with the tenant-purchaser prior to the agreement of
sale and in view of the agreement the tenant holding the possession in the capacity of a
purchaser, the Article-47-A attracts though there is no physical delivery of possession. See also-
1996(3)ALD-919=(3)ALT-725-Dauluru vs. Bhogi; 1995(2)ALD-59=(1)ALT-828-M.Lingareddy
vs. D.Gangareddy.
In-1982(1)SCC-237=AIR-1982-SC-989-Sardar G. Mahadiks case-it was held that there is a
noteworthy difference in the probative value of entering into possession for the first time and
continuing in possession with a claim of change in character, where a person claiming benefit of
part performance of contract was already in possession prior to the contract the Court would
expect something independent of mere retention of possession to evidence partperformance and
some act done in furtherance of the contract.
In-2002(5)ALT-404=(3)LS-175 & 2003(2)LS-325-it was held that an unregistered sale
deed(duly-stamped)in an injunction suit is admissible regarding possession as collateral purpose.
In-2002(6)ALT-144=2001(3)ALD-317=(1)LS-422-it was held that in a suit for a specific
performance on sale agreement as per decree sale deed to be executed, the stamp duty payable is
as per market value on the date of sale deed and not the market value on the sale agreement. This
decision overruled the previous decision of this court in-1998(3)ALD-46- where in it was held
that without recourse to sale agreement consideration-mentioned there in, the Registrar cannot
insist to pay on basic value register valuation at the date of execution of sale deed.
In-AIR-1996-SC-1170(c)-it was held that though basic valuation of Sub-registrar is only for
purpose of collecting stamp duty, even then it cannot be a sole basis or foundation to determine
market value. However, the values mentioned in the basic value register have to be taken into
consideration along with other material in assessing the market value as per Rule-3(3)of the A.P.
Prevention of under valuation of instrument Rules, 1975.Followed-1994(4)SCC-595. See also-
2002(4)ALD-371=(6)ALT-180= (2)LS-229.
(xvi). As per Schedule-1(A)31On Lease Rs.3/-per hundred up to Rs.1000/-and above it Rs.15/-
for every five hundred or part there of, on the amount of annual rent for lease up to five years
and above it five rupees per hundred up to Rs.1000/-and above it for every five hundred or part
thereof at Rs.25/-.
For surrender of lease Rs.30/- as per Schedule-1(A)52(6).
For transfer of lease same as conveyance as per Schedule-1(A)54.
Lease is different from license. License is not transfer of property. See-AIR-1976-SC-1813;
AIR-1978-SC-1587; AIR-1986-AP-256; 1972(2) AnWR-302; AIR-1969-AP-399; AIR-1925-
Madras-434(FB) and AIR-1968- SC-1361. For further discussion, see this notes on Registration
Act under definition of Lease at Para-4(c)(3).
(xvii). As per Schedule-1A(35)-Mortgage deed-(other than an agreement relating to deposit of
title deeds, pawn, pledge, bottomry bond, Security bond, Mortgage of crop)-when possession
given or agreed to be given five rupees per hundred up to Rs.1000/-and above it for every five
hundred or part thereof at Rs.25/-, when possession not given at Rs.3/- per hundred up to one
thousand and above it Rs.15/-for every five hundred or part there of.
For stamp on mortgage of a crop-see-Schedule-1(A)36.
For stamp on agreement relating to deposit of title deeds, pledge and Pawn-see-Schedule-1(A)7.
For re-conveyance of mortgage property-see-Schedule-1(A)45.
As per Section-2(17)Mortgage deed-includes instrument where by to secure money advanced or
to be advanced, by way of loan or an existing or future debt or performance of an engagement,
one transfers or creates to or in favour of another, a right over or in respect of specified property.
See-AIR-1959-AP-650=(2)AnWR-102; 1967(2)AnWR-515(FB); AIR-1953-Madras-764 at
767(FB) and AIR-1969-Madras-1.
A recital regarding deposit of title deeds already made and equitable mortgage created is not a
mortgage deed. SeeAIR-1966-Rajastan-219; AIR-1976-SC-1813; AIR-1968-AP-142 & AIR-
1985-AP-391.
In-2002(5)ALD-135(DB)=ALT-650=(3)LS-36-Durga emporium vs. Munaga Brothers-it was
held that letter evidencing the factum of deposit of title deed already made and equitable
mortgage created , doesnt require registration. See also-AIR-1965-SC-1591-Union Bank vs.
LR.Sonaram & AIR-1923-PC-50.
In-2002(5)ALD-750-distinction between lease and mortgage and requirement of registration
when arises was considered and discussed.
(xviii). As per Schedule-1A(29)-Gift, not being a settlement or will or transfer the same duty as a
conveyance on market value of the property covered by the gift,

(XIX). As per Schedule-1A(49)-Settlement, (which is not a deed of dower at Muslim marriage)


at Rs.3/-per hundred up to one thousand and above it Rs.15/-for every five hundred or part there
of.
For Revocation of settlement at Rs.3/-per hundred up to one thousand rupees and above to it at
Rs.15/-for every five hundred or part there of.
Section-2(24)defines settlement: Settlement is like a gift, a non-testamentary - disposition in
writing by a compulsory attestable document.
It is not the nomenclature but the contents that are decisive to decide whether it is a settlement or
gift or will or partition or family arrangement or relinquishment or the like.
The distinction between settlement and will is whether the document is intended to have
immediate operation or after death of executant/transferor & whether the instrument is
irrevocable or revocable. See1980(2)APLJ-375; 1958-ALT-570; 1970(2)AnWR-181 and AIR-
1977-AP-348
In AIR-1951-SC-103; AIR-1961-SC-1302; AIR-1963-SC-1703; AIR-1972-Madras-309; AIR-
1972-Mysore-222; AIR-1927-Madras-197; AIR-1933-Madras-492 and AIR-1982-Madras-281-it
was held further that the general principles governing construction of will are equally applicable
to construction settlement.
The distinction between settlement and gift is whether it is given with a view to make a provision
for a dependant or out of love and affection and the postponement of possession while conferring
vested right seeAIR-1977-AP-348.
See Specific relief act-for definition of settlement.
In 2013(1 ALT(1)(SC) - Mathai Samuel and others Vs. Eapen Eapen (dead) by Lrs. & others-it
was held onWill and Settlement Basic and fundamental differences, that Gift/settlement is
the transfer of existing property made voluntarily and without consideration by one person called
the donor to another called the donee and accepted by or on behalf of the donee. Gift takes effect
by a registered instrument signed by or on behalf of the donor and attested by at least two
witnesses.
Section 122 of the Transfer of Property Act defines the "gift" as a voluntary transfer of property
in consideration of the natural love and affection to a living person.
(2).Settlement:is transfer of existing property made voluntarily, consideration being natural love
and affection to living person Takes effect by registered instrument signed by or on behalf of
settler and attested at least by two witnesses.
It may point out that: in the case of a Will, the crucial circumstance is the existence of a
provision disposing of or distributing the property of the testator to take effect on his death. On
the other hand, in case of a gift, the provision becomes operative immediately and a transfer in
praesenti is intended and comes into effect.
A Will is, therefore, revocable because no interest is intended to pass during the lifetime of the
owner of the property. In the case of gift, it comes into operation immediately.
The nomenclature given by the parties to the transaction in question, as we have already
indicated, is not decisive.
A Will need not be necessarily registered. The mere registration of 'Will' will not render the
document settlement.
In other words, the real and the only reliable test for the purpose of finding out whether the
document constitutes a Will or a gift is to find out as to what exactly is the disposition which the
document has made, whether it has transferred any interest in praesenti in favour of the settlees
or it intended to transfer interest in favour of the settlees only on the death of the settlors.

Composite Document:
16. A composite document is severable and in part clearly testamentary, such part may take
effect as a Will and other part if it has the characteristics of a settlement and that part will take
effect in that way. A document which operates to dispose of properly in praesenti in respect of
few items of the properties is a settlement and in future in respect of few other items after the
deeds of the executants, it is a testamentary disposition. That one part of the document has effect
during the life time of the executant i.e. the gift and the other part disposing the property after the
death of the executant is a Will. Reference may be made in this connection to the judgment of
this Court in Rev. Fr. M.S. Poulose v. Varghese and others (3) (1995) Supp 2 SCC 294.
17.In a composite document, which has the characteristics of a Will as well as a gift, it may be
necessary to have that document registered otherwise that part of the document which has the
effect of a gift cannot be given effect to. Therefore, it is not unusual to register a composite
document which has the characteristics of a gift as well as a Will. Consequently, the mere
registration of document cannot have any determining effect in arriving at a conclusion that it is
not a Will. The document which may serve as evidence of the gift, falls within the sweep of
Section 17 of the Registration Act, Where an instrument evidences creation, declaration,
assignment, limitation or extinction of any present or future right, title or interest in immovable
property or where any instrument acknowledges the receipt of payment of consideration on
account of creation, declaration, assignment, limitation or extinction of such right, title or
interest, in those cases alone the instrument or receipt would be compulsorily registrable under
Section 17(1) (b) or (c) of the Registration Act, A 'Will' need not necessarily he registered. But
the fact of registration of a 'Will' will not render the document a settlement. Exhibit Al was
registered because of the composite character of the document.

Intention Guiding Factor:


18. The primary rule of construction of a document is the intention of the executants, which must
be found in the words used in the document. The question is not what may be supposed to have
been intended, but what has been said. We need to carry on the exercise of construction or
interpretation of the document only if the document is ambiguous, or its meaning is uncertain. If
the language used in the document is unambiguous and the meaning is clear, evidently, that is
what is meant by the executants of the document. Contemporary events and circumstances
surrounding the execution of the document are not relevant in such situations.
19. Lord Hale in King v. Meling (1 Vent. At p. 231), in construing a testamentary disposition as
well as a settlement, pointed out that the prime governing principle is the "law of instrument" i.e.
the intention of the testator is "the law of the instrument".
Lord Wilmot, C.J. in Doe Long v. Laming (2 Burr. At pp. 11-12) described the intention of the
testator as the "pole star" and is also described as the "nectar of the instrument.
In Re Stone, Baker v. Stone [(1895) 2 Ch. 196 at p. 200] the Master of the Rolls said as follows:
"When I see an intention clearly expressed in a Will, and find no rule of law opposed to giving
effect to it, I disregard previous cases." Coleridge, J. in Shore v. Wilson [9 Cl. & F.'355, at p.
525] held as follows:
"The intention to be sought is the intention which is expressed in the instrument, not the intention
which, the maker of the instrument may have had in his mind. It is unquestionable that the object
of all expositions of written instruments must be to ascertain the expressed meaning or intention
of the writer; the expressed meaning being equivalent to the intention.It is not allowable To
adduce any evidence however strong, to prove an unexpressed intention, varyingfrom that
which the words used import. This may be open, no doubt, to the remark that although we
profess to be explaining the intention of the writer, we may be led in many cases to decide
contrary to what can scarcely be doubted to have been the intention, rejecting evidence which
may be more satisfactory in the particular instance to prove it. The answer is, that the interpreters
have to deal with the written expression of the writer's intention, and courts of law to carry into
effect what he has written, not what it may be surmised, on however probable grounds, that he
intended only to have written."
20.In Halsburys Laws of England, 4th Edn., Vol.50, p.239, it is stated: "408. Leading principle
of construction: The only principle of construction which is a applicable without qualification to
all wills and overrides every other rule construction, is that the testator's intention is collected
from a connection with any evidence properly admissible, and tile meaning of the will and of
every axt of it is determined according to that intention."
21. Underhill and Strahan in Interpretation of Wills and Settlements. (1900 Edn.), while
construing a will held that "the intention to be sought is the intention which is expressed in the
instrument not the intention which the maker of the instrument may have had in his mind. It is
unquestionable that the object of all expositions of written Instruments must be to ascertain the
expressed meaning or intention of the writer ; the expressed meaning being
equivalent to the intention.
22. Theobald on Wills (17th Edn. 2010) examined at length the characteristics of testamentary
instruments. Chapter 15 of that book deals with the General Principles Construction. Referring to
Lindly L.J. in Musther, Re (1889) 43 Ch.D. 569 at p.572, the author stated that the first rule of
will construction is that every will is different and that prior cases are of little assistance.
Referring to Sammut v. Manzxi (4) [2009] 1 W.T.L.R. 1834, the author notices that the Privy
Council had approved the approach of considering wording of the will first without initial
reference to authority, and commented that "little assistance in construing a will is likely to be
gained by consideration of how other judges have interpreted similar wording in other cases

