Vijay Kumar Goyal (Dead) Thr. LR. vs Neena Rani & Ors.
Background
Vijay Kumar Goyal filed a suit for specific performance of a Memorandum of Agreement (1996) and an agreement to sell (2011) relating to land, seeking only an injunction protecting his existing possession rather than seeking possession itself. The trial court directed him to pay deficient stamp duty at the higher rate applicable to agreements "followed by or evidencing delivery of possession." The Punjab and Haryana High Court dismissed his revision petition against that order, leading to this appeal.
Decision Breakdown
The Supreme Court examined the actual text of both agreements and found that they recited that possession of the land was already with the appellant even before the agreements were executed: the agreements did not themselves deliver possession. Since the plaintiff had also not sought possession in his suit (only an injunction against dispossession), the Court held that the higher stamp duty rate under Entry 5/Entry 23 Column 2 (applicable to agreements evidencing delivery of possession) did not apply; the lower stamp duty rate was appropriate instead. The orders of both the trial court and High Court directing the higher deficient stamp duty with penalty were quashed, and the appeal was allowed with no costs.
Lesson Learnt
The stamp duty payable on a sale agreement depends on whether that specific document actually delivers or evidences delivery of possession. If possession was already with the buyer independently of the agreement, and the agreement itself does not transfer possession, the higher "possession" stamp duty rate should not be charged.