Govinda Bhat, J.
1. The Chief Controlling Revenue Authority in Mysore (Commissioner of Stamps), Bangalore has referred this case under Section 54 (1) of the Mysore Stamp Act, 1957, hereinafter called the 'Act' for determination of the duty, if any, with which the Instrument to be executed by Mrs. Elizabeth Appollinaris Rebello and nine others, (hereinafter called the 'declarants') is chargeable.
2. The draft of the instrument was presented before the Deputy Commissioner of Stamps, Chickmagalur, for adjudication under Section 31 (1) of the Act. The Deputy Commissioner was of the opinion that the Instrument is a 'conveyance, of right in properties of the value of Rupees 22,75,000/- not otherwise specifically provided for by the Schedule and as such chargeable with a Stamp Duty of Rupees 1,02,375/- under Article 20 of the Schedule to the Act. In the appeal preferred against the said order, the Chief Controlling Revenue Authority took a contrary view that the Instrument is not a deed of 'conveyance' as defined in Section 2 (1) (d) but a deed of 'partnership' falling under Article 40 of the Schedule to the Act and that the proper stamp duty chargeable is Rupees 60/-. However, since the matter is not free from doubt, he has referred the case for the opinion of this Court.
3. It is cardinal rule of construction that a document has to be construed as a whole, and therefore it is necessary to set out the Instrument which reads thus:--
'Deed of declaration of mutation of nomenclature.-- This deed of declaration of mutation of nomenclature has been executed on the day of March 1969, by the following declarants:--
I. Mrs. Elizabeth Appollinaris Rebello wife of S. B. P. Rebello, aged about 56 years.
X X X X (The names of declarants Nos. 2 to 10 which follow are omitted as unnecessary).all co-owners and partners of 'Doddengudda Estates'. Mudigere P. O., Chickmagalur Dist and hereinafter called as 'Declarants', the said 'Doddengudda Estates' being situated in Vast are Hobli, Chickmagalur Taluk in the Registration District of Chickmagalur.
Whereas the declarants had entered into a mutual agreement to purchase the coffee Estates known as 'Doddengudda Estates,' consisting of Laldi Division, Kelagani Division and Doddengudda Division, from the then owners, Kumara Raiah M. A. M. Muthiah Chettiar and M. A. M. Ramaswamy Chettiar, both sons of Raiah Sir M. A. M. Muthiah Chettiar, residing at Chettinad House, Raiah Annamalaipuram, Madras 28; And, whereas, it was the desire and intention of all the co-owners to form themselves into a partnership firm to own, to maintain and to run the said Estates, under the name and style of 'Doddengudda Estates', and to register the said firm, under that name, with the Registrar of Firms in Mysore, Bangalore-1, under the provisions of the Indian Partnership Act, 1932 (Act 9 of 1932);
And, whereas, it would have been right and proper and in the fitness of things to have the sale deed executed in the name of the said Registered Firm as 'Doddengudda Estates';
But. whereas, there was but quite an insufficient span of time to draw up and to execute a partnership deed and hence the sale deed was executed and registered in favour of the Declarants as 'Co-owners';
And, whereas, the said co-owners and declarants have entered into a Partnership Deed referring to the purchase of 'Doddengudda Estates' by them;
And, whereas, the sale deed of 'Doddengudda Estates', was executed on 19-10-1968 and was got registered on 31-10-1968 as Document No. 1667 of 1968-69 at pages 169-180 Volume 1151 of Book 2, by the Headquarters sub Registrar of the Registration District of Chickmagalur for a sum of Rupees 22,75,000/-;
And, whereas, the declarants, now do desire to clarify, to ratify and to declare that they are the co-owners and partners of a Firm, registered with the Registrar of Firms, Bangalore, under the name and style of 'Doddengudda Estate';
The said declarants and partners do hereby further clarify, ratify and declare, by virtue of this Deed of Declaration of Mutation of Nomenclature, that they are the registered owners and partners of the said 'Doddengudda Estates', in lieu of and in juxtaposition to the names mentioned as co-owners in the aforesaid Sale-deed, and that they are bound by and governed by the provisions of the Indian Partnership Act, 1932, both as to their proprietary rights therein, as also as to their share in the profits and losses of the said Registered firm, 'Doddengudda Estates', as more particularly specified in their Partnership Deed. Now, therefore, know all men by these presents that the co-owners and Partners of 'Doddengudda Estates' do hereby seek the Transfer of Khata, Record of Rights, Pahani Register and Index from their Individual names to the name of their registered firm 'Doddengudda Estates', referred to in this deed of Declaration of Mutation of Nomenclature as more fully described in the Schedule I and II here below:
SCHEDULE I
All these pieces and parcels of land together with Coffee Plantations, Paddy Fields, Jungles, trees, buildings and other assets and appurtenances of the Estates commonly known as Doddengudda Estates comprising of the following items and situated in the Registration District of Chickmagalur within the Registration Sub-District of Chickmagalur and making a total acreage of 584 (Five Hundred and eighty four) acres and 18 (eighteen) guntas, more or less, (Details of Items I to VI omitted as not necessary)
SCHEDULE II
Buildings: Manager's Bungalow, Superintendent's Bungalow, cut-houses, office room, staff quarters, Cooly lines, other buildings and constructions such as pulp house, pump house, stores, barbecues, cattle sheds car sheds, fumigation sheds, Engine sheds, water tanks, wells and etc., appurtenant to and relating to Doddengudda Estates.
