Deemed conveyance for stamp duty upheld where a flat sale agreement provided possession without a separate conveyance.

An agreement to sell immovable property that provides for delivery of possession without execution of a conveyance may be deemed a conveyance for stamp duty purposes under Explanation I to Article 25 of Schedule I to the Bombay Stamp Act, 1958. The statute levies duty on the instrument itself, so the challenge that the charge was really on a transaction rather than on an instrument failed. Because the agreement contemplated sale, consideration, and possession, and omitted any conveyance as contemplated by the flats legislation, it fell within the deeming provision. The levy was upheld and the challenge to stamp duty failed.

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Issues: Whether an agreement for sale of a flat, which provided for delivery of possession without execution of a conveyance, was chargeable to stamp duty as a conveyance under Explanation I to Article 25 of Schedule I to the Bombay Stamp Act, 1958, and whether the levy was invalid as being on a transaction rather than on an instrument.

Analysis: Section 3 of the Bombay Stamp Act, 1958 levies duty on instruments, and Explanation I to Article 25 of Schedule I deems an agreement to sell immovable property to be a conveyance where possession is transferred before, at, or after execution without executing a conveyance. The agreement in question contemplated sale of the flat, payment of consideration, and delivery of possession within a stipulated time, while also omitting any provision for a conveyance as required under the scheme of the Maharashtra Ownership Flats Act, 1963. On that footing, the document fell squarely within the deeming provision. The argument that the levy was on a transaction and not on an instrument was rejected because the statute itself fastened duty on the agreement once the statutory conditions were met. The Court also held that the Legislature was competent to prescribe such a deeming rule and to levy duty at the stage of the agreement itself where the substantial elements of a conveyance were already present.

Conclusion: The agreement was rightly treated as a conveyance for stamp duty purposes, and the challenge to the levy failed.

Final Conclusion: The appeals were dismissed, and the High Court's view sustaining the stamp duty demand was upheld.

Ratio Decidendi: Where an agreement to sell immovable property itself provides for transfer of possession without execution of a conveyance, the statute may deem it to be a conveyance and levy stamp duty accordingly.

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