TaxTMI 
TaxTMI 
2020 (5) TMI 741
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....ht to release/relinquish his rights in the said property in favour of the petitioner. 4. By the Impugned Order dated 05.03.2019, the respondent no. 1, however, impounded the said document treating the same to be as a Gift under Article 33 of Schedule IA of the Indian Stamp Act, 1899 as applicable to the Union Territory of Delhi (hereinafter referred to as 'Act') and thereafter held the Release Deed to be deficiently stamped and impounded the same. Aggrieved of the said order the present petition has been filed. 5. WP (C) 3560/2018 has been filed by the petitioner challenging the order dated 01.03.2013 passed by the respondent no. 3 impounding the Relinquishment Deed(s) executed by the sisters of the petitioner in favour of the petitioner with respect to their share in the property bearing No. E-67, Greater Kailash, Part-II, New Delhi, holding that the said Relinquishment Deeds (five in number; three dated 06.07.2012 and two dated 17.07.2012) are liable to be stamped under Article 33 of the Act. 6. The petition further challenges the order dated 15.05.2013 passed by the respondent no. 2 assessing the Stamp Duty payable on the said Relinquishment Deeds at Rs. 6,60,25....
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....No.5) The same duty as Conveyance (No.23) on the value of the property. 16. As observed hereinabove, in both the petitions the Relinquishment Deed(s) executed in favour of the petitioner(s) have been treated as an instrument of Gift. 17. In Ranganayakamma and Anr. v. K.S. Prakash (Dead) by Lrs. And Ors., (2008) 15 SCC 673, the Supreme Court observed that renunciation in the Indian context may be for consideration or may not be for consideration. Whether the instrument amounts to a release document or not is not a pure question of law. 18. In The Board of Revenue, the Chief Controlling Revenue Authority v. V.M. Murugesa Mudaliar of Gudiyatham, the Full Bench of the Madras High Court was considering a document whereby three persons renounced all their interest in the property of the partnership firm in favour of the two remaining partners for some consideration. The Full Bench has held as under: "It only remains to consider whether the instrument falls within the definition of conveyance under Art. 19 of Schedule I-A of the Stamp Act. We are of opinion that it does not. The document proceeds on the footing that the five persons, namely, the three executants and t....
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....ment between co-owners. With respect, we follow the principle of this Full Bench decision and apply it to the present case. We hold that the document in question is only a release within the meaning of Article 44 of Schedule I-A of the Stamp Act and was properly stamped as such. It was not liable to be charged either as a deed of dissolution of partnership or as a conveyance." 19. In Chief Controlling Revenue Authority, Referring Officer v. Rustorn Nusserwanji Patel, MANU/TN/0223/1968, the Full Bench of the Madras High Court held that the nomenclature given to the instrument is not decisive nor is the language which the parties may choose to employ in framing the document. What is decisive is the actual character of the transaction and the precise nature of the rights created by means of the instrument. It further held that where two parties are co-owners, with a title which cannot be demarcated or fixed and there is joint possession and commonality of title, the documents transferring/releasing the title by one of the co-owners to the other would be a document of release. It further rejected the argument that a releaser cannot validly state in the instrument that he is effacing....
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....ion of a claim which the party relinquishing is entitled to put forward is a release chargeable under Article 55, whether the claim is legally correct or not is not relevant. Where by a document a person voluntarily renounces for consideration coparcenary rights of succession to impartible estate it is a release. There can be no release by one person in favour of another, who is not already entitled to the property as co-owner. Thus, by release, there is no transfer of interest or title to another person, who has no preexisting right to such property. A release can, therefore, be made in favour of a person who has a pre-existing right and interest in the property. It would make no difference even where the release is without consideration. 22. Where the property is owned by two co-owners each having undivided equal share therein and one of them by a deed claims title while the other possession, the document would be a release and not a conveyance. Even where one of the co-sharers of the joint agricultural land had simply renounced his claim in favour of another co-sharer in respect of the same agricultural land, the document in question would be release deed and not a gift....
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....ents of the co-ownership are well established. Each co-owner in theory is entitled to enjoy the joint property either in part or in its entirety and when one co-owner releases his interest or walks out, it cannot be said that there is any conveyance of his interest to the other co-owner. No doubt in the document, the language is employed which if not properly understood in the context of the document and the character of the ownership of the property, may lead to an argument that the transaction evidenced by the document was a conveyance. In fact stress was laid by the Government Pleader on the sentence in the document. " Hence I agree to transfer to you my joint right in the Schedule Property receiving Rs. 9,475/-. ................ I received the entire consideration of Rs. 9,475/-. I hereby transfer to you my joint interest. ............. Hence you shall from now onwards enjoy the schedule property with absolute rights. " The word ' transfer ' employed in the document cannot be understood to mean a conveyance or sale. There is no warrant for the view that it is only in a case where the release deed is gratuitous it operates as a valid release deed. A document of release m....