Golden Rule
23.We, therefore, have to examine the composite character of the document and interpret the
same in accordance with the normal and natural meaning which is discernible from that
document. In order to ascertain the intention of the testator, the point for consideration is not
what the testator meant but what that which he has written means.
It is often said that the expressed intentions are assumed to be actual intentions. This Court in
A.Sreenivasa Pai and another v. Saraswathi Ammal alias G. Kamala Bai (5) (1985) 4 SCC 85
held that in construing a document, whether in English or in any Indian language, the
fundamental rule to be adopted is to ascertain the intention adopted from the words employed in
it. Reference may also be made to the judgment of the privy Council in Rajendra Prasad Bose
and another v. Copal Prasad Sen (6) AIR 1930 PC 242 and C. Cheriathan v.PNarayanan
Embranthiri and others (7) (20),2 SCC 673
Subsequent events: Subsequent events or conduct of parties after the execution of the document
shall not be taken into consideration in interpreting a document especially when there is no
ambiguity in the language of the document. But we may refer to those events also only to re-
enforce the fact that there is no ambiguity in the language employed in the document.

For the distinction between settlement and trust-SeeAIR-1979 Madras-5.


For the distinction between settlement to partition and settlement to family arrangement- besides
distinction between partition and family arrangement-See-AIR-1977-Madras-88; AIR-1986-
Bombay-370, AIR-1967-BomBAY-369; AIR-1966-Madras-315 and AIR-1970-MP-33.
For family arrangement-all persons getting property need not have interest much-less equal or
uniform interest even to get property equally or all persons having equal interest may not be
getting equal extent or share in properties arranged and settled in the family by the family
arrangement.
For partition-depending upon good and bad qualities in proportion to the extent and right of
share the persons having joint interest as co. owners or co. sharers divide and separate their share
in the properties whereby there will be mutual release of joint rights in the property divided and
fallen to the shares of several parties to the partition. That is why partition is not a transfer of
property except separation of existing joint and undivided interest in properties.
Whereas, in case of settlement-the settlee is but for family relationship to settler, not having any
interest in the property, the settlee may not have even any pre-existing right to claim
maintenance etc.,.
For example a father can settle his self acquired property to his daughters or sons or their
children or even to his mother or wife or brothers and sisters or the like.

(xx). As per Schedule-1A(40)-Partition instrument at Rs.3/-per hundred up to one thousand


rupees and above to it Rs.15/- for every five hundred or part there of, the largest share remaining
after partition exempt from stamp duty.
As per Section-2(15)-instrument of partition includes an Award by Arbitrator directing partition
and Since August, 1986 even a memorandum regarding past partition-See-1990(1)ALT-264.
In-AIR-1956-Madras-207(FB)-it was held that a final decree of Court allotting specific property
to each sharer and vested is a final order effecting partition. The final order need not necessarily
be passed in a partition suit. Unless parties furnish requisite stamp for engrossing final decree.
CONTINUE PART II
As per Section-2(15)-instrument of partition includes an Award by Arbitrator directing partition
and Since August, 1986 even a memorandum regarding past partition-See-1990(1)ALT-264.
In-AIR-1956-Madras-207(FB)-it was held that a final decree of Court allotting specific property
to each sharer and vested is a final order effecting partition. The final order need not necessarily
be passed in a partition suit. Unless parties furnish requisite stamp for engrossing final decree for
partition, Court can not draw up the decree.
A decree for partition comes under instrument of partition as such it cannot be admitted in
evidence and cannot be acted upon unless duly stamped and engrossed on stamp papers. Unless
the decree was drawn up on proper stamp papers it cannot be executed.
It is the duty of the Court when passing a final decree for partition-to call upon the parties to
furnish requisite stamp papers for engrossing the decree thereon. See-AIR-1960-AP-54; AIR-
1975-AP-91; AIR-1958-AP- 457; AIR-1973-AP-300 and 1997(3)ALD-261.
A partition list which doesnt effect any division is not an instrument of partition is held in AIR-
1966-AP-184=1965(2)AnWR-276; 1982(2)ALT-384; AIR-1962-AP-132; AIR-1957-AP-
237(FB) and 1957(1) AnWR-288.
In-1997(3)ALD-261-it was held that to decide what is the rate and on what value-the stamp duty
is payable-it is the market value to be taken for consideration is not the value as on the date of
suit but the value when final decree being passed in the partition suit.
In-2002(2)ALD-261-it was held that-in a partition deed executed where by each sharer was put
in possession of his sharea subsequent partition list in accordance with earlier partition deed is
not liable for stamp duty as it wont fall under the definition of the instrument of partition.
In-2002(6)ALD-27-it was held that when two brothers held jointly, divided their property and
prepared two separate lists of it, when it is not a mere partition list, it is liable for stamp duty and
registration as instrument of partition.
In-AIR-1975-AP-9; 1974(1)APLJ-304; 35-Madras-26 & AIR-1933- Oudh-562(FB)-it was held
that the decree of Court whereby allotment of specific properties to several persons was made
with a direction for delivery of the properties, it is not a preliminary decree deciding mere rights
of parties as it tantamounts to actual partition by final order of the court-the final decree is as the
instrument of partition liable for stamp duty. Thus the parties must furnish N.J.Stamp Papers for
drawing up of the final decree and till then there is no decree at all to execute. See also-AIR-
1938-Madras-307 and AIR-1946-Madras-534.
In AIR-2001-Delhi-338-G.C. Kumar Vs. Ashok Kumar; it was held following AIR-1941-
Madras-929(FB), AIR-1937-PC- 163 and AIR-1924-PC-196it was held that the drawing of
decree is the obligation of the Court in terms of judgment, the only bar is for non-payment of
deficit court fees the decree drawn up become unexecutable until deficit court fees is paid. The
non-payment of balance court fees only postpones the date on which decree to be executed;
however, it will not save from running of limitation for execution from date of decree.
The Court has no power to stay drafting of decree once judgement is pronounced, merely
because balance court fees ordered to be paid in the judgement.
Therefore the proper procedure is that the decree shall bear an endorsement that the same shall
not be executed until a difference court fee is paid.
NB-Coming to partition final decree-the parties must furnish N.J.Stamp Papers for drawing up of
the final decree and till then there is no decree at all to execute-from the above referred settled
position of Law.
From the above noticed distinction between Partition list and Partition deed and to say that no
stamp duty is payable and no registration is also required for a partition list when it is a mere
acknowledgement of past oral transaction-See-2005(5)ALT-616 & 2005(5)ALT-274; See also-
1990(1)ALT -264; 1982(2)ALT-384; AIR-1974-Madras-239; 1969(1)APLJ-?; AIR-1929-PC-
269; AIR-1962-AP-132; AIR-1986-AP-1; AIR-1986-AP-14; AIR-1987-Delhi-1101;
1978(1)MLJ-248; AIR-1991-Delhi-178; 1991(2)APLJ(DNC)-45(ALL); 1999(6)ALD-642; AIR-
1989-Madras-268(FB); AIR-1989-Madras-257 and AIR-1937-Madras-308.
Family arrangement different to partition instrument-A family arrangement may be oral or
written or partly oral or partly written-like a partition. If it is in writing and thereby creates right
in immovable property it requires registration like an instrument of partition. Even the instrument
of family arrangement is not registered, like in a partition, it can be received and looked in to for
collateral purpose, subject to requirement of stamp duty-if not duly stamped on impounding or
levy and payment of stamp duty and penality if any.
The theme behind family arrangements is to give finality to family disputes and differences. The
family arrangements are governed by principles which are not applicable to dealings between
strangers.
As per the Halsburys laws-a family arrangement is a transaction between members of same
family for the benefit of the family generally and to preserve the family property, peace and
Security in the family, saving of the honour of the family and to avoid family disputes and
litigations by amicable arrangements. Such family arrangements even can be arrived at orally. Its
terms can be even recorded in writing of what has been settled and such a memorandum is for
the purpose of being used in future for evidencing the past transaction.
If the family arrangement is only a mere memorandum of past oral family arrangement reduced
to writing it does not require stamp duty and registration. If it is a document by which rights are
for the first time created or title for the first time declared by the terms of the document-it
requires Registration. See-AIR-1966-SC-292; AIR-1966-SC-237; AIR-1966-SC-1836; AIR-
1955-SC-486(481); 1979(1)AnWR-416; AIR-1976-SC -807 at 813 and AIR-1971-SC-1337;
1998(1)ALD-501; AIR-1988-SC-881 & 2001(4)ALD-352.
(xxi).As per Schedule-1A(46)-Release-that is one renounces a claim upon another or against a
property at Rs.3/-per hundred up to one thousand rupees and above to it Rs.15/-for every five
hundred or part there of. As per amendment Act 19/05 d1-8-05, if the partition or settlement or
release deeds are between family members the stamp duty is only 1%.
A release-is nothing but relinquishment of joint rights in any property by virtue of it all the other
persons who are co. owners can get benefit even if release is in the name of only one or few.
Since relinquishment or admission doesnt confer title, release doesnt confer title to a stranger
or only to one among several joint owners. See-AIR-1966-SC -605 at 612; AIR-1967-SC-1395;
AIR-1968-Madras-159(FB); AIR-1988-SC881; AIR-1955-Madras-641; 1987(1)LS-2(SN);
AIR-1935-Madras-113; 1983(2)APLJ-72(SN); AIR-1956-Calcutta-668; AIR-1973-AP-275(FB)
and AIR-1966-AP-184.
The distinction between partition and release is that a deed of release is a one sided document
and binds the executant alone, whereas a partition is an arrangement or agreement between two
or more persons dividing their property, though mutual release is an incident in the division. See-
AIR-1958-AP-457 & 1971(1)MLJ-177(FB).

