Judgment:
D.Y. Chandrachud, J.
1. The substantial question of law that arises in the present case is thus:
Whether the Sanad that was executed by the Collector of Pune for and on behalf of the Governor of Maharashtra in favour of the Respondent (Exhibit 75) can be regarded as a conveyance within the meaning of Section 2(g) of the Bombay Stamp Act, 1958, as it stood at the material time?
2. On 20th October 1949, an agreement was executed between the Respondent of the one part and the Government of Bombay of the other under Section 41 of the Land Acquisition Act, 1894. The agreement recites that the Respondent is a Society registered under the Bombay Co-operative Societies Act, 1925, established inter alia wit the object of carrying on the trade of building, buying, selling, hiring, letting and developing land in accordance with Co-operative principles. Respondent No. 1 applied to the State Government for the acquisition of certain lands situated at Aundh. In the City of Pune so as to provide housing accommodation for Refugees. Government having enquired into the request was satisfied that the land was needed for providing housing accommodation for Refugees and consented to the provisions of the Act being put in force in order to acquire the aforesaid land. The agreement recites that the Respondent shall pay to the State Government the entire cost of the acquisition including all charges and other expenses that would be incurred on account of acquisition. The monies which were to be payable by the Respondent by an initial deposit to the Collector, Pune were quantified at Rs. 4.92 lakhs. Thereafter, the Respondent agreed to pay over to the Collector within 14 days of demand such further amounts as the Collector may estimate towards the cost of acquisition. Clause 2 of the agreement then provided as follows:
'2. On payment of the entire cost of the acquisition of the said land, as hereinabove referred to, the whole of the said land, as soon as conveniently may be, be transferred to the Society at the cost in every respect of the society so as to vest in the Society, subject to the provisions of the Bombay Land Revenue Code, 1879 (hereinafter called the 'said Code') and the rules made thereunder and subject also to the provisions of this Agreement as to the terms on which the land shall be held by the Society.'
Clause 3 provided that the said land when so transferred to and vested in the Society, shall be held by the Society as its property to be used only in furtherance of and for purposes for which it is acquired subject nevertheless to the payment of agricultural and non-agricultural or other assessment if and so far as the said land may be subject to assessment under the Bombay Land Revenue Code and the Rules framed thereunder. Clause 4 of the agreement imposes a restriction on the user of the land and under Clause 6 Government is empowered to resume the land for breach of the conditions of allotment.
3. In pursuance of the agreement that was entered into, possession of the land was delivered and transferred to the Society on 13th April 1950. On 5th August 1969. the Collector addressed a communication to the Society demanding payment of stamp duty of Rs. 18,420/- for the execution of the Sanad. On 12th August 1969, the Society deposited the amount of stamp duty in the Revenue Account under protest. On 19th August 1969, a Sanad came to be executed. The Respondent filed a revision before the State Government questioning the demand for stamp duty which was, however, dismissed. Thereupon, on 13th November 1969, 14th February 1970 and 7th July 1972, the Collector called upon the Society to pay the stamp duty demanded. On 21st July 1972, the Respondent-Society transferred the amount of stamp duty which had earlier been deposited in the Revenue Account to the Stamp Duty Account. On 3rd August 1972, further payments of Rs. 35/- and Rs. 12/- respectively were made these being the balance of the consideration that was demanded as being outstanding. A Sanad was executed in favour of the Respondent on 19th August 1969. The Sanad records the antecedent circumstances relating to the acquisition of the land and the payment of the cost of acquisition by the Respondent. Thereupon, the Sanad provides thus:
'NOW, THEREFORE, it is hereby declared that the said land is vested in the Society and is held by the Society as it's property to be used by the Society for the aforesaid purpose, subject nevertheless to the payment by the Society of Agricultural, Non-Agricultural or other assessment as the case may be, to which the said land may be liable under the provisions of the said Code and rules made thereunder and also to the payment of the Local Fund Cess as the case may be on the following terms and conditions.'
4. The Respondent instituted a suit being Special Civil Suit No. 266 of 1975 in the Court of the Learned Civil Judge, Senior Division, Pune, to recover the amount of stamp duty which had been demanded and paid as aforesaid. The Trial Court decreed the suit by a judgment and order dated 18th August 1980 which has been confirmed in appeal on 23rd April 1986. The State Government has come by way of the Second Appeal before this Court which, as earlier noted, has been admitted.
