Stamp duty on oral business-transfer agreement filed for share allotment treated as agreement, not conveyance.

Section 104(2) of the Indian Companies Act, 1913 required particulars of an oral contract supporting share allotment to be filed as the instrument that would have been stamped if reduced to writing. Where the arrangement was only an agreement to transfer a business in future, followed by delivery of assets and allotment of shares, the filed particulars reflected that oral agreement and did not amount to a completed conveyance of property. On that basis, the material was chargeable as an agreement under Article 5(c) of Schedule I-B to the Indian Stamp Act, 1899, and not as a conveyance under Article 23.

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Issues: Whether the particulars filed under section 104(2) of the Indian Companies Act, 1913, in respect of an oral arrangement for transfer of business in consideration of shares and cash were chargeable only as an agreement under Article 5(c) of Schedule I-B to the Indian Stamp Act, 1899, or as a conveyance under Article 23 of that Schedule.

Analysis: Section 104 of the Indian Companies Act, 1913 required the company, where shares were allotted otherwise than for cash, to file the contract constituting the title to allotment or, if the contract was oral, the prescribed particulars. The statutory scheme treated those particulars as an instrument for stamp purposes and required the duty that would have been payable if the contract had been reduced to writing. On the facts found, the only contract established was an agreement to transfer the business in future, followed by delivery of assets and allotment of shares. No deed of conveyance was executed, and the material filed represented the oral agreement for sale, not a completed conveyance of property.

Conclusion: The particulars filed were duly stamped as an agreement and were not chargeable as a conveyance.

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