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TMI Blog2025 (1) TMI 301X X X X Extracts X X X X X X X X Extracts X X X X ..... him by way of consent decree, as affirmed by the Board of Revenue by order dated 12.02.2019. 3. Originally, the appellant had filed a Civil Suit bearing No.47-A/2013 before the Court of First Civil Judge, Class-2, Badnawar, for declaration and permanent injunction against one Abhay Kumar (Respondent No.2 herein) and the State of Madhya Pradesh (Respondent No.1 herein) stating that he is the owner of the subject land and is in long and continuous possession of the same by doing cultivation. It was alleged in the said suit that in the year 2013, the Respondent No.2 herein, who is the adjacent land owner of the appellant, attempted to sell the subject land to third parties, thereby dispossessing the appellant from the same. Pending the suit, both the parties entered into a compromise, based on which, the suit came to be decreed in favour of the appellant, on 30.11.2013 and the Respondent No.1 - State of Madhya Pradesh did not raise any objection nor filed any appeal against the said compromise decree. In terms of the said order dated 30.11.2013, the appellant applied for mutation of the said land before the Tehsildar concerned, who in turn referred the case to the Collector of Stamp ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... rt is exempted from registration by virtue of Section 17(2)(vi) of the Registration Act, 1908'. 4.1. Adding further, the learned counsel submitted that the High Court erred in placing reliance on its earlier order dated 24.07.2019 made in M.P.No.3634/2019 (Siddhulal case), as the facts of the present case are clearly distinguishable from the facts of that case. Siddhulal case was arising out of a suit for declaration on the basis of adverse possession and that, by way of consent decree, new right was created over the property, whereas the appellant herein preferred the suit for declaration and permanent injunction on the basis of his long and continuous ownership and possession of the subject land and he acquired pre-existing right over the same through consent decree. 4.2. It is also submitted by the learned counsel that there was no finding of collusion between the appellant and Respondent No.2 by any Court. 4.3. The learned counsel further submitted that court orders or decrees are not chargeable with stamp duty unless they fall under specific categories of instruments enumerated in Schedule I read with section 3 of the Indian Stamp Act, 1899. In the present case, the consent ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 4. The learned counsel for the Respondent No.1 ultimately submitted that in view of the settled legal position and taking note of the facts and circumstances indicated above, the decision in Mohd. Yusuf v. Rajkumar [(2020) 10 SCC 264] is factually distinguishable and therefore, the appellant is liable to pay stamp duty against mutation of the subject land. 5.5. Thus, according to the learned counsel, the order passed by the High Court is a well-considered one and the same does not require any interference in the hands of this Court. 6. We have heard the learned counsel for the appellant and the learned counsel for the Respondent No.1 and also perused the materials available on record. Despite service of notice, none appeared on behalf of the Respondent No.2. 7. There are two issues involved herein viz., Registration of the document and payment of stamp duty, which are separate and distinct concepts. As regards the issue of registration, we may refer to Section 17 of the Registration Act, 1908 For short, "the Act, 1908", which deals with the documents of which registration is compulsory and the same reads as follows: "17. Documents of which registration is compulsory.-(1) The f ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... assets of such Company consist in whole or in part of immovable property; or (iii) any debenture issued by any such Company and not creating, declaring, assigning, limiting or extinguishing any right, title or interest, to or in immovable property except in so far as it entitles the holder to the security afforded by a registered instrument whereby the Company has mortgaged, conveyed or otherwise transferred the whole or part of its immovable property or any interest therein to trustees upon trust for the benefit of the holders of such debentures; or (iv) any endorsement upon or transfer of any debenture issued by any such Company; or (v) [any document other than the documents specified in sub-section (1A)] not itself creating, declaring, assigning, limiting or extinguishing any right, title or interest of the value of one hundred rupees and upwards to or in immovable property, but merely creating a right to obtain another document which will, when executed, create, declare, assign, limit or extinguish any such right, title or interest; or (vi) any decree or order of a Court [except a decree or order expressed to be made on a compromise and comprising immovable propert ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... or which a compromise has been arrived at. It would be relevant to point out that the provision permitting the compromise between the parties to include in the compromise decree, the subject matter not forming part of the suit property was introduced with effect from 01.02.1977. Prior to that, the compromise decree can be passed only with