Possession-linked agreement to sell treated as conveyance for stamp duty; Section 4 unavailable absent one composite transaction.

An agreement to sell immovable property that provides for transfer of possession before, at, or after execution is deemed a conveyance under the Maharashtra Stamp Act, so stamp duty is leviable on that instrument itself. The later execution of a sale deed does not extinguish the earlier duty liability. Section 4 applies only where multiple instruments complete one composite transaction between the same parties and a principal instrument can be identified. Where the documents arise from different transactions, parties, or stages, Section 4 does not exempt the earlier agreements from separate stamp duty and registration requirements. The ratio treats possession-linked agreements as chargeable instruments for stamp purposes.

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Issues: (i) Whether agreements to sell containing a clause for transfer of possession are chargeable to stamp duty as conveyances under Explanation I to Article 25 of Schedule I to the Maharashtra Stamp Act, 1958. (ii) Whether Section 4 of the Maharashtra Stamp Act, 1958 applies so as to treat the later sale deed as the principal instrument and exempt the earlier agreements to sell from separate stamp duty and registration.

Issue (i): Whether agreements to sell containing a clause for transfer of possession are chargeable to stamp duty as conveyances under Explanation I to Article 25 of Schedule I to the Maharashtra Stamp Act, 1958.

Analysis: The charging scheme under the Stamp Act operates on the instrument and not merely on the underlying transaction. Where an agreement to sell immovable property provides for transfer of possession before, at, or after execution without a conveyance, the instrument is deemed to be a conveyance and duty is leviable accordingly. The agreements in question contained clauses for transfer of possession and attracted the statutory deeming provision. The fact that a subsequent sale deed was executed did not erase the duty liability already arising from the earlier instruments.

Conclusion: The agreements to sell were liable to be stamped as conveyances, and the levy of stamp duty was valid.

Issue (ii): Whether Section 4 of the Maharashtra Stamp Act, 1958 applies so as to treat the later sale deed as the principal instrument and exempt the earlier agreements to sell from separate stamp duty and registration.

Analysis: Section 4 applies only where several instruments are employed for completing a single transaction between the same parties and one principal instrument can be identified. The six documents were found to arise from different transactions, between different parties, and at different stages. They did not form one composite transaction so as to attract Section 4. Once possession was transferred under the agreements to sell, those documents themselves assumed the character of the principal instrument for stamp purposes, and the later sale deed could only give credit for duty already paid where the statute so permits.

Conclusion: Section 4 had no application, and the earlier agreements were not exempt from independent stamp duty and registration requirements.

Final Conclusion: The impugned orders impounding the documents and directing adjudication of stamp duty and penalty were upheld, and the appeal was dismissed.

Ratio Decidendi: An agreement to sell that transfers or contemplates transfer of possession without a conveyance is chargeable as a conveyance under the deeming provision, and Section 4 cannot be invoked unless the instruments form part of one composite transaction involving the same parties and a determinable principal instrument.

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