NOTES
Specific performance of agreement – Contract of sale of suit
premises – Allotment letter issued upon consideration received – Defendants
submits, letter not constitute agreement – Plaintiff sued within 3 years after
denied – Held, suit is not barred by law of limitation, under MOFA Act.
Defendants are liable to be prosecuted for breaches and defaults of statutory
provision under MOFA. Defendant shall deposit in Court Rs.1.5 crore. Plaintiff
to return original documents. Suit is adjourned for considering plaintiffs oral
and further documentary evidence. Sushil Javher Shivdasani v/s Air Inn Pvt.
Ltd. 2009(2) Bom.C.R.608
Agreement/Conveyance---Distinction---Agreement
for sale not providing for when conveyance will be executed, though possession
is handed over on execution of agreement---Agreement when presented for
registration Registrar impounding it on ground that full stamp duty for
conveyance as required to be paid under Explanation to Entry 25 of Schedule I
of the Stamp Act --- Held, where agreement does not provided for when
conveyance will be done and possession is handed over, case is covered by
Explanation to Entry 25 of the Schedule I and High Court view that it is to be
termed as conveyance and duty is payable cannot be faulted.
The High Court in 1992(2)
Bom.C.R. 1 examined the scope of Explanation I to Entry 25 of Schedule I of the
Bombay Stamp Act and held that the same was attracted to the case. Under the
agreement there is an obligation to hand over the possession even before
execution of a conveyance and, therefore, it was a “conveyance” for the purpose
of duty payable under the Bombay Stamp Act and there was no obligation in the
agreement to enter into a conveyance at a letter stage and clearly it was a
case which attracted the said Explanation. Handing over of the possession on
the very date of execution was not relevant for determining the nature of the
document. On that basis the High Court upheld the stand taken by the State in
the matter of levy of duty. The duty in respect of an agreement covered by the
Explanation is leviable as if it is a conveyance. The conditions to be
fulfilled are if there is an agreement to sell immoveable property and
possession of such property is transferred to the purchaser before the execution
or at the time of execution or subsequently without executing any conveyance in
respect thereof such, an agreement to sell is deemed to be a “conveyance”. In
the event a conveyance is executed in pursuance of such agreement subsequently,
the stamp duty already paid and recovered on the agreement of sale which is
demand to a conveyance shall be adjusted towards the total duty leviable on the
conveyance. In the present case, the agreement entered into clearly provides
for sale of an immoveable property and there is also a specific time within
which possession has to be delivered. Therefore, the document in question
clearly falls within the scope of the Explanation I. If the agreement provides
that possession will be handed over on the execution of a conveyance as
contemplated under section 11 of the MOF Act, then the Explanation shall not be
attracted at all. In the present case, it is clear that in the terms of the
agreement there is no provision made at all for execution of the conveyance. On
the other hand, what is submitted is that the provisions of the MOF Act, could
be applied to the agreement and, therefore, a conveyance is to be executed and
the subsequently when it is not clear as to when the conveyance is to be handed
over. If that is so, it is clear that the document would attract duty as if it
is a conveyance as provided in the Explanation. There is no error in the view
taken by the High Court. It is not necessary to examine in these appeals as to
whether the instruments in question itself conveys a title or not. Therefore,
the decision of High Court made in this regards is upheld. The appeals are
dismissed. 1992(2) Bom.C.R. 124; 1999 (1) All.M.R. 698; 1999 (1) Bom.L.R.235
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