1958 (3) TMI 95 - HC - Indian Laws

Summary

Issues Involved:
1. Determination of the nature of the document dated January 11, 1956.
2. Stamp duty applicability under the Indian Stamp Act.
3. Compliance with Section 104 of the Companies Act, 1913.

Issue-wise Detailed Analysis:

1. Determination of the nature of the document dated January 11, 1956:
The primary issue was whether the document executed by Sri Raj Sachdeva on January 11, 1956, was a mere agreement chargeable with a duty of Rs. 2/- under Article 5(c) of the Stamp Act, or a conveyance within the meaning of Section 2(10) of the Act, chargeable under Article 23 Schedule I-B of the Act with a duty of Rs. 15,912/-. The court clarified that the question was not about the document itself but whether the prior oral contract, the particulars of which were specified in the document, would have been chargeable with duty as an agreement or as a conveyance had it been reduced to writing. The court concluded that the particulars filed were of the agreement for sale which preceded the completion of the purchaser's title by delivery, and thus, the document was correctly stamped as an agreement.

2. Stamp duty applicability under the Indian Stamp Act:
The court examined Section 104 of the Companies Act, 1913, which requires evidence of the title of the allottee to the allotment of shares. If the contract is not in writing, the prescribed particulars must bear the same stamp duty as if the contract had been written. The court noted that in the present case, the transfer of assets and liabilities was effected by delivery pursuant to an oral contract for sale. Since no deed of conveyance was executed, the particulars furnished were of the agreement for sale which would have been chargeable with duty under Article 5(c) of Schedule I-B to the Stamp Act. Therefore, the court held that the particulars filed by the Company were duly stamped.

3. Compliance with Section 104 of the Companies Act, 1913:
The court analyzed the requirements under Section 104 of the Companies Act, 1913, which mandates that if shares are allotted for consideration other than cash, the Registrar must have evidence of the title of the allottee to the allotment. If the contract is oral, its particulars must be filed and stamped as if the contract were in writing. The court found that the particulars filed were of the agreement for sale, which preceded the completion of the purchaser's title by delivery. The court concluded that the form of particulars filed by the Company was sufficiently stamped and complied with the requirements of Section 104.

Conclusion:
The court held that the particulars filed by the Company under Section 104(2) of the Indian Companies Act, 1913, were duly stamped and answered the reference accordingly. The opinion of the Chief Justice was agreed upon by the other judges, and the reference was answered in favor of the document being treated as an agreement chargeable with a duty of Rs. 2/- under Article 5(c) of the Stamp Act.