(xxii). As per Schedule-1A(41)- for Partnership deed Rs.300/-and for Partnership deed of
dissolution Rs.150/-.
In-AIR-1966-SC-1300 affirming AIR-1959-AP-380(FB)-it was held that what ever may be the
character of the property whether movable or immovable, brought in by partners for formation of
partnership and whatever the property acquired in the course of partnership business all form part
of property of firm and when the firm seizes its legal existence the properties vest in all partners
thereby every partner has an interest in the partnership property though no partner can deal as his
own any part of it during subsistence of the partnership firm. Though the partnership assets
include immovable property fallen to any partner on dissolution, it is only a movable property
and it can be by book entries allotting to any one or more among the partners. It doesnt require
registration and stamp, even the document evidencing any relinquishment of that interest by
other partners, no registration is necessary. See also-2006(3)ALT-510-WHERE IN ALSO IT
WAS HELD THAT THERE IS NO REUQUIREMENT OF REGISTRATION FROM
DISTRIBUTION OF THE IMMOVABLE PROPERTIES OF THE DISSOLVED FIRM
AMONG ITS PARTNERS AS BOOK ASSESTS.
In-1989(3)ALT-414-it was held that the deed of dissolution of partnership-where properties of
the firm were distributed among the partners, it is not chargeable as partition but only chargeable
as partnership dissolution.
In-2000(4)ALD-203=(3)ALT-787-Pulavarti vs. Pulavarti-it was held under Section-27 of the
Stamp Act by following AIR-1972-SC-899-that entries in the account book doesnt require
stamp duty for admission in evidence, for the entries in the account books about settlement of the
disputes regarding properties of the joint business of the partners-(near relatives)with no value of
it mentioned-held it at best amounts to acknowledgement of family arrangement and it does not
amount to instrument of partition or settlement-to require any stamp duty and registration.
In-2003(3)SCC-229-it was held that from dissolution of partnership firm and distribution of
assets of the firm between partners as per arbitration award as there is no transfer of assets or
assignment of ownership in the assets of the firm the award doesnt require registration.

(xxiii). As per Section-2(21)-Power of attorney includes any instrument empowering a specified


person to act for and in the name of the person executing it. The Power of Attorney is a
delegation of authority in writing by which one or more persons are empowered to do an act or
acts in the name of another. See-15-Madras-386(FB).
As per Schedule-1A(42)-Power of attorney when executed
(i).for sole purpose of getting registration of documents or for authorizing one person or more to
deal with single transaction Rs.25/-,
(ii).for authorizing not more than five persons or more than one transactions Rs.50/-,
(iii).for authorizing more than five and up to ten persons or more than one transaction Rs.75/-,
(iv).when given for consideration authorizing the attorney to sell any immovable property Rs.5/-
per hundred up to Rs.1000/-and above it for every five hundred or part thereof at Rs.25/-, and
(v).in any other case Rs.25/-per each person authorized.
For construction on development of or sale or transfer of any immovable property Rs.5/-per
hundred up to Rs.1000/-and above it for every five hundred or part thereof at Rs.25/-,
See Malaysia Air Lines case of AIR-2001-SC-358-for stamp duty on the Power of attorney and
penalty payable thereon-(a case of power of attorney executed in a Foreign Country relied in
India).

(xxiv). As per Schedule-1A(55)-Trust declaration or Trust revocation-concerning any property is


five rupees per hundred up to Rs.1000/-and above it for every five hundred or part thereof at
Rs.25/-. However, the maximum stamp duty payable for declaration of a trust is Rs.200/-and for
revocation of a trust Rs.100/-.

3). The aspects to be considered for levy of stamp duty and penalty
3(a). In Chapter 2 (Sections-3 to 30) of the Stamp Act; Section-29 speaks of the stamp duty by
whom payable.
As per Sections-3 to 6 r/w.17 to 19, the aspects to be considered are the facts affecting stamp
duty must set forth in the document and as per Section-27 including the facts about
consideration, market value as on the date of the document executed to know whether any stamp
duty is payable, and if so, whether the stamp duty is properly paid or not. See-AIR-1960-AP-155
& 2000(3)ALT-787.
Further, it is not from the mere nomenclature but from substance i.e; contents and recitals in the
document as a whole to be considered to decide by the Court from the nature of the transaction
covered by the document to impound and collect stamp duty. See-AIR-1961-AP-424 & AIR-
1961-Madras-504(FB).
For stamp duty to levy and to impound, it is the date of execution of the document and the value
of the property by then that is the criteria. The Court to impound a document if not duly stamped,
the crucial date is the date of execution since the stamp duty payable is as per the law that was
prevailing on the date of execution and not the date of production for consideration before Court
or Collector or the like. See-AIR-1992-AP-183 & AIR-1968-AP-213(FB). See also-AIR-1962-
Rajastan-68 & AIR-1954-HP-51.
The Stamp duty payable is on the instrument and not on the transaction not covered by the
instrument. It is the real nature of the transaction covered by the instrument from its contents and
not from nomenclature that is decisive to charge or to impound the instrument and to determine
what is the stamp duty and the penalty to be payable. The nature of document to be determined
to decide stamp duty is from the language employed therein from its contents and also the
purpose that is intended to serve. Thus, the substance of the transaction from whole contents of
the document will be determined even to gather the intention of the parties. See-AIR-1961-
Madras-304; AIR-1951-Madras-209, AIR-1954-HP-51; AIR-1972-Mysore-263; 5-Madras-394
and AIR-1955-AP-257.
For charging stamp duty it has to be considered as to whether the instrument covered is a single
transaction or part or more than one transaction. See-AIR-1956-SC-35; AIR-1986-SC-403; AIR-
1977-SC-500; AIR-1956-AP-252; AIR-1962-AP-145; AIR-1976-AP-417; AIR-1952-Madras-
515; AIR-1970-Madras-2; AIR-1970-Madras-5; AIR-1970-Madras-10 & 1967(2)AnWR-
515(FB).
In-2005(5)ALD-206-v.Anjaneyulu vs. V.Vadapalli-it was held that when the instrument is
unregistered and insufficiently stamped-runs in two parts which are separable-on stamp duty
required to be paid on impounded respectively-the portion which is required to be registered can
not be looked into but for collateral purpose and the other portion which is not required to be
registered can be looked into for main purpose.
An unstamped or defectively stamped document is not void and it is effective from the date of its
execution once it is properly stamped with, or stamp duty with penalty if any is levied and paid.
It is only till then, it is incapable of being made use of as evidence held in-AIR-1956-Madras-
454; AIR-1968-AP-213(FB); 2003(2)ALD-638; AIR-1972-AP-373; 2003(1)LS-382; 1957-AP-
237(FB); AIR-1962-A.P-132; 2005(5)ALT-616; 2005(5)ALD-274; 2005(4)ALT-411;
2005(1)ALD-607 & 2005(5)ALD-381.
Considerations whether the document validly executed under T.P. Act or Registration Act etc.
are immaterial for the Court to impound once the document is filed in Court. For an unstamped
document unless stamp duty paid the document has no validity in law. See-1967(2)AnWR-
515(FB)= AIR-1968-AP-213. This decision also speaks about the duty of the Court to see
whether the transaction covered by the document is a mere acknowledgement of a past
transaction or it is the transaction entered and dealt by the document and rights and interest are
for the first time created and conferred by the document. In fact, it is the instrument where by the
transaction that is affected to be considered. For example in case of sale or conveyance or
transfer if carried orally and not by any instrument there is no question of imposing or to
impound any stamp duty. There can be no legal impediment to a party to select and adopt a
particular form of transaction to minimise the expenses of stamp duty.
If any person claims benefit for exemption from payment of stamp duty, it is for him to establish
the applicability of such exemption. See-AIR- 1955-AP-257.
A stamp paper purchased by or for the use of a person can be used by that person or his
authorized agent or legal representatives only. It impliedly means others can not make use of the
stamp paper purchased for the use of a person as per Rule-6(2) of the 1925 Rules under the
Stamp Act and G.O.Ms.No.340(Revenue)dated:16.4.1967-held in 2002(5)ALD-362 =(3)ALT-
754.
A document executed in one state if relied in another state, if there is higher rate of stamp to
charge in the 2nd state on the document, the difference stamp duty is payable before it can be
used in evidence.
In-AIR-1963-SC-1307-New Central Jute Mills Ltd vs. State-it was held that when a document
was executed in one State after it is duly stamped as per Law of that State, it can be used in that
State, and if to be used in another State, if stamp duty payable there is less or equal nothing more
is payable where as it is more than that, the deficit is to be paid. See also- Section-19 of the
Stamp Act.
If a document executed in a foreign country relied in India the document is liable for stamp duty
as per Indian law See AIR-2001-SC-358=2001(1) ALD-SC-57-Malaysia Airlines case. See also-
AIR-1962-Punjab-167.
See also- Section-18 of Stamp Act which says within 3 months after the documents reached
India, to be stamped other than for pro-note & bill of exchange.

3(b). Chapters-III & IV, (Sections-31 to 48)-are important which deal with procedure for
examination and impounding of instruments not duly stamped by whom, when and how-and the
duty of Court to impound and at request of parties to refer to Collector and then duty of the
Collector to adjudicate, decide and collect stamp duty & when once referred by Court or brought
to Collector by a party and impounded-whether the Court has any further say on it.
Sections-31 and 32 speak about the administrative duty of the Collector to decide the stamp duty
on document produced before him for his opinion and order of the Collector in relation thereto
and further that such stamp duty was once paid and certified by the Collector-that is final. See-
AIR-1946-Madras-437; AIR-1942-Madras-381 & AIR-1961-SC-787.
As per Section-35 of the Stamp Act, there is a total and absolute bar to the admissibility of an
unstamped instrument including even a single line or signature etc., of it in evidence what ever
may be the nature or the purpose or how ever foreign and independent the purpose may be for
which it is sought to be used, unless there is a compliance with the requirements of provisos to
Section-35 or unless it is duly impounded as per Section-33 by following the procedure laid
down in Sections-37 to 42. See-AIR-1962-AP-132 & AIR-1972-AP-373. See further-2002(3)LS-
159; AIR-1956-Madras-454; AIR-1968-AP-213(FB); 2003(2)ALD-638; 2003(1) LS-382;
1957-AP-237(FB); AIR-1962-AP-132; 2005(5)ALT-616; 2005(5) ALD-274; 2005(4)ALT-411;
2005(1)ALD-607 & 2005(5)ALD-381.

