9911796707
TMI Blog1992 (2) TMI 385X X X X Extracts X X X X X X X X Extracts X X X X ..... v., L.C. Chogle, Govt. Pld. for appellants in A. Nos. 238, 224, 275 and 551, 1031/1991, A.R. Kini, Adv. in A. Nos. 275 and 551 of 1991, S.T. Tijoriwala and S.N. Vimadalal, Advs. in Appeal No. 276 of 1991, A A.K. Chawla, Adv. in W.P. No. 1031 of 1990, Y. Chandrachud, Adv. i/b Ambubhai & Diwanji in W.P. No. 1031 of 1990, M.V. Patel, Adv. i/b., Estley Lam & Co. in W. P. No. 1720 of 91, M.P.S. Rao, Adv. and H.K. Shroff, Adv. i/b., Rustamji and Ginwala, Advs. W.P. Nos. 332, 3082 of 1986, Shah and Sanghvi, Advs. in Writ Petition No. 1860 of 1986, Mahesh N. Vepari, Adv. in Writ Petition Nos. 2945 and 3351 of 1986, Vinod Mistry and Company in Writ Petition No. 3326 of 1986, M.P. Savla and Co. in Writ Petition No. 3423 of 1986, D.H. Nanavati, Adv. in Writ Petition No. 39 of 1987, Mirashi, Adv. i/b., Shah and Sanghavi, Advs. in W.P. No. 1180 of 1987, Mulla & Mulla, Craigie Blunt and Caroe, in W.P. No. 2333 of 1987, M.L. Chaturvedi, Adv. in Writ Petition No. 1865 of 1988, M.L. Chaturvedi, Adv. in Writ Petition No. 1867 of 1988, S.N. Vimadalal, Adv. i/b., Vinod Solanki, Adv. in Writ Petition No. 2792 of 1989, Kapadia and Co. in Writ Petition No. 3031 of 1989, D.D. Madon and H.N. Vakil, Advs. i ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... rpose of this judgment, we will set out the relevant facts in Appeal No. 238 of 1991. This appeal arises out of a decision dated 10-12-1990 rendered by a learned Single Judge in Writ Petition No. 198 of 1985. The learned Single Judge while construing the definition of `conveyance' under section 2(g) and `instrument' under section 2(1) of the Act, held that the consent decree does not fall in any of these definitions and therefore, such a consent decree is not liable for payment of stamp duty. Learned Single Judge drew support to his interpretation from the decision of this Court in Sharanbasappa Tippanna Indi v. Sanganbasappa Sridramappa Sahapur and others, A.I.R. 1935 Bom. 256 : 37 Bom.L.R. 246. Consequently the learned Single Judge allowed the writ petition. It is this judgment of the learned Single Judge which is sought to be challenged in this appeal. 4. M/s. Ruby Sales and Services Private Limited 1st respondent-writ petitioners (plaintiffs) on 17th April, 1984 obtained a consent decree in Suit No. 321 of 1984 against Mukesh Dehyabhai Patel and others. It was a suit filed by the plaintiffs against the defendants for specific performance of the agreement for sale dated ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... that prior to the execution of the consent terms herein the defendants have handed over to the plaintiff complete vacant possession of the said immovable property more particularly described in Exh. `A' to the plaint." From the above recitals in the Consent Decree there can be no manner of doubt that the parties to the transaction and the suit agreed that this Consent Decree shall operate as the conveyance from the defendants in favour of the plaintiffs in respect of the suit property more particularly described in Exh. A to the plaint. It is also not contested before us by the respondents that this Consent Decree does operate as a conveyance. We may therefore, proceed on the footing that the consent decree operates as a conveyance in favour of the plaintiffs-first respondent-writ petitioners. 4-A. As indicated earlier the material and relevant recitals in the consent decree in all these matters are almost identical except description of the property, parties, consideration and date of consent decree. Each of the consent decree does record that the consent decree operates as a conveyance in favour of the plaintiffs-purchasers. With this background we may now advert to th ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... under section 2(g) came to be amended by Maharashtra Act No. 27 of 1985. However the definition of `instrument' remained unchanged. The amended definition of the word conveyance under section 2(g) reads as under: "Conveyance" includes, (i) a conveyance on sale, (ii) every instrument, and iii) every decree or final order of any Civil Court, by which property, whether moveable or immovable, or any estate or interest in any property is transferred to, or vested in, any other person, inter vivos, and which is not otherwise specifically provided for by Schedule I." From this amended definition of word "conveyance" it is clear that the Legislature has by inserting sub-clause (iii) to Clause (g) of section 2 covered every decree or final order of any Civil Court by which property whether moveable or immovable, or any estate or interest in any property is transferred