Writ Petition No.5304 of 2004

26th August, 2004

Petitioner Counsel: Shri. S. R. GANBAWALE
Respondent Counsel: Shri. S. R. NARGOLKAR

Cases Cited:
Asha Krishinlall Bajaj (Smt.) Vs. Sub-Registrar of Assurances, 2001(2) Bom.C.R. 629 [Para 6,10]
Ramdas Chimna Vs. Pralhad Deorao, AIR 1965 Bom. 74 [Para 9]

JUDGMENT

S. U. KAMDAR, J.:- By the present petition, the petitioner is challenging the order dated 27-2-2004 passed by the District Collector, Kolhapur, inter alia, directing the petitioner to make good the deficiency of stamp duty by properly classifying the release deed under Article 25(b)(5) of Schedule-I to the Bombay Stamp Act, 1958. Some of the material facts in the present case briefly stated are as under :-

2. Ms. Kantaben Harilal Poonatar was the original purchaser of the property bearing Plot No.50, City Survey No.517-A/1, E Ward, Shivaji Peth, Kolhapur and a bungalow built thereupon. The said property which was known as Poonam bungalow was acquired by the said deceased Kantaben Harilal Poonatar on 1-9-1965 under a registered sale deed. On 17-7-1985, the said deceased Kantaben Poonatar executed a Will conferring the right, title and interest in respect of the said property on the petitioner and the respondent No.3. Smt. Kantaben Poonatar subsequently expired.

3. In accordance with the said last deed and testament of Kantaben Poonatar dated 17-7-1985 the petitioners recorded their names in the record of rights including the property register card on 3-11-1985. Thus, the petitioner and the respondent No.3 became the co-owner in respect of the said property under the said last Will and testament of the deceased. Sometime in or about February, 2004 an arrangement was arrived at between the respondent No.3 and the petitioner under which the respondent No.3 agreed to release his right, title and interest in favour of the petitioner herein. Consequently a deed of release was executed sometime on or about 10-2-2004. The said deed of release was executed and appropriate stamp duty as computed under Article 52 of Schedule-I of the Bombay Stamp Act was paid. The said release deed was thereafter forwarded for registration to the 2nd respondent. The said Article 52 deals with the payment of stamp duty on the document described as release deed. The 2nd respondent however inter alia directed the petitioner to pay the stamp duty at the rate of 8% on the market value of the property as in the year 2004. The aforesaid order is passed on the basis that though the document is styles as 'Release Deed' but in fact the same is conveyance as it transfer the property in favour of another co-owner. Thus the authorities held that the said document is liable to payment of stamp duty under Art.25(b)(5) and not Article 52 of Schedule-I to the Bombay Stamp Act.

4. The petitioner thereafter made various representations to the 2nd respondent and pointed out that in the judgment of this Court in Writ Petition No.6425 of 2000 this argument is rejected and further stated that the respondent No.2 is not entitled to classify the said document as deed of conveyance. However, the said representation of the petitioner was not considered. On 10-2-2004, the petitioner made a written application requesting the respondent No.1 to properly ascertain the stamp duty payable on the said release deed in light of the judgment of this Court. However, the respondent passed an order on 27-2-2004 inter alia directing the petitioner to make payment of stamp duty on the basis of sale deed under Article 25(b)(5) of Schedule-I of the Bombay Stamp Act, 1958. The respondents have further by the said order impounded the said release deed and have threatened to recover 2% of the market value of the property as and by way of penalty. In light of the aforesaid position, the petitioner has filed the present petition.

5. Before dealing with the rival contentions, it is necessary to set out the necessary articles which are subject matter of consideration in the present writ petition. Article 52 and Article 25(b)(5) of the said Schedule-I reads as under :-

"25. CONVEYANCE (not being a transfer charged or exempted under Article 59)-

On the true market value of the property which is the subject matter for Conveyance-
(a) if relating to the moveable property, for every Rupees 500 or part thereof.	Fifteen Rupees
(b) if relating to immovable property situated within the limits of:-
(i) any rural area falling within the limits of the Bombay Metropolitan Region as defined in clause (b) of section 2 of the Bombay Metropolitan Region Development Authority Act, 1974, for every Rupees 500 or part thereof;
(i-a) any rural areas excluding the rural area referred to in sub-clause (i),
(A) if suchproperty is residential for every Rupees 500 or part thereof.	Five Rupees
(v) Municipal Corporations (excluding those Municipal Corporations and other areas referred to in sub-clause (vi), the ‘A’, ‘B’ and ‘C’ Class Municipal Councils falling within the limits of the Bombay Metropolitan Region and Cantonment of Devlali, Delhu Road and Aurangabad for every Rupees 500 or part thereof.”	Forty Rupees
“52. RELEASE, that is to say, any instrument (not being a release as is provided for by section 24) whereby a person renounces a claim upon another person or against any specified property-
(a) if the amount or value of the claim doesnot exceed Rupees 2,500.	The same duty as a Bond (Article 13) for such amount or value.
(b) in any other case	(Two Hundred Rupees)”

6. A similar issue arose before this Court in the case of Asha Krishinlall Bajaj (Smt.) Vs. Sub-Registrar of Assurances and others, reported in 2001(2) Bom.C.R. 629, when the Division Bench of this Court while considering the aforesaid issue has held as under :-

"3. The short question for our consideration is, whether the impugned documents involved in this case of which copies are annexed to this petition at Exhs.A & C which are identical, amount to deed of conveyance or the deed of release. In his affidavit in reply, the respondent No.2 has stated that the said documents are impounded by the Sub-Registrar under section 33 of the Bombay Stamp Act and the son and the daughter have relinquished their shares in favour of their mother which comes under Explanation below section 2(g) of the Bombay Stamp Act. Now, the explanation to section 2(g) of the Bombay Stamp Act reads thus -

"Explanation - An instrument whereby a co-owner of any property transfers his interest to another co-owner of the property and which is not an instrument of partition, shall, for the purpose of this clause, be deemed to be an instrument by which property transferred inter vivos."

