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Mukesh vs The State of Madhya Pradesh

Not available · 2024 INSC 1026Decided 20 Dec 2024
Not available

Background

The appellant had filed a civil suit for declaration and injunction claiming ownership of land he had long possessed and cultivated, against a neighbouring landowner and the State of Madhya Pradesh. The suit was decreed in his favour on the basis of a compromise between the parties, with the State raising no objection or appeal. When the appellant sought mutation of the land based on this consent decree, the Collector of Stamps treated it as a conveyance and demanded stamp duty of Rs.6,67,500/-, a demand upheld by the Board of Revenue and the Madhya Pradesh High Court.

Decision Breakdown

The Supreme Court held that a consent decree which merely records and confirms a party's pre-existing rights, without creating or transferring any new right, does not amount to a "conveyance" under the Indian Stamp Act, 1899, and is therefore not chargeable to stamp duty. Since the appellant had only asserted a right he already possessed (long-standing cultivation and ownership), and no new right was created by the compromise, the demand for stamp duty was legally unsustainable. The High Court's order upholding the stamp duty demand was set aside, the appeal was allowed, and the authorities were directed to mutate the land records in the appellant's favour.

Lesson Learnt

A court decree based on a compromise that only confirms rights a person already had, rather than transferring a fresh right, is not treated as a "conveyance" and does not attract stamp duty, which can save landowners from wrongful monetary demands during mutation.

Official source (sci.gov.in)View Judgment (PDF)

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