In Witness whereof, the declarants aforesaid have set their hands unto this deed of Declaration of mutation of nomenclature this day of March, 1969, at Chickmagalur.
Sd/- Mrs. E. A. Rebello
and Nine others'
4. From the document, it is seen, that the Coffee Estates described thereunder known as 'Doddengudda Estates' belonged to Kumara Rajah M. A. Muthiah Chettiar and his brother M. A. M. Ramaswamy Chettiar, who by a sale deed executed on 19-10-1968 and registered on 31-10-1968 had conveyed the same for a consideration of a sum of Rs. 22,75,000/- in favour of the declarants; that it was the intention of the declarants to form themselves into a partnership firm to own, maintain and run the said estates and that as the partnership deed could not be drawn up and executed before the sale deed was executed, the sale deed was executed in favour of the declarants as co-owners but subsequently the declarants had executed the partnership deed, referring to the purchase of 'Doddengudda Estates' by them. The intention of the declarants in executing the document is to declare that the 'Doddengudda Estates' are the properties of the partnership firm which they had formed and that their legal relationship in respect of the said estates is not as co-owners but partners.
5. The question is whether the document falls within the definition of 'conveyance' in Section 2 (1) (d) of the said Act, which defines 'conveyance' thus:
''Conveyance' includes a conveyance on sale and every instrument by which property, whether moveable or immoveable is transferred inter vivos and which is not otherwise specifically provided for by the Schedule;'
6. Sri B. K. Ramachandra Rao, the learned Additional Government Advocate, submitted that on the purchase of the 'Doddengudda Estates', the declarants became co-owners; but when the properties ceased to be held as co-owners and became the trading assets of the partnership firm, the title in them vested in all the partners and that when the exclusive property of a partner is brought into the common stock of the partnership firm there is a transfer of property from the individual partner to all the partners. Therefore, the learned counsel argued that the instrument in question is one by which improvable property is sought to be transferred inter vivos and which is not otherwise specifically provided for by the Schedule and hence it satisfies the definition of a 'conveyance'. He however conceded that if the Instrument does not amount to a 'conveyance', it cannot be construed as a deed of partnership chargeable to duty under Article 40 of the Schedule and that the opinion ot the Chief Controlling Revenue Authority in Mysore in that regard cannot be supported. He further submitted that if we are of the opinion that the deed is not a 'Conveyance', it would fall under Article 5 (d) of the Schedule that is, a 'Memorandum of an Agreement' not otherwise provided for on which the proper stamp duty payable is Rupees 3/-.
7. In support of his argument, the learned Additional Government Advocate relied on the decisions in Narayanappa v. Bhaskara Krishnappa : [1966]3SCR400 and Sudhansu Kanta v. Manindra Nath : AIR1965Pat144 which have no direct bearing on the question before us.
8. The concept of partnership is to embark upon a Joint venture and for that purpose to bring in as capital, money or property including immovable property. When it is shown that property, whatever its character is brought into the common stock of the partnership firm, it would cease to be the exclusive property of the person who brought it in and it would be the trading asset of the partnership in which all the partners would have Interest in proportion to their share in the joint venture of the business of the partnership. Since the firm has no legal existence, the partnership property will vest In all the partners. The provisions of the Indian Partnership Act, 1932 do not prescribe any particular mode by which properties whether moveable or immoveable have to be brought into common stock. For the purpose of bringing the separate property of a partner into the common stock of the firm, it is not necessary to have recourse to any written document at all. As soon as the partners intend that their separate properties should become the partnership properties and they are treated as such, then by virtue of the provisions of the Partnership Act, the properties become the properties of the firm. This result follows by operation of law. This sort of contribution or transfer is not prohibited by the Transfer of Property Act or the Registration Act (vide Prem Rai Brahmin v. Bhani Ram Brahmin), ILR (1946) 1 Cal 191 at pp. 193-194.
