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TMI Blog2025 (2) TMI 737X X X X Extracts X X X X X X X X Extracts X X X X ..... 3. The appellant, originally, preferred a suit being Special Civil Suit No.65 of 2012 before the Court of Civil Judge, Senior Division, Ratnagiri, for specific performance of the agreement to sell deed dated 03.09.2003 and other reliefs. Repudiating the same, the Respondent Nos.1 and 2 filed their written statement. Pending the suit, the respondents filed an application under section 34 of the Bombay Stamp Act, 1958, for impounding the document stating that the agreement in question was executed on a stamp paper of Rs.50 /- and the suit property was situated within the limits of Khed Municipal Council and hence, stamp duty of Rs.44,000/- was required to be paid, besides penalty of Rs.1,31,850/-. The said application was resisted by the appellant by stating that the agreement of sale was not an agreement of conveyance and hence, no stamp duty was payable on the same. However, by order dated 03.08.2015, the trial Court allowed the said application, impounded the sale agreement dated 03.09.2003 and directed the document to be sent to the Registrar of Stamps for recovery of the stamp duty and penalty on it as per law. Challenging the same, the appellant preferred W.P.No.3246 of 2016, w ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... o pass an order to give the possession of the suit property on the ownership basis to the Plaintiff. The Court Commissioner will be appointed to register the Sale Deed in the name of the Plaintiff if the Defendant No. 1 failed to do so." Thus, according to the learned counsel, Explanation I to Article 25 of Schedule I of the Bombay Stamp Act, 1958, does not apply to the facts of the present case, wherein, the conditions necessary for its application are not satisfied viz., (i)no possession was transferred under the agreement to sell; (ii)no agreement to transfer possession exists until the sale deed is executed; and (iii)the possession of the appellant remains that of a tenant, which is legally distinct and independent; and hence, no stamp duty can be levied on the agreement to sell dated 03.09.2003. However, the trial Court erred in holding that Explanation I applies to the present case and directed the document to be sent to the Registrar of Stamps for recovery of stamp duty and penalty from the appellant; and the same was also affirmed by the High Court by the order impugned herein. Therefore, the learned counsel prayed to allow this appeal by setting aside the order of the Hi ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... . It is also submitted that in 2013, Respondent No. 1 filed a civil suit titled 'Avinash Vishwas Patne v. Ramesh Mishrilal Jain' seeking eviction and possession of the suit premises, which is now pending before the Jt. Civil Judge Junior Division and JMFC Khed. 5.4. Stating so, the learned counsel submitted that the order impugned herein does not call for any interference at the hands of this court. 6. We have considered the rival submissions and also perused the documents placed before us. 7. The short question that arises for our consideration is, whether the appellant is liable to pay stamp duty and penalty on the agreement to sell dated 03.09.2003 allegedly executed between the appellant and the mother of Respondent No.1 in respect of the suit property. 8. It is the specific case of the appellant that the agreement to sell clearly states that the possession of the appellant is on a rental basis and the same will not form part of the sale transaction; that, possession on ownership will be given only upon completion of the sale transaction and execution of the sale deed; and therefore, the question of treating the agreement as a deemed conveyance does not arise. It is also st ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... a conveyance is executed in pursuance of such agreement subsequently, the stamp duty already paid and recovered on the agreement of sale which is deemed to be a conveyance shall be adjusted towards the total duty leviable on the conveyance. Now, in the present case, the agreement entered into clearly provides for sale of an immovable property and there is also a specific time within which possession has to be delivered. Therefore, the document in question clearly falls within the scope of Explanation I. It is open to the legislature to levy duty on different kinds of agreements at different rates. If the legislature thought that it would be appropriate to collect duty at the stage of the agreement itself if it fulfils certain conditions instead of postponing the collection of such duty till the completion of the transaction by execution of a conveyance deed inasmuch as all substantial conditions of a conveyance have already been fulfilled such as by passing of a consideration and delivery of possession of the property and what remained to be done is a mere formality of execution of a sale deed, it would be necessary to collect duty at a later (sic agreement) stage