Chief Controlling Revenue Authority, Board of Revenue, Madras Vs. Mohammed Yoonus Sait - Court Judgment

Excerpt:
stamp act (ii of 1899), section 2 (24--settlor and his sons, executants of document--deed reciting oral gift in favour of sons and partition amongst them--recording terms of disposition--deed to be stamped both as partition and settlement--wife and daughters of settlor not executants of document--recital of gift to them may not render deed to be stamped as settlement ; one m and his four sons were parties to a document which purported to record a gift of certain items of properties by m to his four sons who thereafter proceeded to partition these items among themselves. three other items referred to in the document were set apart for being gifted to the wife and the daughters of m. m joined in the execution of the document as a confirming party to declare and confirm that the other..... (1) under s. 57(1) of the indian stamp act, the following question stands referred to us by the chief controlling revenue authority, board of revenue, madras:"whether the document dated 30-6-1955 comprised both a partition and settlement of gift and whether the note to schedule a of the document read with the recitals and the relevant items of property constitute an instrument chargeable as a settlement under the stamp act."one mohammad yoonus sait moved this court under art. 226 of the constitution for a writ of mandamus to direct the board of revenue madras to make the reference. to the document in question, the parties are the said mohamed yoonus sait and his four sons. broadly stated, this document purported to record a gift of certain items of properties, by yoonus sait, to his four.....

Judgment:
(1) Under S. 57(1) of the Indian Stamp Act, the following question stands referred to us by the Chief Controlling Revenue Authority, Board of Revenue, Madras:

"Whether the document dated 30-6-1955 comprised both a partition and settlement of gift and whether the note to Schedule A of the document read with the recitals and the relevant items of property constitute an instrument chargeable as a settlement under the Stamp Act."

One Mohammad Yoonus Sait moved this court under Art. 226 of the Constitution for a writ of mandamus to direct the Board of Revenue Madras to make the reference. To the document in question, the parties are the said Mohamed Yoonus Sait and his four sons. Broadly stated, this document purported to record a gift of certain items of properties, by Yoonus Sait, to his four sons who thereafter proceeded to partition these items among themselves. Three other items referred to in the document are stated to have been set apart for being gifted to the wife and the daughters of Mohamed Yoonus Sait. Mohamed Yoonus Sait joined in the execution of the document as a confirming party "to declare and confirm" that the other parties, the sons, had the right and full power to partition the properties among themselves. This document was presented for registration, being stamped as a partition deed. The registering authority took the view that the document was not a partition deed simpliciter but combined in itself a settlement as well as a partition. The District Registrar decided that the stamp duty paid on the document was insufficient and that a deficit duty of Rs. 4875 together with a penalty of Rs. 10 should be paid. On appeal, the Board of Revenue accepted the decision of the District Registrar as correct. It was at this stage that the matter was brought before this Court by way of a writ proceeding and this Court directed a reference to be made.

(2) A brief reference to the recitals in the document may be made in order to appreciate the points in controversy. So far as these 12 items of properties are concerned they admittedly belonged to Mohamed Yoonus Sait. The parties to the document are Mohamed Yoonus Sait and his four sons, two of them being majors. The document was styled as one of partition in which Mohamed Yoonus Sait stated that he joined only as a confirming party, taking no share in the partition. In the earlier parts of the document, the title of Mohamed Yoonus Sait was traced to these several items of properties. In the operative portion the following recitals were made:-

"And whereas the party of the fifth part Mohamed Yoonus Sait......... is competent to make an oral gift of his properties and whereas for the mutual advantages, benefit and convenience of parties hereto, the party of the fifth part on grounds of pure natural love and affection has made an oral gift of all these 12 items of properties in schedule A hereunder with possession to the parties of the first, second, third and fourth parts hereto and his wife Halima Bai and his daughters Fathima Bai and Habiba Bai according to Mohamedan law............ "

The continuing sentence stated that of the 12 items of properties, 9 were jointly given to the four sons. Item 4 was given to Halima Bai wife, and items 5 and 6 to each of his daughters. The document proceeds to say that the sons had entered into an agreement and arrangement among themselves regarding the partition of the 9 items of properties and in pursuance of that agreement various items were taken by each of the sons, with the exception of item 13 which was continued to be kept joint for common enjoyment. That item was accordingly excluded from partition. Though earlier it is stated that items 4, 5 and 6 had been given to the wife and the two daughters, in the latter part of the document these items are stated " to have been set apart to be given away to the wife and daughters of the party of the fifth part, Mohamed Yoonus Sait by separate deeds of settlement in their favour in pursuance of the oral gift made to them".