respect to properties or subject matter of suit. If a compromise decree involves immovable property other than the property for which a decree is prayed for, such a property would not be exempted and would require registration. This condition or the exclusion clause was introduced in the Registration Act, 1908 by Act 21 of 1929 by substituting for "and any award". To avail the exemption from the mandate of compulsory registration of documents conveying immovable property of a value of more that Rs 100/-, the compromise decree arrived must be only in respect of the property that is the subject-matter of the suit. The compromise arrived at before the Lok Adalat and the award passed by the Lok Adalat thereto assume the character of a decree passed under Order XXIII Rule 3 and would also come within the ambit and purview of sub-section (2) of section ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... avour. However, the Tehsildar referred the case to the Collector of Stamps, who after examination, determined the stamp duty under Article 22 of Schedule IA of the Indian Stamp Act, 1899 and directed the appellant to pay a sum of Rs.6,67,500/- in the Government Treasury. The said order of the Collector of Stamps was affirmed by the Board of Revenue, in the revision filed by the appellant. The High Court has also upheld the orders so passed by the authorities below, by order dated 06.12.2019, which is impugned in this appeal. 10. Evidently, the High Court passed the impugned order by observing that the compromise decree needs registration and stamp duty is also required to be paid for mutation of the subject land. While so, reliance was made on its earlier order dated 24.07.2019 in M.P.No.3634 of 2019 (Siddhulal case), in which, two decisions were referred to, viz., (i)the order of this Court in Bhoop Singh (supra) and (ii)the order passed by the High Court dated 13.02.2017 in W.P.No.2170 of 2015 in Mohd. Yusuf (supra). It is worth mentioning at this juncture that the said order of the High Court dated 13.02.2017 in W.P.No.2170 of 2015 was subsequently, challenged by filing Civil A ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ired to be registered on plain reading of Section 17(2)(vi). The High Court referred to judgment of this Court in Bhoop Singh Vs. Ram Singh Major and Others, (1995) 5 SCC 709, in which case, the provision of Section 17(2)(vi) of Registration Act came for consideration. This Court in the above case while considering clause (vi) laid down following in paragraphs 16, 17 and 18:- "16. We have to view the reach of clause (vi), which is an exception to subsection (1), bearing all the aforesaid in mind. We would think that the exception engrafted is meant to cover that decree or order of a court, including a decree or order expressed to be made on a compromise, which declares the pre-existing right and does not by itself create new right, title or interest in praesenti in immovable property of the value of Rs 100 or upwards. Any other view would find the mischief of avoidance of registration, which requires payment of stamp duty, embedded in the decree or order. 17. It would, therefore, be the duty of the court to examine in each case whether the parties have pre-existing right to the immovable property, or whether under the order or decree of the court one party having right, title ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... petitioner could sustain his case as put up in his written statement in the present suit, despite the decree not having been registered. According to us, it cannot for two reasons: (1) The decree having purported to create right or title in the plaintiff for the first time that is not being a declaration of pre-existing right, did require registration. It may also be pointed out that the first suit cannot really be said to have been decreed on the basis of compromise, as the suit was decreed "in view of the written statement filed by the defendant admitting the claim of the plaintiff to be correct". Decreeing of suit in such a situation is covered by Order 12 Rule 6, and not by Order 23 Rule 3, which deals with compromise of suit, whereas the former is on the subject of judgment on admissions. (2) A perusal of the impugned judgment shows that the first appellate court held the decree in question as 'collusive' as it was with a view to defeat the right of others who had bona fide claim over the property of Ganpat. Learned Judge of the High Court also took the same view." 9. Following the above judgment of Bhoop S Singh (supra), the High Court held that since the compromise ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... session is over, even owner's right to eject him is lost and the possessory owner acquires right, title and interest possessed by the outgoing person/owner. 