PETITIONER: ARUBY SALES AND SERVICES (P) LTD. Vs. RESPONDENT: STATE OF MAHARASHTRA DATE OF JUDGMENT28/10/1993 BENCH: YOGESHWAR DAYAL (J) BENCH: YOGESHWAR DAYAL (J) KULDIP SINGH (J) CITATION: 1994 SCC (1) 531 JT 1993 (6) 217 1993 SCALE (4)280 ACT: HEADNOTE: JUDGMENT:
The Judgment of the Court was delivered by
YOGESHWAR DAYAL, J.- Civil Appeal No. 3477 of 1992 and other
connected matters raise a common question of law under the
Bombay Stamps Act, 1958 (hereinafter referred to as ‘the
Act’).
2.The question involved in all these matters is whether a
consent decree whereunder the title to immovable property is
conveyed expressly falls under the definition of
“conveyance” under Section 2(g) or an “instrument” under
Section 2(1) of the Act or such consent decree falls outside
the ambit and scope of the definition of “conveyance” or
“instrument” under the Act.
3.According to the appellants before us the consent
decree is not covered by the definition of “conveyance” or
“instrument”. The consent decrees in all these matters are
almost identical.
4.The Single Judge of the High Court while construing the
aforesaid definitions held that the consent decree does not
fall in any of these definitions and, therefore, such a
decree is not liable for payment of stamp duty.
5.The State of Maharashtra being dissatisfied with the
judgment of the Single Judge dated December 10, 1990 went up
in Letters Patent Appeal. The Division Bench took the view
that having regard to the recital in the consent decree
itself, the consent decree on its true interpretation, is a
conveyance itself and is covered by the definition of
“conveyance” under the Act and at any rate the consent
decree fulfils all the requirements of transfer under the
consent decree in favour of the vendees i.e. the writ
533
petitioners/appellants before us and such a consent decree
would be liable to stamp duty under Entry 25 of Schedule to
the Act.
6.The Single Judge while holding the opposite view to the
view of the Division Bench had relied on the decision of the
Bombay High Court in Sharanbasappa Tippanna Indi v.
Sanganbasappa Sridramappa Shahapur 1.
7.It will be noticed that Sharanbasappa case’ arose out
of a reference made by a Subordinate Judge of Bijapur under
Section 60 of the Stamp Act. This reference was heard by a
Full Bench. The question which arose before the Full Bench
was as to whether a consent decree creating a charge on the
immoveable property which was not subject-matter of the suit
requires the stamp. The suit itself was filed for recovery
of loan advanced. The suit was compromised in terms of the
compromise and the defendants therein agreed that a certain
sum was to be paid by them and that sum was charged on
immoveable property belonging to the defendants and
consequently a charge was created by consent of the
defendants. The immoveable property was not the subject-
matter of suit. The question that fell for consideration
before the Full Bench was as to whether in such
circumstances the consent decree is an instrument whereby
for the purpose of securing existing or future debt one
person creates in favour of another a right in respect of a
specified property. Under the decree a charge was created
and this was by the agreement between the parties. The Full
Bench took the view that the decree of such a nature is not
liable to stamp duty.
8.The argument before the Full Bench was that the consent
decree itself fell within the definition of “mortgage deed”
but the Full Bench took the view that the definition was not
wide enough to include such a decree. The Full Bench was
also influenced with the other provisions of the Indian
Stamps Act, 1899 including Section 29 thereof which did not
contemplate a consent decree as a mortgage deed. The Full
Bench had no occasion to consider the consent decree like
the present case where such a decree was to operate as a
“conveyance”. It was thus not an authority-for the
proposition that where immoveable property is in fact
transferred under the consent decree, whether it amounts to
“conveyance” within the meaning of the Act or not.
9.It may be stated that the definition of “conveyance”
under Section 2(g) of the Act came to be amended by the
Maharashtra Act No. 27 of 1985. This amendment was brought
into force on December 10, 1985 and, therefore, the same is
not relevant in this case since the consent decrees are of
dates prior to December 10, 1985. The unamended definitions
of the words “conveyance” and “instrument” under the Act are
as under:
“2. (g) ‘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 Schedule 1;
1 AIR 1935 Bom 256: 37 Bom LR 346: 156 IC 960
534
2.(1) ‘instrument’ includes every document by which any
right or liability is, or purports to be created,
transferred, limited, extended, extinguished or recorded,
but does not include a bill of exchange, cheque, promissory
note, bill of lading, letter of credit, policy of insurance,
transfer of share, debenture, proxy and receipt.”