9. Though under law a written document is not necessary to bring in the separate property of a partner into the partnership stock and such property becomes the property of the firm when the partner intends to bring it and treat the same as such, where a document is executed by a partner as a formal conveyance, the question is not whether the contribution or transfer could not be effected otherwise than by execution of a document but whether the document is a conveyance' as defined under Section 2 (1) (d) of the Act. The Act subjects to duty the instruments falling within the description of documents specified in the schedule and for fixing the duty payable, the substance of the document should be looked into.
10. A partner can sell his property to a partnership firm which includes himself as a member. Whether the partner sold his property or he contributed the property to the common stock is a question which would depend upon his intention and on the language of the document. Where the document contains no words whatever of a dispositive character, which expressly or by necessary implication, amount to a transfer of interest as between one partner and the others, there is irresistible conclusion that the properties were brought into the common stock.
11. In Chief Controlling Revenue Authority v. Chidambaram : AIR1970Mad5 there was a trading joint Hindu family the assets of which were involved in certain protracted partition proceedings. In the said proceedings, Chidambaram Chettiar, one of the parties to that litigation and a member of the family, agreed to take certain mill properties and machinery relating thereto for Rupees 3,30,000/-. On 6-6-1962 an instrument was executed between ten persons including the said Chidambaram Chettiar styled as a partnership deed; under Clause (8) of the said instrument, the aforesaid sugar mills etc. dealt with in the Court proceedings were declared as the properties of the partnership firm formed including Chidambaram Chettiar as a partner thereof. The instrument purported to set forth the respective shares of the partners and contained other provisions in respect of dissolution, accounting etc. The Chief Controlling Revenue Authority, Madras, raised a question that the document was liable to be charged as a 'conveyance' under Article 23 of Schedule I of the Indian Stamp Act, (Madras Amendment Act No. 19) 1958. or that even if it is construed as a document of partnership under Article 46 of the said Schedule, it was liable to bo considered as a composite document and liable to be charged with a higher duty under Section 5 or Section 6 of the Indian Stamp Act. On a reference to the Madras High Court, it was held that the document was not a 'conveyance' and cannot be construed as such but was a deed of partnership and dutiable as such. In answering the reference Anantanarayanan C. J. observed thus:
'Certainly, a partner can sell his property to a partnership firm which includes himself as a member. But the question whether there was such a sale, would depend upon his intention and on the language of the document. In the present case, the very partnership firm formally comes into existence under the document and there are no words whatever of a dispositive character, which, expressly or by implication amount to a transfer of interest as between the 5th defendant and the other partners. Admittedly, Clause (8), which is the only clause relied on can only be taken as a declaration of the rights of the partnership in these aforesaid properties, consequent upon the fact that the properties were brought into the common stock.
12. In the instant case, the instrument in question does not purport to convey the 'Doddengudda Estates' to the partnership firm. It merely records the intention of the partners to treat the properties purchased under the registered sale deed dated 19-10-68 as the partnership assets of the firm. The change of legal relationship from one of co-owners to partners in respect of immoveable properties is not brought about by the instrument but by operation of law by virtue of the fact that the partners agreed to treat the said properties. (Sic). The learned Additional High Court Advocate relied on the following clause in the instrument to show that it purports to convey immoveable property to the partnership firm:
'Now, therefore, know all men by these presents that the co-owners and partners of 'Doddengudda Estates' do hereby seek the transfer of Khata, Record of rights, Pahani Register and Index from their several individual names to the name of their registered firm 'Doddengudda Estates'.
13. If the 'Doddengudda Estates' became the properties of the partnership firm by reason of the intention of the partners to treat the said estates as assets of the firm by bringing the same to the common stock, they are entitled to have the Khata, Record of Rights etc., transferred from their several individual names to the name of the firm. That is a consequence which follows as a result of the estates ceasing to be the property of the individual partners and vesting in the partnership firm.
14. For the above reasons, we answer the reference that the document in question is neither a 'deed of conveyance' as defined in Section 2 (1) (d) nor a 'deed of partnership' falling under Article 40 of the Schedule to the Act but it is a 'memorandum of agreement' chargeable to stamp duty of Rupees 3/- under Article 5 (d) of the Schedule of the Mysore Stamp Act, 1957. The reference answered accordingly.