1993 (10) TMI 348 - SC - Indian Laws

Summary

Issues involved:
The judgment addresses the question of whether a consent decree conveying title to immovable property falls under the definition of "conveyance" or "instrument" under the Bombay Stamps Act, 1958.

Analysis:
The Single Judge of the High Court initially held that consent decrees do not fall under the definitions of "conveyance" or "instrument," thus not liable for stamp duty. However, the Division Bench disagreed, stating that a consent decree, based on its true interpretation, is a conveyance covered by the Act and subject to stamp duty.

The case references a previous judgment by the Bombay High Court regarding a consent decree creating a charge on immovable property not part of the suit. The Full Bench in that case determined that such a decree is not liable for stamp duty, but this does not directly apply to the present situation where property is actually transferred under the consent decree.

The definitions of "conveyance" and "instrument" under the Act were amended in 1985, but the consent decrees in question predate this amendment. The consent decree in focus explicitly states the transfer of property from defendants to plaintiffs, confirming its status as a conveyance and an instrument.

The judgment emphasizes that the terms of the document are crucial in determining its nature. A consent decree, although stamped by the court, remains an agreement subject to all rights and liabilities of an agreement. The court affixing a stamp does not alter the document's essence.

In conclusion, the Supreme Court concurred with the Division Bench's decision that the consent decrees in question qualify as both "conveyance" and "instrument." The appeals were dismissed, affirming the liability for stamp duty and upholding the Division Bench's reasoning.