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....instead of using the expression "in favour of the other co-owner", the result is the same, namely, the enlargement of the share of the other co-owner. Rajamannar, C.J., never intended to prohibit such a conveyance in favour of the other co-owner, the effect of which is the enlargement of the share of the releasee. What his Lordship really meant by stating that it is sufficient if one of the co-owners releases his interest and it is not necessary for one of the co-owners to convey his interest to the other co-owners and in such a case there need be no conveyance as such by one of the co-owners in favour of the other co-owner, is that a co-owner cannot and should not convey his share or interest in the property (owned by the co-owners) in favour of one or a few named co-owners/out of the several co-owners, as such a conveyance would defeat the principle that the relinquishment would result in the enlargement of the share of the remaining co-owner or co-owners. In other words, the well settled principle of relinquishment is the enlargement of the share or shares of the co-owners and that principle will be defeated if the relinquishment is made in favour of one or a few named ....
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.... co-owners in favour of all the co-owners. If each co-owner's document in the case on hand is taken into consideration, it reveals that the release is not in favour of all the co-owners. Thus the relinquishment is not in accordance with the law propounded by the Full Bench in Board of Revenue v. Murugesa. The document, therefore, cannot be construed to be deeds of release. 32. Sri Ramarao, of course, argues that, by executing such a deed, the result is the enlargement of the shares of the remaining co-owners. We cannot accept this contention, as the execution of such a deed by each individual out of several co-owners in favour of the few co-owners is not contemplated by law of release under Art. 46. The law relating to releasee permits one co-owner or a few co-owners jointly, where there are more number of co-owners, to execute a deed of release relinquishing his interest or their interests in the property in favour of the remaining co-owners as in the case of the decisions of the Madras High Court cited above or in the case of the decision of the Allahabad High Court cited above. xxx 34. These recitals besides the fact that each of the co-owners exec....
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.... in law and the two documents bearing Nos. 80/2002 and 713/2002, are rightly treated by the Sub Registrar concerned as release deeds and they have not suffered any deficit stamp duty." 26. This Court in Narinder Kaur v. Amarjeet Singh Sethi, 2000 (54) DRJ 53, held that a Relinquishment perforce, cannot be in favour of any particular co-sharer; if it is to operate in favour of a particular party, it amounts to a transfer and must be effected either by a Sale Deed or by a Gift Deed, depending entirely on whether there was any consideration for such a transfer. 27. In Srichand Badlani v. Govt. of NCT of Delhi and Ors., MANU/DE/4731/2013 the Court while considering a Relinquishment Deed by which the legal heirs of one of the co-owner had sought to relinquish their share in the property in favour of one of the co-owner has held as under: "4. It is a settled legal proposition that one of the co-owners can relinquish his share in a co-owned property in favour of one or more of the co-owners. The document executed by him in this regard would continue to be a Relinquishment Deed irrespective of whether the relinquishment is in favour of one or all the remaining co-owners of t....
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....e of word like 'consideration' and 'transfer' would not affect the true character of the transaction; d. What is intended by a Release Deed is the relinquishment of the right of the co-owner; e. Co-ownership need not be only through inheritance, but can also be through purchase; f. Where the relinquishment of the right by the co-owner is only in favour of one of the co-owner and not against all, the document would be one of Gift/Conveyance and not of "release". WP(C) 9193/2019 31. Applying the above test to the facts of the present petitions, as far as WP(C) 9193/2019 is concerned, the Relinquishment Deed dated 01.03.2019 has been executed by a co-owner in favour of the only other co-owner. This would truly be a Release Deed and falls within the ambit of Article 55 of the Act. The Impugned Order dated 05.03.2019, therefore, cannot be sustained and is accordingly set aside. The petition succeeds. 32. The respondents shall forthwith proceed to register the Relinquishment Deed in favour of the petitioner. The respondents shall also pay a cost of Rs. 15,000/- to the petitioner for the present petition. WP(C) 3560/2018 33. As far....
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....ome of the recitals and covenants, relevant for purposes of present adjudication are reproduced hereinbelow:- "AND WHEREAS the said Mr. Jagdish Prashad Sharma did not leave behind his any other legal heirs except the seven mentioned above and consequently upon his death his entire ½ (one half) undivided share right, title and interest in the said property devolve upon them equally. AND WHEREAS the RELEASOR voluntarily out of her natural love and affection for the RELEASEE being real brother has agreed to release and relinquish her entire undivided rights, title share and interest in the said property, i.e. Entire Freehold Built-up Property Bearing no. E-67 measuring 245 square yards, situated at Greater Kailash Part-II, New Delhi, (hereinafter referred to as "THE SAID SHARE OF THE SAID PROPERTY"), in favour of the RELEASEE absolutely and forever xxxxxx 2. That the aforesaid RELEASOR doth hereby convey, transfer assign the said share of the said property, alongwith all the rights of ownership, title interest easement and privileges, whatsoever appurtenant to the said share of the said property TO HAVE AND TO HOLD the same by way of relinqui....