TaxTMI 
TaxTMI 
2025 (1) TMI 301
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....rred to as "the subject land", acquired by him by way of consent decree, as affirmed by the Board of Revenue by order dated 12.02.2019. 3. Originally, the appellant had filed a Civil Suit bearing No.47-A/2013 before the Court of First Civil Judge, Class-2, Badnawar, for declaration and permanent injunction against one Abhay Kumar (Respondent No.2 herein) and the State of Madhya Pradesh (Respondent No.1 herein) stating that he is the owner of the subject land and is in long and continuous possession of the same by doing cultivation. It was alleged in the said suit that in the year 2013, the Respondent No.2 herein, who is the adjacent land owner of the appellant, attempted to sell the subject land to third parties, thereby dispossessing the appellant from the same. Pending the suit, both the parties entered into a compromise, based on which, the suit came to be decreed in favour of the appellant, on 30.11.2013 and the Respondent No.1 - State of Madhya Pradesh did not raise any objection nor filed any appeal against the said compromise decree. In terms of the said order dated 30.11.2013, the appellant applied for mutation of the said land before the Tehsildar concerned, who in turn....
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....tration, although any decree or order of a court is exempted from registration by virtue of Section 17(2)(vi) of the Registration Act, 1908'. 4.1. Adding further, the learned counsel submitted that the High Court erred in placing reliance on its earlier order dated 24.07.2019 made in M.P.No.3634/2019 (Siddhulal case), as the facts of the present case are clearly distinguishable from the facts of that case. Siddhulal case was arising out of a suit for declaration on the basis of adverse possession and that, by way of consent decree, new right was created over the property, whereas the appellant herein preferred the suit for declaration and permanent injunction on the basis of his long and continuous ownership and possession of the subject land and he acquired pre-existing right over the same through consent decree. 4.2. It is also submitted by the learned counsel that there was no finding of collusion between the appellant and Respondent No.2 by any Court. 4.3. The learned counsel further submitted that court orders or decrees are not chargeable with stamp duty unless they fall under specific categories of instruments enumerated in Schedule I read with section 3 of the Indi....
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....ed only with an intent to evade the payment of stamp duty. 5.4. The learned counsel for the Respondent No.1 ultimately submitted that in view of the settled legal position and taking note of the facts and circumstances indicated above, the decision in Mohd. Yusuf v. Rajkumar [(2020) 10 SCC 264] is factually distinguishable and therefore, the appellant is liable to pay stamp duty against mutation of the subject land. 5.5. Thus, according to the learned counsel, the order passed by the High Court is a well-considered one and the same does not require any interference in the hands of this Court. 6. We have heard the learned counsel for the appellant and the learned counsel for the Respondent No.1 and also perused the materials available on record. Despite service of notice, none appeared on behalf of the Respondent No.2. 7. There are two issues involved herein viz., Registration of the document and payment of stamp duty, which are separate and distinct concepts. As regards the issue of registration, we may refer to Section 17 of the Registration Act, 1908 For short, "the Act, 1908", which deals with the documents of which registration is compulsory and the same reads as fo....
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.... (i) any composition deed; or (ii) any instrument relating to shares in a joint stock Company, notwithstanding that the assets of such Company consist in whole or in part of immovable property; or (iii) any debenture issued by any such Company and not creating, declaring, assigning, limiting or extinguishing any right, title or interest, to or in immovable property except in so far as it entitles the holder to the security afforded by a registered instrument whereby the Company has mortgaged, conveyed or otherwise transferred the whole or part of its immovable property or any interest therein to trustees upon trust for the benefit of the holders of such debentures; or (iv) any endorsement upon or transfer of any debenture issued by any such Company; or (v) [any document other than the documents specified in sub-section (1A)] not itself creating, declaring, assigning, limiting or extinguishing any right, title or interest of the value of one hundred rupees and upwards to or in immovable property, but merely creating a right to obtain another document which will, when executed, create, declare, assign, limit or extinguish any such right, t....
