1966 (10) TMI 161 - HC - Indian Laws

Summary

Issues Involved:
1. Whether the document falls within the definition of "settlement" under Section 2(t) of the Bombay Stamp Act.
2. If the document is a "settlement," is it chargeable with stamp duty under Article 55-A (II) of Schedule I of the Bombay Stamp Act?
3. If the document is not a "settlement," under what Article of Schedule I would it be chargeable?

Issue-wise Detailed Analysis:

1. Definition of "Settlement" under Section 2(t) of the Bombay Stamp Act:
The court analyzed whether the document in question qualifies as a "settlement" under Section 2(t) of the Bombay Stamp Act. The definition of "settlement" includes any non-testamentary disposition in writing of movable or immovable property made for the purpose of distributing the property of the settlor among his family or for providing for some persons dependent on him. The court emphasized that the term "disposition" is broader than "transfer" and includes any plan or arrangement for the disposal of property. The court rejected the argument that the definition should be limited to the property in its original form, stating that the purpose of distributing the property, whether in its original form or converted into cash, fulfills the requirements of the section.

2. Chargeability with Stamp Duty under Article 55-A (II):
The court held that the document is chargeable with stamp duty as a "settlement" under Article 55-A (II) of Schedule I of the Bombay Stamp Act. The court reasoned that the document provided for the distribution of the property and its proceeds among the family members of the settlors, thereby fulfilling the purpose mentioned in the definition of "settlement." The court also noted that the beneficial ownership of the property passed to several other persons, including unborn children, which indicated a clear disposition of property.

3. Alternative Article for Chargeability:
Since the court concluded that the document falls within the definition of "settlement" and is chargeable under Article 55-A (II), the third issue of determining an alternative article for chargeability did not arise.

Conclusion:
The court answered the referred questions as follows:
(a) The document falls within the definition of "settlement" under Section 2(t) of the Bombay Stamp Act.
(b) The document is chargeable with stamp duty under Article 55-A (II) of Schedule I of the Bombay Stamp Act.
(c) The third question does not arise.

A copy of the judgment was ordered to be forwarded to the Chief Controlling Revenue Authority, and the settlors were directed to pay the costs of the Chief Controlling Revenue Authority.