Therefore, for a transaction to assume a character of conveyance, what is necessary is, transfer of interest from one co-owner to another co-owner. As against this, the provision of Art.52 of Schedule-I of the Bombay Stamp Act stipulates that the release is that whereby person renounces a claim upon another person or against any specified property.

It is well settled law in this regard that essential ingredients of release are that from the party by a legal right in the property vested in the release and the release should operate to enlarge that right into a absolute title for the entire property as far as the parties are concerned. There can be no release by one person in favour of another who is not already entitled in the property as co-owner. A release deed is valid not only when it is gratuitous, as release deed can be validly executed also for some benefit accruing to the releaser simultaneously.

In this regard, the learned Counsel for the petitioner invited our attention to the ruling of Madras High Court in the case of Chief Controlling Revenue Authority Vs. Rustom Nusserwanji Patel, AIR 1968 Mad. 159, wherein it is observed that, in order to determine whether a document is a release or conveyance, the nomenclature or the language used is not decisive. What is decisive is the actual character of the transaction and the precise nature of the rights created by means of the instrument.

4. Therefore, in our view, it is more than clear in this case that, the daughter and the son have renounced their claim in respect of the property in favour of their mother and, therefore, the documents in question are undoubtedly the deed of release without consideration and cannot be held to be the deed of conveyance."

7. In our view, the present petition is duly covered by the judgment of the Division Bench of this Court which is binding on us and accordingly, we are inclined to pass similar order. However, the learned counsel for the respondent has contended before us as and by way of an additional ground that the Court must decide and ascertain the true nature of transaction and to ascertain further whether it is a deed of release or in fact it is a deed of conveyance. It is his case that the petitioner and thus the respondent No.3 had a defined share in the property and they have independent right, title and interest in the property which was bequeathed to them under a Will. Thus, the case of the learned counsel for the respondent is that where there is a defined share in the said property though they are co-owners for the purpose of Stamp Act Article 52 will not apply but Article 25 will apply because there is no question of release of interest in the immovable property but in fact there is a sale of a defined interest in the said immovable properties. In support of the said argument, the learned counsel has sought to distinguish between the word "gift" and "release".

8. The learned counsel has also relied upon various text books to emphasise difference between the words 'conveyance' and 'release' and inter alia contended that when there is a defined share of interest in the property the provision of Article 52 of the Schedule-I to Bombay Stamp Act will not apply.

9. We are not impressed by the argument of the learned counsel for the respondents. Firstly because in every case of a release it is the release of a share or interest which is a defined share or interest in favour of other co-owners or persons who are holding a joint title in respect of the said property. Even in the case of Hindu Undivided property, every co-parcener will have a defined share which may not have partitioned and in our view this shall make no difference whether a person is having a defined share in the property or an undefined share in the property as long as the interest is held jointly and there is no partition of the said interest among co-owners. Thus, we find that even if there is a defined share or interest in the property it can still be released in favour of another person. In such a case share or interest of the other co-owner will be accelerated and acquire a larger share than what he was originally holding. In Mulla's Transfer or Property, the word 'release' is explained as under :-

"A relinquishment is not an alienation."

Further, in the case of Ramdas Chimna Vs. Pralhad Deorao and others, reported in AIR 1965 Bom. 74, has been inter alia held as under:-

"(8) Mr. Deshpande, however, drew my attention to the provisions of Sec.17 of the Registration Act. There is nothing in the Registration Act or the provisions of Sec.17 thereof, which requires any particular transaction to be recorded in writing. That Act requires only that when certain transactions are so recorded, the writing shall be registered. There is nothing in the Transfer of Property Act or any other law that I am so far aware which requires that a mere extinguishment of an interest in the immoveable property shall be in writing. The relinquishment by Bainabai of her interest in the joint family property was merely abandonment of her interest in the joint family property in favour of her two sons. Such a relinquishment or abandonment of interest in the joint family property, even though it consists of immoveable properties and is of the value of Rs.100/- and upwards, can be effected without a written instrument, though if one is executed, it would undoubtedly require registration under Sec.17 of the Registration Act, Gauri Bai Vs. Gaya Bai, AIR 1927 Nag. 44."

10. In the aforesaid light of the facts and circumstances of the case, we find that the argument advanced by the learned counsel for the respondent does not make any difference in so far as the interpretation of the word 'release' and/or the liability of payment of stamp duty under Article 52 of Schedule-I of the Bombay Stamp Act, 1958 is concerned. We are of the view that the judgment of the Division Bench of this Court in the case of Asha Krishinlall Bajaj (Smt.) Vs. Sub-Registrar of Assurances and others (supra) holds the field in full force and the respondent authority is bound and liable to follow the same.

11. In the aforesaid circumstances, we allow the present petition and quash and set aside the impugned order dated 27-2-2004 and direct the authority to register the said deed of release dated 10-2-2004 executed by and between the petitioner and respondent No.3 by levying stamp duty under Article 52 of Schedule-I of the Bombay Stamp Act, 1958. We make the petition accordingly. However, there shall be no order as to costs.

Parties to act on an ordinary copy of this order duly authenticated by the Private Secretary of this Court.

Petition allowed.