11. In para 62, following has been laid down: (Ravinder Kaur Grewal case, SCC pp.778-78) "62. We hold that a person in possession cannot be ousted by another person except by due procedure of law and once 12 years' period of adverse possession is over, even owner's right to eject him is lost and the possessory owner acquires right, title and interest possessed by the outgoing person/owner as the case may be against whom he has prescribed. In our opinion, consequence is that once the right, title or interest is acquired it can be used as a sword by the plaintiff as well as a shield by the defendant within ken of Article 65 of the Act and any person who has perfected title by way of adverse possession, can file a suit for restoration of possession in case of dispossession. In case of dispossession by another person by taking law in his hand a possessory suit can be maintained under Article 64, even before the ripening of title by way of adverse possession. By perfection of title on extinguishment of the owner's title, a ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... cree dated 4-10-1985 was with regard to the property, which was the subject-matter of the suit, hence not covered by exclusionary clause of Section 17(2)(vi) and the present case is covered by the main exception crafted in Section 17(2)(vi) i.e. "any decree or order of a court". When registration of an instrument as required by Section 17(1)(b) is specifically excluded by Section 17(2)(vi) by providing that nothing in clauses (b) and (c) of sub-section (1) applies to any decree or order of the court, we are of the view that the compromise decree dated 4-10-1985 did not require registration and the learned Civil Judge as well as the High Court erred in holding otherwise. We, thus, set aside the order of the Civil Judge dated 7-1-2015 as well as the judgment of the High Court dated 13-2-2017 [Mohd. Yusuf v. Rajkumar, 2017 SCC OnLine MP 2056]. The compromise decree dated 4-10-1985 is directed to be exhibited by the trial court. The appeal is allowed accordingly." 10.1. The judgments in Mohd Yusuf case (supra) (2020) 10 SCC 264 and Bhoop Singh (supra) were followed by this court in the following subsequent decisions: (i) Khushi Ram v. Nawal Singh (2021) 16 SCC 279 : "30. This Co ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... is erroneous in law. The compromise was between the two brothers consequent to death of their father and no right was being created in praesenti for the first time, thus not requiring compulsory registration. Consequently, the appeal is allowed and the suit is decreed." Thus, it could be discernible that in order to fall under the exception of Section 17(2)(vi) of the Act, 1908, the following conditions must be satisfied: (i) There must be a compromise decree as per the terms of the compromise without any collusion; (ii) The compromise decree must pertain to the subject property in the suit; and (iii) There must be a pre-existing right over the subject property, and the compromise decree should not create a right afresh. 11. There cannot be any doubt that in the civil suit filed by him, the appellant categorically stated that he is the owner of the subject land and is in long and continuous possession by doing cultivation for several years. When the Respondent No.2 sought to disturb the possession of the appellant by selling the subject land to third parties, taking advantage of his name standing in the revenue records, the appellant prayed for declaration and permanent in ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e decree is by way of collusion, cannot be accepted. As already indicated above, the compromise decree reached finality, as the Respondent No.1 has not challenged the same. There is no finding of collusion between the parties in entering into the compromise by any Court as on date. Indisputably, the property is the subject matter of the suit. Thus, the appellant has satisfied the conditions enumerated in section 17(2)(vi) of the Act, 1908 and hence, the subject land acquired by him by way of compromise decree, requires no registration. 13. In respect of the issue relating to payment of stamp duty for mutation of the subject land, it is the specific plea of the appellant that "consent decrees" / "decrees" are not chargeable with "stamp duty" under the Indian Stamp Act, 1899 as applicable to the State of Madhya Pradesh. Section 3 of the Indian Stamp Act, 1899 provides the instruments which are chargeable with duty and the same reads as under: "3. Instrument chargeable with duty- Subject to the provision of this Act and the exemptions contained is Schedule I, the following instrument shall be chargeable with duty of the amount indicated in the schedule as the proper duty therefore, ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 38, or the Indian Registration of Ships Act, 1841 as amended by subsequent Acts." From the above, it is apparent that stamp duty is not chargeable on an order/decree of the Court as the same do not fall within the documents mentioned in Schedule I or I-A read with Section 3 of the Indian Stamp Act, 1899. Though the Collector of Stamps determined the stamp duty for the subject land as per Article 22 of Schedule IA of the Indian Stamp Act, 1899, which states about conveyance, in this case, we have already held that the compromise decree does not fall under the instruments mentioned in the Schedule and that it only asserts the pre-existing rights. Therefore, in the facts of the case, the consent decree will not operate as conveyance as no right is transferred and the same does not require any payment of stamp duty. Since the appellant has only asserted the pre-existing right and no new right was created through the consent decree, the document pertaining to mutation of the subject land is not liable for stamp duty. 14. In the ultimate analysis, we find that the impugned order passed by the High Court, upholding the orders of the authorities below, has no legs to stand and is hence, ..... X X X X Extracts X X X X X X X X Extracts X X X X
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