Stamp duty on agreement to sell applies when possession is delivered or recited in the instrument under the Stamp Act.

An agreement to sell is chargeable as a sale under Explanation I to Article 47-A of Schedule 1A of the Indian Stamp Act when it is followed by delivery of possession or itself recites or evidences that possession has already been delivered. The provision is to be read in its plain fiscal sense, with the document itself as the primary guide. Direct, contemporaneous, past, or symbolic delivery of possession can satisfy the requirement where the agreement shows a change in the jural relationship. Mere continued possession is not decisive if the agreement records delivery. Such instruments therefore attract stamp duty as a sale.

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Issues: Whether an agreement to sell that recites delivery of possession, or records that possession was already delivered, falls within Explanation I to Article 47-A of Schedule 1A of the Indian Stamp Act and is chargeable as a sale.

Analysis: Explanation I treats an agreement to sell followed by delivery of possession, or evidencing delivery of possession, as chargeable as a sale. In a fiscal statute, the language of the provision must be given its plain meaning, and the document itself is the primary guide. The expression "followed by" requires a direct nexus between the agreement and the delivery of possession, including contemporaneous delivery or delivery recited in the agreement itself. The expression "evidencing delivery of possession" covers an agreement that records past delivery of possession as proof of that fact. The earlier view that mere continuation in possession may not attract the provision was rejected because the change in the jural relationship and the recital in the agreement can amount to delivery of possession, including symbolic delivery. The provision is therefore attracted where the agreement itself contains a recital of delivery of possession or shows that possession has already been delivered.

Conclusion: Such agreements fall within Explanation I to Article 47-A of Schedule 1A of the Indian Stamp Act and are liable to stamp duty as a sale.

Ratio Decidendi: For the purposes of Explanation I to Article 47-A of Schedule 1A of the Indian Stamp Act, an agreement to sell attracts stamp duty as a sale when it either follows delivery of possession or records delivery of possession, including where the agreement itself evidences earlier or symbolic delivery.

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