to, or vested in, any other person, inter vivos. Since the consent decrees passed in all these matters are prior to Amendment Act (Maharashtra Act No. 27 of 1985), a serious argument was advanced before us on behalf of writ petitioners that this amendment has introduced a new provisions b ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ords '`conveyance' as well as `instrument' are inclusive definitions and the word 'includes' is often used in interpretation clauses in order to enlarge the meaning of the words or phrases as occurring in the body of the statute. When it is used those words and phrases must be construed as comprehending not only such thing as they signify according to their nature and import but also those things which the interpretation clause declares that they shall include such document which has positive effect of conveying the Immovable property as absolute owners. Miss Ankalesaria, the learned Government Counsel strongly emphasised the object of inclusive definition to include the consent decrees in question. She relied upon the decision of the Supreme Court in C.I.T.A.P. v. M/s. Taj Hotel, Secunderabad, [1971]82ITR44(SC) . The definition of the word `conveyance' is an inclusive definition and it opens with the word, "includes a conveyance". In this reported decision section 10(5) of the Income Tax Act, 1922 fell for consideration. Section 10(5) provides, inter alia, that in sub-section (2), "plant" includes "vehicles, books, scientific appara ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... use which explains the meaning of the principal clause. It has the following properties: (1) it must not be contrary to the principal clause; (2) it must neither increase nor diminish it; (3) but where the principal clause is general in term it may restrict it; see this explained with many examples, Stukeley v. Butler, Hob, 1971. The Supreme Court then observed, "The quotation, given above, from Stroud's Judicial Dictionary shows that ordinarily, the expression "that is to say" is employed to make clear and fix the meaning of what is to be explained or defined. Such words are not sured, as a rule, to amplify a meaning while removing a possible doubt for which purpose the word `includes' is generally employed. In unusual cases, depending upon the context of the words "that is to say" this expression may be followed by illustrative instances." Relying upon these observations of the Supreme Court Counsel urged that the amendment incorporated by Mah. Act No. 27 of 1985 to the definition of "conveyance" is by way of clarification and in order to clarify what was implicit in the provisions as it existed prior to amendment. The amen ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... rument'. 10. Miss Ankalesaria while expanding this argument relied upon the definition of the word `instrument' given in Stroud's Judicial Dictionary of Words and Phrases and it reads as under:- "An instrument is a writing and generally imports a document of a formal legal kind, semble, the word may include an Act of Parliament...Conveyancing Act 1891 (44 and 45 Vict.c.41), 3.2(xiii), instrument includes deed, will enclosure ,award and Act of Parliament..." In support of this submission Miss Ankalesaria drew our attention to the decision of the Supreme Court in Mohan Chaudhari v. Chief Commissioner of Union Territory of Tripura, 1964CriLJ132 . The Supreme Court ruled that the order passed by the President on 3rd November, 1962 suspending the petitioners right to move the Court is an instrument. In this reported decision the Supreme Court was considering the expression `instrument' used in section 8 of General Clauses Act and in that context it was held that President's order is an instrument issued in exercise of constitutional powers. Applying the same analogy Miss Ankalesaria urged that definition of `instrument' under the Bombay Stamp Act i ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... rged that the decree in question vested full ownership and title in the respondents (writ petitioners) by adjudicating upon and expressing the legal result inter alia of the fact that the respondents had made payment of the full purchase price and had received possession of the property. The decree adjudicated and determined the legal effect of these factors which, by their operation, entitled the respondents to full and complete title and ownership. The decree formally expresses such rights. The decree did not create or transfer this legal right to the respondents. All that the decree has done is that the respondents-writ petitioners, were in law deemed to be the owners of the property by virtue of the aforesaid factors. The decree