itself though ri ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... be applied to the agreement and, therefore, a conveyance could be executed subsequently when it is not clear as to when the conveyance is to be executed and the stipulated time within which the possession has to be handed over. If that is so, it is clear that the document would attract duty as if it is a conveyance as provided in the Explanation. Thus we find no error in the view taken by the High Court. It is not necessary to examine in these appeals as to whether the instrument in question itself conveys a title or not. Therefore, we uphold the decision of the High Court made in this regard. The appeals are dismissed." (ii) Referring to the aforesaid judgment, this Court in Shyamsundar Radheshyam Agrawal v. Pushpabai Nilkanth Patil (2024) 10 SCC 324, held that the object of the Explanation is clear that if an agreement is entered into and that agreement itself contemplates the delivery of possession of the property within the stipulated time, then, such an agreement should be deemed to be a conveyance for the purpose of duty leviable under the Bombay Stamp Act. The relevant paragraphs of the same read as under : "16. In the instant case, in the documents, though there was a ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... in conjunction with the earlier expression i.e., "agreement". Even if these two expressions are looked independently, it means an agreement to sell followed by delivery of possession and an agreement to sell evidencing delivery of possession. In the first case, i.e., "followed by delivery", possession cannot be disjuncted from the basic source i.e., agreement to sell. Therefore, the expression followed by delivery of possession should have a direct nexus to the agreement and should be read in juxtaposition to the word 'agreement' and it cannot be independent or outside the agreement. Therefore, the delivery of possession should follow the agreement i.e., through the agreement. It takes in its sweep the recital in the agreement itself that delivery of possession is being handed over. It will also cover cases of delivery of possession contemporaneous with the execution of agreement, even if there is no specific recital in the agreement. In other words, the delivery of possession should be intimately and inextricably connected with the agreement. And in the second type, i.e., agreements evidencing delivery of possession, if the document contains evidence of delivery of possession by a ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... a symbolic delivery. Therefore, it cannot be said that simply because one continued to remain in possession, though in different capacities, there is non-delivery of possession. A symbolic delivery may also amount to actual delivery in given circumstances. Thus in the case in Mohd. Gafoor (supra), there was delivery of possession and the said explanation gets attracted. 12. The Apex Court had an occasion to consider the provisions under the Bombay Stamp Act, 1958 in Veena Hasmukh Jain v. State of Maharastra, JT 1999 (1) SC 186. Explanation I to Article 25 of Schedule I to the Bombay Stamp Act reads as follows: Explanation I:- For the purpose of this Article, where in the case of agreement to sell an immovable property, the possession of any immovable property is transferred to the purchaser before the execution, or at the time of execution, or after the execution of such agreement without executing the conveyance in respect thereof, then such agreement to sell shall be deemed to be a conveyance and stamp duty thereon shall be leviable accordingly". Interpreting the said explanation, it was held: "The duty in respect of an agreement covered by the Explanation is leviable ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... qualising an Agreement on par with a conveyance in the circumstances contemplated thereunder, apparently, the object being to realise the revenue at the earliest point of time on the Agreement akin to sale deeds. Though in different words, in the instant case, the amendment brought in tries to achieve a similar object. 14. In the case on hand, there is a variation in the expressions used viz., "followed by" and "evidencing delivery of possession". As discussed above, the expression "followed by" should be read in conjunction with the earlier expression "agreement" and in the latter case, any agreement recording delivery of possession should invite the stamp duty as a sale deed, even though the possession had been delivered in the past. The expression "evidencing delivery of possession" applies to the situation with which we are concerned in the present case." 11. In the instant case, the agreement to sell executed between the appellant and mother of the Respondent No.1, specifically states that "this property is in your occupation on rental basis and it will not be part of the sale transaction. After completion of sale transaction, the possession of the said property will be g ..... 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