Joseph vs The State Of Kerala

IN THE HIGH COURT

OF KERALA AT ERNAKULAM

PRESENT:

THE HONOURABLE MR.

JUSTICE P.B.SURESH KUMAR

WEDNESDAY, THE 12TH DAY OF

NOVEMBER 2014/21ST KARTHIKA, 1936

WP(C).No.
27793 of 2014 (Y)
------
----------------------

PETITIONER:
-----------------

JOSEPH,
 S/O PAILY,THEKKEKKARA HOUSE,
RAMALOOR.P.O
PIN-686691, KOTHAMANGALAM,
ERNAKULAM DISTRICT.

BY ADVS.SRI.JOSEPH MARKOSE
(SR.)
SRI.V.ABRAHAM
MARKOS
SRI.BINU MATHEW
SRI.TOM THOMAS
(KAKKUZHIYIL)
SRI.ABRAHAM JOSEPH
MARKOS
SRI.ISAAC THOMAS
SRI.NOBY THOMAS
CYRIAC

RESPONDENTS:
------------------------
1. THE STATE OF KERALA,
REPRESENTED BY ITS
SECRETARY, DEPARTMENT OF REVENUE

SECRETARIAT,THIRUVANANTHAPURAM-695001.

2. THE DISTRICT REGISTRAR

(GENERAL)
OFFICE OF THE DISTRICT
REGISTRAR (GENERAL)
 ERNAKULAM, COCHIN -
682 016

3. THE SUB REGISTRAR,

OFFICE OF THE SUB
REGISTRAR
KOTHAMANGALAM - 686
691

4. ISDALE PLANTATIONS, 9-
B, RAM MANSION,
NO.400, PANTHEON ROAD,
EGMORE, MADRAS - 600
008
REPRESENTED BY ITS
MANAGING PARTNER
MR.ISAAC THOMAS, S/O
LATE GEORGE THOMAS,
KOTTUKAPPALLYHOUSE,
A/11/6, PARSON TOWER,
EGMORE, MADRAS - 600
008

5. LAND REVENUE
COMMISSIONER,
GOVERNMENT OF KERALA
THIRUVANANTHAPURAM -
695 001

R1-R3 & R5 BY
ADV.T.R.RAJESH, GOVERNMENT PLEADER
THIS WRIT PETITION (CIVIL) HAVING BEEN
FINALLY HEARD ON 12-11-2014, THE
COURT ON THE SAME DAY DELIVERED THE
FOLLOWING:

WP(C).No. 27793 of 2014 (Y)

----------------------------

APPENDIX

PETITIONER(S)' EXHIBITS :
-------------------------------------

EXT.P1: COPY OF SALE DEED

DATED 20-11-2012 NUMBERED AS P9/2012

EXT.P2: COPY OF THE NOTICE

NO.INS(2)3341/2012 DATED 26-11-2012 ISSUED
BY THE 2ND RESPONDENT

EXT.P3: COPY OF THE ORDER

NO.I.N.S.(2)3341/2012 DATED 06-12-2012
ISSUED
UNDER SECTION 37(2) OF
THE KERALA STAMP ACT ISSUED BY THE
2ND RESPONDENT

EXT.P4: COPY OF DEED OF

CONVEYANCE REGISTERED AS DOCUMENT
 NO.1620/1124 ME DATED
1-12-1948 OF THE KOTTAYAM ADDITIONAL
SUB REGISTRAR'S
OFFICE.

EXT.P5 : COPY OF THE DEED OF

RELEASE REGISTERED AS DOCUMENT
NO.770/1955 DATED 22-
4-1955 OF THE KOTTAYAM ADDITIONAL SUB
REGISTRAR'S OFFICE.

EXT.P6: COPY OF THE

PARTNERSHIP DEED DATED 25-8-1988

EXT.P7(A): COPY OF TAX RECEIPT

DATED 27-8-2012 ISSUED BY THE
KEERAMPARA VILLAGE
OFFICE

EXT.P7(B): COPY OF TAX RECEIPT

DATED 4-5-2012 ISSUED BY THE KEERAMPRA
VILLAGE OFFICE

EXT.P8: COPY OF THE

RECONSTITUTION DEED EXECUTED ON 1-4-1994

EXT.P9: COPY OF JUDGMENT DATED

31-5-2013 OF THIS HONOURABLE COURT
IN W.P(C)6373/2013
EXT.P10: COPY OF APPEAL WITHOUT
ANNEXURES NO.L.R.(A)32869/2013 DATED
12-6-2013 FILED BY THE
PETITIONER BEFORE THE 5TH RESPONDENT

EXT.P11: COPY OF ORDER DATED

17-9-2014 PASSED BY THE 5TH RESPONDENT
IN EXT.P10 APPEAL.