put a seal of the Court on the position existing in law as to the legal status of the respondents. If, under the Stamp Act, the label has to be ignored, then merely because the decree used the words "do operate as a conveyance", by itself did not in any way detract from or alter the aforesaid position in law. The decree gave effect to the consequential position in law, and it is a formal order of the Court. Wherever the Legislature intended to ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... erformance and it was decreed. The plaintiff-vendee got title to the moveable and Immovable property under the decree and not on consent. The Division Bench had no occasion to consider the provisions of the Stamp Act and in particular the definition of 'conveyance' and `instrument'. These observations, in our opinion, are restricted to the facts of that case and there was no occasion for Their Lordships to consider the provisions of the Stamp Act. This judgment, in our opinion, therefore, does not take the respondents' contention any further. 14. Mr. Khambatta also urged that words used in the decree, "as it amounts to conveyance" are re-fondant and that full title vests in the vendee on the basis of adjudication in the decree. Full title is not vested because of the words "it amounts to conveyance". Decree only recognises the plaintiffs as full owners. Mr. Khambatta also urged that the word `includes' is not always and invariably used as a word of extension. It can also be used to signify exhaustiveness in definition. In this connection he drew our attention to the decision of the Supreme Court in S.G.R. Tiles Manufacturers v. State of Guja ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... o whether consent decree is an instrument whereby for the purpose of securing existing or future debt one person creates in favour of another a right in respect of specified property. Under the decree charge was created and this was by reason of agreement between the parties. On these facts the Full Bench observed as under :--- "It is argued that the consent decree is an instrument whereby for the purpose of securing an existing or future debt one person creates in favour of another a right in respect of specified property. No doubt if that definition stood alone there would be some force in the contention because the decree is only passed by reason of the agreement of the parties, and it may be argued that the inclusion of that agreement in a decree of the Court is a mere matter of machinery; but at the same time taking the language literally, it is the decree of the Court, and not the agreement of the parties, which actually creates the charge. There are, however, certain other provisions in the Act which throw some light on the question. Reliance is placed by the learned advocate for the applicant on the fact that in sub-section (15) of section 2 of the Act, it contained ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... field now in view of the development of law over the years particularly in view of the decision of the Supreme Court in Madhav Rao Scindia v. Union of India, [1971]3SCR9 . She urged that legal rights secured by a party by enforcement of law (by approaching a Court and obtaining decree) are now recognised as a species of property for the purposes of Article 31 of the Constitution. She drew support to this proposition from the judgement of the Supreme Court in Delhi Cloth and General Mills Co. Ltd. v. Rajasthan State Electricity Board, [1986]1SCR633 . Relying upon these decisions Miss Ankalesaria urged that the age old concept appearing in the judgement of the Full Bench Sharanbasappa v. Sanganbasappa, (supra) that even consent decree is nothing more than adjudication of the rights of the parties does no longer survive. In the present matters plaintiffs approached the Court and obtained a decree in their favour by virtue of which they secured title in Immovable property and by reason of such a decree they got an absolute title. In these circumstances such consent decree must amount to a conveyance of such property covered by the decree and, therefore, their is a transfer of property ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... vations contained in A.I.R. 1935 Bom 256 (supra), that a consent decree is outside the purview of the Stamp Act. 19. Mr. Chogle while distinguishing the decision of the Full Bench A.I.R. 1935 Bom. 256 of this Court urged that the consent decree creating a charge of Immovable property which was not the subject matter of the suit does not amount to mortgage-deed within the meaning of Indian Stamp Act. It is, therefore, not an authority for the proposition that where Immovable property