Section-36 of the stamp Act says that-once a document is admitted in evidence either by mistake
or other wise, it is not open to reject the same either in the same proceedings or in the further
stages of litigation in appeal or revision-See-AIR-1956-SC-12; AIR-1961-SC-1655,
1969(1)SCC- 597=AIR-1969-SC-1238; AIR-1957-AP-1022; AIR-1956-Madras-250; AIR-1961-
AP-424; AIR-1962-AP-398; AIR-1963-AP-442, AIR-1966-AP-184; AIR-1975-AP-96; AIR-
1977-AP-247; AIR-1977-AP-397; AIR-1977-AP-348; AIR-1982-AP-240; 1964(2)ALT-374;
1968(1)AnWR-221; 1972(1) ALT-232; 1997(1)ALD-246; 1998(2) ALT-21; 1998(5)ALD-166;
1999(2)ALD-314; 2000(1)ALD-504; 2000(3)ALD-649; 2002(5)ALD-660=(3)LS-149 and
2004(1)LS-30.
In-AIR-1982-AP-240-Pilla N.Patrudu vs. BOB-it was held that where a question as to
admissibility of the document in question is raised on the ground that it was not duly stamped,
the party challenging has to be alert to see that the document is not admitted by the Court. The
Court has also to judicially determine the matter as soon as the document is tendered in evidence.
Once the document is admitted in evidence, it is not open to the party to raise any objection
regarding stamp duty as it is not even open to the trial Court to go in to it. However, the judicial
determination of the admissibility of the document in evidence must culminate in the
endorsement on the very document stating that the document has been admitted in evidence
followed by the initials of the trial judge. When examining a witness when a document was
tendered and marked with out giving any consideration of what is contemplated by Section-33,
the said marking can be said only for purpose of identification and not admission in evidence as
the question whether it should be acted up on or not is still res-Integra and it is open to the Court
to consider the admissibility as holding otherwise results Section-42(2)otiose. Followed-AIR-
1961-SC-1655 & 1969(1)SCC-597=AIR-1969-SC-1238.
In-2004(2)ALD-627=(1)AnWR-730-Vemi Reddy vs. Vemi Reddy it was held that any
document filed with chief examination can be rejected as per Order 13 Rule 3 CPC., by the Court
at any stage; as proof and admissibility of it is subject to the orders of the Court. Mere affixture
of seal & giving of Exhibit number even with initial of Judge mechanically, does not amount to
admission of the document in evidence with only there being judicial determination on
admissibility.
In-2005(6)ALD-228-Supreme Music, Hyderabad v. Manilal G.Purohi it was held regarding-
Admissibility of documents Vis--vis stamp dutythat-referring a document for impounding to
revenue authority is at request of parties. The discretion of Court in marking of a document
subject to objections when tendered along with chief-affidavit means that it was admitted
tentatively and actual admissibility of documents can be considered only at the stage of cross
examination of the concerned witnesses.

In-2001(3)SCC-1=AIR-2001-SC-1158-Bipin Shantilal Panchal vs. State-it was held that the


objections relating to stamp duty has to be decided immediately before marking the documents
and for all other objections the trial shall proceed with subject to objection on relevancy
otherwise admissibility etc., to decide at final hearing of the matter. When Court marked the
document in question, it doesnt mean that the Court rejected the objection, unless there is a
specific order of the Court to that effect. See also- AIR-1969-AP-417 and AIR-1978-SC-1393.

The law laid down by the Apex Court in-AIR-2001-SC-1158-Bipin Shantilal Panchals case was
followed and relied on by the AP.High Court in 2006(2)ALT-699-Mede Anjamma vs.
V.Ch.Veeraiah.
Thus, as per Section-33 it is the duty of the trial Court to necessarily apply its mind to the
admissibility of the document and requirement of the stamp duty before admitting in evidence. It
is also the duty of the other party to be alert to see and raise objection regarding stamp duty for
the admissibility of the document presented by the party. Virtually the Court has an independent
duty before admitting any document, on the question of stamp duty, even no objection taken by
the parties.
In-AIR-1933-Madras-117-it was held that in spite of waiver of objection on stamp duty or
waiver of objection on admission regarding proof under Section-58 of the Evidence Act, the
instrument not duly stamped cannot be allowed to be admitted by Court, Since the Stamp Act is a
fiscal legislation to secure revenue.
In-1982(1)ALT55(NRC)-it was held that for unstamped document to impound by Court where
no value mentioned in the document, the Court has to ascertain the market value as on date of the
document and for that, the Court can appoint a Commissioner to ascertain the said market value.
In-1976(1)AnWR-22(NRC)-it was held that u/s.29 of the Stamp Act, where Plaintiff or
defendant paid the stamp duty and penalty on any document when impounded by Court, he or
they can not ask the Court as of right to include the amount in the costs of the suit in decree, as it
is for the Court to decide as to who is responsible to pay or whose document it is etc., facts while
awarding costs.
As per Sections 33 and 35 except a police officer, every other person having authority to receive
evidence, before whom, when an instrument not duly stamped is produced or got produced, can
examine the same, ascertain its value and impound the instrument as per the Law in force in
India at the time the document was executed. A document chargeable with duty shall not be
admitted in evidence unless duty stamped for any purpose (to mean even for collateral purpose).
However, a Criminal Court (except in the criminal proceedings under chapter-XII-Information to
police and their powers of investigation & Chapter-XXXVILimitation to take cognizance) not
bound to impound such unstamped instrument.
If the Court thinks fit not to impound in any case; nothing prevents the Criminal Court. See-AIR-
1953-Madras-698.
As per Section-35(e)-the documents(though not duly stamped)when executed by or on behalf of
Govt. or when the documents bear certificate of Collector, those documents are admissible in
evidence.
As per Section-36-once the Court applied its mind and admitted a document, it cannot be open to
raise later any objection regarding stamp duty and it cannot be prevented from being acted upon
once admitted.
The only exception to it is Section- 61, the power of the Appellate Court etc. either suo-mottu or
on Collectors application to determine and collect proper stamp duty to protect revenue. See-
AIR-1960-AP-155.
In-AIR-1977AP-348(B)-it was held that admission of insufficiently stamped document can be
called in question under Section-61 only for payment of deficit stamp duty. See also-AIR-1937-
Madras-763 and AIR-1974-AP-83.
Even in the case of a promissory note insufficiently stamped when it was received, marked and
exhibited and used in evidence with no objection regarding stamp duty, merely because a suit on
pro-note insufficiently stamped is not maintainable, when no objection raised for admitting and
marking u/s. 36 (as the Bar is for marking), the suit on the pronote insufficiently stamped is
maintainable-held in-1998(5)ALD-166=(5)ALT-1=(2)LS-254-Palavela vs. Mosa-after relying
upon-AIR-1973-AP-342(FB) and 1997(1)ALD-246-M.Narasimhulu vs. M.Laxmamma. (See
1998(4)ALD-375=1997(6)ALT-9=(3)APLJ-306-Kunduru vs. Namana-for contra view). For
further guidance see also-1997(3)ALD-436=(2)APLJ-360=(2)AnWR-45=(2)LS-252-Adapa vs.
Ravulapati-where in it was held that in a suit based on pronote insufficiently stamped is in
admissible and the suit wont lie, in the absence pleading and evidence regarding claim to base on
original cause of action, no decree can be passed.
For further guidance read-AIR-1961-SC-1655; AIR-1969-SC-1238; 1970(2)ALT-234; AIR-
1973-AP-342 (FB)at paras-174 & 175; AIR-1938-Madras-785(FB); AIR-1986-AP-120; AIR-
1985AP-26 & AIR-1982-AP-240.
Coming to the aspect as to whether the suit based on insufficiently or improperly stamped
pronote since not maintainable, can the plaintiff base his case on original cause of action-In the
full bench decision of the AP.High Court reported in AIR-1973-AP-342 at para-154, by relying
upon the full bench judgement of the Madras High Court in AIR-1938-Madras- 785(FB)-it was
held that since suit won lie in sufficiently stamped or improperly stamped pronote wont lie, the
Plaintiff has right to fall back on original cause of action, if there are allegations in the same suit
to recover the amount based on the original cause of action.
In-AIR-1963-AP-457-it was held that in case of pronotes not duly stamped as per Section-35-
proviso(a), the Collector also has no right to collect deficit stamp or to impound and certify.
Even if so done, such certificate or order has no legal sanctity and wont bind Civil Court and
such pronote is not at all admissible in evidence and such suit on such pronote wont lie. See
also-1967(2)AnWR-268.
Section-37 deals with instruments stamped with improper description though it bears a stamp of
sufficient amount. It says that in that regard the State Government may make Rules to collect
proper stamp chargeable on such instruments and certify to deem it as if duly stamped on the
date of execution of instrument.
In-AIR-1963-AP-457-it was held that Section-37 can not be made use of in respect of
instruments exempted under the proviso(a)to Section- 35 and therefore the pronote which is
engrossed on a non-adhesive stamp can not be validated u/s.37 by Collector in view of the
Section-40(1)of the Stamp Act.
In this context see the Indian Stamp Rules 1925 with A.P. Amended Rules therein. Chapter-III of
the 1925 Rules-speaks about the instruments on which adhesive stamps be used.
As per Rule-13(f)-it is clear that adhesive stamps be used for instruments chargeable with stamp
duty under schedule-1 of the Stamp Act.
For Article-37(letter of credit), Article-49(a)(ii) and (iii)-i.e.-on pronote defined in Section-
2(22)-when payable on demand for value up to Rs. 1000/-stamp of Rs.0-15 paise and in any
other case stamp of Rs.0-25 paise and Article-52(proxy), Section-47-doest apply.
In fact Section-47 speaks of only pronotes covered by Article 49(a) (i)for stamp up to Rs.0-10
paise only for a pronote amount up to Rs.250/- See Rule16 of Stamp Rules-1925 and the
A.P.Rules therein by G.O.Ms.No.1060(Revenue) dated:2.6.1959 w.e.f. 1.4.1959 which says that
the adhesive stamp denote in-land revenue of 0.25 N.P. etc.,
Thus, it appears there from that every pronote must be duly stamped by affixing required
revenue(adhesive stamp)and not any other non-judicial stamp as per the above A.P.decision.
In the recent decision of our AP. High Court reported in-2006(3)ALT-486-it was held by
referring to Sections-10,11(a) & 12 of the Stamp Act that Pronote on adhesive stamp is valid.
In the other decision of our AP. High Court reported in-2005(1)ALD-713-it was held that a
pronote executed on non-judicial stamp is valid-by referring to 1963(2)AnWR-198 & 1978-LS-
40.
Regarding impounding of instruments and power of Collector, as per Sections-38 and 39 on
document impounded and stamp duty levied as per Section-33 or 37 and with penalty as
provided in Section-35, if the party paid the same, the Court or Officer impounded shall send the
amount and copy of the instrument to Collector with certificate about stamp duty and penalty
levied and the Collector may refund entire or any portion of the penalty to the party; if he feels
that there is no fraudulent intention on the part of the party except a bonafide mistake or
ignorance of the party.
See-AIR-1964-AP-107 and 2000(3)ALD-649(DB)-paras-6 and 9.
Where the party requests the Court before impounding by Court to refer to Collector or where
the party did not pay the stamp duty and ten times penalty i.e. when impounded by Court or other
Officer u/s.33 and he requests the Court or other Officer to send the instrument(document)to
Collector as per Section-38(2), the Court or other Officer shall send the original
instrument(document)to the Collector for purpose of impounding.
In-2004(4)ALT-177Y.Vijaya vs. B.Baghaiahit was held that impounding is only during trial
and if the party fails to pay, the Court cannot attach his property or send him to Jail. The remedy
is to send to Collector to recover the amount of stamp duty and penalty as arrears of land
revenue-relied up on-1961(1)AnwR-425-K.Sante-Kunarislese & 2002 (10)SCC-427-regarding
procedure for impounding. Also referred-1955(1) MLJ-457-Devasikamani vs. Andamuthu.
See also 2005(1)ALT-507-Khasim Sahib vs. S.Hanumanthu-regarding objection for marking that
was to be considered during trial & plaint shall not be rejected by raising objection for
numbering under Order 7 Rule 11(d) CPC.,
In the case of AIR 1981 A.P.274 Y.P. Venkaiah Vs. R.D.O. Guntur; it was held that when the
original document was sent to Collector u/s.38(2) by Court, the trial of the case need not be
stayed till the document is received back by the Court . What the Court has to do-was discussed
in this decision See also Section-46(2) and 2000(3)ALD-649-para-25-at page 657 in this regard.
As per Section-40(1)-the Collector has to decide and certify as to whether the document is duly
stamped or not chargeable-to that effect, or where chargeable and not duly stamped-require
payment of proper stamp duty or its amount together with penalty of Rs.5/-or more, however, not
exceeding ten times of the stamp duty value-to that effect, or where remitted to the party the
penalty to that effect and such certificate of the Collector as per Section-40(2) is conclusive and
as per Section-40(3)-in such a case, the Collector shall return back the impounded instrument
duly certified as per the Section-42. Thus, the Collectors duty u/s.40-is a quasi- judicial one by
application of mind following the principles of natural justice.
Section-41 speaks of production of instruments unduly stamped by accident, within one year of
execution, other than pronotes etc., the Collector instead of proceeding u/s.31 to 33, or u/s.40,
can receive the actual stamp due and payable.-See-AIR-1955-Madras-652.
The above procedure to be followed u/s.31 to 42 has been clearly laid down by the Apex Court
in AIR-2001-SC-1321-in Chilukuti Gangulappa vs. RDO. Madanapalli-holding that, when a
document is found insufficiently stamped, when the instrument is presented before Civil Court,
the party can ask the Court to forward the same to Collector, then the Court has to forward the
same. Otherwise, under Section-33 r/w. Section-38(1), the Court has the power to admit such
document in evidence if the party producing the same pays the stamp duty together with 10 times
of that stamp duty amount as penalty, when the Court chooses to admit the document on
compliance with such condition u/s. 38(1), the Court has to forward only a copy of the document
to the Collector, together with the amount collected from the party for taking adjudicatory steps.
But, if the party refuses to pay the amount impounded by the Court on the document and asks the
Court to forward the same to Collector, the Court has no option except to forward. On receipt of
the document through either of the said avenues-the Collector has to adjudicate. He can not
refuge to adjudicate or to say that-if Civil Court already impounded, since impounded he wont
interfere.
Section-40(1)-says that-when Collector impounds document u/s.33 or receives any instrument
sent to him u/s.38(2), the Collector u/s.40(1) r/w.33 and 38(2) shall adopt the procedure laid
down u/s.40(1) on the question of deficiency of stamp duty.
On facts it was held that the proceedings got misdirected from the stage of trial Court. The trial
Court should have asked the party that the instrument since insufficiently stamped, as to whether
he would remit the deficit portion of stamp duty together with ten times of it as penalty to admit
on collection by impounding and to proceed with trial and to forward a copy of it to Collector or
if he is unwilling to pay the stamp duty and ten times penalty, whether to forward the original
document itself to Collector to adjudicate. Since ten times penalty is the upper limit, it is for the
Collector to take into account all factors to decide what should be the proper amount of penalty
to be impounded. The decision of the Collector regarding the stamp duty and penalty impounded,
shall not be open for challenge again before Civil Court nor even Civil Court can say that the
amount collected on impounding by Collector is not correct, since the certificate given by the
Collector on the stamp-duty is conclusive. However, regarding nomenclature of the document or
decision of the Collector about nature of the document, it wont bind the Civil Courts.
The above Apex Court decision is followed by our High Court in 2003(1)LS-417;
2002(1)AnWR-393=2002 Supplment(1)ALD-610; 2002(5) ALD-330=(6)ALT-239=(3)LS-115
and 2002(2)ALT-15.
See also-1999(2)ALD-314; 1997(1) ALT 725; AIR-1981-AP-274; 1979(1)ALT-155; AIR-1975-
AP-96 & 1974(2)AnWR-240.
Following the-AIR-2001-SC-1321 & 2002(6)ALT-239 & AIR 1981-AP-274-in Malle
Satyanarayana vs. L.V.Ramannamma-2004(1)ALT-316it was held u/s. 38(2) & 40 of the Stamp
Act that the insufficiently stamped sale agreement sent to Collector by Court for impounding/
levy of the deficient stamp duty & penalty if anythe Collector cannot refuse to exercise his
power.