RESPONDENT(S)' EXHIBITS: N I L
---------------------------------------

//TRUE COPY//

P.A. TO JUDGE

JV

C.R.

P.B. SURESH KUMAR, J.

 ----------------------
---------
W.P.(C) No.27793 of
2014
-----------------------------
-----------------
Dated this the 12th day of
November, 2014

JUDGMENT
Ext.P3 order of the second respondent and Ext.P11 order by
which the fifth respondent confirmed Ext.P3 order in appeal, are
under challenge in the writ petition.
2. A company called M/s.Periyar and Pareekanni Rubbers Ltd
owned 6.63 hectors of rubber plantation. On 25.08.1988, a firm
was constituted in the name and style 'Isdale Plantations', as per
Ext.P6 partnership. M/s.Periyar and Pareekanni Rubbers Ltd
was one of the partners of the newly constituted firm. As per the
terms of the partnership, the company brought the said item of
property into the stock of the firm. Consequent thereto, the
mutation of the property was also changed to the name of the
firm. Ext.P6 partnership was reconstituted as per Ext.P8 deed by
which M/s. Periyar and Pareekanni Rubbers Ltd retired from the
firm and the rest of the partners continued as partners. On
20.11.2012, the firm 'Isdale Plantations' sold the said property to
 the petitioner as per Ext.P1 sale deed for a total consideration of
Rs 13,56,000/-. However, when Ext.P1 document was presented
for registration, the Sub Registrar entertained a doubt as to the
correctness of the stamp duty paid on the document and
consequently, impounded the document, in exercise of his
powers under section 33 of the Kerala Stamp Act ('the Act', for
short). Thereupon, the document was sent to the District
Registrar for determination of the stamp duty payable on the
instrument under section 39 of the Act and the District Registrar
as per Ext.P3 order held that the property was brought into the
stock of the firm fixing a value of Rs.80,000/- without executing
any instrument and without remitting the stamp duty payable
and therefore, the petitioner is liable to pay the stamp duty
which should have been paid at the time of bringing the property
into the stock of the firm also. The petitioner though challenged
Ext.P3 order in appeal before the fifth respondent, as per
Ext.P11 order, the fifth respondent confirmed Ext.P3 order
reiterating the stand taken in Ext .P3 order.
3. Section 33 of the Act dealing with impounding of documents
reads as follows:
33. Examination and impounding of instruments -- (1)
 Every person having by law or consent of parties authority to
receive evidence, and every person in charge of a public office,
except an Officer of Police, before whom any instrument,
chargeable in his opinion, with duty, is produced or comes in the
performance of his functions, shall, if it appears to him that such
instrument is not duly stamped, impound the same.
(2) For that purpose every such person shall examine every
instrument so chargeable and so produced or coming before him,
in order to ascertain whether it is stamped with a stamp of the
value and description required by the law in force in the State
when such instrument was executed or first executed :
Provided that --
(a) nothing herein contained shall be deemed to require any
Magistrate or Judge of a Criminal Court to examine or impound,
if he does not think fit so to do, any instrument coming before
him in the course of any proceeding other than a proceeding
under Chapter XII or Chapter XXXVI of the Code of Criminal
Procedure, 1898;
(b) in the case of a Judge of the High Court, the duty of
examining and impounding any instrument under this section
may be delegated to such officer as the Court appoints in this
behalf.
(3) For the purpose of this section, in cases of doubt, the
Government may determine--
(a) what offices shall be deemed to be public offices; and
(b) who shall be deemed to be persons in charge of public
offices."
Section 39 of the Act dealing with the power of the Collector to
determine and require payment of stamp duty reads as follows;
"39:- Collector's power to stamp instruments impounded:- (1)
When the Collector impounds any instrument under Section 33,
or receives any instrument sent to him under sub-section (2) of
Section 37, not being an instrument chargeable with a duty of
[twenty paise] or less, he shall adopt the following procedure:-
(a) if he is of opinion that such instrument is duly stamped or is
not chargeable with duty, he shall certify by endorsement
thereon that it is duly stamped or that it is not so chargeable, as
the case may be;
(b) if he is of opinion that such instrument is chargeable with
duty and is not duly stamped he shall require the payment of the
proper duty or the amount required to make up the same,
together with a penalty of [ten rupees]; or if he thinks fit, an