(3) The wife and the daughters were not parties to this document. In effect, the document, in so far as they are concerned, only states that those items had been set apart to be given away and separate documents were to be executed in the future. We shall initially confine ourselves to the settlement or gift in favour of the sons and the partition as among themselves.

(4) There is no dispute that on the date of execution of this document, it was Mohamed Yoonus Sait who was the absolute owner of the properties. He made a gift of the 9 items in favour of his sons, whether on the date of the instrument or a short while prior thereto is not very material. Following this settlement or gift, which created the necessary title in the four sons, the four sons proceeded to divide the properties among themselves. It is not in dispute that the document is liable to stamp duty as a partition. The only controversy is whether stamp duty has also to be paid on the foot of a settlement or gift. On behalf of the respondent the stand has been taken that there was a completed settlement or gift prior to the partition and that as the document did not operate to create a settlement or gift, it is not liable to additional stamp duty on such basis. For the Board of Revenue, however, it is claimed that a settlement has been inclusively defined by the Indian Stamp Act. By Section 2(24) of this Act, a settlement means "any non-testamentary disposition, in writing, of moveable or immoveable property made for the purpose of distributing property of the settlor among his family or those for whom he desires to provide or for the purpose of providing for some person dependent on him............... and includes an agreement in writing to make such a disposition has not been made in writing, any instrument recording, whether by way of declaration of trust or otherwise, the terms of any such disposition". It is contended that in so far as the gift or the settlement to the sons is concerned, that gift or settlement has not been made in writing. But here is an instrument which records the terms of such disposition, to which instrument the settlor or the donor is himself a party, admittedly joining in the execution of the instrument for the purpose of "declaring and confirming" the title so created in favour of the sons. It is accordingly the contention of the Board of Revenue that this instrument records the terms of the disposition so made and that though the document itself is not a settlement, it is never the less an instrument which comes within the mischief of the inclusive part of the definition of a settlement as found in the Act. If that should be so, it is liable to stamp duty as a settlement as well.

(5) The question resolves itself into determining what is the precise meaning of the expression, "recording the terms of any such disposition" contained in the definition extracted above. On first principles it seems to us that the expression "recording" has a more far-reaching significance than that of a mere narration. A "record" is intended to furnish indubitable proof of a transaction while a "narrative" may be only a statement proceeding from a party. Here is a case where Mohamed Yoonus Sait who was the owner of the properties records the fact that he had effected a settlement of the properties upon his sons. He joined in the execution of the document. It is clear that he binds himself thereby and can no longer repudiate the position that he had made a valid settlement or gift in favour of his sons. Obviously it would be otherwise, if Mohamed Yoonus Sait had not been a party to the document and the sons merely stated that they had obtained the properties by way of settlement or gift from their father. That would be a narrative explaining the source of their title but would not be a record of a disposition. Even of the plain meaning of the expression found in the definition, it would appear to follow that the instrument is one which is a settlement as well as a partition.

(6) Section 2(24) of the Indian Stamp Act was amended by Act XV of 1904 and the inclusive part of the definition bringing within its scope an instrument recording the terms of a disposition was put in by that Act Mullah in his "Indian Stamp Act 6th Edn" notes that "the words relating to oral settlement recorded in writing were added by Act XV of 1904 to prevent an evasion of duty by the simple expedient of first making an oral disposition of the property to be settled and then recording the terms of the disposition in a declaration of trust in which the settlee and the trustee join". Clearly the definition was amplified only for the purpose of levying duty on documents which may not be themselves settlements but which record earlier settlement in respect of which no document in writing had been executed.