4). Scheme of the Indian Registration Act (with A.P. Amendments)


4(a). The Indian Registration Act contains 15 parts in 91 Sections and 220 Rules in 31 chapters
for the State of A.P. framed in pursuance of the Sections in 1959 with amendments from time to
time.
In 1999 the A.P. Prohibition of certain documents opposed to public policy Rules were also
framed.
There are also uniform Rates of Registration fees prescribed.

4(b). In the Act the part-I consists of Sections 1 & 2 regarding extent of applicability and
commencement of the Act besides several definitions under the Act;
Part-II consists of Sections 3-16 about registration establishment;
Part-III consists of Sections 17-20 about registration of documents where compulsory and where
optional, description of properties covered by the documents etc.,
Part-IV consists of Sections 23-27 about time for presentation of documents for registration of
those executed in India and out of India;
Part-V consists of Sections 28-31 regarding place of registration for immoveable properties etc.,
Part-VI consists of Sections 32-35 about persons competent to present documents for
registration, admission of execution and enquiry by Registrar in this regard etc;
Part-VII consists of Sections 36-39 regarding appearance of executants, witnesses, exemption
from appearance & procedure for summoning etc.,
Parts-VIII & IX consist of Sections 40-46 about persons entitled to present wills and authorities
to adopt, regarding registration of the same, deposit of the wills etc.
Part-X consists of Sections 47-50 about effect of registration and non-registration of documents
relating to the properties, preference of registered over un-registered documents etc.
Parts-XI, XIA, XII & XIII consist of Sections 51-80-A regarding duties and powers of
registering Officers, procedure to be followed, registration of electronic documents, and
registration when can be refused, re-course on refusal, fees payable for registration and its
recovery etc.,
Part-XIV consists of Sections 81-84 regarding penalties and prosecutions;
Part-XV consists of Sections 85-91 which are miscellaneous provisions regarding destruction of
unclaimed documents, bonafide mistakes of officers, exemption from the Act to documents of
the Government and inspection of the documents by the public etc.,

4(c). Definitions: (1). As per Section-2(6)-Immoveable property includes land, buildings,


hereditary allowances, right of ways, lights, ferries, fisheries or any other benefit to arise out of
land and things attached to earth or permanently fastened to any thing attached to earth, but not
standing timber, growing crops and grass. (Standing timber to mean if cut it can be used as
timber See 1958 SC 532).
(2). As per Section-2(9)-Moveable property includes standing timber, growing crops and grass,
fruits upon and juice in trees and property of every description, except immoveable property.
See also Section-3(26)-General Clauses Act definition of immovable property.
In-AIR-1956-SC-17 and AIR-1977-SC-2149-it was held that an exclusive right of fishery(in
waters covering land)is interest in immoveable property thus, on grant of lease of fisheries in a
tank, registration is required.
Easementary right to ways, light etc. are immoveable property and to create any rights therein for
consideration of above Rs.100/-, thus, it requires registration-held in-AIR-1943-Madras-522.
In-AIR-1944-Madras-492 and 1965(1)AnWR-183-it was held that moveable property like
machinery etc., once attached to earth or permanently fastened to any thing attached to earth, it is
immoveable property and any transfer of it worth Rs.100/-and above-requires registration.
In-1998(6)ALT-520 at 530-it was held that right to tonsure in T.T.D. is not a hereditary office
and cannot be regarded as immoveable property.
Right to receive future rents on land or building is held as immoveable property-held in-AIR-
1936-PC-230.
In AIR-1959-AP-380(FB)-confirmed in AIR-1966-SC-1300(B)-it was held that since partnership
assets whether moveable or immoveable are book assets, these are there by movables and any
partner relinquishes any rights therein since not immoveable property, no registration is required.
In-AIR-1927-PC-172-it was held that benefit to arise out of land and things attached to earth or
permanently fastened to any thing attached to earth must mean for permanent benefit of
enjoyment of the land or building-that can be regarded as immovable property. See also-AIR-
1944- Madras-492.
(3). Section-2(7)-says that lease includes a counter part, kabuliyat, an undertaking to cultivate or
occupy and an agreement of lease. The ingredients of lease as per TP.Act are transfer of a right
to enjoy immoveable properly, for certain time or in perpetuity and the lease consideration is
either premium or rent or both and acceptance of the (lease) transfer by the transferee. Thus,
lease is a transfer of interest in immoveable property. If it is initially an oral lease and
subsequently only a memorandum of the past transaction reduced to writing it doesnt require
registration u/s. 17 or u/s. 49 of the Indian Registration Act.
(a).The difference between lease and agreement to lease is that-whether the agreement it self-
would confer a legal right or whether the execution of another instrument-which would give a
legal right was in the contemplation of the parties-should be construed to be a lease if the present
demise is to be inferred from the language employed. Since the dominant intention of the parties
that should be the criteria in deciding whether a particular instrument is an agreement to lease or
merely an agreement to grant lease in future creating right in a party to obtain a document under
certain contingencies or circumstances. See-AIR-1959-SC-620; AIR-1960-AP-83; AIR-1930-
Bombay-210; AIR-1960-Allahabad- 420; AIR-1976-Delhi-15; 1998(5)ALD-330; 1998(5)ALD-
502; 1998(6)ALT- 224 & 2003(5)ALD-43.
(b). The basic difference between lease and license is that -
(i). in a lease one enjoys the property but has no right to take the property away since, interest
created in property is to enjoy it, whereas in a profit-a-prendre, one has a license to enter the
property, not for enjoying the property but for removing something from it like plucking of
leaves, nuts, fruits or part of produce of soil or to collect toll tax etc.,
(ii). for the difference the document must be preferred to the forum;
(iii). the real test is the intention of the parties as to whether they intend to create a lease or a
license;
(iv). if the document creates interests in immoveable property it can be a lease but, if it only
permits another to make use of the property on which the legal possession continues with the
owner, it is a license and
(v). where contents of documents use exclusive possession of property, it can be inferred as lease
unless the circumstances show that intention of parties is not to create lease.
However, exclusive possession by itself is not decisive generally without re-course to the
intention of the parties. For proper understanding of the difference between lease and licence-
See-AIR-1953-SC-108; AIR- 1958-SC-532; AIR-1958-SC-1262; AIR-1965-SC-610; AIR-1968-
SC-175; AIR-1968-SC-919; AIR-1974-SC-396; AIR-1976-SC-1813; AIR-1988-SC- 184; AIR-
1988-SC-1845 and 1971(1)SCC-276.