The consent decree recites thus:
“[A]nd the suit being this day called on for
hearing and final disposal and the plaintiffs
and the defendants appearing by their
respective Advocates and at this stage the
parties hereto through their Advocates
consenting to the following order and decree,
this Court by and with such consent doth order
and decree that sale dated 18th day of
October, 1982 being Exhibit ‘B’ to the plaint
and do grant, sell, convey, assign, transfer,
release and assure in favour of the
plaintiffs, the immovable property comprising
of the pieces or parcels of land…. And this
Court by and with such consent doth record
that on or before execution of the consent
terms herein, the plaintiffs have paid to the
defendants and the defendants have received
from the plaintiffs the sum of Rs 9,55,000
(Rupees Nine Lakhs Fifty-five thousand) being
the full amount of the agreed purchase price
of the said property and the defendants do and
each of them doth hereby admit and acknowledge
receipt of the said agreed purchase price of
the said property more particularly described
in Exhibit ‘A’ to the plaint being the same
property as described in the Schedule hereto
and do hereby acquit, release and discharge
the plaintiffs from payment thereof and this
Court by and with such consent doth further
record that the defendants do and each of them
doth for themselves and for their respective
heirs, executors and administrators declare
that they have now no right, title, interest,
claim or demand of any kind or nature
whatsoever against the plaintiffs in respect
of the said property more particularly
described in the Schedule hereto or any part
or portion thereof and in respect of the
purchase price of the said property or portion
thereof and this Court by and with such
consent both order and decree that this decree
do operate as the conveyance from defendants
in favour of the plaintiffs in respect of the
said property more particularly described in
Exhibit ‘A’ to the plaint. And this Court by
and with such consent doth further record that
prior to the execution of the consent terms
herein the defendants have handed over to the
plaintiffs complete vacant possession of the
said immoveable property more particularly
described in Exhibit ‘A’ to the plaint.”
10.From the above recital in the consent decree there can
be no manner of doubt that the parties to the transaction
and the suit agreed that the consent decree itself shall
operate as conveyance from defendants in favour of the
plaintiffs in respect of the suit property particularly
described in Ex. ‘A’ to the plaint. Before the High Court
it was not contested that the consent decree does not
operate as “conveyance”.
535
11.There is no particular pleasure in merely going by the
label but what is decisive is by the terms of the document.
It is clear from the terms of the consent decree that it is
also an “instrument” under which title has been passed over
to the appellants/plaintiffs. It is a live document
transferring the property in dispute from the defendants to
the plaintiffs.
12.Thus the position becomes clear that the consent decree
falls under the definitions of “conveyance” as well as
“instrument”.
13.Normally either the vendor or the vendee files a suit
for specific performance of the agreement to sell. But the
suit is really directing the opposite party to comply with
the terms of the agreement. If the plaintiff succeeds in
establishing the agreement and that he was already ready and
willing to perform his part of the agreement the court will
normally decree the suit for specific performance of the
agreement. The decree itself will provide time for
performance by way of execution of sale deed and if the
defendant fails to execute the sale deed then the court gets
it executed through its officer on behalf of the judgment-
debtor in favour of the decree holder. In the present case
all that had happened is that instead of first decree for
specific performance of agreement to sell being passed and
later on by execution the conveyance deed being executed in
pursuance thereof, by the compromise decree both the stages
have been gone through at the initial stage of suit itself
whereby conveyance itself had been executed and the property
was transferred after the filing of the suit for specific
performance of the agreement to sell.
14.Mr Ganesh, learned counsel for the appellants,
submitted that it is only by the amendment that with effect
from December 10, 1985 the decree passed by the court has
been for the first time introduced in the definition of ”
conveyance” and the said amendment does not refer to be by
way of clarification or declaration of that position. It
was thus submitted that prior to amendment the consent
decree was not included in the definitions of ” conveyance”
and “instrument”. The High Court proceeded on the footing
that the 1985 Amendment was clarificatory and declaratory.
15.As we have noticed earlier the definitions of
“conveyance” and “instrument” start with the expression
“includes” which shows that the definitions are very wide.
It appears to us that the amendment was made out of abundant
caution and it does not mean that the consent decree was not
otherwise covered by the definitions given in Section 2(g)
or 2(1) of the Act. As stated earlier it depends on the
terms thereof. Merely because an agreement is put in the
shape of a consent decree it does not change the contents of
the document. It remains an agreement and it is subject to
all rights and liabilities which any agreement may suffer.
Having a stamp of court affixed will not change the nature
of the document. A compromise decree does not stand on a
higher footing than the agreement which preceded it. A
consent decree is a mere creature of the agreement on which
it is founded and is liable to be set aside on any of the
grounds which will invalidate the agreement.
536
16.We are thus in agreement with the reasonings and
conclusion of the Division Bench in the impugned judgment.
The appeals consequently fail and are dismissed with costs.