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.... would not require compulsory registration. Section 17(2)(vi) carves out the distinction between the property which forms subject-matter of the suit and the property that was not the subject-matter of the suit, but for which a compromise has been arrived at. It would be relevant to point out that the provision permitting the compromise between the parties to include in the compromise decree, the subject matter not forming part of the suit property was introduced with effect from 01.02.1977. Prior to that, the compromise decree can be passed only with respect to properties or subject matter of suit. If a compromise decree involves immovable property other than the property for which a decree is prayed for, such a property would not be exempted and would require registration. This condition or the exclusion clause was introduced in the Registration Act, 1908 by Act 21 of 1929 by substituting for "and any award". To avail the exemption from the mandate of compulsory registration of documents conveying immovable property of a value of more that Rs 100/-, the compromise decree arrived must be only in respect of the property that is the subject-matter of the suit. The compromise arrived ....
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....No.1 before any Court of law and hence, the same attained finality and is binding on the parties. 9. It is further seen that on the strength of the compromise decree passed by the civil court, the appellant approached the Tehsildar for mutation of the subject land in his favour. However, the Tehsildar referred the case to the Collector of Stamps, who after examination, determined the stamp duty under Article 22 of Schedule IA of the Indian Stamp Act, 1899 and directed the appellant to pay a sum of Rs.6,67,500/- in the Government Treasury. The said order of the Collector of Stamps was affirmed by the Board of Revenue, in the revision filed by the appellant. The High Court has also upheld the orders so passed by the authorities below, by order dated 06.12.2019, which is impugned in this appeal. 10. Evidently, the High Court passed the impugned order by observing that the compromise decree needs registration and stamp duty is also required to be paid for mutation of the subject land. While so, reliance was made on its earlier order dated 24.07.2019 in M.P.No.3634 of 2019 (Siddhulal case), in which, two decisions were referred to, viz., (i)the order of this Court in Bhoop Singh (....
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....as been brought on record as Annexure P-2, which indicates that decree dated 4- 10-1985 was passed by the Court for the property, which was subject-matter of the suit. Thus, the exclusionary clause in Section 17(2)(vi) is not applicable and the compromise decree dated 4-10-1985 was not required to be registered on plain reading of Section 17(2)(vi). The High Court referred to judgment of this Court in Bhoop Singh Vs. Ram Singh Major and Others, (1995) 5 SCC 709, in which case, the provision of Section 17(2)(vi) of Registration Act came for consideration. This Court in the above case while considering clause (vi) laid down following in paragraphs 16, 17 and 18:- "16. We have to view the reach of clause (vi), which is an exception to subsection (1), bearing all the aforesaid in mind. We would think that the exception engrafted is meant to cover that decree or order of a court, including a decree or order expressed to be made on a compromise, which declares the pre-existing right and does not by itself create new right, title or interest in praesenti in immovable property of the value of Rs 100 or upwards. Any other view would find the mischief of avoidance of registration, w....
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....e correct". Further, the earlier decree was held to be collusive. Two reasons for holding that the earlier decree in the above said case required registration have been mentioned in paragraph 19 of the judgment, which is to the following effect:- "19. Now, let us see whether on the strength of the decree passed in Suit No. 215 of 1973, the petitioner could sustain his case as put up in his written statement in the present suit, despite the decree not having been registered. According to us, it cannot for two reasons: (1) The decree having purported to create right or title in the plaintiff for the first time that is not being a declaration of pre-existing right, did require registration. It may also be pointed out that the first suit cannot really be said to have been decreed on the basis of compromise, as the suit was decreed "in view of the written statement filed by the defendant admitting the claim of the plaintiff to be correct". Decreeing of suit in such a situation is covered by Order 12 Rule 6, and not by Order 23 Rule 3, which deals with compromise of suit, whereas the former is on the subject of judgment on admissions. (2) A perusal of the impug....