5). Out of the Parts-III to XV-(Sections-17-91), the important Sections for regular reference are
Sections 17 & 18 which shall be r/w. Section-49; Sections-23 to 27; Sections-32 to 40; Section-
50; Section-57; Sections-58 to 60 r/w. Section-87; Sections- 71 to 77 and Section-90.
5(a). Section-90 deals with exemption of certain documents executed by or in favour of
Government.
Section-50 says that the document falls under Section-17 or 18, once duly registered take affect
as regard the property comprised therein, against every unregistered documents relating to the
same property and not being a decree or order, whether such un registered document be of the
same nature as the registered document or not unless leases exempted under Section-17 or any
registered document which has no priority under law in force.
Section-48 speaks about registered non-testamentary instruments relating to property when to
take effect over oral agreements.
In-AIR-1923-Oudh-114-it was held that Section-50 doesnt apply where the competition is
between a registered document and unregistered document falling under Section-90 and in such
case the unregistered document must also be deemed as registered.
Section-57 speaks that subject to payment of fees the Book Nos. 1 & 2-and index of book No.1,
on application for inspection is open for inspection to any person and such person is entitled to
copies if applied for.
In Book No.3 copies of entries can be given on payment of fees, after duly signed and sealed by
the Registering Officer to the persons executing the documents or their agents and to any persons
after death of executants.
Entries in Book No.4 can be given on payment of fees, to the persons executing the documents
or persons claiming that the entries in the document refer to them or their agents or
representatives.
Sections-58 to 60 r/w. 87 speak that whether a document falls u/s. 17 or 18, once registered there
is presumption of due execution. However it is a rebutable presumption.
See-AIR-1962-AP-29; AIR-1962-AP-178; AIR-1961-AP-361; AIR- 1978-Madras-244; AIR-
1973-Madras-421; AIR-1962-Madras-111; AIR-1977-Kerala-41; AIR-1969-Mysore-103; AIR-
1961-SC-1747; AIR-1969-SC- 244; AIR-1969-SC-1147 & AIR-1979-SC-553.
However, there is no presumption about passing of consideration from contents of the documents
or endorsements of the Registering Officer-See-AIR-1924-Madras-?; AIR-1969-Kerala-265;
AIR-1969-Gujarat- 270; 1985(1)APLJ-99=(2)ALT-492 & AIR-1969-Mysore-360.
See contra-1999(2)MLJ-267 at 273 and AIR-1977-Orissa-178.
In this context one has to keep in mind the basic principle that a presumption is not in it self
evidence but, only makes a prima-facie case for a party in whose favour in exists. Thus, it is a
rule concerning evidence. It depends upon conclusiveness or rebutability of the presumption and
the burden of proof shifts accordingly. Thus, Presumptions are thereby distinct from legal
fictions.
5.(b). Section-58 says that a document admitted for registration, the particulars as per Section-58
regarding signatures and admission of execution by a person or agent or representative and every
person examined in reference to such document and signature of him and regarding of payment
of money delivery of goods in presence of Registering Officer in reference to execution and
admission of receipt of consideration, the Registrar must got endorse. If the person admitting
execution refuses to endorse it, the Registrar must note such refusal and shall not register.
Section-59 speaks of endorsements made under Sections-58 and 52 must be signed and dated by
the Registering Officer.
Section-52 speaks about the duty of Registering Officer when document presented for
registration to endorse the hour and place of presentation and signature of person presenting it
and receipt of the document by Registering Officer to endorse.
Section-60 speaks about certificate of registration by the Registrar duly signed and sealed and to
enter in a book meant for it after compliance with Sections-34, 35, 58 and 59.
Sections-32 to 40 speak about presentation of document for registration by person executing it or
his agent, power of attorney or other representative or assignee and the procedure for recognizing
the power of attorney and its execution in India and outside India and enquiry before registration
by the Registering Officer, procedure to be followed on admission or denial of execution, power
and procedure to enforce appearance of executants and witnesses and exemption of certain
persons for personal appearance.
The scope of Sections-40 to 46 is mentioned in this notes at para-4 above.
Section-47 says that a registered document shall operate once registered, from the time of
execution or from the time from which it would operate if no registration is required.
The scope of Sections-23, 23A & 25 is mentioned in this notes in Para-1(d)(ii).
Section-70(A to C)-deals with Registration of Documents by electronic media.
Section-69 speaks about general superintendence of the Inspector General of Stamps over
Registering Officers of the respective States.
As per the said powers-the Inspector General of Stamps amended the A.P. Registration Manual
Part-II standing order-219 by insertion of Clause(b) as per G.O.Ms.Nos. 620-dt.28-09-2002 and
497-dt.07-04-2003- which say that if the A.P. High Court or any other Civil Court restrained
any person from alienating any property and if the orders of Court brought to the notice of the
Registering Officers they are estopped from registering any documents for such property.
Regarding refusal of registration covered by Sections-71 to 77- Section-71 says that-if the
property not situate in the sub-dist .....CONTINUE PART III
A SEMINAR ON THE LAW ON STAMP DUTY AND REGISTRATION IN A.P.
(AN ANALYTICAL STUDY) ( PART III )

Dr. B.SIVA SANKARA RAO,


MCOM, LLM.,Ph.D.
Judge,HIGH COURT OF A.P.Regarding refusal of registration covered by Sections-71 to 77-
Section-71 says that-if the property not situate in the sub-district, registration can be refused by
endorsing the fact on the document and this can be challenged in appeal within 30 days as per
Section-72.
As per Section-73 where Sub-Registrar refused to register on round that there is a denial of
execution of the document presented for registration, it can be with in 30 days presented before
superior authority showing the right to ask for registration ; and
Sections-74 & 75 speak about the procedure in this regard. See-2003(2)LS-159. See also-
2003(3)ALD-115.
As per Section-77 where the Registrar refused to register document u/s. 72 or u/s. 76 within 30
days a civil suit can be instituted to direct the document to be registered within 30 days after
passing of such decree. The scope of the Section-77 is dealt with by the Apex Court in a specific
performance suit reported in-2001(5)ALD-47(SC)-Chandeshwar Yadav vs. Radha Deviholding
that in case when vendor having received the entire sale consideration and executed the sale deed
and later refused to appear before the Sub-Registrar concerned for registration & the Registrar if
refused to register, Section-77 gives option to Purchaser either to file suit U/s. 77 of the Act or to
bring a suit with in limitation period for specific performance of an agreement for sale of the
property.
If the said suit claim is in time for specific performance, there is no need to file the suit as per
Section-77 with in one month from date of refusal by vendor to register.
In-2004(1)ALT-174-Property Association of Baptist Church vs. S.R.Jangeronit was held that as
per Section-77 & Rule-58 of the AP-Registration Rulesto question the document registered by
Sub-Registrar, the remedy is by civil suit for declaration u/s. 34 of the Specific Relief Act r/w.
Article-59 of the schedule of the Limitation Act.
In 2008 (1) ALT 28 in Venkateswara Housing Pvt. Ltd., Vs. C & I.G. registration and Stamps it
was held by distinguishing the full bench Judgment in Yanala Malleswaris case of 2006 (6)
ALT 523-holding the Registering Authority can admit a deed of cancellation to Registration,
without insisting on participation of the parties to the transaction, which is sought to be annulled
(SLP against the FB Judgment is pending in SC), that as per Rule 26 (k) added by amendment to
the rules after the full bench Judgment in exercise of power conferred u/s.68 Registration Act of
the rule making authority, incorporating the independent clause in Rule 26 insisting before any
deed of cancellation is admitted to registration the Registering Authority shall ensure, that the
parties to the deed, which is sought to be cancelled, have consented for cancellation, parties to
the sale deed must consent for cancellation thereof and must join as parties to deed of
cancellation. Therefore seeking cancellation of sale deeds by vendors alone without participation
of purchasers is impermissible as register deeds can not be cancelled without participation of
both parties to such deeds &without their consent as per the Rule 26(k).
6). Now coming to the scope of Sections-17, 18 and 49 of the Indian Registration Act - it is the
settled law that to decide whether and when unregistered document is admissible in evidence, all
the three Sections must be read together more particularly Section-17 r/w. 49. Unless a document
clearly comes with in the purview of the Section-17, its non-registration is no bar to its
admissibility.
See the observations of the Apex Court in AIR-1970-SC-833-that it is for the Court to find-out
from the facts and circumstances of each case and also by construction of the terms of the
document before it, as to whether it comes under Section-17 or not & then reference to Section-
49. See also-2001(1)ALT-115; 2000(6)ALT-739 at 745 and 1992(1)AnWR-684 at 688.
6.(a). As per Section-17(1)(a) registration is compulsory in case of Instruments of gift of
immoveable property,(irrespective of the value).

N.B: A reading of Section-17r/w Section-18 and Section-49 clearly indicates the above.
The T.P. Act-Sections-122,123 & 129 mainly deal with gift as per which acceptance of gift by
donee is mandatory besides transfer of property by a registered instrument by donor voluntary
and without consideration to the donee. It is a compulsory attestable document.
In-AIR-1917-Madras-859-it was held that a mere memorandum of an already completed oral
gift, since no way declaring rights of the parties as per Section-17 of the Registration Act, it
doesnt require registration.
In-AIR-1924-Madras-800(a)-it was held that an unregistered gift deed though invalid for want of
registration, may be considered for the collateral purpose of ascertaining the nature and character
of possession. However, in the decisions made by the AP.High Court reported in-2003(1)ALT-
228 and also in 2002(6)ALD-752=2002(2)AnWR-787-it was held that an unregistered gift deed
cannot be used for any purposes. See also-1969(1)APLJ-1(FB);AIR-1958-SC-199;AIR-1987-
Delhi-1101;1978(1) MLJ-248 & 1991(2)APLJ-DNC-45=AIR-1991-Delhi-178.
In 1996(3)SCJ-495-it was held that since gift of immoveable should be made only for
transferring the right, title and interest by a donor to a donee by registered instrument duly
executed and signed by or on behalf of donor and must be attested by two witnesses since the pre
existing right and interest of donor stand divest by donee by registration after the gift deed was
duly registered and thereafter only the donee would loose title to the property.
Section-129 of the TP.Act deals with an exception in the case of gifts under Mohammedan Law.
In-2003(4)ALT-43 relied upon-AIR-1966-SC-1194, AIR-1995-SC-1205 & also of AIR-1972-
Kerala-27-it was held that under Muslim Law the three essential requisites for a valid gift are (i)
declaration of gift by donor, (ii) acceptance of the gift by donee, (iii) delivery of possession
(either actual or constructive) property i.e., of the subject of the gift.
A gift under Muslim Law can be valid without any registration since registration is not
compulsory to its legal force and in fact no written document is even necessary under Muslim
personal Law. See also-AIR- 1927-Calcutta-197 and AIR-1929-Oudh-435 and the notes under
Section- 150 of Mullah Mohammedan Law.
However in AIR-1962-AP-199(FB)=1962(1)ALT-108(FB)-it was held that where a gift deed has
been executed by a Mohammedan to serve as evidence of the gift but not as a memorandum of
past transaction such a document requires registration u/s.17 of the Registration Act. This
decision is overruled see below:
Also see for Muslim gift reduced to writing stated gift made not requiring registration-
2001(4)ALT(SC)-5-Hafeeja Bibi vs. Sheik Fareed-in appeal against APHC decision, by
overruling the Decision of 1962(1)ALT-108=(1)AnWR-16(SB) and holding the decisions of
AIR-1975-AP-271,1954(2)MLJ-113&1985(2)MLJ-136 as not correct law.
The recognised custom under South Indian Mitakshara Law permits gift in immoveable property
to a girl at the time of her marriage by parents or brothers without registration and even orally as
Pasupukumkuma. For that mutation in Revenue records in her name as owner is the best
evidence besides other circumstances if the transaction is oral-See-1998 (4)ALD-107; ILR-40-
Madras-204(FB); AIR-1999-AP-189; AIR-1981-AP-30; AIR-1964-SC-510; AIR-2000-
Karnataka-318.
In-AIR-1927-PC-42-it was further held that while registration is a necessary solemnity for
enforcement of gift of immoveable property, it doesnt suspend the gift until the registration
actually takes place.
However in the latest Full Bench judgment of our High Court reported in 2001(5)ALT-
130=2001(5)ALD-402-it was held by referring to Sections-123 & 123 of the TP. Act and
Sections-17 & 49 of the Registration Act that a Pasupukumkuma gift of immovable property to a
daughter at the time of marriage is like any other gift, a compulsory registerable document
referred and over ruled-1999(2)ALT-192 & Air-1980-AP-139.
In this context it is relevant to mention here that the correctness of the above full bench decision
is under challenge in CRP 3482/2000 in Veeramreddy Chandra Rao Vs. LRAT, Kakinada
reported in-2002(2)-AnWR 69 and it was referred to decide by an appropriate larger bench on
the following questions:
1. Whether the decision reported in 2001(5) ALD 402 can be said to be a binding decision in the
light of in the decision of the Apex Court reported in-AIR-1964-SC-510, especially in the light
of Article-141 of the Constitution of India?
2. Whether the customary mode of giving property by way of Pasupukumkuma is not saved
under Hindu Law-(in view of Section-3(b) r/w. Section-4 of the Hindu Adoptions and
Maintenance Act, 1956.)?
*See the correctness of the Full Bench judgment of our High Court reported in 2001(5)ALT-
130=2001(5)ALD-402-from the Apex Courts observation in Anardevis case of 2006- by
J.SB.Sinha & another decision later by J.laxmanan.
As per Section-17(1)(b)-registration is compulsory in case of other non-testamentary instruments
(other than for gift) which purport or operate to create, declare, assign, limit or extinguish,
whether in present or in future, any right, title or interest whether vested or contingent, of the
value of Rs.100/-and upwards, to or in immoveable property.
As per AIR-1924-Madras-605-a non-testamentary instrument is one which intends to operate
immediately and to be irrevocable. See also-AIR- 1931-PC-196 & AIR-1969-AP-131.
N.B: As per Section-18(a)-if the value is below Rs.100/-registration is optional in the case of
instruments other than gift.