(7) It is the contention of the learned Government Pleader that the liability to stamp duty arises, as the document is undoubtedly a settlement in the sense indicated above. Alternatively, it is pleaded that the document itself may be regarded as effecting a settlement at least in so far as the wife and the daughters are concerned, for it states of further documents to be executed in their favour. Whether that position would be correct or not when once the factum of an oral settlement has thus been recorded, Section 2(24) of the Indian Stamp Act steps in and imposes the duty as on a settlement.

(8) As we stated earlier, the controversy relates to the precise meaning to be given to the expression "recorded". On this head, there are one or two authorities which may be referred to. In In re Mansukhram, (1905) 7 Bom LR 931, a similar question arose. There, one Mansukhram established an institution and provided certain properties therefor. That was in or about 1892. In 1905, he executed a trust and made over a sum of Rs. 35000 to certain trustees for the furtherance of the objects set out in the deed. When this deed was presented for registration, stamped as a trust deed, the registration authorities claimed that it should be stamped as a deed of settlement. Apparently it was not denied that there was in fact a settlement and the only question that arose was whether the Amending Act of 1904 should be construed to have retrospective effect and to apply even in respect of dispositions of property which were anterior to that Act. The judgment in the case consists of a single sentence, the learned Judge expressing their view that the document is a settlement and should be stamped as such. In the context of the arguments presented before them it seems clear that they accepted the view that though the disposition of the property might be prior to the Act of 1904, since the instrument recording its terms was subsequent to that Act, it would be liable as a settlement. We are inclined to believe that this decision really accords with the view which we have earlier expressed regarding the interpretation of the word, "recording".

(9) The meaning of the word "recording" came before a Special Bench of the Lahore High Court in Labh Singh v. Mehr Singh ILR 13 Lah 270: (AIR 1932 Lah 118) (SB). That was a case of an adoption document. The document began by reciting the factum of adoption and proceeded to say that no document was executed at the time or subsequently and therefore the document in question was executed to confirm that adoption. The question was whether it was liable to stamp duty as a deed of adoption. One of the learned Judges observed:-

"Nothing could I think be clearer than that the document is primarily a deed recording an adoption. The word 'recording' includes in my opinion not merely the recital of what happens contemporaneously but the recapitulation and placing on record of what has happened in the past".

(It may be mentioned that in the Schedule to the Stamp Act, adoption deed is defined as "any instrument other than will recording an adoption"). The contention in that case was that the document was merely a will which incidentally recited the factum of adoption and need not therefore, be stamped as an adoption deed Jailal J. another learned Judge expressed himself thus:

"In my opinion 'recording' as used in this article means committing to writing as authentic evidence of a matter having legal importance evidence of which is thus preserved and may be appealed to in case of dispute. It is not legally necessary that the matter and the record thereof should be contemporaneous. There may be cases in which a fact is reduced to writing as authentic evidence thereof long after it came into existence. The document clearly indicates that the primary object........ in executing it was to bring into existence documentary evidence of the adoption which may be appealed to in case of any future dispute............"

(10) This passage clearly indicates the scope of expression 'recording' and the purpose for which a record is made.

(11) A decision of the King's Bench Division has been referred to by the learned Government Pleader. That does not however touch unon the precise question before us. In that case Cohen & Moore v. Inland Revenue Commrs 1933-2-KB 126 what was decided was that both a verbal declaration of trust, though made before the actual execution of the deed and the deed itself formed parts of a single transaction and the deed was chargeable as a settlement.