5. The A.G.P. has adverted to the definition of the expression 'conveyance' in Section 2(g) of the Bombay Stamp Act, 1958 as it stood at the material time and to the definition of the expression 'instrument' in Section 2(1). The A.G.P. submitted that the definition of the expression 'conveyance' is inclusive and covers every instrument by which property is transferred inter vivos and the expression 'instrument' includes every document by which any right is created. In the present case, it was urged that the agreement which was entered into on 20th October 1949 contemplated the payment by the Respondent of the cost of acquisition whereafter the land would be transferred to the Respondent subject to the provisions of the Bombay Land Revenue Code, 1879 and the Rules made thereunder. Hence, it was urged that upon the execution of the Sanad, an interest in the land was created in favour of the Respondent upon which stamp duty would clearly stand attracted. On the other hand, it was urged on behalf of the Respondent that the property was acquired and transferred in 1950 and the Sanad only conferred a right of allotment. Counsel appearing on behalf of the Respondent supported the judgment of the Appellate Court urging that the property has not been conveyed absolutely to the Respondent at any stage and in which event, the definition of the expression 'conveyance' in Section 2(g) was not attracted.
6. The Bombay Stamp Act, 1958 has undergone several amendments from time to time. What is material, therefore, is for the Court to consider the provisions of the Act as they stood at the material time viz., when the Sanad came to be executed on 19th August 1969. At the relevant time, the Bombay Stamp Act, 1958, defined the expression 'conveyance' in Section 2(g) as follows:
'2(g) 'conveyance' includes a conveyance on sale and every instrument by which property, whether moveable or immovable, is transferred inter vivos and which is not otherwise specifically provided for by Schedule I.'
The expression 'instrument' was defined in Section 2(1) thus:
'2(1) 'instrument' includes every document by which any right or liability is, or purports to be, created, transferred, limited, extended, extinguished or recorded, but does not include a bill of exchange, cheque, promissory note, bill of lading, latter of credit, policy of insurance, transfer of share, debenture, proxy and receipt.'
7. The definition of the expression 'conveyance' was thus inclusive. The expression 'conveyance included a conveyance on sale and every instrument by which property whether moveable or immovable is transferred inter vivos. The definition of expression 'instrument' was also inclusive and was defined inter alia to include every document by which any right or liability is, or purports to be, created, transferred, limited, extended, extinguished or recorded.
8. In the present case, an agreement was entered into between the then Government of Bombay and the Respondent on 20th October 1949 in pursuance of the provisions of Section 41 of the Land Acquisition Act, 1894. The Respondent had submitted a proposal to the State Government for the acquisition of land for providing housing accommodation to its members. The Government having considered the proposal, accepted it and the agreement stipulated that the Respondent would pay to the Government the entire cost, charges and expenses of acquisition which were estimated at Rs. 4.92 lakhs. Clause 2 of the agreement provided that on the payment of the entire cost of the acquisition of the land, the whole of the land, as soon as conveniently may be, be transferred to the Society so as to vest in the society, subject to the provisions of the Bombay Land Revenue Code, 1879 and the rules made thereunder. The society deposited the stamp duty demanded by the Collector under protest on 12th August 1969 upon which a Sanad was executed on 19th August 1969. The Sand Stipulates and declares that the land is vested in the Society and it was held by the society as its property to be used by the Society for the purpose specified therein subject to the payment of agricultural, non-agricultural or other assessment to which the land may be liable under the provisions of the Land Revenue Code. At this stage, it would be material to note that by the time that the Sanad came to be executed, The Bombay Land Revenue Code, 1879 had been replaced by the Maharashtra Land Revenue Code, 1966. Section 20 of the Code of 1966 inter alia provides that all lands wherever situated, which are not the property of persons legally capable of holding property, and except in so far as any rights of such persons may be established, are declared to be, with all rights in or over the same, or appertaining thereto the property of the State Government. Section 20 provides that it is lawful for the Collector, subject to the orders of the Commissioner, to dispose of such lands in such manner as may be prescribed by the State Government in this behalf, subject always to the rights of way and all other rights of the public or of individuals legally subsisting. Section 29 of the Code provides for different classes of persons holding land including occupants in Class I, occupants in Class II and Government lessees. Under Section 31, it is lawful for the Collector subject to such rules as may from time to time be made by the State Government in this behalf, to require the payment of a price for unalienated land or to sell the same by auction and to annex such conditions to the grant as may be prescribed by such rules before land is entered upon under Section 30. Section 30, it must be noted, provides that where any unoccupied land which has not been alienated, is granted to any person under any of the provisions of the Code, it shall be the duty of the Tahsildar without delay to call upon such person to enter upon the occupation of such land in accordance with the terms of the grant.