is transferred under consent decree does not amount to conveyance within the meaning of the Bombay Stamp Act. Mr. Chogle further urged that what weighed with the Full Bench was that in the decree creating a charge no person can draw or make or execute such instrument. On the other hand the Bombay Stamp Act makes a distinction between those instruments which are mentioned in section 30(a) and the conveyance and lease which are mentioned in Clause (b) of section 30. Section 30 provides that in the absence of agreement to the contrary the expense of providing proper stamp shall be borne in the case of instruments falling under certain articles of Schedule I namely Administration Bond, Indemnity Bond. Mort ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ument, we do not see any force in this submission. What label attached to it is not germane but the description contained in the instrument is a decisive factor. In the consent decree in question parties agreed that the consent decree do operate as a conveyance as if this be so such a consent decree is an instrument and liable for stamp duty under Entry 25(a) of Scheduled 1 of the Act. Mr. Chogle rightly drew our attention to the decision of the Full Bench of the Madras High Court in Chief Controlling Revenue Authority, Board of Revenue, Madras v. R. Thirthalu AIR1973Mad1. The Full Bench of the Madras High Court held that the affidavits which were intended to convey a property amount to instrument under section 2(10) of the Stamp Act, 1899. The Madras High Court observed: "...Though it is an inclusive definition, it is clear that the essence of a conveyance is transfer of property or an interest therein, whether moveable or immovable, and the transfer should be inter vivos. That the recital in the two documents amounted to a transfer is apparent. No doubt, it is mentioned in the document that possession of the properties has been delivered earlier, but that would not by itse ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ument' has been raised before the Court and if the Court does not agree with the interpretation given by Mr. V.T. Athavale, the interpretation given by the Court must prevail. 26. The last question that requires consideration is as regards amendment by Maharashtra Act No. 27 of 1985. Mr. Chogle urged that amendment is merely a declaratory and by way of clarification and it is not a new provision. In fact we are really not concerned with the amended provision because the decrees in all these cases were passed prior to 10th December, 1985. The learned Government Pleader relied upon the amendment only to impress upon the Court with reference to the statement of objects that such a clarification was needed because of some ambiguity, in the definition of words "conveyance" and "instrument". We were taken through the Statement of Objects and Reasons of the amending Act. It appears that this was necessitated because of the judgment of the Supreme Court in Narandas Karandas v. S.A. Kamatam, [1977]2SCR341 . The Supreme Court held that a conveyance on sale meant an absolute transfer of ownership and not limited interest in the property. The substantive part of the de ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ns of the Supreme Court giving different angles to the property rights under Article 311 of the Constitution. If we accept the doctrine of stare decisis propounded by Mr. Zaiwala, the result is grave in a sense that the transactions involving transfer of Immovable properties of lacs and lacs of rupees covered by such consent decrees would fall outside the purview of the Stamp Act and consequently the State would lose a substantial revenue. It is therefore, not in the public interest to apply the doctrine of stare decisis. There will be encouragement to the parties not to convey the property by document of conveyance or an instrument but instead to approach the Court by a collusive suit and obtain a consent decree to operate as a conveyance for sale. This would clearly frustrate the object of the Stamp Act. It will also encourage collusive litigation which may be against public policy. 30. It is well settled that construction of the statute must be to advance the object and suppress the mischief, S. Raghubir Singh Gill v. S. Gurcharan Singh Tohra [1980]3SCR1302 . It is also well settled that Court should not be deterred from changing a decision which is wrong or not in public inter ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... w world, a new environment, a new atmosphere was emerging into the industrial revolution. The winds of change blew over India. For a variety of historic reasons, those winds caused much of precipitation, in the Indian soul as well. An alien Government, eager to expand its revenue source, till then almost confined to the lands and the ryots, translated that idea into the Indian Stamp Act, 1899. 