1992 (2) TMI 385 - HC - Indian Laws

Summary

Issues Involved:
1. Whether a consent decree conveying title to immovable property falls under the definition of 'conveyance' under section 2(g) of the Bombay Stamp Act, 1958.
2. Whether such a consent decree is an 'instrument' under section 2(1) of the Act.
3. Whether the amendment to section 2(g) of the Act by Maharashtra Act No. 27 of 1985 is clarificatory or remedial.

Issue-Wise Detailed Analysis:

1. Definition of 'Conveyance' under Section 2(g) of the Bombay Stamp Act, 1958:
The core question was whether a consent decree that conveys title to immovable property is a 'conveyance' under section 2(g) of the Act. The appellants argued that such a decree falls within this definition, while the respondents contended it does not. The court noted that the consent decrees in question explicitly stated they would operate as conveyances. The court interpreted the unamended definition of 'conveyance' to include such consent decrees, noting that the term 'includes' is used to expand the definition. The court supported this interpretation with the Supreme Court's decision in CIT v. M/s. Taj Hotel, which emphasized that 'includes' is used to amplify the meaning of a term. The court concluded that even before the amendment, the definition of 'conveyance' in section 2(g) was broad enough to cover consent decrees that transfer property.

2. Definition of 'Instrument' under Section 2(1) of the Act:
The court examined whether a consent decree could be considered an 'instrument' under section 2(1) of the Act. The definition includes every document by which any right or liability is created, transferred, limited, extended, extinguished, or recorded. The court found that the consent decrees in question did indeed transfer property rights and extinguish the rights of the defendants, thereby fitting the definition of an 'instrument'. The court referenced the Supreme Court's decision in Mohan Chaudhari v. Chief Commissioner of Union Territory of Tripura, which recognized a wide interpretation of 'instrument'. Consequently, the court held that the consent decrees were instruments under section 2(1) and thus liable for stamp duty.

3. Clarificatory or Remedial Nature of the Amendment by Maharashtra Act No. 27 of 1985:
The court addressed whether the amendment to section 2(g) by Maharashtra Act No. 27 of 1985, which explicitly included decrees or final orders of any Civil Court, was clarificatory or remedial. The respondents argued that the amendment introduced a new provision and should not apply retrospectively. The court, however, concluded that the amendment was clarificatory, intended to remove any ambiguity in the original definition. The court noted that the amendment did not introduce a new concept but clarified the existing one. Therefore, the amendment was applicable to consent decrees passed before its enactment.

Conclusion:
The court concluded that consent decrees conveying title to immovable property are covered under the definitions of 'conveyance' and 'instrument' in the Bombay Stamp Act, 1958, even before the amendment by Maharashtra Act No. 27 of 1985. Consequently, such decrees are liable for stamp duty. The court set aside the impugned orders of the learned Single Judge and allowed the appeals with costs, discharging the rules granted in the writ petitions. The judgment emphasized that the interpretation of statutory provisions must advance the object of the law and suppress any mischief, aligning with public interest and preventing revenue loss due to collusive litigation.