(12) Mr. Ramaswami Reddiar insists nevertheless that unless rights as under a settlement or a gift are created by the document itself there can be no levy of stamp duty as a settlement. He claims that the requisites of a settlement are that the property must belong to the settlor at the time of the settlement. He must settle it by a document and the document should be of a non-testamentary nature. He refutes the position that first two of these incidents are available in this case. He claims that at the time of the execution of the document, Mohamed Yoonus Sait was not the owner of the properties, having already validly gifted them away to his sons. The parties being Mohamedans, an oral gift is valid under the Mohamedan law, by which they are governed. He also urges that the document itself did not settle the properties upon these sons. If he had already divested himself of the ownership, he settled nothing hereunder. It is also urged by the learned counsel that a settlement as defined even by Section 2(24) should be for the purpose of distributing the property of the settlor among his family and he claims that the settlor himself should distribute the property and if he effected no distribution the document cannot be of the nature of a settlement. We are really at a loss to follow this line of argument which completely overlooks the amendment made by the Act of 1904, which brought within the ambit of a settlement something which was not a settlement but which merely recorded the disposition under an earlier oral settlement. We agree with Mr. Ramaswami Reddiar that the document is not a settlement in the sense that the owner of the property settled it under the document upon certain other persons. But it becomes a settlement by reason of the artificial definition created by the Section, that is to say, it is a record of an earlier oral settlement. Certain decisions have been cited by the learned counsel which do not, in our minds, touch upon the question before us. In Dr. Vishnu Shankar v. State of Bihar, , a partition deed recited that a window of X surrendered her limited interest in favour of the parties entering into the deed and the question arose whether the document required additional stamp as a deed of gift. The learned Judges observed that in so far as the reference to the surrender was concerned it was a mere statement and that it did not purport to operate or terminate the interest of the persons who were said to have surrendered their interest. It is noticeable that in that case the persons who surrendered their interest were not parties to the document, though they attested the document. The executants of the document were only those who partitioned the properties among themselves. The learned Judges observed:-

"If by reason of any omission it appears later that their title in the property is incomplete, that is their concern and they run the risk with open eyes"

This passage clearly indicates that if the person surrendering the interest does not join the instrument, then the reference to the surrender is merely a narrative of the origin of title and the document could not operate of its own volition as a gift. In Hanuman Prasad v. State of Rajasthan, , what purported to be a receipt referred to an earlier gift of three lakhs of rupees by a father to his son. This receipt had been impounded and the claim was made that it should be stamped as an instrument of gift. The Bench of the Rajasthan High Court held that the receipt was not an instrument as defined by section 2(14) of the Stamp Act and a mere recital of a past transaction in such a document, which was itself not an instrument, would not attract stamp duty. We are unable to receive any assistance from this decision for the contention advanced by Mr. Ramaswami Reddiar. It is true that the document in that case purported to record an event of the past. But even the amplified definition of a settlement under Section 2(24) would not certainly apply unless the record of the past disposition or gift is made in an "instrument". Muhammad Hasham v. Crown, ILR 14 Lah 102: (AIR 1932 Lah 535 (SB)) was a similar case. Therein a receipt bearing one anna stamp recited an earlier conveyance of land and stated that the sum covered by that receipt had been paid as consideration for the sale which had been completed previously. The learned Judges observed that the test should be whether the intention of the parties was that the document should be the only repository and the appropriate evidence of the transaction. But if that merely recites the past accomplished fact, the document should not be regarded as a conveyance. They also pointed out that the decision in each case must turn on the peculiar wording employed in the document and the circumstances in which it was executed. Other decisions bearing upon the meaning of the word "declaring" appearing in Section 17 of the Indian Registration Act have been referred to. We do not think that any assistance is derivable from them for the purpose of understanding the meaning of the expression "recorded" with which alone we are at present concerned. We do not therefore propose to refer to them.

(13) We are accordingly satisfied that the document must, in addition to being stamped as a deed of partition be stamped as for a settlement.

(14) In the light of what we have stated, while undoubtedly reference to the gift in favour of the sons is a record of an earlier disposition, which had not been made in writing, the position seems to be different in so far as items 4, 5, and 6 are concerned. On a close reading of the document, it seems to us that though reference is made to a gift, as having been made in favour of the wife and the daughters the full effect of the document only indicates the setting apart if these items for the purpose of making a gift in favour of the wife and the daughters, by means of documents to be executed in future. Even assuming that a gift had been made in favour of the wife and the daughters, we are not satisfied that, in the absence of these persons joining in the execution of the document, the recital in so far as they are concerned can be regarded as a "record" in the sense in which that term is used in Section 2(24) of the Stamp Act. We must therefore hold that there is no settlement in so far as these items are concerned.

(15) We express accordingly our views as hereunder:

(16) The document is chargeable with duty as a settlement in respect of 9 items excluding items 4, 5 and 6. It is also liable to stamp duty as a partition deed in respect of items 1, 2, 3 and 7 to 11 only, as item 12 has not been partitioned and continues to remain joint.

(17) We make no order as to costs.

(18) Reference answered accordingly.