6. Fast changes took place in the political and administrative areas thereafter. Another half of a century, and India was free. Soon came the Constitution. It delineated clearly the legislative lists, and described in detail the legislative exercises permissible for the Central and the State. The State-Re-organization came about in 1956. 7. Stamp duty by and large fell into State field. (Entry of List of Schedule VII). Centre was in control of the sophisticated Commercial instruments, the promissory note, the Bill of Exchange and the like (vide Entry II in State List). Soon thereafter was enacted the Bombay Stamp Act, 1958. The frontiers of the State were again altered later and many amendments were made to the Act. One substantial amendment was in the year 1985. We are not concerned with s ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e in which consideration is satisfied; the operative ness of the instrument, which on its own force, has transferred the title from one party to the other; the manner in which divestiture of title in the earlier order has been accomplished. These would be sufficient any ample, for postulating a chargeability of the instrument to Stamp duty under the enactment. There is no escape route, even if the above premises, turns out to be wrong. It is not possible to wriggle out of the stronger and close grip made by words : "Instrument by which property is transferred inter vivos". What is an 'instrument', in the context of commercial transactions and legal treatments.? There have been numerous occasions where that question has been asked, and answered. A century back, many aspects of that concept had been analysed and annotated upon. An 'award', for example, was acknowledged as coming within its amptitude. That view is a hint about the width of the term. 13. An instrument is a document. When will you call something a document? Contentions have gone even to the extent that a painting on a fabric would also be within the general understanding of that term. It ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ho decided this case, to expand the implications of that decision into areas which would not have been in the contemplation of the Court. 17. By way of illustration it is only illustrative and not exhaustive - the strands of reasoning based on substantial principles of law discriminable in the decision of the Madras High Court, Chief Controlling Revenue Authority v. R. Thirthalu, AIR1973Mad1 , were unavailable to the Full Bench of this Court. The Madras decision rightly took note of the emphasis to be placed on the essence of the transaction, the ignoring or a recital about an anterior delivery of possession of the property, as contained in the document in question. The recital notwithstanding, the title in the property had not been divested from the prior owner. It had not yet vested in the purchaser. It was by that affidavit, that the deponents divested themselves of their title. The propositions propounded by the Madras High Court, in the background of the factual matrix are clear : the substance is to be examined; one need not unnecessarily search for familiar term like 'transfer' or 'assign' in the document, if it is otherwise effective to operate as a conveya ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... eached by having the ships with tonnage fixed at 499 tons. That may be permissible. But then, parties cannot take advantage of dishonest deeds to defeat Inland Revenue", is the echo in English Courts, atleast from 1935. See Alexander v. Rayson, 1935 All.E.R. 185; Wyld & others v. Silver, 1963 (I) K.B. 169; Inland Revenue Commissioner and another v. Rossminister Ltd. & related appeals, (1980)1 All.E.R. 80. We notice that in this and the connected batch of cases (Appeal No. 238 of 1991 in Writ Petition No. 198 of 1985; Appeal No. 224 of 1991 in Writ Petition No. 1568 of 1984; and Appeal No. 395 of 1991 in Writ Petition No. 3693 of 1990), the parties are mostly 'Builders'. In its historic perspective, we do appreciate the role of the "Builders" and their activities, The efficiency of their organisation, the economy they practice, in man power and materials, the swiftness with which they build up brick or block by block, all elicit appreciation due to a dynamic entrepreneur. "The Bombay Builder" was a publication which started in late 1860's. It has highly critical about the P.W.D. and about architects like Wilkins and Stevens and even against a gr ..... X X X X Extracts X X X X X X X X Extracts X X X X
|