amount not exceeding ten times the amount of the proper duty or
of the deficient portion thereof whether such amount exceeds or
falls short of [ten rupees]:
Provided that, when such instrument has been impounded only
because it has been written in contravention of Section 13 or
Section 14, the Collector may, if he thinks fit, remit the whole
penalty prescribed by this section.
(2) Every certificate under clause (a) of sub-section (1) shall, for
the purposes of this Act, be conclusive evidence of the matters
stated therein.
(3) Where an instrument has been sent to the Collector under
sub-section (2) of Section 38, the Collector shall, when he has
dealt with it as provided by this section, return it to the
impounding officer."
Ext.P3 is seen issued invoking the power under Section 39(1)(b)
of the Act. It is evident from the provision in Section 39(1)(b) of
the Act that the said provision is attracted only when the
Collector is of the opinion that an instrument chargeable with
duty is not duly stamped. In the instant case, neither the third
respondent nor the fifth respondent has any case that Ext.P1
document is not duly stamped. Instead both the aforesaid
authorities maintained the stand that since the vendor of the
property has not obtained an instrument in respect of the
property after remitting the stamp duty at the time of acquisition,
the stamp duty which should have been paid at the time of
acquisition shall also be paid while transferring the property to a
third party. As such, the powers under Sections 33 and 39 of the
Act could not have been invoked in respect of Ext.P1 sale deed.
4. That apart, even the ground stated in Exts.P3 and P11 orders
for requiring payment of stamp duty is unsustainable in
law. Section 14 of the Partnership Act dealing with the
properties of the firm reads thus;
"14:-The property of the firm:- Subject to contract between the
partners, the property of the firm includes all
 property and rights and interests in property originally brought
into the stock of the firm, or acquired, by purchase or otherwise,
by or for the firm, or for the purposes and in the course of the
business of the firm, and includes also the goodwill of the
business.
Unless the contrary intention appears, property and rights and
interests in property acquired with money belonging to the firm
are deemed to have been acquired for the firm"
The Act does not prescribe any particular mode for bringing the
individual property of the partners into the common stock of the
firm. As such, as soon as the partners intend that their individual
property should become the property of the firm and the
property is treated as the property of the firm, it becomes the
property of the firm by virtue of the provision contained
in Section 14 of the Partnership Act. [See George v.
George (2010(2) KLT 692)]. While bringing an item of
immovable property of the partner into the common stock of the
firm towards the contribution of that partner to the capital of the
firm, he reduces his exclusive rights in the property to a shared
right with the remaining partners of the firm. While he does not
lose his rights over the property altogether, what he enjoys
thereafter is only an abridged right which cannot be identified
with the fullness of the right which he
 enjoyed in the property before it was brought into the common
stock of the firm. [See Sunil v. I.T.Commissioner,
Ahmedabad (AIR 1986 SC 368)]. It is settled that on account of
the said reasons, while bringing the individual immovable
property of the partner into the common stock of the firm in
terms of a written instrument, it does not require registration
compulsorily, for, that transaction cannot be considered as
transfer of a right, title or interest in immovable property, within
the meaning of Section 17(1)(b) of the Registration Act. [See
George v. George (supra)]. If the said transaction cannot be
treated as transfer of a right, title or interest in immovable
property, within the meaning of Section 17(1)(b) of the
Registration Act, the same would not come within the meaning
of 'conveyance', as defined in the Kerala Stamp Act to attract the
liability to pay stamp duty on that document, for, to attract the
liability to pay stamp duty, the instrument shall be an
instrument, by which immovable property is transferred inter
vivos and which is not otherwise specifically provided for by the
Schedule. For the aforesaid reasons, Exts.P3 and P11 orders are
liable to be quashed.
5. In the result, the writ petition is allowed and Exts.P3
 and P11 orders are quashed. The third respondent is directed to
return the original of Ext.P1 sale deed to the petitioner within
one month from the date of receipt of a copy of this judgment.
Sd/-

P.B. SURESH KUMAR,

JV
JUDGE