9. In the present case, the Court has to construe a piece of fiscal legislation which the Bombay Stamp Act, 1958 undoubtedly is. The Stamp Act incorporates artificial definitions which are employed for a specified fiscal purpose. The expression 'conveyance' even at the material time was defined to include every instrument by which property is transferred inter vivos and 'instrument' similarly included every document by which any right or liability is, or purports to be created, transferred, limited, extended, extinguished or recorded. In the present case, the Sanad which was entered into clearly answers the description of an instrument by which immovable property is transferred inter vivos. The Sanad is clearly an instrument by which a right is created, transferred or recorded within the meaning of those words in Section 2(1) of the Stamp Act.
10. The District Judge while dismissing the appeal filed by the State has relied upon several reasons in support of his conclusion that no stamp duty is attracted. The first reason is that the clauses of the Sanad would show that the land has vested in the Respondent-Society in pursuance of the earlier agreement. The second reason was that after the acquisition proceedings had been completed, the land was given in possession of the Society by Government and the Society had commenced the work of development thereon. The third reason is that the Sanad was a result of a unilateral action of the Government and the document was not executed by the Society. The fourth reason is that what the Government did in handing over the land to the Respondent is to declare the Respondent the holder of occupancy right subject to the payment of assessment. The fifth reason was that by and as a result of the allotment, the Society had not obtained a complete right of ownership in respect of the land, but only a right of occupancy which would not fall within the meaning of Section 2(g) of the Act. The sixth reason is that the Government had not put the Society on notice that it would be liable to pay stamp duty upon the execution of the Sanad. These reasons, in my view, are clearly extraneous to the construction which is required to be placed by the Court on the provisions of the Bombay Stamp Act. The District Judge was clearly in error in holding that the vesting had taken place in pursuance of the earlier agreement that was entered into on 20th October 1949. The agreement that was entered into under Section 41 of the Land Acquisition Act, 1894 spelt out that the Respondent would pay to the Government the cost of acquisition and that it was only on the payment of the entire cost of the acquisition, that steps would be taken for transferring the land to the Respondent subject to the provisions of the Bombay Land Revenue Code and the rules framed thereunder. On the plain terms of Clause 3 of the agreement dated 20the October 1949, it is impossible to hold that there was any transfer or vesting upon the execution of the said agreement. The handing over of advance possession of the land to the Respondent in April 1950 did not complete the process of vesting in the Respondent since it was after necessary steps were taken in accordance with the provisions of the Land Revenue Code for the allotment of land and for the conferment of occupancy rights that an interest in respect of the land was created and recorded in favour of the Respondent. The circumstance that the Sanad was a unilateral action on the part of the Government and that an absolute right of ownership was not transferred to the Respondent is again an extraneous consideration having regard to the definition of the expression 'conveyance' in Section 2(g) of the Stamp Act. Similarly, it is wholly irrelevant to the construction to be placed on the provisions of the Stamp Act as to whether Government had in fact put the Society to notice that stamp duty would be leaved when the conveyance would take place.
11. For all these reasons, I am of the view that the Courts below have erred in decreeing the suit filed by the Respondent for the refund of stamp duty. The stamp duty for the reasons already recorded earlier was clearly attracted on the Sanad that was executed by the Appellant-State in favour of the Respondent.
12. The Second Appeal, in the circumstances, has to be allowed and is accordingly allowed. The impugned judgment and order of the Extra Joint District Judge, Pune, dated 23rd April 1986 is quashed and set aside. Special Civil Suit No. 266 of 1975 instituted by the Respondent shall, in the circumstances, stand dismissed. There shall be no order as to costs. In the event that the amount of stamp duty has been withdrawn by the Respondent, the Appellant will be at liberty to take steps in accordance with law to recover the aforesaid amount. In the event that the amount has not been withdrawn, the amount shall be appropriated towards the stamp duty that is due and payable.
13. Parties be given copies of this order duly authenticated by the Sheristedar/Personal Secretary of this Court.