As per Section-17(1)(c)-registration is compulsory-in case of non-testamentary instruments


which acknowledge the receipt or payment of any consideration on account of the creation,
declaration, assignment, limitation or extinction of any such right, title or interest.
N.B: As per Section-18(b)-registration is optional in case of other- instruments acknowledging
the receipt or payment of any consideration on account of the creation, declaration, assignment,
limitation or extinction, of any such right, title or interest.
N.B: As per Amendment in 2001 by Parliament which came in to force w.e.f., dated-24-9-2001
to Section-17 after Section-17(1)(a)-inserted as Section-17(1A)-which says that the documents
containing contracts to transfer for consideration, any immoveable property for the purpose of
Section-53A-TP. Act shall be registered after commencement of this Act, if not they shall have
no effect for purposes of Section-53A-TP. Act. Similar amendment is made in Section-53A of
the TP. Act by omitting there from the words the contract though required to be registered has
not been registered or.

Section-17(2) says that nothing in the clauses (b) and (c) of the Section-17(1)-applies to
(i) any composition deed or (ii) any instrument relating to shares in joint stock company, not-
withstanding that the assets of such company even consists any immoveable property or (iii) any
debentures issued by any such company and not creating, declaring, assigning, limiting or
extinguishing a right, title or interest of Rs.100/- and upwards to or in immoveable property,
except in so far as it entitles the holder of a Security by registered instrument where by the
company has mortgaged, conveyed or otherwise transferred the whole or part of its immoveable
property or any interest therein to trustees upon trust for the benefit of the holders of such
debentures or (iv) any endorsement upon or transfer of any debentures issued by any such
company or (v) any agreement except any agreement of sale as mentioned Section-17(1)(g)-(and
document containing transfer for consideration of immoveable property under Section-53A-TP.
Act as per the 2001 Central amendment)-not in itself creating, declaring, assigning, limiting or
extinguishing any right, title or interest of Rs.100/-and upwards to or in immoveable property,
but merely creating a right to obtain another document which will, when executed, create,
declare, assign, limit or extinguish , any such right, title or interest, or (vi) any decree or order of
a Court not being a decree or order or award falling u/s 17(1)(f), except decree or order
expressed to made on a compromise and comprising immoveable property other than that which
is the subject matter of the suit or proceeding or (vii) any grant of immoveable property by the
Government, (viii) any instrument of partition made by a Revenue Officer or (ix & x) any order
granting a loan or instrument of collateral Security granted under land improvement Act or land
improvement loans Act or Agriculturist Loans Act or instrument for Securing re-payment of a
loan under the Act or any order made under Charitable Endowments Act vesting or divesting any
property in its Treasurer or (xi) any endorsement on a mortgaged deed acknowledging payment
of any mortgage money, and any receipt for payment of money due under the mortgage when
such receipt doesnt extinguish the mortgage or (xii) any certificate of sale to the purchase of the
property sold by public action granted by the Civil or Revenue Officer.
As per Section-17(1)(d)-Registration is compulsory in case of lease of immoveable property,
irrespective of the value as per A.P. Amendment w.e.f. 1.4.1999.
As per Section-17(1) Proviso, the State Government may, by order published by the Gazette,
exempt from the operation of this sub-Section any leases executed any district, or part of a
district, the terms granted by which do not exceed 5 years and the annual rents reserved by which
do not exceed Rs.50/-.
As per Section-17(1)(e) Registration is compulsory in case of Non-testamentary instrument
transferring or assigning any decree or order of a court or any award purports or operates to
create, declare, assign, limit or extinguish, whether in present or in future, any right, title or
interest, whether vested or contingent, of the value of Rs.100/- and upwards to or in immoveable
property,
N.B: As per Section-18(cc)-registration is optional in the above if the value is less than Rs.100/-.
As per Section-17(1)(f)-registration is compulsory in case of any decree or order or award or
copy thereof passed by a Civil Court on consent of the defendants or on circumstantial evidence
but not on the basis of any instrument which is admissible in evidence u/s. 35 of the Stamp Act,
such as registered title deed produced by the plaintiff where such decree or order or award
purports or operate to create, declare, assign, limit or extinguish, whether in present or in future,
any right, title or interest, whether vested or contingent, of the value of Rs.100/-and upwards to
or in immoveable property w.e.f.,dated-1.4.99 as per the A.P. Amendment.
N.B: As per Section-18(d)-registration is optional in the case of instruments (other than wills)
which purport or operate to create, declare, assign, limit or extinguish any right, title or interest,
to or in moveable property.
As per Section-18(e)-registration is optional in case of wills.
Further as per Section-18(f)-registration is optional in all other documents not required
registration as per Section-17.
As per Section-17(3)-authorities to adopt a son, executed after 1.1.72 not confirmed by a will,
shall also be registered.
As per Section-17(1)(g)-registration is compulsory in case of agreement of sale of immoveable
property of the value of Rs.100/-and upwards, as per A.P. Amendment w.e.f.,dated-1.4.99.
It is based on this amendment, the A.P. High Court on Administrative side issued a circular in
Roc.No.100/SO/1/2001, dated-16-05-2001 which reads that in view of the above amendment,
only the registered documents shall be received in evidence.(For agreements executed after 01-
04-1999). In view of this circular such sale agreements cannot be received for main purpose if
not registered in view of Section-17(g).
However, since Section-49 deals with the effect of non-registration of documents require
registration, if the un-registered document (though compulsorily registerable u/s.17) is
admissible u/s 49, as per its proviso, as an exception to the general rule in Section-17, the
circular no way bars such admission.
In 2004(2)SCC-297-DDA & Others vs. Joginder S.M.(E)-it was held that executive
instructions(administrative-law)though got force of a subordinate legislationif it is in conflict
with statutory provisions, the later will prevail. But in the absence of any conflict, both will
prevail.
As per Section-49-a document required to be registered u/s. 17 or as per the TP. Act, unless
registered, shall not effect any immoveable property comprised therein nor shall be received as
evidence of any transaction effecting such property, further, it shall not confer any power to
adopt nor shall be received as evidence of any transaction conferring such a power.
The proviso to Section-49 however says that an unregistered document affecting immoveable
property and required to be registered u/s. 17 or as per the TP. Act, may be received in evidence
of a contract in a suit for specific performance under chapter 2 of the Specific Relief Act or as
evidence of any collateral transaction not required to be effected by the registered instrument.
In-AIR-2003(NOC)41; 1975(2)APLJ-298 and AIR-1976-AP-74-it was held that as per Section-
49 an unregistered document may be received for the purposes mentioned therein.
Thus Section-49 proviso is only an exception to the general rule that unregistered documents
with reference to Section-17 are inadmissible. Therefore, merely because, Section-49 deals with
the effect of non-registration of compulsory registerable documents covered by Section-17; when
by proviso to the Section-49 it gives admissibility to an unregistered document, it cannot be said
that Section-49 proviso is in direct conflict or inconsistent or repugnant to Section-17(more
particularly to Section-17(g) amended with effect form dated-1.4.99 by the State of AP). From
this it appears that it may not be possible for saying that the Section-49 proviso isdeemed
repelled by Section-17(g).
In-2001(1)LS-93-it was held clearly that proviso to Section- 49 is an exception to the general
rule that unregistered documents with reference to Section-17 are inadmissible.
In-AIR-1926-Nagpur-335-FaKira vs. Ram Chandra-it was held that Section-17 of the
Registration Act like any other enactment must be read as subject to any other law for the time
being in force.
In-AIR-1934-Patna-495-it was held that un-registered agreement of sale of immovable property
of value above Rs.100/-which u/s.17 though requires registration, the unregistered agreement can
be admitted and used in evidence in an action for obtaining specific performance of contract as
per Section-49 proviso. See also-AIR-1929-Madras16 & AIR-1921-Madras-82.
In-AIR-1961AP-534-Anuchuru Veerappa Naidu vs. G.V.Chowdari-it was held that as per
proviso to Section-49, an unregistered document affecting immovable property, inspite of want
of registration u/s.17, is admissible as evidence of a suit for specific performance under chapter
II of the specific relief Act.
See also-AIR-1988-Kerala-255; AIR-1968-Allahabad-168; AIR-1926 Madras-1117; AIR-1950-
SC-1 and AIR-1960-Madras-33.
In fact the cloud is cleared by our High Court-with reference to the proviso to Section-49 and
amended Section-17(g) in AP. and the Circular there from of our High Court- in the decision
reported in-2004(1)ALD-629-(1)LS-124-Javvadi K.Rao vs. Sonte S.Raoholding that an
unregistered sale agreement which is compulsorily be registered is admissible in evidence in a
suit for specific performance referred 2001(1)ALD-349=AIR-2001-AP-142.
In this context it is also necessary to take notice of the amendment to the Registration Act adding
Section-17(1A)-to the effect that documents containing contracts to transfer for consideration
any immoveable property for purpose of Section-53A of the TP. Act shall be registered, if not
shall not have effect for purpose of Section-53A of the TP. Act and in Section-49 of the
Registration Act in the proviso by omission of the words or as evidence of part performance of
a contract for the purposes of Section-53A-TP. Act and in Section-53A-of the TP. Act by
omission of words the contract though required to be registered has not been registered or, by
the Central Government in 2001 which came into force from dated-24-9-2001.
A close reading of the A.P. State amendment in 1999 by Section-17 (g) and the Central
amendment in 2001 by Section.17(1A) of the Indian Registration Act & Section-53-A of the
Transfer of Property Act and also Section-49 of the Registration Act after the Central
amendment in 2001, crystallizes that the amendments are no way conflicting. For Example-
though a suit for specific performance on possessory sale agreement bared by time, the
protection under Section-53-A of the TP. Act to invoke as a shield is still available if the
requirements of Section-53-A of the TP. Act are satisfied and only in such cases which are not
covered by the Specific Relief Act to invoke Section-53-A of the TP. Act protection, the
unregistered sale agreement executed after dated-24-9-2001 cannot be admitted in evidence (for
main purpose-except for collateral purpose).
See-AIR-1957-AP-58; AIR-1988-AP-254; AIR-2002SC-960; 1967-(2)AnWR-2 &
