GOPI KRISHNA TRIVEDI v.

SUDAMA PRASAD OJHA (Civil Appeal No. 5414 of 2008)

SEPTEMBER 1, 2008 [Dr. Arijit Pasayat and Dr. Mukundakam Sharma, JJ]

The Order of the Court was delivered by

Dr. ARIJIT PASAYAT, J. Heard learned counsel for the parties.

Leave granted. Challenge in  this  appeal  is  to  the  order  passed  by a  learned

Single Judge of the Calcutta High Court allowing the revision petition filed  by  the  respondent.  In  a  Suit  for  specific  performance of  the contract for sale of immovable property, the present respondent took the  stand  that  he  had  entered  into  an  oral  agreement  with  the defendant, i.e. the present appellant for purchase of the Suit property for a consideration of Rs.6,01,000/-. Following the execution of the contract, an amount of Rs.3,51,000/- was stated to have been paid. It was followed by another  payment of Rs.1,11,618/-.  The defendant acknowledged  the  factum  of  acceptance  of  part  payment  of  the consideration  amount.  When  the  Suit  came  up  for  hearing,  the respondent  came  up  with  the  application  for  accepting  certain documents, i.e. the documents containing the terms and conditions of agreement and certain rent receipts. The appellant took the stand that  these  documents  cannot  be  admitted  because  there  was  no payment  of  stamp  duty.  The  Trial  Court  took  the  view  that  the document  is  nothing  but  a  letter  incorporating  the  terms  and conditions of an agreement for sale of a property and the receipts were just  acknowledgment of  the factum of  acceptance of money. Accordingly,  the  Trial  Court  refused  to  impound  the  aforesaid documents.

Challenging the  order,  a  revision petition  was filed before  the High Court.

Reliance was placed before the High Court on a decision of this Court in  Brij Mohan and Ors. Vs. Sugra Begum and Ors. (1990 (4) SCC 147) to contend that when the vital and fundamental terms of an agreement for sale of immovable property were effected through an oral agreement,  the written agreement incorporating the terms and conditions of the oral agreement would be deemed to be a formal agreement  only.  Since  no  rights  or  liabilities  have  been  created through the document incorporating the terms and conditions of oral agreement, it cannot be called to be an instrument either.

The High Court, after considering the rival submissions and with reference to explanation appended to item No.5 of Schedule 1-A of Stamp Duty on Instruments in West Bengal, concluded as follows:

“The purported letter contains all the terms and conditions of an agreement for sale of immovable property. What were the terms and  conditions  of  the  alleged  oral  agreement  are  not  known. There is nothing on record to show that rights and interest had been created following execution of an oral agreement. What we find is the existence of a document incorporating of terms and conditions  of  an agreement for sale of an immovable property and  receipts  acknowledging  receipts  of  consideration  amount. The agreements containing terms and conditions for transfer of an  immovable  property,  as  such,  are  required  to  be  properly stamped in terms of the recent amendment of Stamp Act in West Bengal. Adequate stamp not having been paid, the trial court is not  right  in  making  the  observation  that  the  documents  in question are not to be impounded. Since it is the agreement for sale, stamp duty will have to be paid in terms of Schedule 1A as amended. Right and liability having been created or purported to have been created,  transferred and extended or recorded,  the documents  in  question  will  come  within  the  meaning  of “instrument”  as  defined  in  Section  2(14)  of  the  Indian  Stamp Act.” Ultimately, the High Court held that right and liability having been

created  or  purported  to  have  been  transferred  and  extended  or created,  the  documents  in  question  come  within  the  meaning  of ‘instrument’  as  defined  in  Section  2(14)  of  the  Indian  Stamp  Act, 1899 (in short ‘the Act’). Therefore, the revision petition was allowed and the Trial  Court  was directed to take steps for impounding the

documents  before  having  been  the  documents  being  marked  as exhibits.  

Learned counsel for the appellant submitted that essentially the dispute related to the terms and conditions in an oral agreement and, therefore, the High Court was not justified in its view.

Learned  counsel  for  the  respondent,  on  the  other  hand, supported the judgment of the High Court.

In view of what has been stated in Brij Mohan’s case (supra), the High Court was right in holding that the document in question being an agreement for sale, stamp duty will have to be paid by treating the document to be an ‘instrument’,  as defined in Section 2(14) of the Act.  

The appeal fails and is dismissed.