1967 (2) TMI 113 - HC - Indian Laws

Summary

Issues:
Determining whether a document should be classified as a conveyance or a release under the Indian Stamp Act.

Analysis:
The judgment in question revolves around the classification of a document as either a conveyance or a release under the Indian Stamp Act. The case involved a settlement deed dated 5-4-1955, where the settlor and his first son were co-owners of certain immovable properties. The settlor made a settlement of his undivided half share in the properties in favor of his second son, thereby ending the right of survivorship. The second son would then hold the property along with the first son as tenants-in-common in equal shares.

The subsequent document dated 12-7-1957 was under scrutiny, where the first son assigned a mortgage to the second son as consideration for the release of his undivided half share and interest in the entire property. The consideration for the release was the amount secured under the mortgage, valued at Rs. 51,250. The question before the court was whether this document should be construed as a conveyance or a release under the Indian Stamp Act.

The court emphasized that the nomenclature or language used in the document is not decisive; instead, the actual character of the transaction and the nature of the rights created must be considered. Referring to relevant authorities, including the decision in Board of Revenue v. Murugesa Mudaliar, the court highlighted that in cases of co-ownership, a release can enlarge the share of the other co-owners without the need for a conveyance. The court also cited the Supreme Court decision in Kuppuswami Chettiar v. Arumuga Chettiar, which emphasized that a release deed can only feed title but not transfer title.

The court rejected arguments that the document should be interpreted as a conveyance based on distinctions between joint tenancy and tenancy in common or the language of Article 55 of Schedule I. The court held that the document, which operated to enlarge the rights of the releasee, should be classified as a release under Article 55 of Schedule I of the Indian Stamp Act and is liable to duty as such.

In conclusion, the court unequivocally answered that the document in question was rightly interpreted as a release under the Indian Stamp Act and should be subject to stamp duty as such.