2002(3)SCC-676-Srimant SS. Case.
The reasoning is that law of limitation barred the claim or the remedy but did not a bar to the
defence, as such even to file suit for specific performance became bared by limitation, the person
who obtained possession in part performance of sale agreement, can defend his possession in a
suit for recovery of possession filed by transferor or any subsequent transferee claiming under
him, provided the requirements of Section-53-A of the TP. Act exists.
Thus, in a suit for Specific Performance of a contract under Specific Relief Act even the sale
agreement(whether non-possessory or possessory) executed on or after dated-1.4.1999 for
immoveable property not registered can be admitted in evidence by a Court as per the proviso to
Section-49 Registration Act, though possessory agreement executed after dated-24.9.2001 not
registered shall not have effect u/s.53-A TP.Act.
6(b). The concepts main purpose and collateral purpose play a pivotal role for admitting or
not admitting in evidence an un-registered document compulsorily registerable. The main
purpose means the purpose mentioned in Section-17 i.e. for the purpose of creating, declaring,
assigning, limiting or extinguishing a right to immoveable property, such a document when
compulsory registerable not admissible in evidence for the said main purposes. The effect of
non-registration of such an instrument compulsory registerable is that the instrument doesnt
affect any immoveable property comprised therein nor can it be received as evidence of any
transaction affecting such property. It does not follow, however, that the document is wholly
irrelevant. Though the instrument is not admissible for the purpose of proving a concluded
transaction transferring an interest, yet it can be received in evidence for collateral purposes.
Collateral purpose is any purpose other than that of creating, declaring, assigning, limiting or
extinguishing a right to immoveable property.
The proviso to Section-49 permits the use of an un-registered document even compulsorily be
registered, as evidence of a collateral transaction within the meaning of Section-49 proviso.
Collateral transaction means a transaction other than the transaction affecting the immoveable
property but which is in some ways connected with it. See-1999(3)MLJ-423 & AIR-1942-
Bombay-268.
6(c). The expression collateral transaction is not used in the sense of an ancillary transaction to
a principal transaction or subsidiary transaction to a main transaction. The root meaning of the
word collateral is running together or running on parallel lines. The transaction as recorded
would be a particular or specific transaction. But it would be possible to read in that transaction
what may be called the purpose of the transaction and what may be called a collateral purpose.
The fulfillment of that collateral purpose would bring into existence a collateral transaction,
which may be said to be a part and parcel of the transaction but nonetheless, a transaction which
runs together with or on parallel lines with the same. Thus, a collateral purpose is a purpose
which must be unrelated to the terms and conditions of the main purpose of the transaction
covered by the document. It must be independent of, or divisible from the transaction which
requires registration, and it must be a transaction not by itself required to be effected by a
registered document.
The term collateral purpose is a very vague one and therefore it is the courts that must decide in
each case depending upon facts and circumstances and from contents, as to whether the parties
who seek a compulsory but unregistered document when not admissible to main purpose, for a
purpose which is really a collateral purpose to mean other than for any of the main purposes
mentioned-See-AIR-1957-Madras-472. It is because a party cannot use such un-registered
document by the simple device of calling it as collateral purpose. In legal proceedings what one
cannot directly bring about, cannot indirectly bring about-See-2001(1) MLJ-1 or 115.
In-AIR-1932-PC-55 and AIR-1952-SC-153-it was clearly held that to decide whether
registration required or not the words creating, declaring, assigning, limiting or extinguishing a
right to immoveable property are ejusdem-generis and imply a definite change of legal rights in
the property that is main purpose. Where the document doesnt reflect any definite change of
legal rights in the property and merely recites what the existing rights therein are i.e. mere
acknowledgment of a fact took place, likewise merely recites with whom the possession of the
property lies, it cannot be construed from the contents as of creating, declaring, assigning,
limiting or extinguishing any rights in immovable property.
See also-1999(1)ALT-136=(1)ALD-191, AIR-1999-SC-2054=(5)SCC- 108 & AIR-1953-
Bombay-50.
In-1969(1)SCWR-it was held that evidence as to character of possession is being considered as
collateral purpose. See also-AIR-1977-AP-371.
In-AIR-1959-SC-199-it was held that character of possession prior to date of document can not
be regarded as collateral purpose. The test would be whether the party relying on the registered
document seeks to rely on its terms for affecting such property or conferring such power.
If the genuineness of a document is questioned, the execution of the document itself will have to
be proved and that cannot be a collateral purpose. For instance, an unregistered lease deed cannot
be relied upon to enforce the terms of the agreement such as the period of tenancy, quantum of
rent, mutual obligations under the agreement, where the lessee has the right to sub-lease or to
carry out the repairs to the building etc., In other words, what is prohibited is the attempt to
enforce the terms of the unregistered document, but not to establish the purpose for which the
property was given possession i.e., nature of possession which is a collateral purpose. See-AIR-
1975-MP-230; AIR-1977-AP-371; 1975(2)APLJ-298; AIR-1973-Madras-262; AIR-1986-MP-
215; 1975(2)AnWR-226=(1)APLJ-372; 2002(3)ALD-186-all the above cases are relating to
unregistered lease deed or lease agreements.
In-2005(1)ALD-607-Ambati Durgamma vs. Pericherla Ragapathiraju- it was held that an
unregistered lease deed, which is compulsorily registerable can be looked into for the purpose of
proving nature of possession of lessee over leasehold land.
In-2005(4)ALT-411-Giri Yadav vs. L.Ramesh Goud-it was held that a lease deed in respect of
immovable property for a period exceeding one year or reserving yearly rent requires
registration. However, unregistered lease is admissible in evidence for collateral purpose of
provision possession of a party.
In-ILR-13-Madras-308-it was held that, where the transaction evidenced by particular instrument
is single and indivisible or whether it really evidencing two transactions which can be severed
from each other, the one as creating an independent personal obligation and the other as merely
strengthening it by adding a right to proceed against immovable property.
In-2002(5)ALT-404=(3)LS-175-Sit was held that an unregistered sale deed in an injunction suit
is admissible regarding possession as collateral purpose. See also-2001(1)LS-93 and
2003(4)ALD461.
In-2003(1)ALT-336-it was held that unregistered sale deeds for apartments can be received in
evidence only for collateral purpose as to nature and proof of possession.
In-2003(1)ALD-251it was held that a partition may be effected orally and an unregistered
partition can be admissible for the collectoral purpose of showing division in status and
possession. Further, if it is a mere acknowledgment of oral partition already affected, no
registration is required. See also-2003(1)ALT-336; 2000(6)ALT-772; 1999(6)ALD-642;
1982(2)ALT-384; 1969(1)APLJ-1(FB); AIR-1969-AP-242; AIR-1962- AP-132; AIR-1986-AP-
14; AIR-1986-AP-1; AIR-1929-PC-269; AIR-1974 Madras-239; AIR-1988-Delhi-13.
Further the decisions reported in AIR-1970-SC-833; AIR-1972-SC 1121; AIR-1961-SC-1077
and 2003(3)SCC-229-are for partition or distribution of assets among partners based on
Arbitration award and discussed when registration is not required for the same.
Further in 2003(4)ALT84 & in 2002(1)ALT-49=(6)ALD-213-by following-1966(2)ALT-
300(FB) & 1966(2)AnWR-361 confirmed in AIR-1972 SC-1121 & AIR-1974-SC-1066-it was
held that award passed by Arbitrator creating rights in or in relation to immoveable proprieties
worth above Rs.100/-requires registration to give rights.
In-AIR-1924-Madrasd-542-it was also held that a partition already effected if covered by a list
indicating the properties which fell to the share of each party, though signed by all and attested
by mediators when the document not contained words that can be construed as creating a
partition of the status of the parties by the document, it doesnt require registration.
In-1987(2)ALT-842-it was held that a family arrangement entered into in a compromise decree
under which no right conferred for the first time to the parties therein then such a family
arrangement covered by the compromise decree doesnt require registration. See also-AIR-1965-
AP-367 & AIR-1976-SC-807.
For more details about difference between partition list and deed on the aspect of stamp duty and
registration see discussion under the Stamp Act in this notes at-para-2(c)(19).
In-2001(2)ALT-417=(2)ALD-525-Abdul Majeed vs. Yadram Suresh-it was held that a document
in question touches upon certain creation, declaration, assignment or limiting or extinguishing
rightsit is not an agreement, thus such a document requires registration and proper stamp.
A memorandum merely recorded the fact of mortgage created already doesnt require
registration. See-AIR-1967-AP-51.
A letter when requires registration see the discussion under Stamp Act in this notes at Para-
2(c)(4).
In-AIR-1996-SC-196-Bhoop Singhs Case it was held u/s 17(2) (vi) that where the compromise
decree if bonafide in the sense that the compromise is not a device to obviate payment of stamp
duty and frustrate the law relating to registration would not require registration, in a converse
situation, it would require registration. If the compromise decree were to create for the first time
right, title or interest in immoveable property of the value of Rs.100/-or upwards in favour of any
party to the suit, the decree or order would require registration. If the decree were not to attract
any of the clauses of sub-Section(1) of Section-17, it is apparent that the decree would not
require registration. If the decree were not to embody the terms of compromise, benefit from the
terms of compromise cannot be derived, even if a suit were to be disposed of because of the
compromise in question. If the property dealt with by the decree be not the subject matter of the
suit or proceeding, Clause (vi) of sub-Section(2) would not operate. It was held that where the
compromise decree confined to subject matter of suit it doesnt require registration to confer
title. If the compromise covers outside the subject matter of the suit that portion requires
registration to confer title to that property since decree creates new rights for first time to the
subject matter not covered by the suit. See also-2004(1)ALD-18(SC).
In-AIR-2006-AP-111-Guduru Nirmala vs. GA.Kumar- following the above and the decision
reported in-2001(3)ALD-522=2001(4)ALT-490G. Sanjeeva Reddy vs. Indukuri Lakshmamma
it was also held that If subject matter not in respect of property other than subject matter of suit,
such a comprise decree is exempt from registration and is admissible in evidence without
registration. with Bommasani Ravi and Srinivasarao Puppala.