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.... be the owner automatically after the expiry of the said limitation." 10. The judgment of Gurdwara Sahib Vs. Gram Panchayat Village Sirthala and Another (supra) has now been expressly overruled by a Three Judge Bench judgment in Ravinder Kaur Grewal and Others Vs. Manjit Kaur and Others, (2019) 8 SCC 729. This Court held in the above case in paragraph 62 that once 12 years' period of adverse possession is over, even owner's right to eject him is lost and the possessory owner acquires right, title and interest possessed by the outgoing person/owner. 11. In para 62, following has been laid down: (Ravinder Kaur Grewal case, SCC pp.778-78) "62. We hold that a person in possession cannot be ousted by another person except by due procedure of law and once 12 years' period of adverse possession is over, even owner's right to eject him is lost and the possessory owner acquires right, title and interest possessed by the outgoing person/owner as the case may be against whom he has prescribed. In our opinion, consequence is that once the right, title or interest is acquired it can be used as a sword by the plaintiff as well as a shield by the defendant withi....
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....wing: (SCC p. 800) "18. ... But with respect, it must be pointed out that a decree or order of a court does not require registration if it is not based on a compromise on the ground that clauses (b) and (c) of Section 17 of the Registration Act are attracted. Even a decree on a compromise does not require registration if it does not take in property that is not the subject-matter of the suit." 16. In the facts of the present case, the decree dated 4-10-1985 was with regard to the property, which was the subject-matter of the suit, hence not covered by exclusionary clause of Section 17(2)(vi) and the present case is covered by the main exception crafted in Section 17(2)(vi) i.e. "any decree or order of a court". When registration of an instrument as required by Section 17(1)(b) is specifically excluded by Section 17(2)(vi) by providing that nothing in clauses (b) and (c) of sub-section (1) applies to any decree or order of the court, we are of the view that the compromise decree dated 4-10-1985 did not require registration and the learned Civil Judge as well as the High Court erred in holding otherwise. We, thus, set aside the order of the Civil Judge dated 7-1-201....
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....8) 13 SCC 102], the dispute was not amongst the family members but between neighbours regarding right over passage. Obviously, none of them had any pre-existing right over the immovable property in question. 18. In view of enunciation of law in Bhoop Singh case [Bhoop Singh v. Ram Singh, (1995) 5 SCC 709], we find that the judgment [Tikka Maheshwar Chand v. Ripudaman Singh, 2016 SCC OnLine HP 3808] and decree of the High Court holding that the decree requires compulsory registration is erroneous in law. The compromise was between the two brothers consequent to death of their father and no right was being created in praesenti for the first time, thus not requiring compulsory registration. Consequently, the appeal is allowed and the suit is decreed." Thus, it could be discernible that in order to fall under the exception of Section 17(2)(vi) of the Act, 1908, the following conditions must be satisfied: (i) There must be a compromise decree as per the terms of the compromise without any collusion; (ii) The compromise decree must pertain to the subject property in the suit; and (iii) There must be a pre-existing right over the subject property, an....
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....s not the case of the Respondent No.1 - State that the suit itself was collusive as the property was not in possession of the appellant and that it belongs to any other third party. Such rival claim by any other person other than the defendant has not been brought to our knowledge. Obviously, the case before us is not a title dispute, but rather one relating to registration and payment of stamp duty and therefore, we leave the issue there. Under the above circumstances, we have no option but to hold that the compromise decree is by way of collusion, cannot be accepted. As already indicated above, the compromise decree reached finality, as the Respondent No.1 has not challenged the same. There is no finding of collusion between the parties in entering into the compromise by any Court as on date. Indisputably, the property is the subject matter of the suit. Thus, the appellant has satisfied the conditions enumerated in section 17(2)(vi) of the Act, 1908 and hence, the subject land acquired by him by way of compromise decree, requires no registration. 13. In respect of the issue relating to payment of stamp duty for mutation of the subject land, it is the specific plea of the appel....